-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PyUGMYYKhKmHJc6TdUPMXNpdlma6nyWJyQbcwns1Pl1zMSq00e1dVL8hd23Rqag1 zXrHRWp4gAlmdCBP0mKpQw== 0000891804-07-000018.txt : 20070105 0000891804-07-000018.hdr.sgml : 20070105 20070105132038 ACCESSION NUMBER: 0000891804-07-000018 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061031 FILED AS OF DATE: 20070105 DATE AS OF CHANGE: 20070105 EFFECTIVENESS DATE: 20070105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND INC CENTRAL INDEX KEY: 0000860188 IRS NUMBER: 363689957 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06040 FILM NUMBER: 07512848 BUSINESS ADDRESS: STREET 1: 333 W WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 MAIL ADDRESS: STREET 1: 333 W WACKER CITY: CHICAGO STATE: IL ZIP: 60606 N-CSR 1 file001.txt NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-06040 --------------------- 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, 2006 ------------------ 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, 2006 ------------------------------ Nuveen Investments Municipal Closed-End 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: Woman and man at the beach. Photo of: A child. 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: Woman Photo of: Man and child 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 WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund dividends OR if you get your Nuveen Fund dividends and statements from your financial and statements directly from Nuveen. advisor or brokerage account. (BE SURE TO HAVE THE ADDRESS SHEET THAT ACCOMPANIED THIS REPORT HANDY. YOU'LL NEED IT TO COMPLETE THE ENROLLMENT PROCESS.) [LOGO] NUVEEN INVESTMENTS Chairman's LETTER TO SHAREHOLDERS Photo of Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Once again, I am pleased to report that over the twelve-month period covered by this report your Fund continued to provide you with attractive monthly tax-free income. For more details about the management strategy and performance of your Fund, please read the Portfolio Managers' Comments, the Dividend and Share Price Information, and the Performance Overview sections of this report. For some time, I've used these letters to remind you that municipal bonds can be an important building block in a well balanced investment portfolio. In addition to providing attractive tax-free monthly income, a municipal bond investment like your Fund may help you achieve and benefit from greater portfolio diversification. Portfolio diversification is a recognized way to try to reduce some of the risk that comes with investing. For more information about this important investment strategy, I encourage you to contact your personal financial advisor. "IN ADDITION TO PROVIDING ATTRACTIVE TAX-FREE MONTHLY INCOME, A MUNICIPAL BOND INVESTMENT LIKE YOUR FUND MAY HELP YOU ACHIEVE AND BENEFIT FROM GREATER PORTFOLIO DIVERSIFICATION." We also are pleased to be able to offer you a choice concerning how you receive your shareholder reports and other Fund information. As an alternative to mailed copies, you can sign up to receive future Fund reports and other Fund information by e-mail and the Internet. The inside front cover of this report contains information on how you can sign up. We are grateful that you have chosen us as a partner as you pursue your financial goals, and we look forward to continuing to earn your trust in the months and years ahead. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering investment services and products that can help you to secure your financial objectives. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger CHAIRMAN OF THE BOARD December 15, 2006 Nuveen Investments Municipal Closed-End Funds NPP, NMA, NMO, NAD, NXZ, NZF Portfolio Managers' COMMENTS PORTFOLIO MANAGERS TOM SPALDING AND PAUL BRENNAN DISCUSS U.S. ECONOMIC AND MUNICIPAL MARKET CONDITIONS, KEY INVESTMENT STRATEGIES, AND THE ANNUAL PERFORMANCE OF THESE SIX NATIONAL FUNDS. A 30-YEAR VETERAN OF NUVEEN, TOM HAS MANAGED NXZ SINCE ITS INCEPTION IN 2001 AND NPP, NMA, NMO, AND NAD SINCE 2003. WITH 17 YEARS OF INVESTMENT EXPERIENCE, INCLUDING 15 YEARS AT NUVEEN, PAUL ASSUMED PORTFOLIO MANAGEMENT RESPONSIBILITY FOR NZF IN JULY 2006. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL REPORTING PERIOD ENDED OCTOBER 31, 2006? In response to market concerns about oil prices, inflation, and the actions of the Federal Reserve over the past 12 months, bond yields exhibited some volatility during this reporting period, with longer-term rates hitting a peak in June 2006 before falling sharply for the remainder of the period. For the period as a whole, interest rates at the shorter end of the taxable yield curve generally continued to rise, while longer rates ended the period close to where they began it or even declined. As short-term rates approached and exceeded the levels of long-term rates, the taxable yield curve became increasingly flat and subsequently inverted. Consequently, bonds with longer durations 1 generally outperformed those with shorter durations during this period. Between November 1, 2005 and October 31, 2006, the Federal Reserve announced six increases of 0.25% each in the fed funds rate before pausing to leave monetary policy unchanged at the August-October 2006 sessions of its Open Market Committee. The increases raised the short-term target by 150 basis points, from 3.75% to 5.25%, its highest level since March 2001. During this same period, the yield on the benchmark 10-year U.S. Treasury note rose just four basis points to end October 2006 at 4.60%. In contrast, in the municipal market, the yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal market rates, fell to 4.78% at the end of October 2006, a decline of 43 basis points from the end of October 2005. Economic growth over the past year reflected the fluctuations in interest rates, energy prices, and the effects of a softening housing market. After expanding at a rate of 1.8% in the fourth quarter of 2005, the U.S. gross domestic product (GDP) rebounded sharply with a 5.6% gain in the first quarter of 2006 before moderating to a pace of 2.6% in the second quarter of 2006 (all GDP numbers annualized). In the third quarter of 2006, the rate of GDP growth slowed to 2.2%, largely as the result of an 18% slump in residential investment, the largest decrease in 15 years. Despite the recent slowdown in economic 1 Duration is a measure of a bond's price sensitivity as interest rates change, with longer duration bonds displaying more sensitivity to these changes than bonds with shorter durations. 4 growth, the markets continued to keep a close eye on inflation trends. While declining energy prices contributed to a benign 1.3% year-over-year increase in the Consumer Price Index as of October 2006, the core rate (which excludes food and energy prices) rose 2.7% for the same period. In general, the jobs picture remained positive, with national unemployment at 4.4% in October 2006, down from 4.9% in October 2005, the lowest level since May 2001. Over the 12 months ended October 2006, municipal bond issuance nationwide totaled $367.1 billion, down 8% from the previous 12 months. This total reflected the general decrease in the supply of municipal paper during 2006. After reaching record levels in calendar year 2005, municipal supply declined during the first 10 months of 2006, with $295.1 billion in new securities coming to market, off 12.5% from the same period in 2005. A major factor in 2006's drop was the sharp reduction in refunding volume, which fell almost 50% from last year's levels. Overall, demand for municipal bonds, especially those offering higher yields, continued to be strong and broad-based, with retail investors, institutional investors such as hedge funds and arbitragers, and foreign participants all taking part in the market. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING PERIOD? As the yield curve flattened over this 12-month period, we continued to emphasize careful management of the Funds' underlying portfolios in line with our established targets. This included pursuing a disciplined approach to duration management and yield curve positioning throughout the period. As part of this approach, we focused on purchasing bonds that we believed provided attractive total return opportunities without excessive risk, emphasizing attractively priced bonds with defensive coupons in the 20- to 30-year part of the yield curve in NPP, NMA, NMO, NAD, and NXZ and in the 15- to 20-year range in NZF. For all of these Funds, our purchases of defensive coupon bonds included bonds with premium coupons 2. We also broadened the scope of our investment performance management strategies to place additional emphasis on income strategies. As part of exploring further ways to increase the Funds' income-generating potential, we employed additional tools that helped us measure and manage interest rate risk. We also focused on purchasing bonds that offered the potential for more income in a variety of ways, such as different types of 2 Premium coupon bonds are credits that, at the time of purchase, are trading above their par values because their coupons are higher than current coupon levels. Historically, these bonds have held their value better than current coupon bonds when interest rates rise. 5 coupons. Among the bonds we added during this period were zero coupon bonds, discount coupon bonds, and inverse floaters, all of which also added duration to our portfolios at the time of purchase. (Inverse floaters are bonds with coupons structured to move in the opposite direction of interest rates. For example, if market interest rates decline, the interest rate earned by the inverse floater will rise. An inverse floater increases the market rate risk and modified duration of the investment.) Since late 2004, we have also been using hedging strategies, including interest rate swap agreements and futures contracts, in funds where we believed this would help support our overall investment performance strategies, especially our income strategies and our duration (interest rate risk) objectives. As discussed in previous shareholder reports, the goal of these hedging strategies is to manage the funds' durations (and price sensitivity) within a preferred range without having a negative impact on their income streams or common share dividends over the short term. In line with this objective, we deployed these strategies in NZF later in the reporting period. Although issuance nationwide declined during this period, the reduction in issuance did not have a major impact on the implementation of this or other strategies we had planned for these Funds. Much of the new supply was highly rated and/or insured, and many of our new purchases were higher-rated credits. In NPP, NMA, NMO, NAD, and NXZ, we added some uninsured health care names, primarily dominant providers with strong management and operating histories, as well as a few selected tobacco credits. In NZF, most of our purchase activity focused on the essential services sectors. In addition, we continued to keep the Funds well diversified geographically, looking to states with stronger issuance, including California, Texas, New York, and Florida, to find more attractive offerings as municipal issuance declined. NZF also purchased paper issued in specialty states, such as California, New York, and Ohio, which have relatively higher income tax levels. Municipal bonds issued in these specialty states are generally in great demand by in-state individual investors, which helps to support their value. These bonds also provide additional liquidity, making it easier for us to execute trades as part of implementing our strategies. We also continued to emphasize maintaining the Funds' weightings of lower-quality bonds. However, as credit spreads continued to narrow over this period and municipal 6 issuance tightened, we generally found fewer attractively structured lower-rated credit opportunities in the market. This was especially true during the second half of this reporting period. Overall, the Funds continued to have good exposure to the lower-rated credit categories. In NPP, NMA, NMO, NAD, and NXZ, most of the cash we redeployed during this period came from called bond holdings, although we also trimmed some of our exposure to pre-refunded bonds to generate cash for new purchases. In NZF, we sold holdings with shorter durations, including pre-refunded bonds, as well as bonds with less attractive call features and credits producing lower tax-exempt income streams as part of our yield curve and income strategies. HOW DID THE FUNDS PERFORM? Individual results for these Funds, as well as relevant index and peer group information, are presented in the accompanying table. TOTAL RETURNS ON NET ASSET VALUE* For periods ended 10/31/06 1-YEAR 5-YEAR 10-YEAR - -------------------------------------------------------------------------------- NPP 7.50% 6.51% 6.75% - -------------------------------------------------------------------------------- NMA 7.16% 7.03% 6.95% - -------------------------------------------------------------------------------- NMO 7.49% 6.46% 6.28% - -------------------------------------------------------------------------------- NAD 7.59% 7.50% NA - -------------------------------------------------------------------------------- NXZ 7.86% 8.02% NA - -------------------------------------------------------------------------------- NZF 7.57% 7.95% NA - -------------------------------------------------------------------------------- Lehman Brothers Municipal Bond Index 3 5.75% 5.05% 5.85% - -------------------------------------------------------------------------------- Lipper General Leveraged Municipal Debt Funds Average 4 8.42% 7.00% 6.63% - -------------------------------------------------------------------------------- * Annualized. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. For additional information, see the individual Performance Overview for your Fund in this report. For the 12 months ended October 31, 2006, the total returns on net asset value (NAV) for all six of the Funds in this report exceeded the return on the Lehman Brothers Municipal 3 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. 4 The Lipper General Leveraged Municipal Debt Funds category average is calculated using the returns of all closed-end funds in this category for each period as follows: 1 year, 56; 5 years, 45; and 10 years, 39. Fund and Lipper returns assume reinvestment of dividends. 7 Bond Index. The six Funds underperformed the average return for their Lipper peer group for this period. Factors that influenced the Funds' returns during this period included yield curve positioning and duration management, the addition of bonds purchased as part of our duration and income strategies, allocations to lower-rated credits, the use of financial leverage, and advance refunding activity. 5 As longer rates declined and the yield curve flattened over the course of this period, yield curve and duration positioning played an important role in the performance of these Funds. Overall, bonds in the Lehman Brothers Municipal Bond Index with maturities between one and four years were the most adversely impacted by changes in the interest rate environment over this period, as rates in that part of the curve rose. As a result, these bonds generally underperformed longer bonds, with issues having maturities between 17 and 22 years and those with maturities 22 years and longer achieving the best returns for the period. Yield curve positioning, or exposure to those parts of the yield curve that performed best during this period, helped the Funds' performances. In particular, NMA was not as well positioned as the other Funds in this report, with relatively less exposure to the longer part of the curve and more exposure to the shorter end, which hindered its performance. We continued to work to strengthen the yield curve positioning of all of these Funds. As previously mentioned, in recent months we added zero coupon bonds, discount coupon bonds, and inverse floaters to our portfolios, all of which had a positive impact on the Funds' performances for this period. Zero coupon bonds, for example, typically have very long durations, all else equal, and tend to be very sensitive to changes in interest rates. With rates at the long end of the curve declining throughout much of this 12-month period, zero coupon bonds in the Lehman Brothers Municipal Bond Index performed very well, exceeding the return for the general municipal market by almost 500 basis points. With bonds rated BBB or lower and non-rated bonds generally outperforming other credit quality sectors during this period, these Funds also benefited from their allocations of lower-quality credits. The performance of this sector was largely the result of investor demand for the higher yields typically associated with lower-quality bonds, which drove up their value and caused credit spreads to tighten. As of October 31, 2006, allocations of 5 Advance refundings, also known as pre-refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund principal and interest payments of older existing bonds. This process often results in lower borrowing costs for bond issuers. 8 bonds rated BBB or lower and non-rated bonds accounted for 12% of NPP's and NMO's portfolio, 15% of NAD and NZF, 19% of NMA, and 20% of NXZ, including an 8% allocation to bonds rated BB or lower, which helped to boost this Fund's annual performance. Among the lower-rated holdings making positive contributions to the Funds' total returns for this period were industrial development and resource recovery bonds and health care (including hospitals) credits, which ranked as the top performing revenue sectors in the Lehman Brothers Municipal Bond Index. Bonds backed by the 1998 master tobacco settlement agreement, which are generally rated BBB, also contributed to the Funds' performances. These bonds comprised approximately 4% to 6% of the portfolios of these six Funds as of October 31, 2006. Another factor in the annual performance of these Funds, especially relative to that of the unleveraged Lehman Brothers Municipal Bond Index, was the use of financial leverage. While leveraging can add volatility to a Fund's NAV and share price, this strategy can also provide opportunities for additional income and total return for common shareholders. Over this 12-month reporting period, the Funds' performances were positively impacted by the leveraging strategy, although not to the extent we have seen in past years. Over the long term, we firmly believe that the use of financial leverage should continue to work to the benefit of these Funds. This is demonstrated by the total return performances--both absolute and relative to the Lehman Brothers Municipal Bond Index--of all six Funds over the 5-year period and of NPP, NMA, and NMO over the 10-year period ended October 31, 2006. We also continued to see positive contributions from advance refunding activity, which benefited these Funds through price appreciation and enhanced credit quality. While advance refundings generally enhanced performance for this 12-month period, the Funds' holdings of older, previously pre-refunded bonds tended to underperform the general municipal market, due primarily to their shorter effective maturities. Among the Funds in this report, the three older Funds--NPP, NMA, and NMO--had the largest allocations of pre-refunded bonds going into this period. 9 HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF OCTOBER 31, 2006? Maintaining strong credit quality remained an important requirement. As of October 31, 2006, all six of these Funds continued to offer excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 69% in NXZ to 79% in NMA, 83% in NAD and NZF, 84% in NPP, and 85% in NMO. At the end of October 2006, potential call exposure for the period November 2006 through the end of 2007 ranged from 7% in NXZ and NZF and 8% in NMO to 12% in NPP, 13% in NAD, and 16% in NMA. The number of actual bond calls in all of these Funds depends largely on future market interest rates. 10 Dividend and Share Price INFORMATION As previously noted, these six Funds use leverage to potentially enhance opportunities for additional income for common shareholders. The benefits of leveraging are tied in part to the short-term rates that leveraged Funds pay their MuniPreferred shareholders. During periods of low short-term rates, these Funds generally pay lower dividends to their MuniPreferred shareholders, which can leave more earnings to support common share dividends. Conversely, when short-term interest rates rise, as they did during this reporting period, the Funds' borrowing costs also rise, impacting their income streams and reducing the extent of the benefits of leveraging. The Funds' income streams were also impacted as the proceeds from older, higher-yielding bonds that matured, were called, or were sold were reinvested then into bonds currently available in the market, which generally offered lower yields. These factors resulted in one monthly dividend reduction in NZF, two in NMA and NMO, and three in NPP, NAD, and NXZ over the 12-month period ended October 31, 2006. Due to capital gains generated by normal portfolio activity, common shareholders of the following Funds received capital gains and/or net ordinary income distributions at the end of December 2005, as follows: LONG-TERM CAPITAL GAINS ORDINARY INCOME (PER SHARE) (PER SHARE) - -------------------------------------------------------------------------------- NPP $0.0174 $0.0001 - -------------------------------------------------------------------------------- NMA $0.0116 $0.0030 - -------------------------------------------------------------------------------- NMO -- $0.0036 - -------------------------------------------------------------------------------- All of the Funds in this report seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of October 31, 2006, all of the Funds in this report had positive UNII balances for both financial statement and tax purposes. 11 At the end of the reporting period, the Funds' share prices were trading at premiums or discounts to their NAVs as shown in the accompanying chart: 10/31/06 12-MONTH PREMIUM/DISCOUNT AVERAGE PREMIUM/DISCOUNT - -------------------------------------------------------------------------------- NPP -4.37% -4.99% - -------------------------------------------------------------------------------- NMA -0.19% -1.55% - -------------------------------------------------------------------------------- NMO -2.66% -5.27% - -------------------------------------------------------------------------------- NAD -1.54% -3.38% - -------------------------------------------------------------------------------- NXZ +3.00% +3.46% - -------------------------------------------------------------------------------- NZF +2.19% -0.92% - -------------------------------------------------------------------------------- 12 Nuveen Performance Plus Municipal Fund, Inc. NPP Performance OVERVIEW As of October 31, 2006 - -------------------------------------------------------------------------------- [PIE CHART] CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 76% AA 8% A 4% BBB 8% BB or Lower 2% N/R 2% - -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2 [BAR CHART] 0.0745 0.0745 0.0745 0.0745 0.0705 0.0705 0.0705 0.0670 0.0670 0.0670 0.0640 0.0640 - ------------------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE [LINE CHART] Weekly Closing Date Price ---------- --------- 11/01/05 $ 14.50 $ 14.48 $ 14.44 $ 14.45 $ 14.44 $ 14.48 $ 14.33 $ 14.09 $ 14.07 $ 13.85 $ 13.93 $ 14.01 $ 14.05 $ 14.09 $ 14.08 $ 14.06 $ 14.01 $ 14.03 $ 14.18 $ 14.13 $ 14.15 $ 14.18 $ 14.20 $ 14.20 $ 14.21 $ 14.23 $ 14.29 $ 14.36 $ 14.45 $ 14.26 $ 14.20 $ 14.24 $ 14.19 $ 14.18 $ 14.14 $ 14.13 $ 14.21 $ 14.30 $ 14.38 $ 14.42 $ 14.49 $ 14.70 $ 14.70 $ 14.79 $ 14.90 $ 14.96 $ 14.91 $ 15.00 $ 15.12 $ 15.11 $ 15.11 $ 15.13 $ 15.08 $ 15.04 $ 15.06 $ 15.03 $ 15.05 $ 14.98 $ 14.99 $ 14.97 $ 15.11 $ 15.15 $ 15.22 $ 15.14 $ 15.13 $ 15.15 $ 15.08 $ 15.12 $ 15.04 $ 15.06 $ 15.02 $ 14.91 $ 14.93 $ 14.94 $ 15.01 $ 15.11 $ 15.16 $ 15.25 $ 15.21 $ 15.22 $ 15.23 $ 15.24 $ 15.22 $ 15.23 $ 15.10 $ 15.00 $ 14.96 $ 14.96 $ 15.11 $ 15.04 $ 15.05 $ 15.08 $ 15.02 $ 15.18 $ 15.10 $ 15.21 $ 15.35 $ 15.45 $ 15.38 $ 15.34 $ 15.21 $ 15.14 $ 15.21 $ 15.07 $ 15.08 $ 15.13 $ 15.10 $ 14.98 $ 14.93 $ 14.87 $ 14.82 $ 14.62 $ 14.65 $ 14.64 $ 14.54 $ 14.53 $ 14.50 $ 14.44 $ 14.35 $ 14.40 $ 14.36 $ 14.43 $ 14.45 $ 14.51 $ 14.51 $ 14.53 $ 14.55 $ 14.50 $ 14.52 $ 14.55 $ 14.54 $ 14.51 $ 14.58 $ 14.40 $ 14.40 $ 14.45 $ 14.49 $ 14.39 $ 14.38 $ 14.36 $ 14.34 $ 14.36 $ 14.40 $ 14.42 $ 14.45 $ 14.46 $ 14.50 $ 14.59 $ 14.62 $ 14.50 $ 14.53 $ 14.51 $ 14.51 $ 14.57 $ 14.55 $ 14.45 $ 14.38 $ 14.39 $ 14.39 $ 14.43 $ 14.35 $ 14.34 $ 14.26 $ 14.24 $ 14.25 $ 14.13 $ 14.20 $ 14.28 $ 14.28 $ 14.33 $ 14.39 $ 14.41 $ 14.46 $ 14.45 $ 14.41 $ 14.31 $ 14.30 $ 14.36 $ 14.35 $ 14.33 $ 14.40 $ 14.38 $ 14.34 $ 14.43 $ 14.47 $ 14.54 $ 14.75 $ 14.78 $ 14.82 $ 14.90 $ 14.85 $ 14.87 $ 14.85 $ 14.74 $ 14.79 $ 14.77 $ 14.82 $ 14.70 $ 14.65 $ 14.83 $ 14.88 $ 14.87 $ 14.91 $ 14.89 $ 14.93 $ 14.90 $ 14.98 $ 14.92 $ 14.93 $ 14.97 $ 15.00 $ 14.98 $ 14.94 $ 14.98 $ 14.96 $ 15.03 $ 15.13 $ 15.10 $ 15.11 $ 15.00 $ 14.95 $ 14.96 $ 14.94 $ 14.94 $ 14.92 $ 14.93 $ 14.95 $ 14.97 $ 14.95 $ 14.99 $ 14.97 $ 15.00 $ 15.00 $ 14.98 $ 14.97 $ 14.95 $ 14.95 $ 14.97 $ 14.93 $ 14.92 $ 14.84 $ 14.84 $ 14.70 $ 14.69 $ 14.80 $ 14.77 $ 14.81 $ 14.90 $ 14.88 $ 14.96 $ 15.04 $ 15.01 $ 15.08 $ 15.08 10/31/06 $ 15.09 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders capital gains and net ordinary income distributions in December 2005 of $0.0175 per share. FUND SNAPSHOT - -------------------------------------------------------------------------------- Common Share Price $ 15.09 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.78 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -4.37% - -------------------------------------------------------------------------------- Market Yield 5.09% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 7.07% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $945,222 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 15.58 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 8.39 - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 6/22/89) - -------------------------------------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------------------------------------- 1-Year 10.78% 7.50% - -------------------------------------------------------------------------------- 5-Year 7.35% 6.51% - -------------------------------------------------------------------------------- 10-Year 6.57% 6.75% - -------------------------------------------------------------------------------- STATES (as a % of total investments) - -------------------------------------------------------------------------------- Illinois 14.7% - -------------------------------------------------------------------------------- California 10.0% - -------------------------------------------------------------------------------- New York 6.6% - -------------------------------------------------------------------------------- New Jersey 6.0% - -------------------------------------------------------------------------------- Michigan 4.5% - -------------------------------------------------------------------------------- Indiana 4.4% - -------------------------------------------------------------------------------- Texas 4.4% - -------------------------------------------------------------------------------- Florida 4.2% - -------------------------------------------------------------------------------- Colorado 4.1% - -------------------------------------------------------------------------------- Massachusetts 3.8% - -------------------------------------------------------------------------------- Washington 3.3% - -------------------------------------------------------------------------------- Utah 2.9% - -------------------------------------------------------------------------------- South Carolina 2.9% - -------------------------------------------------------------------------------- Ohio 2.4% - -------------------------------------------------------------------------------- Pennsylvania 2.3% - -------------------------------------------------------------------------------- Georgia 2.2% - -------------------------------------------------------------------------------- Minnesota 2.0% - -------------------------------------------------------------------------------- Louisiana 2.0% - -------------------------------------------------------------------------------- Nevada 1.6% - -------------------------------------------------------------------------------- Wisconsin 1.4% - -------------------------------------------------------------------------------- Other 14.3% - -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 24.2% - -------------------------------------------------------------------------------- Tax Obligation/Limited 15.9% - -------------------------------------------------------------------------------- Tax Obligation/General 15.0% - -------------------------------------------------------------------------------- Transportation 10.0% - -------------------------------------------------------------------------------- Utilities 9.8% - -------------------------------------------------------------------------------- Health Care 8.3% - -------------------------------------------------------------------------------- Consumer Staples 5.5% - -------------------------------------------------------------------------------- Other 11.3% - -------------------------------------------------------------------------------- 13 Nuveen Municipal Advantage Fund, Inc. NMA Performance OVERVIEW As of October 31, 2006 FUND SNAPSHOT - -------------------------------------------------------------------------------- Common Share Price $ 15.85 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.88 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -0.19% - -------------------------------------------------------------------------------- Market Yield 5.41% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 7.51% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $683,675 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 16.15 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 8.09 - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/89) - -------------------------------------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------------------------------------- 1-Year 10.68% 7.16% - -------------------------------------------------------------------------------- 5-Year 8.31% 7.03% - -------------------------------------------------------------------------------- 10-Year 7.36% 6.95% - -------------------------------------------------------------------------------- STATES (as a % of total investments) - -------------------------------------------------------------------------------- Texas 11.3% - -------------------------------------------------------------------------------- New York 11.0% - -------------------------------------------------------------------------------- Illinois 10.8% - -------------------------------------------------------------------------------- Washington 9.6% - -------------------------------------------------------------------------------- California 8.0% - -------------------------------------------------------------------------------- Louisiana 6.2% - -------------------------------------------------------------------------------- Colorado 4.5% - -------------------------------------------------------------------------------- Tennessee 3.6% - -------------------------------------------------------------------------------- Ohio 3.0% - -------------------------------------------------------------------------------- South Carolina 2.8% - -------------------------------------------------------------------------------- New Jersey 2.6% - -------------------------------------------------------------------------------- Nevada 2.4% - -------------------------------------------------------------------------------- Indiana 2.4% - -------------------------------------------------------------------------------- Alabama 2.1% - -------------------------------------------------------------------------------- Wisconsin 2.0% - -------------------------------------------------------------------------------- North Carolina 1.7% - -------------------------------------------------------------------------------- Oklahoma 1.5% - -------------------------------------------------------------------------------- Other 14.5% - -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 28.6% - -------------------------------------------------------------------------------- Utilities 15.1% - -------------------------------------------------------------------------------- Transportation 10.6% - -------------------------------------------------------------------------------- Health Care 9.9% - -------------------------------------------------------------------------------- Tax Obligation/Limited 9.8% - -------------------------------------------------------------------------------- Tax Obligation/General 8.1% - -------------------------------------------------------------------------------- Consumer Staples 5.5% - -------------------------------------------------------------------------------- Housing/Single Family 5.1% - -------------------------------------------------------------------------------- Other 7.3% - -------------------------------------------------------------------------------- [PIE CHART] CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 71% AA 8% A 2% BBB 16% BB or Lower 3% - -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2 [BAR CHART] 0.0795 0.0795 0.0795 0.0795 0.0755 0.0755 0.0755 0.0715 0.0715 0.0715 0.0715 0.0715 - ------------------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE [LINE CHART] Weekly Closing Date Price ---------- --------- 11/01/05 $ 15.27 $ 15.20 $ 15.24 $ 15.20 $ 15.21 $ 15.25 $ 15.22 $ 15.19 $ 15.23 $ 15.09 $ 15.08 $ 15.08 $ 15.12 $ 15.12 $ 15.01 $ 14.99 $ 15.00 $ 15.03 $ 15.09 $ 15.13 $ 15.05 $ 15.10 $ 15.14 $ 15.12 $ 15.22 $ 15.21 $ 15.27 $ 15.45 $ 15.38 $ 15.14 $ 15.19 $ 15.07 $ 15.06 $ 14.98 $ 15.02 $ 15.03 $ 15.01 $ 15.18 $ 15.20 $ 15.18 $ 15.35 $ 15.38 $ 15.38 $ 15.42 $ 15.45 $ 15.70 $ 15.65 $ 15.70 $ 15.77 $ 15.81 $ 15.72 $ 15.43 $ 15.64 $ 15.71 $ 15.89 $ 15.92 $ 15.85 $ 15.91 $ 15.95 $ 15.94 $ 15.98 $ 16.05 $ 16.02 $ 16.01 $ 16.00 $ 15.66 $ 15.63 $ 15.68 $ 15.69 $ 15.68 $ 15.79 $ 15.60 $ 15.63 $ 15.61 $ 15.77 $ 15.77 $ 15.80 $ 15.75 $ 15.95 $ 15.82 $ 15.86 $ 15.92 $ 15.93 $ 15.94 $ 15.70 $ 15.45 $ 15.38 $ 15.46 $ 15.55 $ 15.58 $ 15.49 $ 15.46 $ 15.43 $ 15.57 $ 15.52 $ 15.50 $ 15.50 $ 15.47 $ 15.49 $ 15.46 $ 15.47 $ 15.55 $ 15.49 $ 15.45 $ 15.46 $ 15.51 $ 15.53 $ 15.46 $ 15.47 $ 15.35 $ 15.25 $ 15.13 $ 15.17 $ 15.29 $ 15.15 $ 15.22 $ 15.23 $ 15.14 $ 15.15 $ 15.17 $ 15.12 $ 15.17 $ 15.15 $ 15.17 $ 15.17 $ 15.24 $ 15.25 $ 15.29 $ 15.31 $ 15.33 $ 15.43 $ 15.33 $ 15.42 $ 15.30 $ 15.28 $ 15.34 $ 15.36 $ 15.29 $ 15.32 $ 15.35 $ 15.34 $ 15.36 $ 15.32 $ 15.28 $ 15.28 $ 15.35 $ 15.27 $ 15.40 $ 15.37 $ 15.31 $ 15.33 $ 15.25 $ 15.29 $ 15.25 $ 15.27 $ 15.15 $ 15.06 $ 15.05 $ 15.10 $ 15.04 $ 15.03 $ 14.90 $ 14.86 $ 14.80 $ 14.81 $ 14.81 $ 14.82 $ 14.80 $ 14.90 $ 14.99 $ 14.98 $ 14.88 $ 14.97 $ 14.90 $ 14.93 $ 14.86 $ 14.94 $ 14.87 $ 14.78 $ 14.72 $ 14.86 $ 14.81 $ 14.85 $ 15.00 $ 15.01 $ 15.05 $ 15.15 $ 15.17 $ 15.18 $ 15.35 $ 15.39 $ 15.34 $ 15.40 $ 15.25 $ 15.36 $ 15.44 $ 15.50 $ 15.52 $ 15.41 $ 15.44 $ 15.46 $ 15.42 $ 15.50 $ 15.49 $ 15.46 $ 15.46 $ 15.47 $ 15.47 $ 15.59 $ 15.50 $ 15.53 $ 15.54 $ 15.60 $ 15.62 $ 15.58 $ 15.54 $ 15.56 $ 15.57 $ 15.61 $ 15.59 $ 15.42 $ 15.38 $ 15.42 $ 15.39 $ 15.46 $ 15.48 $ 15.50 $ 15.57 $ 15.58 $ 15.73 $ 15.75 $ 15.72 $ 15.72 $ 15.80 $ 15.85 $ 15.82 $ 15.87 $ 15.88 $ 15.84 $ 15.81 $ 15.67 $ 15.71 $ 15.62 $ 15.59 $ 15.60 $ 15.71 $ 15.72 $ 15.70 $ 15.77 $ 15.77 $ 15.85 $ 15.85 $ 15.87 $ 15.87 10/31/06 $ 15.85 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders capital gains and net ordinary income distributions in December 2005 of $0.0146 per share. 14 Nuveen Municipal Market Opportunity Fund, Inc. NMO Performance OVERVIEW As of October 31, 2006 - -------------------------------------------------------------------------------- [PIE CHART] CREDIT QUALITY (as a % of total municipal bonds) AAA/U.S. Guaranteed 77% AA 8% A 3% BBB 8% BB or Lower 3% N/R 1% - -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2 [BAR CHART] 0.0725 0.0725 0.0725 0.0725 0.0685 0.0685 0.0685 0.0660 0.0660 0.0660 0.0660 0.0660 - ------------------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE [LINE CHART] Weekly Closing Date Price ---------- --------- 11/01/05 $ 14.17 $ 14.18 $ 14.15 $ 14.21 $ 14.28 $ 14.26 $ 13.96 $ 13.83 $ 13.80 $ 13.53 $ 13.53 $ 13.69 $ 13.76 $ 13.65 $ 13.69 $ 13.65 $ 13.65 $ 13.64 $ 13.70 $ 13.76 $ 13.82 $ 13.86 $ 13.91 $ 13.98 $ 14.04 $ 14.01 $ 14.04 $ 14.04 $ 14.04 $ 13.77 $ 13.81 $ 13.87 $ 13.84 $ 13.82 $ 13.86 $ 13.88 $ 13.94 $ 13.97 $ 14.18 $ 14.18 $ 14.32 $ 14.47 $ 14.47 $ 14.51 $ 14.59 $ 14.72 $ 14.59 $ 14.77 $ 14.66 $ 14.60 $ 14.60 $ 14.53 $ 14.40 $ 14.52 $ 14.65 $ 14.64 $ 14.59 $ 14.54 $ 14.48 $ 14.58 $ 14.59 $ 14.63 $ 14.69 $ 14.76 $ 14.72 $ 14.67 $ 14.54 $ 14.52 $ 14.51 $ 14.60 $ 14.54 $ 14.46 $ 14.47 $ 14.48 $ 14.61 $ 14.59 $ 14.67 $ 14.72 $ 14.68 $ 14.77 $ 14.79 $ 14.84 $ 14.78 $ 14.74 $ 14.64 $ 14.57 $ 14.54 $ 14.52 $ 14.53 $ 14.49 $ 14.55 $ 14.46 $ 14.50 $ 14.62 $ 14.65 $ 14.51 $ 14.55 $ 14.60 $ 14.55 $ 14.53 $ 14.50 $ 14.58 $ 14.60 $ 14.53 $ 14.65 $ 14.65 $ 14.65 $ 14.53 $ 14.43 $ 14.36 $ 14.22 $ 14.10 $ 14.04 $ 14.11 $ 13.96 $ 14.10 $ 14.10 $ 14.13 $ 14.05 $ 14.12 $ 13.98 $ 14.03 $ 14.11 $ 14.09 $ 14.09 $ 14.12 $ 14.13 $ 14.15 $ 14.11 $ 14.10 $ 14.17 $ 14.15 $ 14.13 $ 14.08 $ 14.14 $ 14.24 $ 14.38 $ 14.31 $ 14.49 $ 14.34 $ 14.23 $ 14.19 $ 14.28 $ 14.22 $ 14.20 $ 14.21 $ 14.27 $ 14.34 $ 14.30 $ 14.19 $ 14.21 $ 14.13 $ 14.10 $ 14.17 $ 14.11 $ 14.00 $ 14.08 $ 14.02 $ 14.11 $ 14.05 $ 14.03 $ 14.00 $ 13.85 $ 13.85 $ 13.80 $ 13.84 $ 13.73 $ 13.76 $ 13.79 $ 13.97 $ 13.97 $ 13.94 $ 13.88 $ 13.90 $ 13.90 $ 13.89 $ 13.97 $ 13.93 $ 13.89 $ 13.89 $ 13.89 $ 13.81 $ 13.84 $ 13.99 $ 13.90 $ 13.99 $ 14.10 $ 14.19 $ 14.32 $ 14.33 $ 14.41 $ 14.41 $ 14.42 $ 14.42 $ 14.41 $ 14.45 $ 14.52 $ 14.47 $ 14.43 $ 14.55 $ 14.57 $ 14.60 $ 14.61 $ 14.63 $ 14.63 $ 14.56 $ 14.59 $ 14.60 $ 14.56 $ 14.61 $ 14.64 $ 14.64 $ 14.61 $ 14.58 $ 14.49 $ 14.53 $ 14.58 $ 14.63 $ 14.63 $ 14.63 $ 14.62 $ 14.67 $ 14.67 $ 14.68 $ 14.63 $ 14.69 $ 14.90 $ 14.77 $ 14.82 $ 14.95 $ 14.90 $ 14.96 $ 14.96 $ 14.93 $ 14.95 $ 14.98 $ 14.97 $ 15.02 $ 14.93 $ 14.92 $ 14.81 $ 14.80 $ 14.62 $ 14.60 $ 14.55 $ 14.58 $ 14.65 $ 14.65 $ 14.75 $ 14.80 $ 14.87 $ 14.82 $ 14.90 $ 14.92 10/31/06 $ 15.00 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders a net ordinary income distribution in December 2005 of $0.0036 per share. FUND SNAPSHOT - -------------------------------------------------------------------------------- Common Share Price $ 15.00 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.41 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -2.66% - -------------------------------------------------------------------------------- Market Yield 5.28% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 7.33% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $701,559 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 13.78 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 8.17 - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/21/90) - -------------------------------------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------------------------------------- 1-Year 11.92% 7.49% - -------------------------------------------------------------------------------- 5-Year 7.06% 6.46% - -------------------------------------------------------------------------------- 10-Year 6.52% 6.28% - -------------------------------------------------------------------------------- STATES (as a % of total municipal bonds) - -------------------------------------------------------------------------------- Texas 16.8% - -------------------------------------------------------------------------------- Washington 11.6% - -------------------------------------------------------------------------------- New York 9.5% - -------------------------------------------------------------------------------- Illinois 8.1% - -------------------------------------------------------------------------------- California 5.7% - -------------------------------------------------------------------------------- Minnesota 5.1% - -------------------------------------------------------------------------------- South Carolina 4.9% - -------------------------------------------------------------------------------- New Jersey 4.1% - -------------------------------------------------------------------------------- Colorado 3.5% - -------------------------------------------------------------------------------- Nevada 3.0% - -------------------------------------------------------------------------------- Georgia 3.0% - -------------------------------------------------------------------------------- Massachusetts 2.9% - -------------------------------------------------------------------------------- North Dakota 2.8% - -------------------------------------------------------------------------------- Pennsylvania 2.5% - -------------------------------------------------------------------------------- Ohio 2.0% - -------------------------------------------------------------------------------- Other 14.5% - -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 34.0% - -------------------------------------------------------------------------------- Transportation 15.2% - -------------------------------------------------------------------------------- Tax Obligation/General 15.1% - -------------------------------------------------------------------------------- Tax Obligation/Limited 8.3% - -------------------------------------------------------------------------------- Utilities 6.8% - -------------------------------------------------------------------------------- Health Care 6.6% - -------------------------------------------------------------------------------- Consumer Staples 5.1% - -------------------------------------------------------------------------------- Other 8.9% - -------------------------------------------------------------------------------- 15 Nuveen Dividend Advantage Municipal Fund NAD Performance OVERVIEW As of October 31, 2006 FUND SNAPSHOT - -------------------------------------------------------------------------------- Common Share Price $ 15.30 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.54 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -1.54% - -------------------------------------------------------------------------------- Market Yield 5.41% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 7.51% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $610,316 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 15.24 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 7.55 - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 5/26/99) - -------------------------------------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------------------------------------- 1-Year 11.19% 7.59% - -------------------------------------------------------------------------------- 5-Year 6.86% 7.50% - -------------------------------------------------------------------------------- Since Inception 6.81% 7.61% - -------------------------------------------------------------------------------- STATES (as a % of total investments) - -------------------------------------------------------------------------------- Illinois 23.7% - -------------------------------------------------------------------------------- New York 10.5% - -------------------------------------------------------------------------------- Texas 10.4% - -------------------------------------------------------------------------------- Washington 7.8% - -------------------------------------------------------------------------------- Florida 5.3% - -------------------------------------------------------------------------------- Wisconsin 4.6% - -------------------------------------------------------------------------------- New Jersey 4.1% - -------------------------------------------------------------------------------- Pennsylvania 3.3% - -------------------------------------------------------------------------------- Louisiana 3.0% - -------------------------------------------------------------------------------- Ohio 2.7% - -------------------------------------------------------------------------------- Indiana 2.5% - -------------------------------------------------------------------------------- Michigan 2.5% - -------------------------------------------------------------------------------- Rhode Island 2.2% - -------------------------------------------------------------------------------- California 1.9% - -------------------------------------------------------------------------------- Massachusetts 1.6% - -------------------------------------------------------------------------------- Other 13.9% - -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 19.3% - -------------------------------------------------------------------------------- Tax Obligation/General 16.9% - -------------------------------------------------------------------------------- Tax Obligation/Limited 15.0% - -------------------------------------------------------------------------------- Health Care 12.6% - -------------------------------------------------------------------------------- Transportation 11.0% - -------------------------------------------------------------------------------- Utilities 7.2% - -------------------------------------------------------------------------------- Consumer Staples 6.4% - -------------------------------------------------------------------------------- Other 11.6% - -------------------------------------------------------------------------------- [PIE CHART] CREDIT QUALITY (as a % of total investment) AAA/U.S. Guaranteed 73% AA 10% A 2% BBB 7% BB or Lower 5% N/R 3% - -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE [BAR CHART] 0.0790 0.0750 0.0750 0.0750 0.0715 0.0715 0.0715 0.0690 0.0690 0.0690 0.0690 0.0690 - ------------------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE [LINE CHART] Weekly Closing Date Price ---------- --------- 11/01/05 $ 14.56 $ 14.57 $ 14.63 $ 14.65 $ 14.64 $ 14.69 $ 14.55 $ 14.47 $ 14.48 $ 14.38 $ 14.30 $ 14.38 $ 14.39 $ 14.36 $ 14.37 $ 14.35 $ 14.38 $ 14.42 $ 14.49 $ 14.50 $ 14.56 $ 14.68 $ 14.60 $ 14.64 $ 14.60 $ 14.51 $ 14.50 $ 14.41 $ 14.37 $ 14.19 $ 14.25 $ 14.29 $ 14.22 $ 14.17 $ 14.18 $ 14.11 $ 14.20 $ 14.28 $ 14.25 $ 14.43 $ 14.56 $ 14.60 $ 14.60 $ 14.66 $ 14.77 $ 14.91 $ 15.09 $ 15.13 $ 15.15 $ 15.09 $ 15.06 $ 15.09 $ 15.02 $ 15.04 $ 15.04 $ 15.01 $ 15.12 $ 15.13 $ 15.15 $ 15.14 $ 15.20 $ 15.19 $ 15.25 $ 15.22 $ 15.16 $ 15.13 $ 15.10 $ 15.17 $ 15.09 $ 15.13 $ 15.10 $ 14.94 $ 14.86 $ 14.85 $ 14.87 $ 14.90 $ 15.00 $ 15.05 $ 15.15 $ 15.16 $ 15.20 $ 15.28 $ 15.27 $ 15.24 $ 15.22 $ 15.03 $ 15.05 $ 15.07 $ 15.07 $ 15.04 $ 14.91 $ 14.77 $ 14.79 $ 14.86 $ 14.89 $ 14.83 $ 14.78 $ 14.65 $ 14.66 $ 14.67 $ 14.67 $ 14.73 $ 14.77 $ 14.79 $ 14.84 $ 14.83 $ 14.85 $ 14.75 $ 14.61 $ 14.46 $ 14.44 $ 14.28 $ 14.34 $ 14.33 $ 14.30 $ 14.33 $ 14.39 $ 14.34 $ 14.37 $ 14.47 $ 14.46 $ 14.41 $ 14.36 $ 14.41 $ 14.41 $ 14.45 $ 14.54 $ 14.51 $ 14.50 $ 14.47 $ 14.52 $ 14.58 $ 14.68 $ 14.53 $ 14.51 $ 14.60 $ 14.72 $ 14.63 $ 14.62 $ 14.69 $ 14.68 $ 14.77 $ 14.74 $ 14.81 $ 14.84 $ 14.86 $ 14.87 $ 14.90 $ 14.93 $ 14.98 $ 15.02 $ 14.98 $ 14.70 $ 14.70 $ 14.71 $ 14.55 $ 14.47 $ 14.44 $ 14.39 $ 14.35 $ 14.35 $ 14.28 $ 14.24 $ 14.10 $ 14.13 $ 14.15 $ 14.12 $ 14.20 $ 14.27 $ 14.35 $ 14.30 $ 14.39 $ 14.42 $ 14.45 $ 14.46 $ 14.41 $ 14.46 $ 14.47 $ 14.49 $ 14.41 $ 14.46 $ 14.41 $ 14.45 $ 14.48 $ 14.44 $ 14.43 $ 14.46 $ 14.61 $ 14.74 $ 14.81 $ 14.79 $ 14.82 $ 14.80 $ 14.85 $ 14.86 $ 14.90 $ 14.91 $ 14.69 $ 14.69 $ 14.79 $ 14.85 $ 14.89 $ 14.86 $ 14.85 $ 14.85 $ 14.84 $ 14.89 $ 14.91 $ 14.88 $ 14.90 $ 14.98 $ 15.00 $ 15.10 $ 15.07 $ 14.96 $ 15.04 $ 15.07 $ 15.14 $ 15.12 $ 15.02 $ 15.00 $ 15.01 $ 15.06 $ 15.08 $ 15.05 $ 15.17 $ 15.10 $ 15.13 $ 15.25 $ 15.24 $ 15.19 $ 15.20 $ 15.20 $ 15.22 $ 15.22 $ 15.25 $ 15.29 $ 15.35 $ 15.36 $ 15.36 $ 15.23 $ 15.22 $ 15.12 $ 15.12 $ 15.12 $ 15.16 $ 15.18 $ 15.13 $ 15.14 $ 15.17 $ 15.17 $ 15.24 $ 15.22 $ 15.27 10/31/06 $ 15.30 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 16 Nuveen Dividend Advantage Municipal Fund 2 NXZ Performance OVERVIEW As of October 31, 2006 - -------------------------------------------------------------------------------- [PIE CHART] CREDIT QUALITY (as a % of total municipal bonds) AAA/U.S. Guaranteed 62% AA 7% A 11% BBB 10% BB or Lower 8% N/R 2% - -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE [BAR CHART] 0.0860 0.0860 0.0860 0.0860 0.0820 0.0820 0.0820 0.0795 0.0795 0.0795 0.0765 0.0765 - ------------------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE [LINE CHART] Weekly Closing Date Price ---------- --------- 11/01/05 $ 15.58 $ 15.71 $ 15.74 $ 15.80 $ 15.86 $ 15.99 $ 15.96 $ 15.80 $ 15.84 $ 15.74 $ 15.68 $ 15.74 $ 15.95 $ 15.90 $ 15.95 $ 16.01 $ 15.95 $ 16.00 $ 16.15 $ 16.30 $ 16.18 $ 16.21 $ 16.03 $ 16.02 $ 16.07 $ 16.12 $ 16.30 $ 16.18 $ 16.30 $ 15.95 $ 15.84 $ 16.12 $ 15.75 $ 15.88 $ 16.09 $ 16.11 $ 16.10 $ 16.13 $ 16.40 $ 16.39 $ 16.43 $ 16.47 $ 16.47 $ 16.54 $ 16.52 $ 16.55 $ 16.72 $ 16.75 $ 16.75 $ 16.57 $ 16.62 $ 16.50 $ 16.38 $ 16.53 $ 16.68 $ 16.80 $ 16.80 $ 16.82 $ 16.80 $ 16.88 $ 16.95 $ 17.20 $ 17.15 $ 17.01 $ 16.92 $ 16.75 $ 16.66 $ 16.70 $ 16.66 $ 16.13 $ 16.17 $ 16.00 $ 15.95 $ 15.95 $ 16.05 $ 16.14 $ 16.05 $ 16.15 $ 16.13 $ 16.19 $ 16.29 $ 16.30 $ 16.22 $ 16.25 $ 16.19 $ 16.19 $ 16.09 $ 16.13 $ 16.15 $ 16.15 $ 16.23 $ 16.15 $ 16.22 $ 16.38 $ 16.32 $ 16.38 $ 16.29 $ 16.27 $ 16.60 $ 16.55 $ 16.60 $ 16.56 $ 16.62 $ 16.56 $ 16.62 $ 16.68 $ 16.62 $ 16.65 $ 16.60 $ 16.40 $ 16.30 $ 16.16 $ 16.15 $ 16.08 $ 16.09 $ 16.19 $ 16.19 $ 16.15 $ 16.13 $ 16.36 $ 16.22 $ 16.05 $ 16.14 $ 16.20 $ 16.20 $ 16.28 $ 16.40 $ 16.33 $ 16.52 $ 16.53 $ 16.48 $ 16.48 $ 16.49 $ 16.26 $ 16.47 $ 16.41 $ 16.45 $ 16.42 $ 16.34 $ 16.39 $ 16.42 $ 16.35 $ 16.34 $ 16.43 $ 16.45 $ 16.26 $ 16.40 $ 16.35 $ 16.38 $ 16.32 $ 16.32 $ 16.45 $ 16.42 $ 16.38 $ 16.25 $ 16.20 $ 16.25 $ 16.26 $ 16.32 $ 16.23 $ 16.18 $ 16.24 $ 16.09 $ 16.01 $ 16.04 $ 16.21 $ 15.95 $ 16.11 $ 16.07 $ 16.08 $ 16.07 $ 16.07 $ 16.20 $ 16.20 $ 16.07 $ 16.03 $ 16.03 $ 16.06 $ 16.09 $ 16.00 $ 16.06 $ 16.19 $ 16.11 $ 16.14 $ 16.14 $ 16.23 $ 16.27 $ 16.27 $ 16.36 $ 16.41 $ 16.41 $ 16.39 $ 16.52 $ 16.42 $ 16.29 $ 16.29 $ 16.38 $ 16.32 $ 16.40 $ 16.45 $ 16.62 $ 16.59 $ 16.62 $ 16.64 $ 16.77 $ 16.79 $ 16.83 $ 16.83 $ 16.91 $ 17.00 $ 16.95 $ 16.96 $ 17.05 $ 16.99 $ 16.80 $ 16.74 $ 16.79 $ 16.78 $ 16.82 $ 16.75 $ 16.71 $ 16.68 $ 16.70 $ 16.72 $ 16.76 $ 16.78 $ 16.74 $ 16.76 $ 16.74 $ 16.76 $ 16.74 $ 16.69 $ 16.69 $ 16.73 $ 16.63 $ 16.70 $ 16.66 $ 16.74 $ 16.68 $ 16.65 $ 16.47 $ 16.50 $ 16.38 $ 16.32 $ 16.35 $ 16.34 $ 16.32 $ 16.35 $ 16.39 $ 16.37 $ 16.40 $ 16.47 $ 16.52 $ 16.55 10/31/06 $ 16.50 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. FUND SNAPSHOT - -------------------------------------------------------------------------------- Common Share Price $ 16.50 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 16.02 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV 3.00% - -------------------------------------------------------------------------------- Market Yield 5.56% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 7.72% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $470,189 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 19.75 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 6.33 - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) - -------------------------------------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------------------------------------- 1-Year 11.95% 7.86% - -------------------------------------------------------------------------------- 5-Year 8.92% 8.02% - -------------------------------------------------------------------------------- Since Inception 8.45% 8.69% - -------------------------------------------------------------------------------- STATES (as a % of total municipal bonds) - -------------------------------------------------------------------------------- Texas 17.1% - -------------------------------------------------------------------------------- Michigan 9.7% - -------------------------------------------------------------------------------- Illinois 7.6% - -------------------------------------------------------------------------------- California 7.5% - -------------------------------------------------------------------------------- Colorado 4.6% - -------------------------------------------------------------------------------- New York 4.5% - -------------------------------------------------------------------------------- New Mexico 3.6% - -------------------------------------------------------------------------------- Washington 3.5% - -------------------------------------------------------------------------------- Florida 3.4% - -------------------------------------------------------------------------------- Missouri 3.3% - -------------------------------------------------------------------------------- Indiana 3.3% - -------------------------------------------------------------------------------- Louisiana 3.1% - -------------------------------------------------------------------------------- Alabama 2.9% - -------------------------------------------------------------------------------- Massachusetts 2.8% - -------------------------------------------------------------------------------- Nevada 2.8% - -------------------------------------------------------------------------------- Kansas 2.7% - -------------------------------------------------------------------------------- Oregon 2.6% - -------------------------------------------------------------------------------- Other 15.0% - -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 21.4% - -------------------------------------------------------------------------------- Health Care 17.2% - -------------------------------------------------------------------------------- Tax Obligation/Limited 16.0% - -------------------------------------------------------------------------------- Transportation 14.3% - -------------------------------------------------------------------------------- Utilities 7.0% - -------------------------------------------------------------------------------- Tax Obligation/General 5.9% - -------------------------------------------------------------------------------- Consumer Staples 5.1% - -------------------------------------------------------------------------------- Other 13.1% - -------------------------------------------------------------------------------- 17 Nuveen Dividend Advantage Municipal Fund 3 NZF Performance OVERVIEW As of October 31, 2006 FUND SNAPSHOT - -------------------------------------------------------------------------------- Common Share Price $ 15.88 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.54 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV 2.19% - -------------------------------------------------------------------------------- Market Yield 5.52% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 7.67% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $626,836 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 16.88 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 7.14 - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01) - -------------------------------------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------------------------------------- 1-Year 16.90% 7.57% - -------------------------------------------------------------------------------- 5-Year 7.80% 7.95% - -------------------------------------------------------------------------------- Since Inception 7.74% 7.99% - -------------------------------------------------------------------------------- STATES (as a % of total municipal bonds) - -------------------------------------------------------------------------------- Texas 12.6% - -------------------------------------------------------------------------------- Illinois 12.0% - -------------------------------------------------------------------------------- Washington 10.4% - -------------------------------------------------------------------------------- California 7.7% - -------------------------------------------------------------------------------- Michigan 6.2% - -------------------------------------------------------------------------------- Nevada 5.2% - -------------------------------------------------------------------------------- Iowa 3.9% - -------------------------------------------------------------------------------- Indiana 3.9% - -------------------------------------------------------------------------------- Colorado 3.5% - -------------------------------------------------------------------------------- New York 3.2% - -------------------------------------------------------------------------------- Wisconsin 3.0% - -------------------------------------------------------------------------------- New Jersey 2.5% - -------------------------------------------------------------------------------- Louisiana 2.3% - -------------------------------------------------------------------------------- Kentucky 2.1% - -------------------------------------------------------------------------------- Alaska 1.8% - -------------------------------------------------------------------------------- Missouri 1.7% - -------------------------------------------------------------------------------- Oregon 1.7% - -------------------------------------------------------------------------------- Maryland 1.5% - -------------------------------------------------------------------------------- Other 14.8% - -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 20.5% - -------------------------------------------------------------------------------- Transportation 16.1% - -------------------------------------------------------------------------------- Health Care 16.0% - -------------------------------------------------------------------------------- Tax Obligation/General 9.5% - -------------------------------------------------------------------------------- Utilities 6.6% - -------------------------------------------------------------------------------- Water and Sewer 6.6% - -------------------------------------------------------------------------------- Education and Civic Organizations 5.6% - -------------------------------------------------------------------------------- Tax Obligation/Limited 5.5% - -------------------------------------------------------------------------------- Other 13.6% - -------------------------------------------------------------------------------- [PIE CHART] CREDIT QUALITY (as a % of total municipal bonds) AAA/U.S. Guaranteed 74% AA 9% A 2% BBB 7% BB or Lower 3% N/R 5% - -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE [BAR CHART] 0.0770 0.0770 0.0770 0.0770 0.0770 0.0770 0.0770 0.0730 0.0730 0.0730 0.0730 0.0730 - ------------------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE [LINE CHART] Weekly Closing Date Price ---------- --------- 11/01/05 $ 14.50 $ 14.52 $ 14.52 $ 14.55 $ 14.66 $ 14.61 $ 14.67 $ 14.53 $ 14.53 $ 14.49 $ 14.37 $ 14.54 $ 14.45 $ 14.50 $ 14.41 $ 14.43 $ 14.44 $ 14.42 $ 14.54 $ 14.52 $ 14.43 $ 14.46 $ 14.48 $ 14.55 $ 14.61 $ 14.48 $ 14.50 $ 14.66 $ 14.69 $ 14.46 $ 14.47 $ 14.40 $ 14.40 $ 14.39 $ 14.41 $ 14.42 $ 14.49 $ 14.61 $ 14.52 $ 14.71 $ 14.82 $ 14.91 $ 14.91 $ 14.99 $ 15.01 $ 15.15 $ 15.30 $ 15.30 $ 15.40 $ 15.25 $ 15.35 $ 15.26 $ 15.20 $ 15.16 $ 15.24 $ 15.28 $ 15.29 $ 15.38 $ 15.38 $ 15.31 $ 15.37 $ 15.40 $ 15.49 $ 15.45 $ 15.40 $ 15.38 $ 15.37 $ 15.40 $ 15.40 $ 15.41 $ 15.43 $ 15.35 $ 15.32 $ 15.33 $ 15.40 $ 15.35 $ 15.34 $ 15.15 $ 15.10 $ 15.15 $ 15.20 $ 15.21 $ 15.24 $ 15.15 $ 15.13 $ 15.17 $ 15.10 $ 15.12 $ 15.13 $ 15.19 $ 15.17 $ 15.19 $ 15.30 $ 15.34 $ 15.32 $ 15.33 $ 15.29 $ 15.35 $ 15.49 $ 15.45 $ 15.48 $ 15.45 $ 15.40 $ 15.28 $ 15.26 $ 15.35 $ 15.35 $ 15.40 $ 15.38 $ 15.32 $ 15.26 $ 15.29 $ 15.20 $ 15.25 $ 15.02 $ 15.08 $ 15.09 $ 15.05 $ 14.95 $ 15.00 $ 15.03 $ 15.00 $ 15.15 $ 15.10 $ 15.10 $ 15.30 $ 15.32 $ 15.37 $ 15.42 $ 15.47 $ 15.41 $ 15.42 $ 15.46 $ 15.40 $ 15.40 $ 15.58 $ 15.52 $ 15.37 $ 15.34 $ 15.42 $ 15.39 $ 15.40 $ 15.37 $ 15.39 $ 15.50 $ 15.42 $ 15.50 $ 15.57 $ 15.56 $ 15.43 $ 15.40 $ 15.40 $ 15.38 $ 15.35 $ 15.39 $ 15.15 $ 15.12 $ 15.09 $ 15.10 $ 15.03 $ 15.01 $ 15.02 $ 14.83 $ 14.79 $ 14.75 $ 14.55 $ 14.50 $ 14.65 $ 14.69 $ 14.82 $ 14.81 $ 14.90 $ 14.93 $ 14.92 $ 14.94 $ 14.85 $ 14.84 $ 14.88 $ 14.91 $ 14.91 $ 14.91 $ 14.91 $ 14.95 $ 15.03 $ 15.01 $ 15.10 $ 15.12 $ 15.30 $ 15.34 $ 15.36 $ 15.43 $ 15.36 $ 15.39 $ 15.28 $ 15.28 $ 15.25 $ 15.33 $ 15.24 $ 15.17 $ 15.24 $ 15.25 $ 15.30 $ 15.36 $ 15.36 $ 15.34 $ 15.36 $ 15.38 $ 15.37 $ 15.39 $ 15.43 $ 15.43 $ 15.46 $ 15.40 $ 15.40 $ 15.40 $ 15.43 $ 15.47 $ 15.54 $ 15.56 $ 15.53 $ 15.48 $ 15.56 $ 15.53 $ 15.55 $ 15.67 $ 15.65 $ 15.64 $ 15.67 $ 15.72 $ 15.73 $ 15.76 $ 15.74 $ 15.74 $ 15.78 $ 15.70 $ 15.80 $ 15.79 $ 15.82 $ 15.78 $ 15.82 $ 15.65 $ 15.71 $ 15.55 $ 15.52 $ 15.53 $ 15.56 $ 15.72 $ 15.68 $ 15.70 $ 15.63 $ 15.75 $ 15.80 $ 15.83 $ 15.80 10/31/06 $ 15.88 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 18 Shareholder MEETING REPORT The Annual Shareholder Meeting was held on August 1, 2006, at The Northern Trust Company, 50 South LaSalle Street, Chicago, Illinois 60675.
NPP NMA NMO - ------------------------------------------------------------------------------------------------------------------------------------ Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting voting shares 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 52,507,004 -- 34,217,676 -- 40,035,219 -- Withhold 510,531 -- 221,265 -- 284,538 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,017,535 -- 34,438,941 -- 40,319,757 -- ==================================================================================================================================== Lawrence H. Brown For 52,488,387 -- 34,224,946 -- 40,044,414 -- Withhold 529,148 -- 213,995 -- 275,343 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,017,535 -- 34,438,941 -- 40,319,757 -- ==================================================================================================================================== Jack B. Evans For 52,505,508 -- 34,207,335 -- 40,037,349 -- Withhold 512,027 -- 231,606 -- 282,408 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,017,535 -- 34,438,941 -- 40,319,757 -- ==================================================================================================================================== William C. Hunter For 52,510,395 -- 34,214,420 -- 40,036,552 -- Withhold 507,140 -- 224,521 -- 283,205 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,017,535 -- 34,438,941 -- 40,319,757 -- ==================================================================================================================================== David J. Kundert For 52,511,866 -- 34,211,931 -- 40,036,283 -- Withhold 505,669 -- 227,010 -- 283,474 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,017,535 -- 34,438,941 -- 40,319,757 -- ==================================================================================================================================== William J. Schneider For -- 16,963 -- 12,490 -- 14,056 Withhold -- 1 -- 6 -- 25 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 16,964 -- 12,496 -- 14,081 ==================================================================================================================================== Timothy R. Schwertfeger For -- 16,960 -- 12,489 -- 14,056 Withhold -- 4 -- 7 -- 25 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 16,964 -- 12,496 -- 14,081 ==================================================================================================================================== Judith M. Stockdale For 52,517,699 -- 34,239,485 -- 40,014,158 -- Withhold 499,836 -- 199,456 -- 305,599 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,017,535 -- 34,438,941 -- 40,319,757 -- ==================================================================================================================================== Eugene S. Sunshine For 52,505,605 -- 34,217,653 -- 40,039,911 -- Withhold 511,930 -- 221,288 -- 279,846 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,017,535 -- 34,438,941 -- 40,319,757 -- ====================================================================================================================================
19 Shareholder MEETING REPORT (continued)
NAD NXZ NZF - ------------------------------------------------------------------------------------------------------------------------------------ Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting voting shares 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 37,392,215 -- 28,036,570 -- 38,043,001 -- Withhold 289,959 -- 108,803 -- 325,299 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 37,682,174 -- 28,145,373 -- 38,368,300 -- ==================================================================================================================================== Lawrence H. Brown For 37,375,705 -- 28,031,579 -- 38,023,161 -- Withhold 306,469 -- 113,794 -- 345,139 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 37,682,174 -- 28,145,373 -- 38,368,300 -- ==================================================================================================================================== Jack B. Evans For 37,389,171 -- 28,043,178 -- 38,042,068 -- Withhold 293,003 -- 102,195 -- 326,232 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 37,682,174 -- 28,145,373 -- 38,368,300 -- ==================================================================================================================================== William C. Hunter For 37,391,817 -- 28,045,340 -- 38,045,034 -- Withhold 290,357 -- 100,033 -- 323,266 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 37,682,174 -- 28,145,373 -- 38,368,300 -- ==================================================================================================================================== David J. Kundert For 37,387,918 -- 28,045,340 -- 38,046,584 -- Withhold 294,256 -- 100,033 -- 321,716 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 37,682,174 -- 28,145,373 -- 38,368,300 -- ==================================================================================================================================== William J. Schneider For -- 11,080 -- 8,307 -- 11,363 Withhold -- 32 -- 65 -- 14 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,112 -- 8,372 -- 11,377 ==================================================================================================================================== Timothy R. Schwertfeger For -- 11,083 -- 8,307 -- 11,363 Withhold -- 29 -- 65 -- 14 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,112 -- 8,372 -- 11,377 ==================================================================================================================================== Judith M. Stockdale For 37,398,427 -- 28,034,169 -- 38,039,635 -- Withhold 283,747 -- 111,204 -- 328,665 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 37,682,174 -- 28,145,373 -- 38,368,300 -- ==================================================================================================================================== Eugene S. Sunshine For 37,393,127 -- 28,043,432 -- 38,045,784 -- Withhold 289,047 -- 101,941 -- 322,516 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 37,682,174 -- 28,145,373 -- 38,368,300 -- ====================================================================================================================================
20 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 (the "Funds") as of October 31, 2006, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen 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, 2006, the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Chicago, Illinois December 14, 2006 21 Nuveen Performance Plus Municipal Fund, Inc. (NPP) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.1% (0.7% OF TOTAL INVESTMENTS) Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 1997A: $ 3,640 5.625%, 2/01/22 (Pre-refunded 2/01/07) - FGIC Insured 2/07 at 101.00 AAA $ 3,694,564 3,820 5.375%, 2/01/27 (Pre-refunded 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 3,837,075 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 1997A: 1,435 5.625%, 2/01/22 - FGIC Insured 2/07 at 101.00 AAA 1,456,138 1,505 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 1,510,990 - ------------------------------------------------------------------------------------------------------------------------------------ 10,400 Total Alabama 10,498,767 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.3% (0.9% OF TOTAL INVESTMENTS) 1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,084,650 Series 2002B, 5.250%, 7/01/22 (Pre-refunded 7/01/12) Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport Revenue Bonds, Series 2002B: 5,365 5.750%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AAA 5,867,808 5,055 5.750%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AAA 5,534,113 - ------------------------------------------------------------------------------------------------------------------------------------ 11,420 Total Arizona 12,486,571 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.7% (0.5% OF TOTAL INVESTMENTS) 5,080 Independence County, Arkansas, Hydroelectric Power Revenue Bonds, 5/13 at 100.00 A 5,331,257 Series 2003, 5.350%, 5/01/28 - ACA Insured 1,000 Washington County, Arkansas, Hospital Revenue Bonds, Washington 2/15 at 100.00 BBB 1,027,410 Regional Medical Center, Series 2005A, 5.000%, 2/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ 6,080 Total Arkansas 6,358,667 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 14.9% (10.0% OF TOTAL INVESTMENTS) 3,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 2,840,285 Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured 11,000 Anaheim Public Finance Authority, California, Subordinate Lease No Opt. Call AAA 6,131,400 Revenue Bonds, Public Improvement Project, Series 1997C, 0.000%, 9/01/20 - FSA Insured California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 4,000 6.000%, 5/01/15 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 4,532,640 3,175 5.375%, 5/01/22 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 3,500,914 3,365 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 3,459,422 Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 California Health Facilities Financing Authority, Revenue Bonds, Kaiser Permanante System, Series 2006: 5,000 5.000%, 4/01/37 4/16 at 100.00 A+ 5,217,300 7,000 5.250%, 4/01/39 4/16 at 100.00 A+ 7,465,570 2,380 California Infrastructure Economic Development Bank, Revenue 10/11 at 101.00 A- 2,490,599 Bonds, J. David Gladstone Institutes, Series 2001, 5.250%, 10/01/34 5,300 California, General Obligation Bonds, Series 2004, 5.100%, 2/01/34 2/09 at 100.00 A+ 5,405,629 5,000 California, General Obligation Bonds, Series 2005, 5.000%, 3/01/31 3/16 at 100.00 A+ 5,296,050 6,435 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call AAA 7,608,165 6.000%, 4/01/16 - AMBAC Insured 5,000 Coast Community College District, Orange County, California, 8/18 at 100.00 AAA 3,788,900 General Obligation Bonds, Series 2006C, 0.000%, 8/01/32 - FSA Insured 2,990 East Bay Municipal Utility District, Alameda and Contra Costa 6/21 at 100.00 AAA 2,991,615 Counties, California, Water System Subordinated Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 - FGIC Insured
22
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 10,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB $ 11,412,900 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 8,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 A 8,274,960 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 5.000%, 6/01/45 1,000 Mt. Diablo Hospital District, California, Insured Hospital 12/06 at 100.00 AAA 1,020,620 Revenue Bonds, Series 1993A, 5.125%, 12/01/23 - AMBAC Insured (ETM) 13,450 Ontario Redevelopment Financing Authority, San Bernardino County, No Opt. Call AAA 17,010,887 California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.200%, 8/01/17 - MBIA Insured 14,535 Palmdale Community Redevelopment Agency, California, Residential No Opt. Call AAA 15,300,413 Mortgage Revenue Refunding Bonds, Series 1991A, 7.150%, 2/01/10 (ETM) 2,325 Palmdale Community Redevelopment Agency, California, Restructured No Opt. Call AAA 3,095,110 Single Family Mortgage Revenue Bonds, Series 1986D, 8.000%, 4/01/16 (Alternative Minimum Tax) (ETM) 2,000 San Francisco Airports Commission, California, Revenue Bonds, 5/09 at 101.00 AAA 2,064,620 San Francisco International Airport, Second Series 1999, Issue 23B, 5.125%, 5/01/30 - FGIC Insured 2,000 San Francisco Airports Commission, California, Revenue Refunding 5/11 at 100.00 AAA 2,101,060 Bonds, San Francisco International Airport, Second Series 2001, Issue 27B, 5.125%, 5/01/26 - FGIC Insured 3,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 841,050 California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured 15,745 Walnut Valley Unified School District, Los Angeles County, 8/11 at 103.00 AAA 18,650,424 California, General Obligation Refunding Bonds, Series 1997A, 7.200%, 2/01/16 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 136,200 Total California 140,500,533 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.2% (4.1% OF TOTAL INVESTMENTS) 5,240 Adams 12 Five Star Schools, Adams County, Colorado, General 12/15 at 100.00 AAA 5,618,328 Obligation Bonds, Series 2005, 5.000%, 12/15/24 - FSA Insured 3,000 Colorado Educational and Cultural Facilities Authority, Charter 8/14 at 100.00 AAA 3,216,480 School Revenue Bonds, Peak-to-Peak Charter School, Series 2004, 5.250%, 8/15/34 - XLCA Insured 5,860 Colorado Health Facilities Authority, Revenue Refunding Bonds, 9/11 at 100.00 AA(4) 6,278,404 Catholic Health Initiatives, Series 2001, 5.250%, 9/01/21 (Pre-refunded 9/01/11) 7,575 Denver City and County, Colorado, Airport System Revenue Bonds, 11/07 at 101.00 AAA 7,760,890 Series 1997E, 5.250%, 11/15/23 - MBIA Insured 20,000 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 21,642,799 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 (Pre-refunded 12/01/13) - XLCA Insured 10,615 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 5,631,045 Series 1997B, 0.000%, 9/01/21 - MBIA Insured 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 3,183,600 Series 2000B, 0.000%, 9/01/32 - MBIA Insured 755 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 808,235 Bonds, Series 2004, 5.000%, 12/15/22 - FSA Insured 4,125 Municipal Subdistrict Northern Colorado Water District, Revenue 12/07 at 101.00 AAA 4,234,478 Bonds, Series 1997G, 5.250%, 12/01/15 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 67,170 Total Colorado 58,374,259 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 2.0% (1.3% OF TOTAL INVESTMENTS) 6,110 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB 6,590,429 Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 5,590 District of Columbia, General Obligation Bonds, Series 1999B, 6/09 at 101.00 AAA 5,890,630 5.500%, 6/01/13 - FSA Insured 6,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 6,224,040 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.250%, 10/01/10 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 17,700 Total District of Columbia 18,705,099 - ------------------------------------------------------------------------------------------------------------------------------------
23 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 6.3% (4.2% OF TOTAL INVESTMENTS) Broward County Housing Finance Authority, Florida, Multifamily Housing Revenue Bonds, Venice Homes Apartments, Series 2001A: $ 1,545 5.700%, 1/01/32 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA $ 1,583,532 1,805 5.800%, 1/01/36 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA 1,854,547 5,300 Escambia County Health Facilities Authority, Florida, Revenue No Opt. Call AA 5,823,375 Bonds, Ascension Health Credit Group, Series 2003A, 5.250%, 11/15/14 2,360 Florida Housing Finance Corporation, Homeowner Mortgage Revenue 1/10 at 100.00 AAA 2,441,137 Bonds, Series 2000-11, 5.850%, 1/01/22 - FSA Insured (Alternative Minimum Tax) 10,050 Florida State Board of Education, Full Faith and Credit Public 6/10 at 101.00 AAA 10,835,207 Education Capital Outlay Refunding Bonds, Series 1999D, 5.750%, 6/01/22 7,000 Hillsborough County Aviation Authority, Florida, Revenue Bonds, 10/13 at 100.00 AAA 7,543,620 Tampa International Airport, Series 2003A, 5.250%, 10/01/17 - MBIA Insured (Alternative Minimum Tax) 10,000 JEA, Florida, Electric System Revenue Bonds, Series 2006-3A, 4/15 at 100.00 AAA 10,512,700 5.000%, 10/01/41 - FSA Insured 10,750 Martin County Industrial Development Authority, Florida, 12/06 at 100.00 BB+ 10,789,560 Industrial Development Revenue Bonds, Indiantown Cogeneration LP, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax) 2,570 Miami-Dade County Housing Finance Authority, Florida, Multifamily 6/11 at 100.00 AAA 2,680,484 Mortgage Revenue Bonds, Country Club Villas II Project, Series 2001-1A, 5.850%, 1/01/37 - FSA Insured (Alternative Minimum Tax) 3,500 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/15 at 100.00 AAA 3,648,925 International Airport, Series 2005A, 5.000%, 10/01/37 - XLCA Insured (Alternative Minimum Tax) 1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 AA 1,851,232 Development District, Special Assessment Bonds, Commercial Project, Series 2002A, 5.625%, 5/01/32 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ 56,580 Total Florida 59,564,319 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 3.1% (2.2% OF TOTAL INVESTMENTS) 4,920 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 5,276,356 Series 2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) - FGIC Insured 5,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, No Opt. Call AAA 5,814,150 Series 1999A, 5.500%, 11/01/22 - FGIC Insured 2,000 George L. Smith II World Congress Center Authority, Atlanta, 7/10 at 101.00 AAA 2,118,900 Georgia, Revenue Refunding Bonds, Domed Stadium Project, Series 2000, 5.500%, 7/01/20 - MBIA Insured (Alternative Minimum Tax) 15,000 Private Colleges and Universities Authority, Georgia, Revenue 11/09 at 101.00 AA(4) 15,997,950 Bonds, Emory University, Series 1999A, 5.500%, 11/01/25 (Pre-refunded 11/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ 26,920 Total Georgia 29,207,356 - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.1% (0.1% OF TOTAL INVESTMENTS) 665 Idaho Housing and Finance Association, Single Family Mortgage 1/10 at 100.00 A1 679,750 Bonds, Series 2000D, 6.200%, 7/01/14 (Alternative Minimum Tax) 395 Idaho Housing and Finance Association, Single Family Mortgage 7/10 at 100.00 Aa2 407,024 Bonds, Series 2000G-2, 5.950%, 7/01/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,060 Total Idaho 1,086,774 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 21.9% (14.7% OF TOTAL INVESTMENTS) 10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 5,790,500 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 5,507,900 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/20 - FGIC Insured Chicago, Illinois, General Obligation Bonds, City Colleges, Series 1999: 32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AAA 17,656,505 32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AAA 17,060,274 3,000 Chicago, Illinois, General Obligation Bonds, Library Projects, 1/08 at 102.00 AAA 3,133,440 Series 1997, 5.750%, 1/01/17 (Pre-refunded 1/01/08) - FGIC Insured 9,145 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1996A, 1/07 at 101.00 AAA 9,265,257 5.500%, 1/01/29 - MBIA Insured
24
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 1,665 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA $ 1,758,240 O'Hare International Airport, Series 2005A, 5.000%, 1/01/33 - FGIC Insured DuPage County Forest Preserve District, Illinois, General Obligation Bonds, Series 2000: 8,000 0.000%, 11/01/18 No Opt. Call AAA 4,869,600 15,285 0.000%, 11/01/19 No Opt. Call AAA 8,881,655 4,000 Illinois Health Facilities Authority, FHA-Insured Mortgage 8/13 at 100.00 AAA 4,178,920 Revenue Refunding Bonds, Sinai Health System, Series 2003, 5.150%, 2/15/37 1,090 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/12 at 100.00 A- 1,173,494 Hospital, Series 2002A, 5.750%, 7/01/29 3,000 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 3,310,050 Hospital, Series 2003, 6.000%, 7/01/33 4,580 Illinois Health Facilities Authority, Revenue Bonds, Midwest Care 8/10 at 102.00 Aaa 4,970,353 Center IX Inc., Series 2000, 6.250%, 8/20/35 2,645 Illinois Health Facilities Authority, Revenue Bonds, Silver Cross 8/09 at 101.00 A 2,737,866 Hospital and Medical Centers, Series 1999, 5.250%, 8/15/15 (Mandatory put 4/01/08) 7,250 Kane, Kendall, LaSalle, and Will Counties, Illinois, Community 12/13 at 57.71 AAA 3,037,025 College District 516, General Obligation Bonds, Series 2005E, 0.000%, 12/15/24 - FGIC Insured 5,000 Kane, McHenry, Cook and DeKalb Counties Community Unit School 12/11 at 100.00 AAA 5,438,750 District 300, Carpentersville, Illinois, General Obligation Bonds, Series 2000, 5.500%, 12/01/19 (Pre-refunded 12/01/11) - MBIA Insured 3,700 Libertyville, Illinois, Affordable Housing Revenue Bonds, Liberty 11/09 at 100.00 A3 3,819,140 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 6,487,980 Obligation Bonds, Series 2001A, 5.625%, 2/01/21 (Pre-refunded 2/01/11) - FGIC Insured 5,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue 6/12 at 101.00 AAA 5,365,550 Bonds, McCormick Place Expansion Project, Series 2002A, 5.250%, 6/15/42 - MBIA Insured 10,650 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 14,322,972 Bonds, McCormick Place Hospitality Facility, Series 1996A, 7.000%, 7/01/26 (ETM) 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 5,699,690 16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AAA 9,149,457 23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 11,804,438 13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 5,938,920 5,100 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 5,989,287 Refunding Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%, 12/15/23 - FGIC Insured 5,180 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 6,189,945 Refunding Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%, 12/15/23 - FGIC Insured (ETM) 17,865 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 21,559,660 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 Bonds, Villa 10/09 at 102.00 AAA 6,573,790 Vianney, Series 1999A, 6.450%, 10/01/29 10,000 Will County Community High School District 210 Lincoln-Way, No Opt. Call Aaa 4,955,700 Illinois, General Obligation Bonds, Series 2006, 0.000%, 1/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 281,605 Total Illinois 206,626,358 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 6.6% (4.4% OF TOTAL INVESTMENTS) 2,465 Danville Multi-School Building Corporation, Indiana, First 7/11 at 100.00 AAA 2,626,827 Mortgage Refunding Bonds, Series 2001, 5.250%, 7/15/18 - AMBAC Insured 14,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 15,103,900 Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 (Pre-refunded 8/15/10) - MBIA Insured 2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 2,915,750 Refunding Bonds, Columbus Regional Hospital, Series 1993, 7.000%, 8/15/15 - FSA Insured
25 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) Indiana Health Facility Financing Authority, Revenue Bonds, Ancilla Systems Inc. Obligated Group, Series 1997: $ 15,380 5.250%, 7/01/17 - MBIA Insured (ETM) 7/07 at 101.00 AAA $ 15,694,521 4,320 5.250%, 7/01/22 - MBIA Insured (ETM) 7/07 at 101.00 AAA 4,406,486 2,250 5.250%, 7/01/22 - MBIA Insured (ETM) 7/07 at 101.00 AAA 2,295,045 2,000 Indiana Health Facility Financing Authority, Revenue Bonds, 5/15 at 100.00 AAA 2,100,980 Community Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 - AMBAC Insured 6,715 Indiana Transportation Finance Authority, Highway Revenue Bonds, 12/10 at 100.00 AA 7,124,346 Series 2000, 5.375%, 12/01/25 1,285 Indiana Transportation Finance Authority, Highway Revenue Bonds, 12/10 at 100.00 AA(4) 1,373,626 Series 2000, 5.375%, 12/01/25 (Pre-refunded 12/01/10) 3,105 Indiana University, Student Fee Revenue Bonds, Series 2003O, 8/13 at 100.00 AAA 3,371,626 5.250%, 8/01/20 - FGIC Insured 1,000 Marion County Convention and Recreational Facilities Authority, 6/11 at 100.00 AAA 1,052,800 Indiana, Excise Taxes Lease Rental Revenue Refunding Senior Bonds, Series 2001A, 5.000%, 6/01/21 - MBIA Insured 2,395 Shelbyville Central Renovation School Building Corporation, 7/15 at 100.00 AAA 2,395,719 Indiana, First Mortgage Bonds, Series 2005, 4.375%, 7/15/26 - MBIA Insured 1,800 Sunman Dearborn High School Building Corporation, Indiana, First 1/15 at 100.00 AAA 1,907,298 Mortgage Bonds, Series 2005, 5.000%, 7/15/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 59,215 Total Indiana 62,368,924 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.7% (0.5% OF TOTAL INVESTMENTS) 1,500 Iowa Finance Authority, Health Facility Revenue Bonds, Care 7/16 at 100.00 BBB- 1,588,080 Initiatives Project, Series 2006A, 5.500%, 7/01/21 5,000 Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed 6/11 at 101.00 AAA 5,449,150 Revenue Bonds, Series 2001B, 5.600%, 6/01/35 (Pre-refunded 6/01/11) - ------------------------------------------------------------------------------------------------------------------------------------ 6,500 Total Iowa 7,037,230 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.3% (0.9% OF TOTAL INVESTMENTS) 3,790 Kansas Department of Transportation, Highway Revenue Bonds, 3/14 at 100.00 AAA 4,029,869 Series 2004A, 5.000%, 3/01/23 5,790 Sedgwick County Unified School District 259, Wichita, Kansas, 9/10 at 100.00 AA 5,572,817 General Obligation Bonds, Series 2000, 3.500%, 9/01/17 3,200 Wyandotte County Unified School District 500, Kansas, General 9/11 at 100.00 AAA 3,176,864 Obligation Bonds, Series 2001, 4.000%, 9/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 12,780 Total Kansas 12,779,550 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.4% (0.3% OF TOTAL INVESTMENTS) 3,700 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 3,789,799 Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997A, 6.250%, 5/15/26 (Pre-refunded 5/15/07) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.0% (2.0% OF TOTAL INVESTMENTS) 1,020 East Baton Rouge Mortgage Finance Authority, Louisiana, GNMA/FNMA 10/07 at 102.00 Aaa 1,041,053 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 4,365,200 Series 2004, 5.250%, 11/01/25 - MBIA Insured 4,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 4,968,525 General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA 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 10,502,600 6,680 5.875%, 5/15/39 5/11 at 101.00 BBB 7,114,801 - ------------------------------------------------------------------------------------------------------------------------------------ 26,350 Total Louisiana 27,992,179 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 0.6% (0.4% OF TOTAL INVESTMENTS) 5,680 Portland, Maine, Airport Revenue Bonds, Series 2003A, 5.000%, 7/13 at 100.00 AAA 5,939,860 7/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------
26
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.7% (1.1% OF TOTAL INVESTMENTS) $ 7,720 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AAA $ 8,145,990 Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.125%, 3/01/20 - AMBAC Insured (Alternative Minimum Tax) 7,090 Takoma Park, Maryland, Hospital Facilities Revenue Refunding and No Opt. Call AAA 7,801,482 Improvement Bonds, Washington Adventist Hospital, Series 1995, 6.500%, 9/01/12 - FSA Insured (ETM) - ------------------------------------------------------------------------------------------------------------------------------------ 14,810 Total Maryland 15,947,472 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 5.7% (3.8% OF TOTAL INVESTMENTS) 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 4,207,080 5,625 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 5,916,206 1,190 Massachusetts Educational Finance Authority, Student Loan Revenue 12/09 at 101.00 AAA 1,199,794 Refunding Bonds, Series 2000G, 5.700%, 12/01/11 - MBIA Insured (Alternative Minimum Tax) 8,730 Massachusetts Health and Educational Facilities Authority, Revenue 10/15 at 100.00 AAA 9,370,258 Bonds, Berkshire Health System, Series 2005F, 5.000%, 10/01/19 - AGC Insured 1,530 Massachusetts Health and Educational Facilities Authority, Revenue 7/08 at 101.00 Aaa 1,549,676 Bonds, Southcoast Health System Obligated Group, Series 1998A, 4.750%, 7/01/27 - MBIA Insured 5,745 Massachusetts Industrial Finance Agency, Resource Recovery Revenue 12/08 at 102.00 BBB 5,937,400 Refunding Bonds, Ogden Haverhill Project, Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax) 10,150 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 10,369,951 Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured 890 Massachusetts, General Obligation Bonds, Consolidated Loan, Series 11/12 at 100.00 AA(4) 965,365 2002C, 5.250%, 11/01/30 (Pre-refunded 11/01/12) Massachusetts, General Obligation Bonds, Consolidated Loan, Series 2002E: 1,255 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 1,366,005 3,745 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 4,076,245 8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AAA 9,024,620 Massachusetts, Lease Revenue Bonds, Series 2000, 5.375%, 6/15/33 (Pre-refunded 6/15/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 51,360 Total Massachusetts 53,982,600 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 6.7% (4.5% OF TOTAL INVESTMENTS) 17,000 Birmingham City School District, Oakland County, Michigan, School 11/07 at 100.00 AAA 17,113,900 Building and Site Bonds, Series 1998, 4.750%, 11/01/24 - FSA Insured 5,000 Detroit, Michigan, Second Lien Sewerage Disposal System Revenue 7/15 at 100.00 AAA 5,271,050 Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured 3,000 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/07 at 101.00 AAA 3,058,470 Series 1997A, 5.000%, 7/01/21 (Pre-refunded 7/01/07) - MBIA Insured 4,030 Hancock Hospital Finance Authority, Michigan, FHA-Insured Mortgage 8/08 at 100.00 AAA 4,142,115 Hospital Revenue Bonds, Portage Health System Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured 1,500 Michigan State Building Authority, Revenue Bonds, Facilities 10/11 at 100.00 AA- 1,574,355 Program, Series 2001I, 5.000%, 10/15/24 5,000 Michigan State Building Authority, Revenue Refunding Bonds, 10/13 at 100.00 AAA 5,249,800 Facilities Program, Series 2003II, 5.000%, 10/15/29 - MBIA Insured 7,115 Michigan State Hospital Finance Authority, Hospital Revenue 3/13 at 100.00 A1(4) 7,843,647 Refunding Bonds, Henry Ford Health System, Series 2003A, 5.500%, 3/01/16 (Pre-refunded 3/01/13) 5,000 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 5,349,850 Refunding Bonds, Sisters of Mercy Health Corporation, Series 1993P, 5.375%, 8/15/14 - MBIA Insured (ETM) 3,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 3,165,660 Pollution Control Revenue Refunding Bonds, Detroit Edison Company, Series 1999A, 5.550%, 9/01/29 - MBIA Insured (Alternative Minimum Tax)
27 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA $ 10,383,300 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/16 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 60,645 Total Michigan 63,152,147 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 3.0% (2.0% OF TOTAL INVESTMENTS) 3,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 3,154,200 Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/26 - FGIC Insured 20,165 St. Paul Housing and Redevelopment Authority, Minnesota, Sales Tax 11/15 at 103.00 AAA 25,063,077 Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 23,165 Total Minnesota 28,217,277 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.3% (0.9% OF TOTAL INVESTMENTS) 9,750 Mississippi Business Finance Corporation, Pollution Control 4/07 at 100.00 BBB- 9,780,323 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 2,475 Mississippi Hospital Equipment and Facilities Authority, Revenue 9/14 at 100.00 N/R 2,537,717 Bonds, Baptist Memorial Healthcare, Series 2004B-1, 5.000%, 9/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ 12,225 Total Mississippi 12,318,040 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.6% (1.1% OF TOTAL INVESTMENTS) 6,350 Kansas City, Missouri, Airport Revenue Bonds, General Improvement 9/12 at 100.00 AAA 6,825,615 Projects, Series 2003B, 5.250%, 9/01/17 - FGIC Insured 1,845 Missouri Health and Educational Facilities Authority, Revenue 5/13 at 100.00 AA 1,979,906 Bonds, BJC Health System, Series 2003, 5.250%, 5/15/18 3,815 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 4,111,883 Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured 2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,104,300 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 14,010 Total Missouri 15,021,704 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.7% (0.4% OF TOTAL INVESTMENTS) 610 Montana Board of Housing, Single Family Mortgage Bonds, Series 6/07 at 101.50 AA+ 622,267 1997A-1, 6.150%, 6/01/30 (Alternative Minimum Tax) 740 Montana Board of Housing, Single Family Mortgage Bonds, Series 12/09 at 100.00 AA+ 756,532 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 4,795 Montana Higher Education Student Assistance Corporation, Student 12/08 at 101.00 A2 4,916,505 Loan Revenue Bonds, Subordinate Series 1998B, 5.500%, 12/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 6,145 Total Montana 6,295,304 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.1% (0.1% OF TOTAL INVESTMENTS) 1,430 Nebraska Investment Finance Authority, Single Family Housing 9/10 at 100.00 AAA 1,442,641 Revenue Bonds, Series 2000E, 5.850%, 9/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 2.4% (1.6% OF TOTAL INVESTMENTS) 10,900 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 11,955,011 Series 2002C, 5.500%, 6/15/19 (Pre-refunded 6/15/12) - MBIA Insured 5,000 Clark County, Nevada, General Obligation Bank Bonds, Southern 6/11 at 100.00 AAA 5,368,050 Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19 (Pre-refunded 6/01/11) - FGIC Insured 4,980 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 5,190,505 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 20,880 Total Nevada 22,513,566 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 1.5% (1.0% OF TOTAL INVESTMENTS) 3,265 New Hampshire Health and Education Facilities Authority, Revenue 1/15 at 100.00 A 3,374,214 Bonds, Southern New Hampshire University, Series 2005, 5.000%, 1/01/30 - ACA Insured
28
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE (continued) New Hampshire Housing Finance Authority, FHLMC Multifamily Housing Remarketed Revenue Bonds, Countryside LP, Series 1994: $ 3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa $ 3,919,408 6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,290,861 - ------------------------------------------------------------------------------------------------------------------------------------ 13,935 Total New Hampshire 14,584,483 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 8.9% (6.0% OF TOTAL INVESTMENTS) 3,000 New Jersey Economic Development Authority, Transportation Sublease 5/09 at 100.00 AAA 3,122,820 Revenue Bonds, Light Rail Transit System, Series 1999A, 5.250%, 5/01/17 (Pre-refunded 5/01/09) - FSA Insured 2,490 New Jersey Higher Education Assistance Authority, Student Loan 6/10 at 101.00 AAA 2,541,120 Revenue Bonds, Series 2000A, 6.000%, 6/01/13 - MBIA Insured (Alternative Minimum Tax) 8,750 New Jersey Transportation Trust Fund Authority, Transportation 6/07 at 102.00 AAA 9,014,600 System Bonds, Series 1996B, 5.250%, 6/15/16 (Pre-refunded 6/15/07) 4,500 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 5,197,095 System Bonds, Series 2001C, 5.500%, 12/15/18 - FSA Insured 9,250 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 10,275,178 System Bonds, Series 2003C, 5.500%, 6/15/23 (Pre-refunded 6/15/13) New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2006C: 35,000 0.000%, 12/15/29 - FSA Insured No Opt. Call AAA 13,028,050 10,000 0.000%, 12/15/30 - FGIC Insured No Opt. Call AAA 3,566,600 10,000 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 10,697,300 5.000%, 1/01/20 - FSA Insured 13,470 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 BBB 14,316,455 Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 4,450 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 BBB 5,078,741 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 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,369,933 3,335 5.500%, 9/01/22 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,567,850 - ------------------------------------------------------------------------------------------------------------------------------------ 107,395 Total New Jersey 83,775,742 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 9.9% (6.6% OF TOTAL INVESTMENTS) 5,500 Dormitory Authority of the State of New York, FHA-Insured Mortgage 2/14 at 100.00 AAA 5,788,090 Revenue Bonds, Kaleida Health, Series 2004, 5.050%, 2/15/25 35 Dormitory Authority of the State of New York, Improvement Revenue 2/08 at 100.00 AAA 35,747 Bonds, Mental Health Services Facilities, Series 1996B, 5.375%, 2/15/26 - MBIA Insured 2,070 Dormitory Authority of the State of New York, Insured Revenue 7/08 at 101.00 AAA 2,155,367 Bonds, 853 Schools Program, Gateway-Longview Inc., Series 1998A, 5.500%, 7/01/18 - AMBAC Insured 2,250 Dormitory Authority of the State of New York, Lease Revenue Bonds, 7/09 at 101.00 AAA 2,386,080 State University Dormitory Facilities, Series 1999C, 5.500%, 7/01/29 (Pre-refunded 7/01/09) - MBIA Insured Dormitory Authority of the State of New York, Revenue Bonds, Marymount Manhattan College, Series 1999: 1,580 6.375%, 7/01/13 - RAAI Insured 7/09 at 101.00 AA 1,692,701 9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 AA 9,858,824 1,500 Dormitory Authority of the State of New York, Revenue Bonds, 8/07 at 101.00 AAA 1,535,565 St. Barnabas Hospital, Series 1997, 5.450%, 8/01/35 - AMBAC Insured 3,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 3,122,100 Resolution Consolidated Revenue Bonds, City University System, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded 1/01/08) - FSA Insured 17,000 Dormitory Authority of the State of New York, Third General 7/09 at 101.00 AAA 18,028,160 Resolution Consolidated Revenue Bonds, City University System, Series 1999-1, 5.500%, 7/01/29 (Pre-refunded 7/01/09) - FSA Insured 1,500 Hempstead Industrial Development Agency, New York, Resource 12/10 at 100.00 BB+ 1,540,335 Recovery Revenue Refunding Bonds, American Ref-Fuel Company of Hempstead LP, Series 2001, 5.000%, 12/01/10 (Mandatory put 6/01/10)
29 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 13,220 Metropolitan Transportation Authority, New York, Dedicated Tax 11/12 at 100.00 AAA $ 14,437,298 Fund Bonds, Series 2002A, 5.500%, 11/15/26 - FSA Insured 1,380 New York City Municipal Water Finance Authority, New York, Water 9/07 at 100.00 AAA 1,395,925 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, Water 6/09 at 101.00 AA+(4) 10,656,400 and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/30 (Pre-refunded 6/15/09) 7,810 New York City Transitional Finance Authority, New York, Future Tax 8/09 at 101.00 AAA 8,348,890 Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded 8/15/09) 5 New York City, New York, General Obligation Bonds, Fiscal Series 2/07 at 100.00 AA- 5,058 1987D, 8.500%, 8/01/08 6,300 New York City, New York, General Obligation Bonds, Fiscal Series 5/10 at 101.00 AAA 6,876,954 2000A, 6.250%, 5/15/26 - FSA Insured 3,000 New York State Energy Research and Development Authority, 9/08 at 102.00 AAA 3,170,940 Pollution Control Revenue Bonds, Rochester Gas and Electric Corporation, Series 1998A, 5.950%, 9/01/33 - MBIA Insured (Alternative Minimum Tax) 2,320 New York State Tobacco Settlement Financing Corporation, Tobacco 6/10 at 100.00 AA- 2,456,068 Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003A-1, 5.500%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 87,705 Total New York 93,490,502 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.8% (0.5% OF TOTAL INVESTMENTS) 4,900 Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/15 at 100.00 AA 5,106,535 Healthcare System Revenue Bonds, DBA Carolinas Healthcare System, Series 2005A, 5.000%, 1/15/45 2,000 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/08 at 102.00 AAA 2,066,360 Bonds, Series 1998A, 5.000%, 1/01/20 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,900 Total North Carolina 7,172,895 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.6% (2.4% OF TOTAL INVESTMENTS) 7,500 Cleveland, Ohio, Airport System Revenue Bonds, Series 2000A, 1/10 at 101.00 AAA 7,728,150 5.000%, 1/01/31 - FSA Insured 3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,811,148 Initiatives, Series 2004A, 5.000%, 5/01/30 2,125 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 7/09 at 100.00 Aaa 2,142,170 Program Residential Mortgage Revenue Bonds, Series 1999C, 5.750%, 9/01/30 (Alternative Minimum Tax) 6,400 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102.00 N/R 6,493,952 Bonds, Bay Shore Power, Series 1998A, 5.875%, 9/01/20 (Alternative Minimum Tax) 13,300 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/09 at 102.00 N/R 13,791,435 Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 32,975 Total Ohio 33,966,855 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.3% (0.2% OF TOTAL INVESTMENTS) 3,400 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 6/09 at 100.00 B 3,451,544 American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Mandatory put 12/01/08) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 1.0% (0.7% OF TOTAL INVESTMENTS) 9,150 Port of St. Helens, Oregon, Pollution Control Revenue Bonds, No Opt. Call Baa1 9,204,992 Portland General Electric Company, Series 1985B, 4.800%, 6/01/10 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.4% (2.3% 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 1,603,625 3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,528,781 3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,463,763 3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 1,340,244 4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,722,662 2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 1,087,352 3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 1,139,730
30
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 3,415 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- $ 3,596,132 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, Revenue Bonds, Catholic 11/08 at 102.00 AAA 11,353,870 Health East, 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) 1/07 at 100.00 B+ 2,100,042 4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/07 at 100.00 B+ 4,500,135 25 Pennsylvania Economic Development Financing Authority, Senior Lien No Opt. Call N/R(4) 25,124 Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994B, 6.750%, 1/01/07 (Alternative Minimum Tax) (ETM) 600 Pennsylvania Economic Development Financing Authority, Subordinate 1/07 at 100.00 N/R 599,982 Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994C, 6.875%, 1/01/11 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 44,125 Total Pennsylvania 32,061,442 - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.1% (0.1% OF TOTAL INVESTMENTS) 1,250 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/10 at 101.00 AAA 1,362,262 Bonds, Series 2000B, 5.875%, 7/01/21 (Pre-refunded 7/01/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.2% (0.8% OF TOTAL INVESTMENTS) 2,000 Kent County Water Authority, Rhode Island, General Revenue Bonds, 7/12 at 100.00 AAA 2,113,540 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 1,345,025 1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 AA 1,150,826 7,000 Rhode Island Housing and Mortgage Finance Corporation, 10/14 at 100.00 AA+ 7,043,540 Homeownership Opportunity Bond Program, Series 50A, 4.650%, 10/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 11,340 Total Rhode Island 11,652,931 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 4.2% (2.9% OF TOTAL INVESTMENTS) 2,625 Medical University Hospital Authority, South Carolina, FHA-Insured 8/14 at 100.00 AAA 2,821,665 Mortgage Revenue Bonds, Series 2004A, 5.250%, 2/15/25 - MBIA Insured 22,855 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 7,815,267 Bonds, Series 2004A-2, 0.000%, 1/01/31 - AMBAC Insured 6,925 South Carolina, General Obligation Bonds, Series 1999A, 4.000%, 10/09 at 101.00 Aaa 7,030,260 10/01/14 21,000 Tobacco Settlement Revenue Management Authority, South Carolina, 5/11 at 101.00 BBB 22,441,439 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%, 5/15/22 - ------------------------------------------------------------------------------------------------------------------------------------ 53,405 Total South Carolina 40,108,631 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.3% (0.9% OF TOTAL INVESTMENTS) 2,860 Johnson City Health and Educational Facilities Board, Tennessee, 7/23 at 100.00 AAA 2,966,135 Hospital Revenue Refunding and Improvement Bonds, Johnson City Medical Center, Series 1998C, 5.125%, 7/01/25 (Pre-refunded 7/01/23) - MBIA Insured 1,700 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 1,826,242 Revenue Bonds, Series 1999D, 6.000%, 3/01/24 - AMBAC Insured (Alternative Minimum Tax) 6,000 Metropolitan Government of Nashville-Davidson County Health and 12/17 at 100.00 AAA 7,162,080 Educational Facilities Board, Tennessee, Revenue Refunding and Improvement Bonds, Meharry Medical College, Series 1996, 6.000%, 12/01/19 - AMBAC Insured 175 Tennessee Housing Development Agency, Homeownership Program Bonds, 7/10 at 101.00 AA 178,988 Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 10,735 Total Tennessee 12,133,445 - ------------------------------------------------------------------------------------------------------------------------------------
31 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 6.5% (4.4% OF TOTAL INVESTMENTS) $ 3,975 Bell County Health Facilities Development Corporation, Texas, 2/10 at 101.00 AAA $ 4,315,538 Revenue Bonds, Scott and White Memorial Hospital and Scott, Sherwood and Brindley Foundation, Series 2000A, 6.125%, 8/15/23 (Pre-refunded 2/15/10) - MBIA Insured 5,000 Bexar Metropolitan Water District, Texas, Waterworks System 5/16 at 100.00 AAA 5,284,600 Revenue Bonds, Series 2006, 5.000%, 5/01/35 - MBIA Insured Central Texas Regional Mobility Authority, Travis and Williamson Counties, Toll Road Revenue Bonds, Series 2005: 4,000 5.000%, 1/01/35 - FGIC Insured 1/15 at 100.00 AAA 4,192,280 3,000 5.000%, 1/01/45 - FGIC Insured 1/15 at 100.00 AAA 3,125,340 1,000 Fort Worth, Texas, Water and Sewerage Revenue Bonds, Series 1998, 2/08 at 100.00 AA(4) 1,021,620 5.250%, 2/15/15 (Pre-refunded 2/15/08) 1,000 Harlingen Independent School District, Cameron County, Texas, 8/09 at 100.00 AAA 1,055,230 Unlimited Tax School Building Bonds, Series 1999, 5.650%, 8/15/29 (Pre-refunded 8/15/09) 1,625 Harris County Health Facilities Development Corporation, Texas, 7/09 at 101.00 AAA 1,710,491 Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 (Pre-refunded 7/01/09) - MBIA Insured 4,000 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 4,185,120 Bonds, Series 2003, 5.000%, 2/15/27 - AMBAC Insured 3,885 Houston Independent School District, Public Facility Corporation, No Opt. Call AAA 2,260,953 Harris County, Texas, Lease Revenue Bonds, Cesar E. Chavez High School, Series 1998A, 0.000%, 9/15/19 - AMBAC Insured 33,855 Leander Independent School District, Williamson and Travis 8/14 at 23.67 AAA 5,541,725 Counties, Texas, General Obligation Bonds, Series 2006, 0.000%, 8/15/40 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 2/07 at 47.76 AAA 2,319,614 3,705 0.000%, 8/15/22 2/07 at 42.48 AAA 1,550,431 285 Lubbock Housing Finance Corporation, Texas, GNMA Mortgage-Backed 6/07 at 102.00 AAA 285,527 Securities Program Single Family Mortgage Revenue Refunding Bonds, Series 1997A, 6.125%, 12/01/17 3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 5.000%, 3/12 at 100.00 AAA 3,619,200 3/01/27 - FGIC Insured 6,835 San Antonio, Texas, Electric and Gas System Revenue Refunding 2/09 at 100.00 Aa1 6,883,323 Bonds, New Series 1998A, 4.500%, 2/01/21 6,000 Spring Branch Independent School District, Harris County, Texas, 2/11 at 100.00 AAA 6,224,940 Limited Tax Schoolhouse and Refunding Bonds, Series 2001, 5.125%, 2/01/26 4,000 Tarrant Regional Water District, Texas, Water Revenue Refunding 3/13 at 100.00 AAA 4,228,520 and Improvement Bonds, Series 1999, 5.000%, 3/01/22 - FSA Insured 1,740 Texas, General Obligation Bonds, Water Financial Assistance, State 8/09 at 100.00 AAA 1,820,144 Participation Program, Series 1999C, 5.500%, 8/01/29 - MBIA Insured 1,690 Webb County, Laredo, Texas, Combination Tax and Sewer System, 2/08 at 100.00 AAA 1,700,715 Revenue Certificates of Obligation, Series 1998A, 4.500%, 2/15/18 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 94,005 Total Texas 61,325,311 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 4.3% (2.9% OF TOTAL INVESTMENTS) 3,315 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/07 at 102.00 AAA 3,428,207 Bonds, Series 1997B, 5.750%, 7/01/19 (Pre-refunded 7/01/07) - MBIA Insured 6,685 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/07 at 102.00 AAA 6,905,605 Bonds, Series 1997B, 5.750%, 7/01/19 - MBIA Insured Utah County, Utah, Hospital Revenue Bonds, IHC Health Services Inc., Series 1997: 12,885 5.250%, 8/15/21 - MBIA Insured (ETM) 8/07 at 101.00 AAA 13,176,459 3,900 5.250%, 8/15/26 - MBIA Insured (ETM) 8/07 at 101.00 AAA 3,988,218 3,455 Utah Housing Corporation, Single Family Mortgage Bonds, Series 1/12 at 100.00 AA- 3,590,954 2002A-1, 5.300%, 7/01/18 (Alternative Minimum Tax) 20 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1/10 at 100.00 AA 20,425 2000B, 6.250%, 7/01/22 (Alternative Minimum Tax)
32
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTAH (continued) $ 1,650 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 AA- $ 1,664,157 2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax) 665 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 AA 678,500 2000E-1, Class II, 6.150%, 1/01/27 (Alternative Minimum Tax) 1,995 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 Aa1 2,019,219 2000E-1, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) 940 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/11 at 100.00 AA 968,980 2001A-2, 5.650%, 7/01/27 (Alternative Minimum Tax) 740 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1/11 at 100.00 Aa2 757,013 2001B-1, 5.750%, 7/01/19 (Alternative Minimum Tax) 3,000 Utah Water Finance Agency, Revenue Bonds, Pooled Loan Financing 10/12 at 100.00 Aaa 3,208,770 Program, Series 2002C, 5.250%, 10/01/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 39,250 Total Utah 40,406,507 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGIN ISLANDS - 0.8% (0.5% OF TOTAL INVESTMENTS) 4,700 Virgin Islands Public Finance Authority, Gross Receipts Taxes Loan 10/14 at 100.00 AA 4,945,998 Note, Series 2003, 5.000%, 10/01/33 - RAAI Insured 2,500 Virgin Islands Public Finance Authority, Revenue Bonds, Refinery 1/14 at 100.00 BBB 2,768,100 Project - Hovensa LLC, Series 2003, 6.125%, 7/01/22 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 7,200 Total Virgin Islands 7,714,098 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 5.0% (3.3% OF TOTAL INVESTMENTS) 12,235 Chelan County Public Utility District 1, Washington, Columbia No Opt. Call AAA 5,128,056 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, Electric 9/14 at 100.00 AAA 3,264,982 Production Revenue Bonds, Series 2004, 5.000%, 9/01/28 - FGIC Insured 5,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/13 at 100.00 Aaa 5,488,450 Nuclear Project 1, Series 2003A, 5.500%, 7/01/16 10,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/16 at 100.00 AAA 10,113,100 Providence Health Care Services, Series 2006A, 4.625%, 10/01/34 - FGIC Insured 4,685 Washington State Healthcare Facilities Authority, Revenue Bonds, 12/09 at 101.00 AAA 4,970,972 Providence Services, Series 1999, 5.375%, 12/01/19 (Pre-refunded 12/01/09) - MBIA Insured 5,000 Washington State Housing Finance Commission, Non-Profit Housing 7/09 at 101.00 AA 5,313,500 Revenue Bonds, Kline Galland Center, Series 1999, 6.000%, 7/01/29 - RAAI Insured 12,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, 1/11 at 100.00 Aa1 12,543,960 Series 2001D, 5.250%, 1/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ 52,020 Total Washington 46,823,020 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.5% (0.4% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,176,900 Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------
33 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.1% (1.4% OF TOTAL INVESTMENTS) $ 11,620 Wisconsin Health and Educational Facilities Authority, Revenue 2/10 at 101.00 AA $ 12,543,674 Bonds, Marshfield Clinic, Series 1999, 6.250%, 2/15/29 - RAAI Insured 7,490 Wisconsin Health and Educational Facilities Authority, Revenue 7/08 at 103.00 N/R 7,639,500 Bonds, Millennium Housing Foundation Inc., Series 1998, 6.100%, 1/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ 19,110 Total Wisconsin 20,183,174 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,532,930 Total Investments (cost $1,303,450,908) - 148.8% 1,406,801,730 ============------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - 1.9% 17,420,499 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.7)% (479,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 945,222,229 =====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. (ETM) Escrowed to maturity. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 34 Nuveen Municipal Advantage Fund, Inc. (NMA) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.1% (2.1% OF TOTAL INVESTMENTS) $ 10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA $ 10,488,700 Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded 2/01/09) - FGIC Insured 5,075 Lauderdale County and Florence Healthcare Authority, Alabama, 7/09 at 101.00 AAA 5,297,691 Revenue Bonds, Coffee Health Group, Series 1999A, 5.250%, 7/01/24 - MBIA Insured 5,155 Phenix City Industrial Development Board, Alabama, Environmental 5/12 at 100.00 BBB 5,550,389 Improvement Revenue Bonds, MeadWestvaco Corporation, Series 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 20,230 Total Alabama 21,336,780 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.4% (0.3% OF TOTAL INVESTMENTS) Alaska Housing Finance Corporation, General Housing Purpose Bonds, Series 2005A: 1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AAA 1,207,215 1,280 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AAA 1,363,597 - ------------------------------------------------------------------------------------------------------------------------------------ 2,405 Total Alaska 2,570,812 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.7% (0.5% OF TOTAL INVESTMENTS) 5,000 Maricopa County Pollution Control Corporation, Arizona, Remarketed 11/06 at 101.00 BBB 5,056,800 Revenue Refunding Bonds, Public Service Company of New Mexico, Series 1992A, 5.750%, 11/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 11.8% (8.0% OF TOTAL INVESTMENTS) 2,500 Alameda Corridor Transportation Authority, California, Subordinate 10/17 at 100.00 AAA 2,028,775 Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured Calexico Unified School District, Imperial County, California, General Obligation Bonds, Series 2005B: 4,070 0.000%, 8/01/32 - FGIC Insured No Opt. Call AAA 1,294,016 6,410 0.000%, 8/01/34 - FGIC Insured No Opt. Call AAA 1,854,349 3,000 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 3,084,180 Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 7,500 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A 7,913,925 Department of Mental Health, Coalinga State Hospital, Series 2004A, 5.125%, 6/01/29 9,955 Capistrano Unified School District, Orange County, California, No Opt. Call AAA 3,353,342 Special Tax Bonds, Community Facilities District, Series 2005, 0.000%, 9/01/31 - FGIC Insured Colton Joint Unified School District, San Bernardino County, California, General Obligation Bonds, Series 2006C: 3,800 0.000%, 2/01/33 - FGIC Insured 2/15 at 38.73 AAA 998,298 3,795 0.000%, 2/01/37 - FGIC Insured No Opt. Call AAA 970,230 7,535 Contra Costa County, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 9,775,683 Program Home Mortgage Revenue Bonds, Series 1989, 7.750%, 5/01/22 (Alternative Minimum Tax) (ETM) 8,145 Cupertino Union School District, Santa Clara County, California, 8/13 at 55.54 AAA 3,339,043 General Obligation Bonds, Series 2003B, 0.000%, 8/01/25 - FGIC Insured 2,990 East Bay Municipal Utility District, Alameda and Contra Costa 6/21 at 100.00 AAA 2,991,615 Counties, California, Water System Subordinated Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 - FGIC Insured 2,000 Folsom Cordova Unified School District, Sacramento County, No Opt. Call AAA 760,640 California, General Obligation Bonds, School Facilities Improvement District 1, Series 2004B, 0.000%, 10/01/28 - MBIA Insured 3,360 Folsom Cordova Unified School District, Sacramento County, No Opt. Call AAA 1,358,515 California, General Obligation Bonds, School Facilities Improvement District 2, Series 2002A, 0.000%, 7/01/27 - MBIA Insured 2,315 Gateway Unified School District, California, General Obligation No Opt. Call AAA 736,031 Bonds, Series 2004B, 0.000%, 8/01/32 - FGIC Insured
35 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 3,000 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA $ 1,269,270 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 0.000%, 6/01/26 - FSA Insured 1,275 Madera Unified School District, Madera County, California, General 8/12 at 100.00 AAA 1,373,711 Obligation Bonds, Series 2002, 5.250%, 8/01/23 - FSA 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 3,401,466 4,000 0.000%, 8/01/26 - FGIC Insured No Opt. Call AAA 1,680,320 5,000 Palmdale Community Redevelopment Agency, California, Residential No Opt. Call AAA 5,775,150 Mortgage Revenue Refunding Bonds, Series 1991B, 7.375%, 2/01/12 (ETM) 5,000 Palmdale Community Redevelopment Agency, California, Single Family No Opt. Call AAA 6,643,750 Restructured Mortgage Revenue Bonds, Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax) (ETM) 9,315 Perris, California, GNMA Mortgage-Backed Securities Program Single No Opt. Call AAA 11,628,101 Family Mortgage Revenue Bonds, Series 1989A, 7.600%, 1/01/23 (Alternative Minimum Tax) (ETM) 23,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 6,448,050 California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured 7,250 San Jose-Evergreen Community College District, Santa Clara County, 9/15 at 100.00 AAA 2,307,748 California, General Obligation Bonds, Series 2005A, 0.000%, 9/01/29 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 132,950 Total California 80,986,208 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.6% (4.5% OF TOTAL INVESTMENTS) 8,350 Colorado Health Facilities Authority, Remarketed Revenue Bonds, 1/07 at 102.00 AAA 8,528,440 Kaiser Permanente System, Series 1994A, 5.350%, 11/01/16 (ETM) 9,440 Colorado Health Facilities Authority, Revenue Bonds, Catholic 9/16 at 100.00 AA 9,321,339 Health Initiatives, Series 2006A, 4.500%, 9/01/38 (WI/DD, Settling 11/09/06) 4,335 Denver City and County, Colorado, Airport Revenue Bonds, Series 11/16 at 100.00 AAA 5,244,830 2006, 7.281%, 11/15/25 - FGIC Insured (IF) 2,000 Denver Convention Center Hotel Authority, Colorado, Senior Revenue 11/16 at 100.00 AAA 2,050,440 Bonds, Convention Center Hotel, Series 2006, 4.750%, 12/01/35 - XLCA Insured E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series 1997B: 2,650 0.000%, 9/01/16 - MBIA Insured No Opt. Call AAA 1,783,636 8,160 0.000%, 9/01/26 - MBIA Insured No Opt. Call AAA 3,408,758 1,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 1,095,810 Series 2000A, 5.750%, 9/01/35 (Pre-refunded 9/01/10) - MBIA Insured E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series 2000B: 7,500 0.000%, 9/01/29 - MBIA Insured No Opt. Call AAA 2,739,375 10,000 0.000%, 9/01/32 - MBIA Insured No Opt. Call AAA 3,183,600 Platte River Power Authority, Colorado, Power Revenue Refunding Bonds, Series 2002EE: 2,000 5.375%, 6/01/17 6/12 at 100.00 AA 2,168,060 5,000 5.375%, 6/01/18 6/12 at 100.00 AA 5,414,900 - ------------------------------------------------------------------------------------------------------------------------------------ 60,435 Total Colorado 44,939,188 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.4% (0.2% OF TOTAL INVESTMENTS) 1,725 District of Columbia Housing Finance Agency, GNMA/FNMA Single 6/07 at 102.00 AAA 1,754,084 Family Mortgage Revenue Bonds, Series 1997B, 5.900%, 12/01/28 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.9% (1.3% OF TOTAL INVESTMENTS) 2,770 Florida Housing Finance Corporation, Housing Revenue Bonds, 12/10 at 100.00 AAA 2,881,465 Stratford Point Apartments, Series 2000O-1, 5.850%, 12/01/31 - FSA Insured (Alternative Minimum Tax) 10,130 Tampa, Florida, Healthcare System Revenue Bonds, Allegany Health 12/06 at 100.00 AAA 10,204,152 System - St. Mary's Hospital, Series 1993, 5.125%, 12/01/23 - MBIA Insured (ETM) - ------------------------------------------------------------------------------------------------------------------------------------ 12,900 Total Florida 13,085,617 - ------------------------------------------------------------------------------------------------------------------------------------
36
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.6% (0.4% OF TOTAL INVESTMENTS) $ 4,000 Augusta, Georgia, Water and Sewerage Revenue Bonds, Series 2004, 10/14 at 100.00 AAA $ 4,315,160 5.250%, 10/01/39 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,215 Hawaii Housing and Community Development Corporation, GNMA 7/10 at 102.00 AAA 2,333,325 Collateralized Multifamily Housing Revenue Bonds, Sunset Villas, Series 2000, 5.700%, 7/20/31 705 Hawaii Housing Finance and Development Corporation, Single Family 7/07 at 102.00 AAA 708,680 Mortgage Purchase Revenue Bonds, Series 1997A, 5.750%, 7/01/30 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,920 Total Hawaii 3,042,005 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.9% (10.8% OF TOTAL INVESTMENTS) 12,500 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 12,932,875 Obligation Bonds, Dedicated Tax Revenues, Series 1997A, 5.250%, 12/01/27 - AMBAC Insured 4,000 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 4,171,120 Obligation Bonds, Dedicated Tax Revenues, Series 1997, 5.750%, 12/01/20 (Pre-refunded 12/01/07) - AMBAC Insured 2,175 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 824,695 Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1, 0.000%, 12/01/28 - FGIC Insured 2,250 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 747,833 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/31 - FGIC Insured 5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods Alive 7/10 at 101.00 AAA 6,500,766 21 Program, Series 2000A, 6.500%, 1/01/35 (Pre-refunded 7/01/10) - FGIC Insured 5,000 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue 1/11 at 101.00 AAA 5,234,300 Bonds, O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) 5,000 Chicago, Illinois, Second Lien Wastewater Transmission Revenue 1/08 at 102.00 AAA 5,192,300 Bonds, Series 1997, 5.250%, 1/01/28 (Pre-refunded 1/01/08) - AMBAC Insured 6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 6,398,760 Medical Center, Series 2002, 5.750%, 5/15/22 6,165 Illinois Health Facilities Authority, Revenue Bonds, Sarah Bush 2/07 at 102.00 A 6,310,926 Lincoln Health Center, Series 1996B, 5.750%, 2/15/22 4,210 Illinois Health Facilities Authority, Revenue Bonds, Victory 8/07 at 101.00 Ba2(4) 4,305,988 Health Services, Series 1997A, 5.375%, 8/15/16 (Pre-refunded 8/15/07) 10,740 Lake and McHenry Counties Community Unit School District 118, 1/15 at 66.94 Aaa 5,006,881 Wauconda, Illinois, General Obligation Bonds, Series 2005B, 0.000%, 1/01/23 - FSA Insured 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 14,270,104 10,430 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,963,599 3,175 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 685,705 Bonds, McCormick Place Expansion Project, Series 2002A, 0.000%, 6/15/41 - MBIA Insured 6,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 2,800,980 Refunding Bonds, McCormick Place Expansion Project, Series 1996A, 0.000%, 6/15/24 - MBIA Insured 4,600 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 5,790,618 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 2,053,277 Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC Insured 7,500 Valley View Public Schools, Community Unit School District 365U of No Opt. Call AAA 3,262,125 Will County, Illinois, General Obligation Bonds, Series 2005, 0.000%, 11/01/25 - MBIA Insured 23,125 Will County Community High School District 210 Lincoln-Way, No Opt. Call Aaa 10,936,275 Illinois, General Obligation Bonds, Series 2006, 0.000%, 1/01/24 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 134,130 Total Illinois 108,389,127 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.5% (2.4% OF TOTAL INVESTMENTS) 5,205 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 5,615,414 Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 (Pre-refunded 8/15/10) - MBIA Insured
37 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 9,000 Indiana Health Facility Financing Authority, Hospital Revenue 11/06 at 102.00 AAA $ 9,192,870 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 Mortgage 10/09 at 101.00 A3(4) 6,434,093 Jail Bonds, Series 1998, 5.400%, 10/01/21 (Pre-refunded 10/01/09) 2,725 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/09 at 102.00 BBB 2,839,695 Madison Center Inc., Series 1999, 5.450%, 2/15/12 - ------------------------------------------------------------------------------------------------------------------------------------ 23,005 Total Indiana 24,082,072 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS) 5,000 Burlington, Kansas, Environmental Improvement Revenue Bonds, 9/15 at 100.00 A3 5,040,950 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 Bonds, 3/14 at 100.00 AAA 5,263,474 Series 2004A, 5.000%, 3/01/22 1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas Gas and 6/14 at 100.00 AAA 1,881,495 Electric Company, Series 2004, 5.300%, 6/01/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 11,685 Total Kansas 12,185,919 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS) 5,500 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 5,597,130 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 5,068,058 Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997B, 5.200%, 5/15/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,450 Total Kentucky 10,665,188 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 9.1% (6.2% OF TOTAL INVESTMENTS) 13,500 DeSoto Parish, Louisiana, Pollution Control Revenue Refunding 9/09 at 102.00 AAA 14,525,458 Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured 8,720 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 10,899,128 Revenue Bonds, Comm-Care Corporation Project, Series 1994, 11.000%, 2/01/14 6,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 7,105,525 General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured 6,925 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 6,763,094 Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 3,335 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 3,920,559 Residuals 660-2, 7.348%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 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 6,301,560 11,750 5.875%, 5/15/39 5/11 at 101.00 BBB 12,514,808 - ------------------------------------------------------------------------------------------------------------------------------------ 56,880 Total Louisiana 62,030,132 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.1% (0.8% OF TOTAL INVESTMENTS) 1,750 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 AAA 1,797,355 Revenue Bonds, UMass Memorial Healthcare, Series 1998A, 5.000%, 7/01/28 - AMBAC Insured 830 Massachusetts Housing Finance Agency, Single Family Housing 12/09 at 100.00 AAA 846,227 Revenue Bonds, Series 77, 5.950%, 6/01/25 - FSA Insured (Alternative Minimum Tax) 5,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 5,108,350 Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 7,580 Total Massachusetts 7,751,932 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.7% (1.1% OF TOTAL INVESTMENTS) 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 BB- 5,065,030 3,000 5.250%, 8/15/28 8/08 at 101.00 BB- 3,036,570
38
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 3,275 Michigan State Hospital Finance Authority, Revenue Refunding 2/07 at 100.00 BB- $ 3,277,260 Bonds, Detroit Medical Center Obligated Group, Series 1993A, 6.500%, 8/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ 11,270 Total Michigan 11,378,860 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.5% (1.0% OF TOTAL INVESTMENTS) 5,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 5,251,100 Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/32 - FGIC Insured 3,030 Minnesota Housing Finance Agency, Single Family Mortgage Revenue 7/09 at 100.00 AA+ 3,061,482 Bonds, Series 2000C, 5.550%, 7/01/24 (Alternative Minimum Tax) 2,025 Minnesota Housing Finance Agency, Single Family Mortgage Revenue 1/10 at 100.00 AA+ 2,040,167 Bonds, Series 2000J, 5.400%, 1/01/23 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 10,055 Total Minnesota 10,352,749 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.9% (0.6% OF TOTAL INVESTMENTS) 11,705 Kansas City Municipal Assistance Corporation, Missouri, Leasehold No Opt. Call AAA 4,395,110 Revenue Bonds, Series 2004B-1, 0.000%, 4/15/29 - AMBAC Insured 200 Missouri Housing Development Commission, Single Family Mortgage 9/09 at 102.00 AAA 208,048 Revenue Bonds, Homeownership Loan Program, Series 2000A-1, 7.500%, 3/01/31 (Alternative Minimum Tax) 1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,578,225 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 13,405 Total Missouri 6,181,383 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.0% (0.7% OF TOTAL INVESTMENTS) 6,920 Montana Board of Housing, Single Family Mortgage Bonds, Series 6/07 at 101.50 AA+ 7,075,285 1997A-1, 6.050%, 12/01/37 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.6% (2.4% OF TOTAL INVESTMENTS) 7,310 Clark County, Nevada, Limited Tax General Obligation Bank Bonds, 7/10 at 100.00 AA+(4) 7,796,919 Series 2000, 5.500%, 7/01/19 (Pre-refunded 7/01/10) 7,500 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/10 at 101.00 AAA 8,190,675 Series 1999A, 6.000%, 7/01/29 (Pre-refunded 7/01/10) - MBIA Insured 7,910 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 8,244,356 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 430 Nevada Housing Division, Single Family Mortgage Bonds, Senior 4/07 at 102.00 Aaa 432,774 Series 1997C-2, 5.750%, 4/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 23,150 Total Nevada 24,664,724 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.9% (2.6% OF TOTAL INVESTMENTS) 15,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 5,349,900 System Bonds, Series 2006C, 0.000%, 12/15/30 - FGIC Insured Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 14,690 5.750%, 6/01/32 6/12 at 100.00 BBB 15,613,118 5,050 6.125%, 6/01/42 6/12 at 100.00 BBB 5,483,391 - ------------------------------------------------------------------------------------------------------------------------------------ 34,740 Total New Jersey 26,446,409 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.1% (0.7% OF TOTAL INVESTMENTS) 7,500 Farmington, New Mexico, Pollution Control Revenue Refunding Bonds, 4/07 at 100.50 BBB 7,530,300 Public Service Company of New Mexico - San Juan Project, Series 1997B, 5.800%, 4/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 16.2% (11.0% OF TOTAL INVESTMENTS) 4,395 Dormitory Authority of the State of New York, Revenue Bonds, 2/07 at 102.00 AA- 4,504,304 Mental Health Services Facilities Improvements, Series 1997B, 5.625%, 2/15/21 2,965 Dormitory Authority of the State of New York, Revenue Bonds, 2/07 at 102.00 AA-(4) 3,041,586 Mental Health Services Facilities Improvements, Series 1997B, 5.625%, 2/15/21 (Pre-refunded 2/15/07)
39 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 3,655 Dormitory Authority of the State of New York, Revenue Bonds, State 5/08 at 101.00 AA-(4) $ 3,779,233 University Educational Facilities, Series 1997, 5.125%, 5/15/27 (Pre-refunded 5/15/08) 7,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AA- 7,395,360 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 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,413,780 4,070 7.000%, 3/01/12 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,513,589 3,925 7.000%, 3/01/15 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,352,786 4,975 New York City Industrial Development Agency, New York, Special 12/08 at 102.00 Ba2 4,891,470 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, Special 12/12 at 101.00 Ba2 3,368,670 Facilities Revenue Bonds, British Airways PLC, Series 2002, 7.625%, 12/01/32 (Alternative Minimum Tax) 5,000 New York City Municipal Water Finance Authority, New York, Water 6/07 at 101.00 AAA 5,118,750 and Sewerage System Revenue Bonds, Fiscal Series 1997B, 5.750%, 6/15/29 (Pre-refunded 6/15/07) - FGIC Insured 9,850 New York City Municipal Water Finance Authority, New York, Water 6/09 at 101.00 AAA 10,496,554 and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/31 (Pre-refunded 6/15/09) - FGIC Insured 10,000 New York City Municipal Water Finance Authority, New York, Water 12/14 at 100.00 AAA 10,570,000 and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%, 6/15/36 - FSA Insured 10,000 New York City Transitional Finance Authority, New York, Future Tax 5/10 at 101.00 AAA 10,913,600 Secured Bonds, Fiscal Series 2000B, 6.000%, 11/15/29 (Pre-refunded 5/15/10) 10,000 New York City, New York, General Obligation Bonds, Fiscal Series 10/07 at 101.00 Aaa 10,333,800 1997G, 6.000%, 10/15/26 (Pre-refunded 10/15/07) 7,435 New York City, New York, General Obligation Bonds, Fiscal Series 5/10 at 101.00 AA-(4) 8,055,525 2000A, 5.750%, 5/15/20 (Pre-refunded 5/15/10) 9,025 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, 4/10 at 100.00 Aa1 9,381,036 Series 94, 5.800%, 10/01/20 (Alternative Minimum Tax) 5,000 New York State Urban Development Corporation, Service Contract 1/09 at 101.00 AAA 5,307,450 Revenue Bonds, Correctional Facilities, Series 1999C, 6.000%, 1/01/29 (Pre-refunded 1/01/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 104,275 Total New York 110,437,493 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 2.6% (1.7% OF TOTAL INVESTMENTS) 1,175 North Carolina Housing Finance Agency, Home Ownership Revenue 7/10 at 100.00 AAA 1,202,366 Bonds, 1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 - AMBAC Insured (Alternative Minimum Tax) 6,720 North Carolina Housing Finance Agency, Home Ownership Revenue 7/09 at 100.00 AA 6,941,088 Bonds, 1998 Trust Agreement, Series 7A, 6.250%, 1/01/29 (Alternative Minimum Tax) 3,860 North Carolina Housing Finance Agency, Home Ownership Revenue 1/10 at 100.00 AA 3,899,488 Bonds, 1998 Trust Agreement, Series 8A, 5.950%, 1/01/27 (Alternative Minimum Tax) 5,265 North Carolina Housing Finance Agency, Home Ownership Revenue 1/10 at 100.00 AA 5,431,374 Bonds, 1998 Trust Agreement, Series 9A, 5.875%, 7/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 17,020 Total North Carolina 17,474,316 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.7% (0.5% OF TOTAL INVESTMENTS) 2,190 North Dakota Housing Finance Agency, Home Mortgage Finance Program 7/08 at 102.00 Aaa 2,219,959 Bonds, Series 1998B, 5.500%, 7/01/29 - MBIA Insured (Alternative Minimum Tax) 2,250 Ward County Health Care, North Dakota, Revenue Bonds, Trinity 7/16 at 100.00 BBB+ 2,360,903 Obligated Group, Series 2006, 5.125%, 7/01/25 (WI/DD, Settling 11/01/06) - ------------------------------------------------------------------------------------------------------------------------------------ 4,440 Total North Dakota 4,580,862 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.4% (3.0% OF TOTAL INVESTMENTS) 5,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, 11/09 at 101.00 Baa1 5,172,150 Hospital Facilities Revenue Bonds, Summa Health System, Series 1998A, 5.375%, 11/15/18 6,000 Cuyahoga County, Ohio, Hospital Revenue Bonds, University 7/09 at 101.00 AAA 6,318,480 Hospitals Health System, Series 1999, 5.500%, 1/15/30 - AMBAC Insured
40
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ OHIO (continued) Montgomery County, Ohio, Hospital Facilities Revenue Bonds, Kettering Medical Center, Series 1999: $ 7,840 6.750%, 4/01/18 (Pre-refunded 4/01/10) 4/10 at 101.00 A(4) $ 8,687,034 5,000 6.750%, 4/01/22 (Pre-refunded 4/01/10) 4/10 at 101.00 A(4) 5,540,200 1,600 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 8/10 at 100.00 Aaa 1,619,568 Program Residential Mortgage Revenue Bonds, Series 2000D, 5.450%, 9/01/31 (Alternative Minimum Tax) 2,650 Ohio, General Obligation Bonds, Higher Education, Series 2003A, 5/13 at 100.00 AA+ 2,812,816 5.000%, 5/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ 28,090 Total Ohio 30,150,248 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 2.3% (1.5% OF TOTAL INVESTMENTS) 2,890 Oklahoma State Industries Authority, Health System Revenue Bonds, 8/09 at 101.00 AAA 3,059,672 Integris Baptist Medical Center, Series 1999A, 5.750%, 8/15/29 - MBIA Insured 2,110 Oklahoma State Industries Authority, Health System Revenue Bonds, 8/09 at 101.00 AAA 2,248,036 Integris Baptist Medical Center, Series 1999A, 5.750%, 8/15/29 (Pre-refunded 8/15/09) - MBIA Insured 10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 12/08 at 100.00 B 10,083,300 American Airlines Inc., Series 2001B, 5.650%, 12/01/35 (Mandatory put 12/01/08) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 15,000 Total Oklahoma 15,391,008 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 1.2% (0.8% OF TOTAL INVESTMENTS) 1,930 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 2,032,367 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, Series 12/14 at 100.00 AAA 2,886,910 2004A, 5.500%, 12/01/31 - AMBAC Insured 3,240 Washington County Authority, Pennsylvania, Capital Funding Revenue No Opt. Call AAA 3,470,850 Bonds, Capital Projects and Equipment Acquisition Program, Series 1999, 6.150%, 12/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 7,770 Total Pennsylvania 8,390,127 - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 1.4% (1.0% OF TOTAL INVESTMENTS) 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 5,345,900 2005RR, 5.000%, 7/01/26 - XLCA Insured 4,000 Puerto Rico, General Obligation Bonds, Series 2000B, 5.625%, 7/10 at 100.00 AAA 4,283,520 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,000 Total Puerto Rico 9,629,420 - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.8% (1.3% OF TOTAL INVESTMENTS) 1,235 Rhode Island Health and Educational Building Corporation, Hospital 5/07 at 102.00 AAA 1,270,407 Financing Revenue Bonds, Lifespan Obligated Group, Series 1996, 5.500%, 5/15/16 - MBIA Insured 11,015 Rhode Island Health and Educational Building Corporation, Hospital 5/07 at 102.00 AAA 11,347,323 Financing Revenue Bonds, Lifespan Obligated Group, Series 1996, 5.500%, 5/15/16 (Pre-refunded 5/15/07) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 12,250 Total Rhode Island 12,617,730 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 4.1% (2.8% OF TOTAL INVESTMENTS) 10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA-(4) 11,360,300 Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/20 (Pre-refunded 12/01/12) 2,500 Lexington County Health Service District, South Carolina, Hospital 11/13 at 100.00 A 2,713,975 Revenue Refunding and Improvement Bonds, Series 2003, 5.750%, 11/01/28 3,000 Myrtle Beach, South Carolina, Hospitality and Accommodation Fee 6/14 at 100.00 AAA 3,145,440 Revenue Bonds, Series 2004A, 5.000%, 6/01/36 - FGIC Insured 1,220 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 604,595 Bonds, Series 2004A-2, 0.000%, 1/01/23 - FGIC Insured 2,125 South Carolina Public Service Authority, Revenue Refunding Bonds, 7/13 at 100.00 AAA 2,273,176 Santee Cooper Electric System, Series 2003A, 5.000%, 1/01/21 - AMBAC Insured
41 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA (continued) $ 7,500 Tobacco Settlement Revenue Management Authority, South Carolina, 5/11 at 101.00 BBB $ 8,141,925 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ 26,345 Total South Carolina 28,239,411 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 5.2% (3.6% OF TOTAL INVESTMENTS) 6,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa3 6,650,880 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 11,857,032 Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A, 0.000%, 1/01/18 - FSA Insured 14,385 Metropolitan Government of Nashville-Davidson County Health and 11/09 at 101.00 AAA 15,443,590 Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/28 (Pre-refunded 11/15/09) - AMBAC Insured 1,750 Metropolitan Government of Nashville-Davidson County, Tennessee, 5/11 at 100.00 AA 1,821,960 Electric System Revenue Bonds, Series 2001A, 5.125%, 5/15/26 - ------------------------------------------------------------------------------------------------------------------------------------ 42,550 Total Tennessee 35,773,462 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 16.6% (11.3% OF TOTAL INVESTMENTS) 11,810 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa2 12,566,549 Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative Minimum Tax) 6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, Houston No Opt. Call AAA 6,544,920 Lighting and Power Company, Series 1998, 5.050%, 11/01/18 - AMBAC Insured (Alternative Minimum Tax) 10,000 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 10,417,800 Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC Insured 4,250 Ennis Independent School District, Ellis County, Texas, General 8/16 at 60.73 Aaa 1,639,480 Obligation Bonds, Series 2006, 0.000%, 8/15/26 8,400 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal Revenue 4/09 at 101.00 BBB 8,667,960 Bonds, Valero Energy Corporation, Series 1999, 5.700%, 4/01/32 (Alternative Minimum Tax) 5,000 Harris County Health Facilities Development Corporation, Texas, 11/13 at 100.00 AAA 5,215,150 Thermal Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/30 - MBIA Insured 1,540 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 1,609,546 Bonds, Series 2003, 5.000%, 2/15/28 - AMBAC Insured 3,460 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 3,726,212 Bonds, Series 2003, 5.000%, 2/15/28 (Pre-refunded 2/15/13) - AMBAC Insured 13,110 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 13,888,472 Series 2000B, 5.500%, 7/01/30 - FSA 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 6,130,409 2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AAA 2,282,780 9,345 Leander Independent School District, Williamson and Travis 8/15 at 35.34 AAA 2,199,252 Counties, Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/34 - FGIC Insured 16,305 Matagorda County Navigation District 1, Texas, Revenue Bonds, 5/09 at 101.00 BBB- 16,827,084 Reliant Energy Inc., Series 1999B, 5.950%, 5/01/30 (Alternative Minimum Tax) 3,425 Sabine River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa2 3,636,939 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 System 10/12 at 100.00 Baa2 5,000,988 Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21 4,000 Texas, General Obligation Bonds, Water Financial Assistance, State 8/09 at 100.00 Aa1 4,186,360 Participation Program, Series 1999C, 5.500%, 8/01/35 6,840 Travis County Health Facilities Development Corporation, Texas, 11/09 at 101.00 AAA 7,343,356 Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/24 (Pre-refunded 11/15/09) - AMBAC Insured 245 Wood Glen Housing Finance Corporation, Texas, FHA-Insured 1/07 at 100.00 AAA 245,804 Section 8 Assisted Mortgage Revenue Bonds, Copperwood I Project, Series 1990A, 7.625%, 1/01/10 - MBIA Insured (ETM)
42
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 3,000 Wylie Independent School District, Taylor County, Texas, General 8/15 at 74.57 AAA $ 1,522,140 Obligation Bonds, Series 2005, 0.000%, 8/15/21 - ------------------------------------------------------------------------------------------------------------------------------------ 118,920 Total Texas 113,651,201 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS) 730 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 754,930 Refunding Bonds, Series 1997B, 5.750%, 7/01/19 (Pre-refunded 7/01/07) - MBIA Insured 1,470 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 1,518,510 Refunding Bonds, Series 1997B, 5.750%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 2,200 Total Utah 2,273,440 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 14.1% (9.6% OF TOTAL INVESTMENTS) 8,810 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 9,483,172 Consolidated System Revenue Bonds, Series 2001A, 5.600%, 1/01/36 - MBIA Insured (Alternative Minimum Tax) 5,665 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AAA 5,911,031 Consolidated System Revenue Bonds, Series 2002B, 5.250%, 7/01/37 - AMBAC Insured (Alternative Minimum Tax) 10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 11,578,314 Consolidated System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 - MBIA Insured (Alternative Minimum Tax) 10,730 Pierce County School District 320, Sumner, Washington, 12/10 at 100.00 Aaa 11,819,739 Unlimited Tax General Obligation Bonds, Series 2000, 6.250%, 12/01/17 (Pre-refunded 12/01/10) - FSA Insured 10,550 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AAA 11,240,814 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 5,682,054 6.000%, 2/01/10 - MBIA Insured (Alternative Minimum Tax) 19,475 Port of Seattle, Washington, Special Facility Revenue 3/10 at 101.00 AAA 21,137,773 Bonds, Terminal 18, Series 1999A, 6.000%, 9/01/29 (Pre-refunded 3/01/10) - MBIA Insured 5,000 Port of Seattle, Washington, Special Facility Revenue 3/10 at 101.00 AAA 5,371,300 Bonds, Terminal 18, Series 1999B, 6.000%, 9/01/20 - MBIA Insured (Alternative Minimum Tax) 8,750 Washington Public Power Supply System, Revenue Refunding 7/08 at 102.00 Aaa 9,092,913 Bonds, Nuclear Project 3, Series 1998A, 5.125%, 7/01/18 5,000 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 5,305,200 Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 (Pre-refunded 12/01/09) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 90,025 Total Washington 96,622,310 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,176,900 Bonds, Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 3.0% (2.0% OF TOTAL INVESTMENTS) 7,055 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 7,627,795 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 2,250 Green Bay, Wisconsin, Water System Revenue Bonds, Series 11/14 at 100.00 Aaa 2,378,295 2004, 5.000%, 11/01/29 - FSA Insured 5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,392,000 Refunding Bonds, Madison Gas and Electric Company Projects, Series 2002A, 5.875%, 10/01/34 (Alternative Minimum Tax)
43 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN (continued) $ 3,000 Southeast Wisconsin Professional Baseball Park District, No Opt. Call AAA $ 3,470,790 Sales Tax Revenue Refunding Bonds, Series 1998A, 5.500%, 12/15/19 - MBIA Insured 1,620 Wisconsin Housing and Economic Development Authority, Home 3/10 at 100.00 AA 1,630,141 Ownership Revenue Bonds, Series 2000B, 5.750%, 3/01/22 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 18,925 Total Wisconsin 20,499,021 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,095,145 Total Investments (cost $927,999,902) - 147.3% 1,006,727,683 ============------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - 5.1% 34,946,863 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.4)% (358,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 683,674,546 =====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 44 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MUNICIPAL BONDS - 152.1% (100.0% OF TOTAL INVESTMENTS) ALABAMA - 0.7% (0.4% OF TOTAL INVESTMENTS) Henry County Water Authority, Alabama, Water Revenue Bonds, Series 2006: $ 1,935 5.000%, 1/01/36 - RAAI Insured 1/16 at 100.00 AA $ 2,010,581 2,485 5.000%, 1/01/41 - RAAI Insured 1/16 at 100.00 AA 2,577,914 - ------------------------------------------------------------------------------------------------------------------------------------ 4,420 Total Alabama 4,588,495 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.3% (0.3% OF TOTAL INVESTMENTS) Alaska Housing Finance Corporation, General Housing Purpose Bonds, Series 2005A: 1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AAA 1,207,215 1,275 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AAA 1,358,270 - ------------------------------------------------------------------------------------------------------------------------------------ 2,400 Total Alaska 2,565,485 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.0% (0.0% OF TOTAL INVESTMENTS) 105 Pima County Industrial Development Authority, Arizona, FNMA/GNMA 5/07 at 105.85 AAA 106,614 Single Family Mortgage Revenue Bonds, Series 1997A, 7.100%, 11/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.3% (0.8% OF TOTAL INVESTMENTS) 5,000 Arkansas Development Finance Authority, Hospital Revenue Bonds, 2/10 at 100.00 BBB (4) 5,494,900 Washington Regional Medical Center, Series 2000, 7.000%, 2/01/15 (Pre-refunded 2/01/10) 3,480 Cabot School District 4, Lonoke County, Arkansas, General 8/08 at 100.00 Aaa 3,545,111 Obligation Refunding Bonds, Series 2003, 5.000%, 2/01/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 8,480 Total Arkansas 9,040,011 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 8.7% (5.7% OF TOTAL INVESTMENTS) 1,350 Antelope Valley Union High School District, Los Angeles County, No Opt. Call AAA 498,218 California, General Obligation Bonds, Series 2004B, 0.000%, 8/01/29 - MBIA Insured 7,800 California County Tobacco Securitization Agency, Tobacco 12/18 at 100.00 Baa3 6,694,584 Settlement Asset-Backed Bonds, Los Angeles County Securitization Corporation, Series 2006A, 0.000%, 6/01/36 (Mandatory put 6/01/23) 1,000 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 1,121,280 Bonds, Series 2002A, 5.750%, 5/01/17 (Pre-refunded 5/01/12) 1,350 California Educational Facilities Authority, Revenue Refunding No Opt. Call Aaa 308,516 Bonds, Loyola Marymount University, Series 2001A, 0.000%, 10/01/39 - MBIA Insured 4,295 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 4,415,518 Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 4,000 California Health Facilities Financing Authority, Revenue Bonds, 3/16 at 100.00 A+ 4,254,880 Kaiser Permanante System, Series 2006, 5.250%, 3/01/45 8,335 California State, General Obligation Bonds, Series 2006, Residuals 3/16 at 100.00 AAA 9,065,146 Series 1005, 6.805%, 3/01/35 - MBIA Insured (IF) 10,445 Castaic Lake Water Agency, California, Revenue Certificates of No Opt. Call AAA 3,854,727 Participation, Water System Improvement Project, Series 1999, 0.000%, 8/01/29 - AMBAC Insured 8,365 Cupertino Union School District, Santa Clara County, California, 8/13 at 52.66 AAA 3,240,852 General Obligation Bonds, Series 2003B, 0.000%, 8/01/26 - FGIC Insured 5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 5,415,450 Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B, 5.000%, 6/01/38 (Pre-refunded 6/01/13) - AMBAC Insured 3,500 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA 1,480,815 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 0.000%, 6/01/26 - FSA Insured
45 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 1,500 Lincoln Unified School District, Placer County, California, No Opt. Call AAA $ 627,825 Community Facilities District 1, Special Tax Bonds, Series 2005, 0.000%, 9/01/26 - AMBAC Insured 490 Los Angeles Department of Water and Power, California, Electric 4/07 at 100.00 AA-(4) 490,387 Plant Revenue Bonds, Second Series 1993, 4.750%, 10/15/20 (ETM) 995 Los Angeles Department of Water and Power, California, Electric 2/07 at 100.00 AA-(4) 996,433 Plant Revenue Bonds, Series 1994, 5.375%, 2/15/34 (ETM) 1,000 Pajaro Valley Unified School District, Santa Cruz County, No Opt. Call AAA 369,050 California, General Obligation Bonds, Series 2005B, 0.000%, 8/01/29 - FSA Insured 6,000 Placentia-Yorba Linda Unified School District, Orange County, No Opt. Call AAA 1,722,840 California, Certificates of Participation, Series 2006, 0.000%, 10/01/34 - FGIC Insured San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A: 5,000 0.000%, 1/15/17 - MBIA Insured 1/14 at 102.00 AAA 5,379,600 26,000 0.000%, 1/15/35 - MBIA Insured No Opt. Call AAA 7,289,100 5,000 San Jose-Evergreen Community College District, Santa Clara 9/15 at 100.00 AAA 1,679,850 County, California, General Obligation Bonds, Series 2005A, 0.000%, 9/01/28 - MBIA Insured 4,825 Santa Monica Community College District, Los Angeles County, No Opt. Call AAA 1,980,470 California, General Obligation Bonds, Series 2005C, 0.000%, 8/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 106,250 Total California 60,885,541 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 5.4% (3.5% OF TOTAL INVESTMENTS) 1,085 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 AAA 1,169,739 Series 2006, 5.250%, 10/01/40 - XLCA Insured 3,000 Broomfield, Colorado, Master Facilities Lease Purchase Agreement, 12/09 at 100.00 Aaa 3,175,770 Certificates of Participation, Series 1999, 5.750%, 12/01/24 - AMBAC Insured 6,285 Broomfield, Colorado, Sales and Use Tax Revenue Refunding and 12/12 at 100.00 Aaa 6,870,951 Improvement Bonds, Series 2002A, 5.500%, 12/01/22 - AMBAC Insured 11,465 Denver City and County, Colorado, Airport System Revenue Refunding 11/10 at 100.00 AAA 12,371,996 Bonds, Series 2000A, 6.000%, 11/15/18 - AMBAC Insured (Alternative Minimum Tax) 20,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 31.42 AAA 5,447,600 Series 2000B, 0.000%, 9/01/28 (Pre-refunded 9/01/10) - MBIA Insured E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, Series 2004B: 3,800 0.000%, 9/01/27 - MBIA Insured 9/20 at 67.94 AAA 1,379,818 13,300 0.000%, 9/01/31 - MBIA Insured 9/20 at 53.77 AAA 3,827,873 6,250 0.000%, 9/01/32 - MBIA Insured 9/20 at 50.83 AAA 1,695,563 8,000 0.000%, 3/01/36 - MBIA Insured No Opt. Call AAA 1,769,600 - ------------------------------------------------------------------------------------------------------------------------------------ 73,185 Total Colorado 37,708,910 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.5% (0.3% OF TOTAL INVESTMENTS) 3,265 Washington Convention Center Authority, District of Columbia, 10/08 at 100.00 AAA 3,285,961 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 4.750%, 10/01/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 4.5% (3.0% OF TOTAL INVESTMENTS) 15,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 16,086,450 Series 2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) - FGIC Insured 14,330 Fulton County Facilities Corporation, Georgia, Certificates of 11/10 at 101.00 AAA 15,412,918 Participation, Public Purpose Project, Series 1999, 5.500%, 11/01/18 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 29,330 Total Georgia 31,499,368 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 12.4% (8.1% OF TOTAL INVESTMENTS) 600 Bolingbrook, Illinois, General Obligation Refunding Bonds, Series No Opt. Call AAA 198,300 2002B, 0.000%, 1/01/32 - FGIC Insured 4,600 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 2,533,634 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/20 - FGIC Insured
46
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 4,000 Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA $ 4,178,240 5.000%, 1/01/33 - AMBAC Insured 2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, Series No Opt. Call AAA 2,535,129 1993, 5.375%, 1/01/14 - AMBAC Insured 5,250 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1998B, 1/09 at 101.00 AAA 5,386,553 5.000%, 1/01/28 - MBIA Insured 3,335 Illinois Finance Authority, General Revenue Bonds, Northwestern 12/15 at 100.00 Aaa 3,845,155 University, Series 2006, Residuals Series 1489, 7.406%, 12/01/42 (IF) 5,210 Illinois Housing Development Authority, Section 8 Elderly Housing 1/07 at 100.00 BBB 5,313,419 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, Series 4/10 at 100.00 AAA 40,818,779 2000, 5.500%, 4/01/25 - MBIA Insured Lake and McHenry Counties Community Unit School District 118, Wauconda, Illinois, General Obligation Bonds, Series 2005B: 10,230 0.000%, 1/01/22 - FSA Insured 1/15 at 70.63 Aaa 5,039,605 6,780 0.000%, 1/01/24 - FSA Insured 1/15 at 63.44 Aaa 2,978,861 1,975 Lake County Community High School District 127, Grayslake, No Opt. Call AAA 2,550,673 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 2,149,745 3,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 3,424,540 3,700 0.000%, 6/15/30 - MBIA Insured No Opt. Call AAA 1,338,808 3,060 0.000%, 6/15/37 - MBIA Insured No Opt. Call AAA 796,243 11,215 0.000%, 12/15/38 - MBIA Insured No Opt. Call AAA 2,724,348 4,170 0.000%, 6/15/39 - MBIA Insured No Opt. Call AAA 988,082 - ------------------------------------------------------------------------------------------------------------------------------------ 111,590 Total Illinois 86,800,114 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.1% (0.7% OF TOTAL INVESTMENTS) 4,695 Indiana Educational Facilities Authority, Revenue Bonds, Butler 2/11 at 100.00 AAA 5,003,321 University, Series 2001, 5.500%, 2/01/26 - MBIA Insured 5,113 Indianapolis Airport Authority, Indiana, Special Facility Revenue 11/06 at 101.00 N/R 291,431 Bonds, AAR Corporation Assumed Lease, Series 1995, 6.500%, 11/15/31 (Alternative Minimum Tax) (6) 2,000 Petersburg, Indiana, Pollution Control Revenue Refunding Bonds, 8/11 at 102.00 Baa1 2,105,060 Indianapolis Power and Light Company, Series 1991, 5.750%, 8/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ 11,808 Total Indiana 7,399,812 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.6% (0.4% OF TOTAL INVESTMENTS) 4,215 Iowa Finance Authority, Solid Waste Disposal Revenue Bonds, No Opt. Call N/R 4,247,287 IPSCO Project, Series 1997, 6.000%, 6/01/27 (Mandatory put 6/01/07) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,500 Kansas Development Finance Authority, Water Pollution Control 11/12 at 100.00 AAA 2,738,750 Revolving Fund Leveraged Bonds, Series 2002-II, 5.500%, 11/01/21 500 Salina, Kansas, Hospital Revenue Bonds, Salina Regional Medical 4/16 at 100.00 A1 502,255 Center, Series 2006, 4.625%, 10/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 3,000 Total Kansas 3,241,005 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% (1.0% 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 3,215,033 7,490 5.250%, 7/01/20 - FSA Insured 1/10 at 101.00 AAA 7,903,673 - ------------------------------------------------------------------------------------------------------------------------------------ 10,535 Total Kentucky 11,118,706 - ------------------------------------------------------------------------------------------------------------------------------------
47 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.6% (1.1% OF TOTAL INVESTMENTS) $ 7,415 Louisiana Local Government Environmental Facilities and Community 12/12 at 100.00 AAA $ 7,716,123 Development Authority, Revenue Bonds, Baton Rouge Community College Facilities Corporation, Series 2002, 5.000%, 12/01/32 - MBIA Insured 3,350 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 3,579,475 General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,765 Total Louisiana 11,295,598 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 0.3% (0.3% OF TOTAL INVESTMENTS) 2,500 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AA 2,848,150 Revenue Bonds, Series 2002, 5.500%, 2/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.5% (2.9% OF TOTAL INVESTMENTS) 1,100 Massachusetts Bay Transportation Authority, Assessment Bonds, 7/10 at 100.00 AAA 1,155,594 Series 2000A, 5.250%, 7/01/30 4,150 Massachusetts Bay Transportation Authority, Assessment Bonds, 7/10 at 100.00 AAA 4,391,073 Series 2000A, 5.250%, 7/01/30 (Pre-refunded 7/01/10) 8,315 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 8,495,186 Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured 10,000 Massachusetts Water Resources Authority, General Revenue Bonds, 8/10 at 101.00 AAA 10,825,600 Series 2000A, 5.750%, 8/01/39 (Pre-refunded 8/01/10) - FGIC Insured 6,195 University of Massachusetts Building Authority, Facilities Revenue 11/10 at 100.00 AAA 6,557,036 Bonds, Senior Series 2000A, 5.125%, 11/01/25 (Pre-refunded 11/01/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 29,760 Total Massachusetts 31,424,489 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.0% (0.7% OF TOTAL INVESTMENTS) 5,000 Detroit Water Supply System, Michigan, Water Supply System Revenue 7/16 at 100.00 AAA 5,050,200 Bonds, Series 2006D, 4.625%, 7/01/32 - FSA Insured 2,090 Grand Rapids Building Authority, Kent County, Michigan, Limited 8/10 at 100.00 AAA 2,215,546 Tax General Obligation Bonds, Series 2000, 5.375%, 8/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 7,090 Total Michigan 7,265,746 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 7.7% (5.1% OF TOTAL INVESTMENTS) 930 Minnesota Agricultural and Economic Development Board, Healthcare 11/10 at 101.00 A 1,011,003 System Revenue Bonds, Fairview Hospital and Healthcare Services, Series 2000A, 6.375%, 11/15/29 29,070 Minnesota Agricultural and Economic Development Board, Healthcare 11/10 at 101.00 A(4) 32,316,827 System Revenue Bonds, Fairview Hospital and Healthcare Services, Series 2000A, 6.375%, 11/15/29 (Pre-refunded 11/15/10) 2,420 Minnesota Housing Finance Agency, Single Family Remarketed 1/11 at 101.00 AA+ 2,440,449 Mortgage Bonds, Series 1998H-2, 6.050%, 7/01/31 (Alternative Minimum Tax) 13,675 Minnesota, General Obligation Bonds, Series 2000, 5.125%, 11/01/16 11/10 at 100.00 AAA 14,440,253 3,130 St. Paul Housing and Redevelopment Authority, Minnesota, Sales Tax 11/15 at 103.00 AAA 3,890,277 Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 49,225 Total Minnesota 54,098,809 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.0% (0.7% OF TOTAL INVESTMENTS) 5,900 Mississippi Business Finance Corporation, Pollution Control 4/07 at 100.00 BBB- 5,918,349 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 1,090 Mississippi Home Corporation, GNMA Mortgage-Backed Securities 7/07 at 105.00 Aaa 1,102,884 Program Single Family Mortgage Revenue Bonds, Series 1997D-5, 6.750%, 7/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 6,990 Total Mississippi 7,021,233 - ------------------------------------------------------------------------------------------------------------------------------------
48
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.7% (0.4% OF TOTAL INVESTMENTS) Kansas City Municipal Assistance Corporation, Missouri, Leasehold Revenue Bonds,Series 2004B-1: $ 7,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AAA $ 2,868,040 5,000 0.000%, 4/15/31 - AMBAC Insured No Opt. Call AAA 1,720,600 - ------------------------------------------------------------------------------------------------------------------------------------ 12,000 Total Missouri 4,588,640 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.6% (3.0% OF TOTAL INVESTMENTS) Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 6,125 0.000%, 1/01/17 - AMBAC Insured No Opt. Call AAA 3,994,112 8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AAA 3,622,360 5,315 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 2,162,195 21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 21,887,670 2,135 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2005B, 6/15 at 33.61 AAA 465,046 0.000%, 6/01/37 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 43,075 Total Nevada 32,131,383 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 6.3% (4.1% OF TOTAL INVESTMENTS) 170 Camden County Pollution Control Financing Authority, New Jersey, 12/06 at 100.00 Baa3 172,370 Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991D, 7.250%, 12/01/10 18,000 New Jersey Transportation Trust Fund Authority, Transportation 6/10 at 100.00 AAA 19,344,780 System Bonds, Series 2000B, 5.750%, 6/15/17 (Pre-refunded 6/15/10) 35,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 10,377,500 System Bonds, Series 2006C, 0.000%, 12/15/34 - FSA Insured 5,000 New Jersey Turnpike Authority, Revenue Bonds, Growth and Income 1/17 at 100.00 AAA 3,536,600 Securities, Series 2004B, 0.000%, 1/01/35 - AMBAC Insured 3,000 Rahway Valley Sewerage Authority, New Jersey, Sewer Revenue Bonds, No Opt. Call Aaa 1,343,820 Series 2005A, 0.000%, 9/01/25 - MBIA Insured 3,475 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 BBB 3,773,224 Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/42 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 2,100 6.375%, 6/01/32 6/13 at 100.00 BBB 2,337,909 2,925 6.750%, 6/01/39 6/13 at 100.00 BBB 3,338,273 - ------------------------------------------------------------------------------------------------------------------------------------ 69,670 Total New Jersey 44,224,476 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.8% (1.2% OF TOTAL INVESTMENTS) 5,925 New Mexico Hospital Equipment Loan Council, Hospital Revenue 8/11 at 101.00 AA-(4) 6,447,229 Bonds, Presbyterian Healthcare Services, Series 2001A, 5.500%, 8/01/21 (Pre-refunded 8/01/11) 5,675 University of New Mexico, Revenue Refunding Bonds, Series 1992A, No Opt. Call AA 6,176,330 6.250%, 6/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ 11,600 Total New Mexico 12,623,559 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 14.5% (9.5% OF TOTAL INVESTMENTS) 245 Dormitory Authority of the State of New York, Improvement Revenue 2/07 at 102.00 AA- 251,179 Bonds, Mental Health Services Facilities, Series 1997A, 5.750%, 2/15/27 Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 1997A: 465 5.750%, 2/15/27 (Pre-refunded 2/15/07) 2/07 at 102.00 AA-(4) 477,178 19,290 5.750%, 2/15/27 (Pre-refunded 2/15/07) 2/07 at 102.00 AA-(4) 19,795,205 3,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 A- 3,164,610 Revenue Bonds, Series 2006B, 5.000%, 12/01/35 6,750 Nassau County Tobacco Settlement Corporation, New York, Tobacco 7/09 at 101.00 AAA 7,301,003 Settlement Asset-Backed Bonds, Series 1999A, 6.400%, 7/15/33 (Pre-refunded 7/15/09) 17,870 New York City Transitional Finance Authority, New York, Future Tax 8/09 at 101.00 AAA 19,103,030 Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded 8/15/09)
49 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 630 New York City, New York, General Obligation Bonds, Fiscal Series 8/07 at 101.00 AA- $ 647,142 1997H, 6.125%, 8/01/25 9,370 New York City, New York, General Obligation Bonds, Fiscal Series 8/07 at 101.00 AA-(4) 9,643,417 1997H, 6.125%, 8/01/25 (Pre-refunded 8/01/07) New York City, New York, General Obligation Bonds, Fiscal Series 2002G: 1,000 5.000%, 8/01/17 8/12 at 100.00 AA- 1,055,850 6,530 5.750%, 8/01/18 8/12 at 100.00 AA- 7,157,011 5,000 New York City, New York, General Obligation Bonds, Fiscal Series 8/12 at 100.00 AA- 5,507,150 2003A, 5.750%, 8/01/16 7,805 New York State Power Authority, General Revenue Bonds, Series 11/12 at 100.00 Aa2 8,306,081 2002A, 5.000%, 11/15/21 10,000 Port Authority of New York and New Jersey, Special Project Bonds, 12/07 at 102.00 AAA 10,411,400 JFK International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/22 - MBIA Insured (Alternative Minimum Tax) 8,000 TSASC Inc., New York, Tobacco Flexible Amortization Bonds, Series 7/09 at 101.00 AAA 8,623,680 1999-1, 6.250%, 7/15/34 (Mandatory put 7/15/24) (Pre-refunded 7/15/09) - ------------------------------------------------------------------------------------------------------------------------------------ 95,955 Total New York 101,443,936 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.4% (0.9% OF TOTAL INVESTMENTS) 1,900 Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/15 at 100.00 AA 1,980,085 Healthcare System Revenue Bonds, DBA Carolinas Healthcare System, Series 2005A, 5.000%, 1/15/45 7,500 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/13 at 100.00 AAA 8,086,050 Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,400 Total North Carolina 10,066,135 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 4.2% (2.8% OF TOTAL INVESTMENTS) 22,905 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 24,468,494 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 (Pre-refunded 8/01/10) - MBIA Insured 8/10 at 100.00 AAA 2,397,228 2,450 5.750%, 8/01/19 (Pre-refunded 8/01/10) - MBIA Insured 8/10 at 100.00 AAA 2,637,989 - ------------------------------------------------------------------------------------------------------------------------------------ 27,585 Total North Dakota 29,503,711 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.0% (2.0% OF TOTAL INVESTMENTS) 3,335 Columbus City School District, Franklin County, Ohio, General 12/16 at 100.00 AAA 3,110,855 Obligation Bonds, Series 2006, Drivers 1488, 5.077%, 12/01/32 - FSA Insured (IF) 16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, No Opt. Call A 17,933,638 Kettering Medical Center, Series 1999, 6.300%, 4/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ 19,475 Total Ohio 21,044,493 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.0% (0.0% OF TOTAL INVESTMENTS) 300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 6/09 at 100.00 B 304,548 American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Mandatory put 12/01/08) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.4% (1.6% OF TOTAL INVESTMENTS) 5,000 Oregon Health Sciences University, Revenue Bonds, Series 2002A, 1/13 at 100.00 AAA 5,386,400 5.250%, 7/01/22 - MBIA Insured Portland, Oregon, Water System Revenue Bonds, Series 2000A: 6,780 5.375%, 8/01/18 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 7,214,191 3,880 5.500%, 8/01/20 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 4,145,353 - ------------------------------------------------------------------------------------------------------------------------------------ 15,660 Total Oregon 16,745,944 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.8% (2.5% OF TOTAL INVESTMENTS) 5,000 Delaware County Industrial Development Authority, Pennsylvania, 1/08 at 102.00 BB+ 5,140,900 Resource Recovery Revenue Refunding Bonds, Series 1997A, 6.200%, 7/01/19 5,000 Pennsylvania Higher Education Assistance Agency, Capital 12/10 at 100.00 AAA 5,441,900 Acquisition Revenue Bonds, Series 2000, 5.875%, 12/15/30 (Pre-refunded 12/15/10) - MBIA Insured 15,050 Pennsylvania, General Obligation Bonds, Second Series 2001, 9/11 at 101.00 AA 16,086,794 5.000%, 9/15/14 - ------------------------------------------------------------------------------------------------------------------------------------ 25,050 Total Pennsylvania 26,669,594 - ------------------------------------------------------------------------------------------------------------------------------------
50
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.9% (1.9% OF TOTAL INVESTMENTS) $ 12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA $ 12,647,000 Revenue Bonds, Series 2003, 4.500%, 12/01/23 7,500 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 7,880,325 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ 20,000 Total Puerto Rico 20,527,325 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 7.5% (4.9% OF TOTAL INVESTMENTS) 24,730 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA-(4) 27,438,923 Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22 (Pre-refunded 12/01/12) 21,570 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 7,710,844 Bonds, Series 2004A-2, 0.000%, 1/01/30 - AMBAC Insured 3,560 South Carolina Public Service Authority, Revenue Refunding Bonds, 7/13 at 100.00 AAA 3,803,931 Santee Cooper Electric System, Series 2003A, 5.000%, 1/01/20 - AMBAC Insured 1,045 Three Rivers Solid Waste Authority, South Carolina, Solid Waste 1/07 at 102.00 AAA 1,068,272 Disposal Facilities Revenue Bonds, Series 1997, 5.300%, 1/01/27 - MBIA Insured 11,665 Tobacco Settlement Revenue Management Authority, South Carolina, 5/11 at 101.00 BBB 12,663,407 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ 62,570 Total South Carolina 52,685,377 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.7% (0.5% OF TOTAL INVESTMENTS) 5,000 Knox County Health, Educational and Housing Facilities Board, 7/13 at 100.00 AA 5,208,050 Tennessee, Hospital Revenue Bonds, East Tennessee Children's Hospital, Series 2003A, 5.000%, 7/01/23 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 25.5% (16.8% OF TOTAL INVESTMENTS) 5,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/06 at 100.00 CCC+ 5,100,000 Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) 12,250 Austin, Texas, Subordinate Lien Hotel Occupancy Tax Revenue 11/09 at 100.00 AAA 13,034,613 Refunding Bonds, Series 1999, 5.800%, 11/15/29 (Pre-refunded 11/15/09) - AMBAC Insured 11,255 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa2 11,975,995 Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative Minimum Tax) Brownsville Independent School District, Cameron County, Texas, General Obligation Bonds, Series 1999: 5,015 5.625%, 8/15/25 (Pre-refunded 8/15/09) 8/09 at 100.00 AAA 5,281,898 8,825 5.625%, 8/15/29 (Pre-refunded 8/15/09) 8/09 at 100.00 AAA 9,294,667 1,000 Cedar Hill Independent School District, Dallas County, Texas, No Opt. Call AAA 321,410 General Obligation Bonds, Series 2002, 0.000%, 8/15/32 - FGIC Insured 15,000 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 15,626,700 Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC Insured Clear Creek Independent School District, Galveston and Harris Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds, Series 2000: 585 5.400%, 2/15/18 2/10 at 100.00 AAA 615,847 340 5.650%, 2/15/19 2/10 at 100.00 AAA 360,713 235 5.700%, 2/15/20 2/10 at 100.00 AAA 249,676 270 5.700%, 2/15/21 2/10 at 100.00 AAA 286,862 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 2/15/10) 2/10 at 100.00 AAA 17,695,017 9,660 5.650%, 2/15/19 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 10,285,485 6,645 5.700%, 2/15/20 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 7,085,497 7,750 5.700%, 2/15/21 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 8,263,748 2,500 Comal Independent School District, Comal, Bexar, Guadalupe, Hays, No Opt. Call Aaa 1,238,400 and Kendall Counties, Texas, General Obligation Bonds, Series 2005A, 0.000%, 2/01/23 6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/09 at 101.00 CCC+ 6,157,620 Corporation, Texas, Revenue Bonds, American Airlines Inc., Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax)
51 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 11,750 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC+ $ 11,839,183 Corporation, Texas, Revenue Refunding Bonds, American Airlines Inc., Series 2000C, 6.150%, 5/01/29 (Mandatory put 11/01/07) (Alternative Minimum Tax) Ennis Independent School District, Ellis County, Texas, General Obligation Bonds, Series 2006: 3,950 0.000%, 8/15/30 8/16 at 49.21 Aaa 1,231,097 4,000 0.000%, 8/15/31 8/16 at 46.64 Aaa 1,178,240 1,440 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, No Opt. Call AAA 461,938 Convention and Entertainment Project, Series 2001B, 0.000%, 9/01/32 - AMBAC Insured 1,250 Houston, Texas, Junior Lien Water and Sewerage System Revenue 12/11 at 100.00 AAA 1,321,963 Refunding Bonds, Series 2001A, 5.000%, 12/01/20 - FSA Insured 21,500 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 22,776,670 Series 2000B, 5.500%, 7/01/30 - FSA Insured 9,350 Leander Independent School District, Williamson and Travis 8/15 at 39.49 AAA 2,461,201 Counties, Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/32 - FGIC Insured 6,000 Leander Independent School District, Williamson and Travis 8/14 at 35.27 AAA 1,471,680 Counties, Texas, General Obligation Bonds, Series 2006, 0.000%, 8/15/33 15,000 San Antonio Independent School District, Bexar County, Texas, 8/09 at 100.00 AAA 15,886,950 General Obligation Bonds, Series 1999, 5.800%, 8/15/29 (Pre-refunded 8/15/09) 5,000 White Settlement Independent School District, Tarrant County, 8/15 at 36.81 AAA 1,225,550 Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/34 3,970 Wichita Falls, Wichita County, Texas, Priority Lien Water and 8/11 at 100.00 AAA 4,184,737 Sewerage System Revenue Bonds, Series 2001, 5.000%, 8/01/21 - AMBAC Insured Wylie Independent School District, Taylor County, Texas, General Obligation Bonds, Series 2005: 3,000 0.000%, 8/15/23 8/15 at 67.10 AAA 1,366,080 2,000 0.000%, 8/15/24 8/15 at 63.56 AAA 857,440 - ------------------------------------------------------------------------------------------------------------------------------------ 197,280 Total Texas 179,136,877 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 17.6% (11.6% OF TOTAL INVESTMENTS) 5,500 Clark County Public Utility District 1, Washington, Generating 1/11 at 100.00 AAA 5,729,405 System Revenue Refunding Bonds, Series 2000, 5.125%, 1/01/20 - FSA Insured 2,755 Cowlitz County, Washington, Special Sewerage Revenue Refunding No Opt. Call AAA 3,123,233 Bonds, CSOB Wastewater Treatment Facilities, Series 2002, 5.500%, 11/01/16 - FGIC Insured 10,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/11 at 101.00 AAA 10,864,400 Nuclear Project 3, Series 2001A, 5.500%, 7/01/17 - FSA Insured 2,500 King County, Washington, Sewer Revenue Bonds, Series 2001, 1/12 at 100.00 AAA 2,628,625 5.000%, 1/01/23 - FGIC Insured 33,490 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 5.625%, 8/10 at 100.00 AAA 35,853,053 2/01/30 (Pre-refunded 8/01/10) - MBIA Insured 6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 5.625%, 8/10 at 100.00 AAA 7,347,887 2/01/24 - MBIA Insured (Alternative Minimum Tax) Seattle, Washington, General Obligation Refunding and Improvement Bonds, Series 2002: 6,165 4.400%, 12/01/19 12/12 at 100.00 AAA 6,307,535 6,445 4.500%, 12/01/20 12/12 at 100.00 AAA 6,615,535 3,000 Spokane County School District 81, Spokane, Washington, General 6/15 at 100.00 AAA 2,844,900 Obligation Bonds, Series 2005, 5.000%, 6/01/24 - MBIA Insured 6,630 Tacoma, Washington, Electric System Revenue Refunding Bonds, 1/11 at 101.00 AAA 7,248,579 Series 2001A, 5.750%, 1/01/17 (Pre-refunded 1/01/11) - FSA Insured 3,520 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/11 at 100.00 Aaa 3,740,950 Children's Hospital and Regional Medical Center, Series 2001, 5.000%, 10/01/21 (Pre-refunded 10/01/11) - AMBAC Insured 7,890 Washington State Higher Education Facilities Authority, Revenue 11/09 at 101.00 AA 8,417,999 Bonds, Pacific Lutheran University, Series 1999, 5.950%, 11/01/29 - RAAI Insured 12,020 Washington State Tobacco Settlement Authority, Tobacco Settlement 6/13 at 100.00 BBB 13,365,278 Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26
52
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 9,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, 1/12 at 100.00 AAA $ 9,512,640 Series 2002C, 5.000%, 1/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 115,865 Total Washington 123,600,019 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 1.1% (0.7% OF TOTAL INVESTMENTS) 4,030 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 4,357,196 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 1,755 Wisconsin Health and Educational Facilities Authority, Revenue 5/16 at 100.00 BBB 1,763,670 Bonds, Divine Savior Healthcare, Series 2006, 4.750%, 5/01/25 1,250 Wisconsin Health and Educational Facilities Authority, Revenue 3/08 at 101.00 N/R 1,257,600 Bonds, United Lutheran Program for the Aging Inc., Series 1998, 5.700%, 3/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ 7,035 Total Wisconsin 7,378,466 - ------------------------------------------------------------------------------------------------------------------------------------ WYOMING - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,800 Jackson National Rural Utilities Cooperative Financing 5/07 at 101.00 A 2,849,392 Corporation, Wyoming, Guaranteed Gas Supply Revenue Bonds, Lower Valley Power and Light Inc., Series 1997B, 5.875%, 5/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,215,233 Total Municipal Bonds (cost $991,222,192) 1,067,173,259 ============------------------------------------------------------------------------------------------------------------------------ SHARES DESCRIPTION (1) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COMMON STOCKS - 0.0% (0.0% OF TOTAL INVESTMENTS) AIRLINES - 0.0% (0.0% OF TOTAL INVESTMENTS) 1,527 UAL Corporation (5) (7) 54,880 - ------------------------------------------------------------------------------------------------------------------------------------ Total Common Stocks (cost $48,000) 54,880 --------------------------------------------------------------------------------------------------------------------- Total Investments (cost $991,270,192) - 152.1% 1,067,228,139 --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.1% 14,331,122 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (54.2)% (380,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 701,559,261 =====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. The ratings shown for inverse floating rate investments represent those of the underlying bonds and not the inverse floating rate investments themselves. Inverse floating rate investments likely present greater credit risk to the holders of such investments than to those holders of the underlying bonds. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Non-income producing. (6) On December 9, 2002, UAL Corporation ("UAL"), 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 the bonds previously held and thus the Fund had stopped accruing interest on its UAL bonds. (7) On February 1, 2006, UAL emerged from federal bankruptcy with the acceptance of its reorganization plan by the bankruptcy court. Under the settlement agreement established to meet UAL's unsecured bond obligations, the bondholders, including the Fund, received distributions of UAL common stock over the subsequent months, and the bankruptcy court dismissed all unsecured claims of bondholders, including those of the Fund. On April 13, 2006 and May 4, 2006, the Fund liquidated such UAL common stock holdings. On October 5, 2006, the Fund received an additional distribution of UAL common stock as a result of its ownership of UAL bonds, which it still held at October 31, 2006. Subsequent to fiscal year-end, the Fund liquidated its UAL common stock holdings. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 53 Nuveen Dividend Advantage Municipal Fund (NAD) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.3% (0.2% OF TOTAL INVESTMENTS) $ 1,500 Alabama 21st Century Authority, Tobacco Settlement Revenue Bonds, 6/10 at 102.00 A- $ 1,581,555 Series 2000, 5.750%, 12/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.1% (0.1% OF TOTAL INVESTMENTS) 750 Alaska Housing Finance Corporation, General Housing Purpose Bonds, 12/14 at 100.00 AAA 804,810 Series 2005A, 5.250%, 12/01/34 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 2.7% (1.9% OF TOTAL INVESTMENTS) 1,535 Alameda Corridor Transportation Authority, California, Senior Lien No Opt. Call AAA 386,620 Revenue Bonds, Series 1999A, 0.000%, 10/01/37 - MBIA Insured 5,500 Anaheim Public Finance Authority, California, Subordinate Lease No Opt. Call AAA 2,113,870 Revenue Bonds, Public Improvement Project, Series 1997C, 0.000%, 9/01/28 - FSA Insured 200 California, General Obligation Bonds, Series 1997, 5.000%, 10/07 at 101.00 AAA 204,296 10/01/18 - AMBAC Insured California, General Obligation Bonds, Series 1997: 2,195 5.000%, 10/01/18 (Pre-refunded 10/01/07) - AMBAC Insured 10/07 at 101.00 AAA 2,247,351 210 5.000%, 10/01/18 (Pre-refunded 10/01/07) - AMBAC Insured 10/07 at 101.00 AAA 215,009 5,000 California, General Obligation Bonds, Series 2005, 5.000%, 3/01/31 3/16 at 100.00 A+ 5,296,050 3,500 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA 1,480,815 Tobacco Settlement Asset-Backed 17,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 4,765,950 California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 35,140 Total California 16,709,961 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 1.9% (1.3% OF TOTAL INVESTMENTS) 3,205 Denver City and County, Colorado, Airport Special Facilities 1/09 at 101.00 AAA 3,368,711 Revenue Bonds, Rental Car Projects, Series 1999A, 6.000%, 1/01/12 - MBIA Insured (Alternative Minimum Tax) 2,950 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 3,192,313 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/22 (Pre-refunded 12/01/13) - XLCA Insured 1,475 Denver, Colorado, FHA-Insured Multifamily Housing Revenue Bonds, 10/07 at 102.00 AAA 1,513,660 Boston Lofts Project, Series 1997A, 5.750%, 10/01/27 (Alternative Minimum Tax) 8,515 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 3,730,762 Series 1997B, 0.000%, 9/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 16,145 Total Colorado 11,805,446 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,700 Connecticut Development Authority, Health Facilities Revenue 2/07 at 100.00 N/R 2,709,693 Refunding Bonds, Alzheimer's Resource Center of Connecticut Inc., Series 1994A, 7.125%, 8/15/14 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.8% (0.6% OF TOTAL INVESTMENTS) 5,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 5,186,700 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.250%, 10/01/13 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 7.5% (5.3% OF TOTAL INVESTMENTS) 1,630 Florida Housing Finance Agency, Housing Revenue Bonds, Mar Lago 12/07 at 102.00 AAA 1,679,177 Village Apartments, Series 1997F, 5.800%, 12/01/17 - AMBAC Insured (Alternative Minimum Tax)
54
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA (continued) $ 15,000 Florida State Board of Education, Public Education Capital Outlay 6/15 at 101.00 AAA $ 15,051,600 Bonds, Series 2005E, 4.500%, 6/01/35 14,350 JEA St. John's River Power Park System, Florida, Revenue 10/11 at 100.00 Aa2 15,361,101 Refunding Bonds, Issue 2, Series 2002-17, 5.250%, 10/01/13 13,625 Martin County Industrial Development Authority, Florida, 12/06 at 100.00 BB+ 13,675,140 Industrial Development Revenue Bonds, Indiantown Cogeneration LP, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 44,605 Total Florida 45,767,018 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.3% (0.9% OF TOTAL INVESTMENTS) 4,000 Forsyth County Water and Sewerage Authority, Georgia, Revenue 4/10 at 101.00 AA (4) 4,351,400 Bonds, Series 2000, 6.000%,4/01/25 (Pre-refunded 4/01/10) 880 Gainesville and Hall County Hospital Authority, Georgia, 5/09 at 101.00 AAA 924,519 Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 1999, 5.500%, 5/15/29 - MBIA Insured 2,620 Gainesville and Hall County Hospital Authority, 5/09 at 101.00 AAA 2,769,209 Georgia, Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 1999, 5.500%, 5/15/29 (Pre-refunded 5/15/09) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 7,500 Total Georgia 8,045,128 - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.2% (0.1% OF TOTAL INVESTMENTS) 265 Idaho Housing and Finance Association, Single Family 7/09 at 101.00 Aa2 269,359 Mortgage Bonds, Series 1999E, 5.750%, 1/01/21 (Alternative Minimum Tax) 320 Idaho Housing and Finance Association, Single Family Mortgage 1/10 at 100.00 Aa2 330,701 Bonds, Series 2000D, 6.350%, 7/01/22 (Alternative Minimum Tax) 470 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aaa 478,596 Mortgage Bonds, Series 2000E, 5.950%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,055 Total Idaho 1,078,656 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 34.5% (23.7% OF TOTAL INVESTMENTS) 3,265 Channahon, Illinois, Revenue Refunding Bonds, Morris Hospital, 12/09 at 102.00 BBB+ 3,413,166 Series 1999, 5.750%, 12/01/12 7,250 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 8,624,093 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 5.500%, 12/01/26 - FGIC Insured Chicago, Illinois, FHA/GNMA Multifamily Housing Revenue Bonds, Archer Court Apartments, Series 1999A: 830 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 866,014 1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,249,470 1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,982,577 22,750 Chicago, Illinois, General Obligation Refunding Bonds, No Opt. Call AAA 26,678,467 Emergency Telephone System, Series 1999, 5.500%, 1/01/23 - FGIC Insured 2,620 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,887,843 Series 1993, 5.375%, 1/01/14 - AMBAC Insured 3,340 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 3,527,040 O'Hare International Airport, Series 2005A, 5.000%, 1/01/33 - FGIC Insured 1,145 Chicago, Illinois, Wastewater Transmission Revenue Bonds, 1/08 at 100.00 AAA 1,161,568 Series 1995, 5.125%, 1/01/25 - FGIC Insured 190 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 206,612 Illinois, General Obligation Bonds, Series 2003B, 5.250%, 11/01/20 - FSA Insured 810 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 890,579 Illinois, General Obligation Bonds, Series 2003B, 5.250%, 11/01/20 (Pre-refunded 11/01/13) - FSA Insured 500 Hoffman Estates Park District, Cook County, Illinois, 12/09 at 102.00 AAA 532,505 General Obligation Bonds, Series 1999, 5.375%, 12/01/29 - MBIA Insured 3,935 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 2,854,410 Program Revenue Bonds, Lake County School District 116 - Round Lake, Series 1999, 0.000%, 1/01/15 - MBIA Insured
55 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 24,835 Illinois Development Finance Authority, Revenue Bonds, 9/07 at 102.00 AAA $ 25,710,434 Presbyterian Home of Lake Forest, Series 1999, 5.625%, 9/01/31 - FSA Insured 5,570 Illinois Finance Authority, Revenue Bonds, University of Chicago, 7/14 at 100.00 Aa1 5,838,697 Series 2004A, 5.000%, 7/01/34 17,280 Illinois Health Facilities Authority, Converted Adjustable 10/07 at 102.00 AAA 17,991,763 Rate Revenue Bonds, Highland Park Hospital, Series 1991A, 6.000%, 10/01/15 (Pre-refunded 10/01/07) - FGIC Insured 9,880 Illinois Health Facilities Authority, Remarketed Revenue Bonds, 8/11 at 103.00 Aa1 10,767,026 University of Chicago Project, Series 1985A, 5.500%, 8/01/20 5,400 Illinois Health Facilities Authority, Revenue Bonds, 7/07 at 101.00 AAA 5,487,858 Loyola University Health System, Series 1997A, 5.000%, 7/01/24 - MBIA Insured 5,490 Illinois Health Facilities Authority, Revenue Bonds, 2/07 at 102.00 A 5,617,972 Sarah Bush Lincoln Health Center, Series 1996B, 5.500%, 2/15/16 1,500 Illinois Housing Development Authority, Housing Finance Bonds, 1/15 at 100.00 AAA 1,526,790 Series 2005E, 4.800%, 1/01/36 - FGIC Insured 11,345 Lake and McHenry Counties Community Unit School District 118, 1/15 at 60.14 Aaa 4,717,478 Wauconda, Illinois, General Obligation Bonds, Series 2005B, 0.000%, 1/01/25 - FSA Insured 3,000 Lombard Public Facilities Corporation, Illinois, 1/16 at 100.00 N/R 3,226,890 First Tier Conference Center and Hotel Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36 22,500 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 23,863,050 Revenue Bonds, McCormick Place Expansion Project, Series 1999A, 5.500%, 12/15/24 - FGIC 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 4,887,188 13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 6,222,190 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1999: 22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 26,648,858 3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 4,223,835 1,300 Schaumburg, Illinois, General Obligation Bonds, Series 2004B, 12/14 at 100.00 AAA 1,403,324 5.250%, 12/01/34 - FGIC Insured 10,000 Will County Community High School District 210 Lincoln-Way, No Opt. Call Aaa 4,955,700 Illinois, General Obligation Bonds, Series 2006, 0.000%, 1/01/23 - FSA Insured 4,500 Will County School District 122, New Lenox, Illinois, General No Opt. Call Aaa 2,729,520 Obligation Bonds, Series 2000B, 0.000%, 11/01/18 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 221,270 Total Illinois 210,692,917 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.7% (2.5% OF TOTAL INVESTMENTS) 8,755 Indiana Health Facility Financing Authority, Hospital Revenue 11/09 at 101.00 AAA 9,306,915 Bonds, Charity Obligated Group, Series 1999D, 5.500%, 11/15/24 (Pre-refunded 11/15/09) - MBIA Insured 8,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 8,630,800 Revenue Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/26 (Pre-refunded 8/15/10) - MBIA Insured 4,190 Indianapolis, Indiana, Economic Development Revenue Bonds, 6/09 at 101.00 Aa3 (4) 4,445,967 Park Tudor Foundation Inc., Project, Series 1999, 5.700%, 6/01/24 (Pre-refunded 6/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ 20,945 Total Indiana 22,383,682 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.2% (0.8% OF TOTAL INVESTMENTS) 7,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB 7,440,020 Revenue Bonds, Series 2005C, 5.625%, 6/01/46 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS) 3,825 Wichita, Kansas, Water and Sewerage Utility Revenue Bonds, 4/07 at 101.00 AAA 3,831,044 Series 1999, 4.000%, 10/01/18 - FGIC Insured 1,000 Wyandotte County-Kansas City Unified Government, Kansas, Sales 12/15 at 100.00 N/R 1,046,400 Tax Special Obligation Bonds, Redevelopment Project Area B, Series 2005, 5.000%, 12/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ 4,825 Total Kansas 4,877,444 - ------------------------------------------------------------------------------------------------------------------------------------
56
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.7% (1.2% OF TOTAL INVESTMENTS) $ 3,030 Hardin County School District Finance Corporation, Kentucky, 2/10 at 101.00 Aa3 (4) $ 3,261,219 School Building Revenue Bonds, Series 2000, 5.750%, 2/01/20 (Pre-refunded 2/01/10) Kentucky Economic Development Finance Authority, Hospital System Revenue Refunding and Improvement Bonds, Appalachian Regional Healthcare Inc., Series 1997: 1,850 5.850%, 10/01/17 4/08 at 102.00 BB- 1,884,799 5,000 5.875%, 10/01/22 4/08 at 102.00 BB- 5,083,050 - ------------------------------------------------------------------------------------------------------------------------------------ 9,880 Total Kentucky 10,229,068 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 4.3% (3.0% OF TOTAL INVESTMENTS) 2,245 Lafayette, Louisiana, Sales Tax Revenue Bonds, Public 5/10 at 101.50 AAA 2,427,765 Improvements, Series 2000B, 5.625%, 5/01/25 (Pre-refunded 5/01/10) - FGIC Insured 1,750 Louisiana Local Government Environmental Facilities and 6/12 at 105.00 Aaa 1,936,743 Community Development Authority, GNMA Collateralized Mortgage Revenue Refunding Bonds, Sharlo Apartments, Series 2002A, 6.500%, 6/20/37 5,350 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 5,716,475 Baton Rouge General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured 1,815 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 1,772,565 Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 13,570 Louisiana Transportation Authority, Senior Lien Toll Road 12/10 at 38.73 AAA 4,354,206 Revenue Bonds, Series 2005B, 0.000%, 12/01/28 - AMBAC Insured 9,545 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 10,024,732 Settlement Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/30 - ------------------------------------------------------------------------------------------------------------------------------------ 34,275 Total Louisiana 26,232,486 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.3% (1.6% OF TOTAL INVESTMENTS) 1,485 Boston Industrial Development Financing Authority, Massachusetts, 9/12 at 102.00 N/R 1,501,573 Subordinate Revenue Bonds, Crosstown Center Project, Series 2002, 8.000%, 9/01/35 (Alternative Minimum Tax) 4,365 Massachusetts Health and Educational Facilities Authority, 10/15 at 100.00 AAA 4,685,129 Revenue Bonds, Berkshire Health System, Series 2005F, 5.000%, 10/01/19 - AGC Insured 7,000 Massachusetts Port Authority, Special Facilities Revenue Bonds, 7/07 at 102.00 AAA 7,210,210 BOSFUEL Corporation, Series 1997, 5.500%, 7/01/18 - MBIA Insured (Alternative Minimum Tax) 785 Massachusetts Port Authority, Special Facilities Revenue Bonds, 3/07 at 102.00 AAA 802,082 US Airways Group Inc., Series 1996A, 5.875%, 9/01/23 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 13,635 Total Massachusetts 14,198,994 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 3.6% (2.5% OF TOTAL INVESTMENTS) 2,435 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/11 at 100.00 AAA 2,612,000 Series 2001A, 5.250%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 15,255 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, 8/08 at 101.00 BB- 15,440,958 Detroit Medical Center Obligated Group, Series 1998A, 5.250%, 8/15/28 4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 4,153,320 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/16 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 21,690 Total Michigan 22,206,278 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,095 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 101.00 AA+ 1,118,291 Series 1998H-1, 5.650%, 7/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.2% (1.5% OF TOTAL INVESTMENTS) Kansas City Municipal Assistance Corporation, Missouri, Leasehold Revenue Bonds, Series 2004B-1: 7,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AAA 2,868,040 5,000 0.000%, 4/15/29 - AMBAC Insured No Opt. Call AAA 1,877,450 2,185 Missouri Health and Educational Facilities Authority, 6/11 at 101.00 AAA 2,329,734 Revenue Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/21 - AMBAC Insured
57 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI (continued) Missouri Health and Educational Facilities Authority, Revenue Bonds, SSM Healthcare System, Series 2001A: $ 2,185 5.250%, 6/01/21 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AAA $ 2,359,866 3,670 5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AAA 3,955,599 - ------------------------------------------------------------------------------------------------------------------------------------ 20,040 Total Missouri 13,390,689 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,005 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 1,027,452 Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 1,000 Montana Higher Education Student Assistance Corporation, Student 12/09 at 100.00 A2 1,056,830 Loan Revenue Bonds, Subordinate Series 1999B, 6.400%, 12/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,005 Total Montana 2,084,282 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.2% (0.2% OF TOTAL INVESTMENTS) 1,400 NebHelp Inc., Nebraska, Senior Subordinate Bonds, Student Loan No Opt. Call AAA 1,451,562 Program, Series 1993A-5A, 6.200%, 6/01/13 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 1.7% (1.1% OF TOTAL INVESTMENTS) 2,115 Clark County, Nevada, General Obligation Bank Bonds, Southern 6/11 at 100.00 AAA 2,270,685 Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19 (Pre-refunded 6/01/11) - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 8,000 0.000%, 1/01/19 - AMBAC Insured No Opt. Call AAA 4,756,160 3,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 3,126,810 - ------------------------------------------------------------------------------------------------------------------------------------ 13,115 Total Nevada 10,153,655 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.1% (0.1% OF TOTAL INVESTMENTS) 860 New Hampshire Housing Finance Authority, Single Family Mortgage 1/07 at 101.00 Aa2 880,227 Acquisition Revenue Bonds, Series 1995D, 6.550%, 7/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 6.0% (4.1% OF TOTAL INVESTMENTS) 1,105 New Jersey Health Care Facilities Financing Authority, FHA- 8/11 at 100.00 AAA 1,109,343 Insured Mortgage Revenue Bonds, Jersey City Medical Center, Series 2001, 4.800%, 8/01/21 - AMBAC Insured 2,165 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA 2,209,447 Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13 - MBIA Insured (Alternative Minimum Tax) 4,130 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,564,352 Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured 4,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 4,651,440 System Bonds, Series 1999A, 5.750%, 6/15/18 20,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 7,769,600 System Bonds, Series 2006C, 0.000%, 12/15/28 - AMBAC Insured Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 10,480 5.750%, 6/01/32 6/12 at 100.00 BBB 11,138,563 3,165 6.125%, 6/01/42 6/12 at 100.00 BBB 3,436,620 1,365 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 BBB 1,557,861 Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39 - ------------------------------------------------------------------------------------------------------------------------------------ 46,410 Total New Jersey 36,437,226 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.7% (0.5% OF TOTAL INVESTMENTS) 4,000 University of New Mexico, FHA-Insured Mortgage Hospital Revenue 7/14 at 100.00 AAA 4,201,000 Bonds, Series 2004, 5.000%, 7/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------
58
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 15.3% (10.5% OF TOTAL INVESTMENTS) $ 80 Dormitory Authority of the State of New York, Improvement Revenue 2/08 at 100.00 AAA $ 81,398 Bonds, Mental Health Services Facilities, Series 1996B, 5.125%, 8/15/21 - MBIA Insured 4,600 Dormitory Authority of the State of New York, Improvement 2/07 at 102.00 AAA 4,712,424 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 7/07 at 102.00 AA 2,236,033 Revenue Bonds, Franciscan Health Partnership Obligated Group - Frances Shervier Home and Hospital, Series 1997, 5.500%, 7/01/17 - RAAI Insured 7,500 Dormitory Authority of the State of New York, Secured Hospital 2/08 at 101.50 AAA 7,771,500 Revenue Refunding Bonds, Wyckoff Heights Medical Center, Series 1998H, 5.300%, 8/15/21 - MBIA Insured 2,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 2,081,400 Resolution Consolidated Revenue Bonds, City University System, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded 1/01/08) - FSA Insured 5,000 Long Island Power Authority, New York, Electric System General 6/08 at 101.00 AAA 5,182,750 Revenue Bonds, Series 1998A, 5.250%, 12/01/26 (Pre-refunded 6/01/08) - FSA Insured Nassau County, New York, General Obligation Improvement Bonds, Series 1999B: 4,005 5.250%, 6/01/19 (Pre-refunded 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 4,253,390 7,005 5.250%, 6/01/21 (Pre-refunded 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 7,439,450 6,000 New York City Industrial Development Agency, New York, American 8/16 at 101.00 B 7,261,140 Airlines-JFK International Airport Special Facility Revenue Bonds, Series 2005, 7.750%, 8/01/31 (Alternative Minimum Tax) 5,000 New York City Municipal Water Finance Authority, New York, Water 12/14 at 100.00 AAA 5,285,000 and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%, 6/15/36 - FSA Insured 8,800 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 9,335,920 Dedicated Revenue Bonds, Local Government Assistance Corporation, Series 2004A, 5.000%, 10/15/32 - AMBAC Insured 10,000 New York City Transitional Finance Authority, New York, Future 8/09 at 101.00 AAA 10,690,000 Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded 8/15/09) New York City, New York, General Obligation Bonds, Fiscal Series 1998F: 1,980 5.250%, 8/01/14 - AMBAC Insured 2/08 at 101.00 AAA 2,034,965 13,930 5.375%, 8/01/19 - MBIA Insured 2/08 at 101.00 AAA 14,368,099 New York City, New York, General Obligation Bonds, Fiscal Series 1998F: 20 5.250%, 8/01/14 (Pre-refunded 2/01/08) - AMBAC Insured 2/08 at 101.00 Aaa 20,624 70 5.375%, 8/01/19 (Pre-refunded 2/01/08) - MBIA Insured 2/08 at 101.00 AAA 72,288 10,000 Port Authority of New York and New Jersey, Special Project Bonds, 12/07 at 102.00 AAA 10,428,300 JFK International Air Terminal LLC, Sixth Series 1997, 5.900%, 12/01/17 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 88,160 Total New York 93,254,681 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.7% (0.4% OF TOTAL INVESTMENTS) 3,830 Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/15 at 100.00 AA 3,991,435 Healthcare System Revenue Bonds, DBA Carolinas Healthcare System, Series 2005A, 5.000%, 1/15/45 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.0% (2.7% OF TOTAL INVESTMENTS) 2,300 Amherst Exempted Village School District, Ohio, Unlimited Tax 12/11 at 100.00 Aaa 2,467,624 General Obligation School Improvement Bonds, Series 2001, 5.125%, 12/01/21 (Pre-refunded 12/01/11) - FGIC Insured 3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing Mortgage 1/07 at 101.00 Aa2 3,665,752 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 3,811,148 Initiatives, Series 2004A, 5.000%, 5/01/30 12,700 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/09 at 102.00 N/R 13,169,265 Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) 1,115 Warren County, Ohio, Limited Tax General Obligations, 12/07 at 101.00 Aa2 1,147,335 Series 1997, 5.500%, 12/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ 23,400 Total Ohio 24,261,124 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,355 Portland, Oregon, Downtown Waterfront Urban Renewal and 6/10 at 101.00 Aaa 2,526,680 Redevelopment Revenue Bonds, Series 2000A, 5.500%, 6/15/20 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------
59 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 4.8% (3.3% OF TOTAL INVESTMENTS) $ 3,480 Allegheny County Hospital Development Authority, 11/10 at 102.00 Ba3 $ 4,162,358 Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B, 9.250%, 11/15/22 1,710 Carbon County Industrial Development Authority, No Opt. Call BBB- 1,800,698 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 Refunding 6/08 at 102.00 AAA 19,696,068 Bonds, Series 1998A, 5.500%, 6/15/18 - FGIC Insured (Alternative Minimum Tax) 3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,541,813 Obligation Bonds, Series 2002B, 5.625%, 8/01/16 (Pre-refunded 8/01/12) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 27,295 Total Pennsylvania 29,200,937 - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.1% (1.4% OF TOTAL INVESTMENTS) 12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA 12,647,000 Revenue Bonds, Series 2003, 4.500%, 12/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 3.2% (2.2% OF TOTAL INVESTMENTS) 2,015 Central Falls, Rhode Island, General Obligation School 5/09 at 102.00 AA 2,166,991 Bonds, Series 1999, 6.250%, 5/15/20 - RAAI Insured 3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Aaa 3,778,390 Bonds, Public Safety and Municipal Building Projects, Series 1999A, 5.750%, 4/01/29 (Pre-refunded 4/01/10) - AMBAC Insured 12,500 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 13,419,125 Tobacco Settlement Asset-Backed Bonds, Series 2002A, 6.125%, 6/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ 18,015 Total Rhode Island 19,364,506 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,500 Greenville, South Carolina, Hospital Facilities Revenue 5/11 at 101.00 AAA 1,552,800 Bonds, Series 2001, 5.000%, 5/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.0% (1.3% OF TOTAL INVESTMENTS) 6,400 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 6,875,264 Revenue Bonds, Series 1999D, 6.000%, 3/01/24 - AMBAC Insured (Alternative Minimum Tax) 2,425 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 2,520,472 Revenue Bonds, Series 2001B, 5.125%, 3/01/26 - FSA Insured 1,910 Sullivan County Health Educational and Housing Facilities 9/16 at 100.00 BBB+ 2,008,747 Board, Tennessee, Revenue Bonds, Wellmont Health System, Series 2006C, 5.250%, 9/01/36 (WI/DD, Settling 11/02/06) 85 Tennessee Housing Development Agency, Homeownership Program 7/10 at 101.00 AA 86,937 Bonds, Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) 475 Tennessee Housing Development Agency, Homeownership Program 7/10 at 100.00 AA 485,127 Bonds, Series 2000-2B, 6.250%, 1/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 11,295 Total Tennessee 11,976,547 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 15.2% (10.4% OF TOTAL INVESTMENTS) 1,000 Alliance Airport Authority, Texas, Special Facilities 12/06 at 100.00 CCC+ 1,020,000 Revenue Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) 2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Baa2 2,994,611 Refunding Bonds, TXU Electric Company, Series 1999C, 7.700%, 3/01/32 (Alternative Minimum Tax) 4,675 Carrollton-Farmers Branch Independent School District, 2/09 at 100.00 AAA 4,923,850 Dallas County, Texas, Unlimited Tax School Building Bonds, Series 1999, 6.000%, 2/15/20 (Pre-refunded 2/15/09) 2,820 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 AAA 2,937,820 Williamson Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC Insured
60
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (CONTINUED) 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 $ 2,393,402 7,000 0.000%, 8/15/21 8/09 at 49.48 AAA 3,075,240 7,345 0.000%, 8/15/23 8/09 at 44.01 AAA 2,869,765 7,000 0.000%, 8/15/24 8/09 at 41.50 AAA 2,579,220 7,350 0.000%, 8/15/25 8/09 at 39.14 AAA 2,557,433 7,000 0.000%, 8/15/26 8/09 at 36.91 AAA 2,295,720 820 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax 12/11 at 100.00 AAA 849,528 Revenue Bonds, Series 2001, 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 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 12,883,946 11,180 5.375%, 7/01/29 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 11,768,180 2,205 Harris County-Houston Sports Authority, Texas, Senior Lien No Opt. Call AAA 1,211,758 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 877,800 Bonds, Convention and Entertainment Project, Series 2001B, 0.000%, 9/01/30 - AMBAC Insured 2,500 Jefferson County, Texas, Certificates of Obligation, Series 8/10 at 100.00 AAA 2,709,925 2000, 6.000%, 8/01/25 (Pre-refunded 8/01/10) - FSA Insured 2,000 Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, Series 3/09 at 100.00 AAA 2,079,100 2001, 5.300%, 3/15/26 (Pre-refunded 3/15/09) - FGIC Insured 30,095 Leander Independent School District, Williamson and Travis 8/12 at 27.94 AAA 6,570,039 Counties, Texas, General Obligation Bonds, Series 2004, 0.000%, 8/15/34 9,345 Leander Independent School District, Williamson and Travis 8/15 at 37.33 AAA 2,325,036 Counties, Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/33 - FGIC Insured 33,160 Leander Independent School District, Williamson and Travis 8/14 at 26.50 AAA 6,087,844 Counties, Texas, General Obligation Bonds, Series 2006, 0.000%, 8/15/38 1,500 Port Arthur, Texas, Jefferson County, General Obligation 2/07 at 100.00 AAA 1,506,270 Bonds, Series 1997, 5.000%, 2/15/21 (Pre-refunded 2/15/07) - MBIA Insured 1,000 San Antonio, Texas, Water System Revenue Bonds, Series 5/15 at 100.00 AAA 1,022,170 2005, 4.750%, 5/15/37 - MBIA Insured 10,000 Tarrant County Health Facilities Development Corporation, 2/08 at 102.00 AAA 10,372,600 Texas, Revenue Bonds, Texas Health Resources System, Series 1997A, 5.250%, 2/15/17 - MBIA Insured 7,000 White Settlement Independent School District, Tarrant 8/15 at 34.92 AAA 1,626,450 County, Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/35 Wylie Independent School District, Taylor County, Texas, General Obligation Bonds, Series 2005: 3,000 0.000%, 8/15/20 8/15 at 78.46 AAA 1,605,690 3,000 0.000%, 8/15/22 8/15 at 70.77 AAA 1,443,330 - ------------------------------------------------------------------------------------------------------------------------------------ 183,425 Total Texas 92,586,727 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS) Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1999C-2, Class II: 425 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 AAA 431,813 155 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 161,849 130 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.00 AA 132,244 Series 1999D, 5.850%, 7/01/21 (Alternative Minimum Tax) 40 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.50 Aa2 40,882 Series 1999F, 6.300%, 7/01/21 (Alternative Minimum Tax) 1,160 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 1,187,991 Series 2000F-2, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,910 Total Utah 1,954,779 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 3,395 Virginia Small Business Financing Authority, Industrial 11/09 at 102.00 N/R 3,536,368 Development Water Revenue Bonds, S.I.L. Clean Water, LLC Project, Series 1999, 7.250%, 11/01/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------
61 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.3% (7.8% OF TOTAL INVESTMENTS) $ 4,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 AAA $ 4,388,280 Bonds, Nuclear Project 3, Series 2003A, 5.500%, 7/01/17 - XLCA Insured Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, Series 1999B: 1,755 6.000%, 9/01/15 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 1,888,187 2,590 6.000%, 9/01/16 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 2,786,555 Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, Series 1999C: 875 6.000%, 9/01/15 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 941,404 1,260 6.000%, 9/01/16 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 1,355,621 9,760 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 10,623,760 Bonds, Series 2001A, 5.625%, 1/01/21 (Pre-refunded 1/01/11) - FSA Insured 4,800 Washington Public Power Supply System, Revenue Refunding 7/07 at 102.00 AAA 4,942,608 Bonds, Nuclear Project 3, Series 1997A, 5.250%, 7/01/16 - FSA Insured 7,185 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 7,989,145 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 12,051,212 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 2,110,668 Series 1999S-2, 0.000%, 1/01/18 - FSA Insured Washington, General Obligation Compound Interest Bonds, Series 1999S-3: 17,650 0.000%, 1/01/20 No Opt. Call Aa1 10,054,146 18,470 0.000%, 1/01/21 No Opt. Call Aa1 10,025,331 - ------------------------------------------------------------------------------------------------------------------------------------ 83,300 Total Washington 69,156,917 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.7% (4.6% OF TOTAL INVESTMENTS) 2,250 Green Bay, Wisconsin, Water System Revenue Bonds, Series 11/14 at 100.00 Aaa 2,378,295 2004, 5.000%, 11/01/29 - FSA Insured 3,810 La Crosse, Wisconsin, Industrial Development Revenue 12/08 at 102.00 AAA 4,021,455 Refunding Bonds, Dairyland Power Cooperative, Series 1997C, 5.550%, 2/01/15 - AMBAC Insured Wisconsin Health and Educational Facilities Authority, Revenue Bonds, FH Healthcare Development Inc., Series 1999: 8,375 6.250%, 11/15/20 (Pre-refunded 11/15/09) 11/09 at 101.00 N/R (4) 9,079,673 5,000 6.250%, 11/15/28 (Pre-refunded 11/15/09) 11/09 at 101.00 N/R (4) 5,420,700 4,180 Wisconsin Health and Educational Facilities Authority, 5/09 at 101.00 A 4,333,991 Revenue Bonds, Kenosha Hospital and Medical Center Inc., Series 1999, 5.625%, 5/15/29 12,700 Wisconsin Health and Educational Facilities Authority, 8/09 at 101.00 Aaa 13,351,891 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- 2,282,786 Revenue Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ 38,515 Total Wisconsin 40,868,791 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,035,735 Total Investments (cost $821,317,947) - 145.6% 888,546,080 ============------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - 2.7% 16,769,781 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.3)% (295,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 610,315,861 =====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. WI/DD Purchased on a when-issued or delayed delivery basis. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 62 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MUNICIPAL BONDS - 144.8% (100.0% OF TOTAL INVESTMENTS) ALABAMA - 4.2% (2.9% OF TOTAL INVESTMENTS) $ 18,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 $ 19,792,411 Series 2001A, 5.750%, 6/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.7% (0.5% OF TOTAL INVESTMENTS) 2,955 Northern Tobacco Securitization Corporation, Alaska, 6/11 at 100.00 AAA 3,186,938 Tobacco Settlement Asset-Backed Bonds, Series 2001, 5.500%, 6/01/29 (Pre-refunded 6/01/11) - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.7% (0.5% OF TOTAL INVESTMENTS) 3,120 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/12 at 100.00 AAA 3,261,898 Lien Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.4% (0.3% OF TOTAL INVESTMENTS) 1,800 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 1,860,840 Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series 2002C, 5.400%, 1/01/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 10.8% (7.5% OF TOTAL INVESTMENTS) 6,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 6,363,120 Stanford University, Series 2001Q, 5.250%, 12/01/32 6,000 California Statewide Community Development Authority, No Opt. Call A+ 5,948,160 Revenue Bonds, Kaiser Permanente System, Series 2004G, 2.300%, 4/01/34 (Mandatory put 5/01/07) 13,825 California, Department of Veterans Affairs, Home Purchase 12/06 at 101.00 AAA 13,979,563 Revenue Bonds, Series 2001A, 5.550%, 12/01/25 - AMBAC Insured 11,200 California, General Obligation Bonds, Series 2003, 5.250%, 8/13 at 100.00 A+ 11,982,656 2/01/28 5,000 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 BBB 5,706,450 California, 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 6,748,980 California, Sublease Revenue Bonds, Los Angeles International Airport, American Airlines Inc. Terminal 4 Project, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax) 160 Yuba County Water Agency, California, Yuba River 3/07 at 100.00 Baa3 158,982 Development Revenue Bonds, Pacific Gas and Electric Company, Series 1966A, 4.000%, 3/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 48,185 Total California 50,887,911 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.7% (4.6% OF TOTAL INVESTMENTS) 2,730 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 AAA 3,158,282 Charter School Revenue Bonds, Peak-to-Peak Charter School, Series 2001, 7.500%, 8/15/21 (Pre-refunded 8/15/11) 4,335 Denver City and County, Colorado, Airport Revenue Bonds, 11/16 at 100.00 AAA 5,244,830 Series 2006, 7.281%, 11/15/25 - FGIC Insured (IF) 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 2,723,800 Bonds, Series 2000B, 0.000%, 9/01/28 (Pre-refunded 9/01/10) - MBIA Insured 1,500 Eagle County Air Terminal Corporation, Colorado, Airport 5/11 at 101.00 N/R 1,629,840 Terminal Revenue Bonds, Series 2001, 7.125%, 5/01/31 (Alternative Minimum Tax) 755 Jefferson County School District R1, Colorado, General 12/14 at 100.00 AAA 808,235 Obligation Bonds, Series 2004, 5.000%, 12/15/22 - FSA Insured 5,000 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA 5,352,550 Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41 - FSA Insured
63 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (CONTINUED) 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 $ 6,460,520 17,650 0.000%, 6/15/29 - AMBAC Insured 6/11 at 33.45 AAA 4,863,811 1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 1,110,290 Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ 64,970 Total Colorado 31,352,158 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.3% (0.1% OF TOTAL INVESTMENTS) 1,145 District of Columbia Tobacco Settlement Corporation, 5/11 at 101.00 BBB 1,235,031 Tobacco Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.0% (3.4% OF TOTAL INVESTMENTS) 15,000 Jacksonville, Florida, Transportation Revenue Bonds, Series 10/11 at 100.00 AAA 15,931,950 2001, 5.250%, 10/01/29 - MBIA Insured 4,000 Miami-Dade County Health Facility Authority, Florida, 8/11 at 101.00 AAA 4,193,360 Hospital Revenue Refunding Bonds, Miami Children's Hospital, Series 2001A, 5.125%, 8/15/26 - AMBAC Insured 3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 3,173,520 International Airport, Series 2002, 5.375%, 10/01/32 - FGIC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 22,000 Total Florida 23,298,830 - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 2.2% (1.5% OF TOTAL INVESTMENTS) Honolulu Board of Water Supply, Hawaii, Water System Revenue Bonds, Series 2001: 3,000 5.250%, 7/01/26 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 3,218,070 6,725 5.250%, 7/01/31 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 7,213,840 - ------------------------------------------------------------------------------------------------------------------------------------ 9,725 Total Hawaii 10,431,910 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 11.0% (7.6% OF TOTAL INVESTMENTS) 3,645 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 A+ 3,786,462 Housing Revenue Bonds, Stone Terrace Apartments, Series 2001A, 5.750%, 12/20/42 (Alternative Minimum Tax) 1,195 Chicago, Illinois, FNMA/GNMA Collateralized Single Family 4/11 at 105.00 AAA 1,212,184 Mortgage Revenue Bonds, Series 2001A, 6.250%, 10/01/32 (Alternative Minimum Tax) 14,920 Chicago, Illinois, General Obligation Bonds, Series 2001A, 1/11 at 101.00 AAA 15,822,212 5.250%, 1/01/33 - MBIA Insured 350 Chicago, Illinois, General Obligation Bonds, Series 2001A, 1/11 at 101.00 AAA 375,932 5.250%, 1/01/33 (Pre-refunded 1/01/11) - MBIA Insured 285 Chicago, Illinois, General Obligation Refunding Bonds, 11/06 at 102.00 AAA 289,027 Series 1996B, 5.125%, 1/01/25 - FGIC Insured 3,180 Illinois Development Finance Authority, Revenue Bonds, 12/21 at 100.00 BBB 3,342,752 Chicago Charter School Foundation, Series 2002A, 6.250%, 12/01/32 5,000 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AAA 5,362,700 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- 3,325,463 Midwestern University, Series 2001B, 6.000%, 5/15/31 3,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Aaa 3,037,710 Revenue Bonds, Educational Advancement Foundation Fund, University Center Project, Series 2002, 6.250%, 5/01/34 5,000 Illinois Health Facilities Authority, Revenue Bonds, Edward 2/11 at 101.00 AAA 5,254,450 Hospital Obligated Group, Series 2001B, 5.250%, 2/15/34 - FSA Insured 2,500 Illinois Housing Development Authority, Homeowner Mortgage 2/16 at 100.00 AA 2,562,950 Revenue Bonds, Series 2006C-2, 5.050%, 8/01/27 (Alternative Minimum Tax) 2,275 Illinois, Sales Tax Revenue Bonds, Series 2001, 5.500%, 6/11 at 100.00 AAA 2,454,429 6/15/16 4,980 Metropolitan Pier and Exposition Authority, Illinois, 12/06 at 102.00 AAA 5,084,879 Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1996A, 5.250%, 6/15/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 49,430 Total Illinois 51,911,150 - ------------------------------------------------------------------------------------------------------------------------------------
64
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.7% (3.3% OF TOTAL INVESTMENTS) $ 2,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A- $ 2,081,640 Bonds, Methodist Hospitals Inc., Series 2001, 5.500%, 9/15/31 2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 2,915,750 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 4,238,880 6,000 5.000%, 6/01/24 - FSA Insured 6/13 at 100.00 AAA 6,353,700 3,107 Indianapolis Airport Authority, Indiana, Special Facility 11/06 at 101.00 N/R 177,099 Revenue Bonds, AAR Corporation Assumed Lease, Series 1995, 6.500%, 11/15/31 (Alternative Minimum Tax) (6) 6,100 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/09 at 102.00 BBB 6,372,609 Madison Center Inc., Series 1999, 5.800%, 2/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ 23,707 Total Indiana 22,139,678 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,000 Iowa Higher Education Loan Authority, Private College Facility 10/12 at 100.00 A (4) 1,094,550 Revenue Bonds, Wartburg College, Series 2002, 5.500%, 10/01/28 (Pre-refunded 10/01/12) - ACA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 3.8% (2.7% OF TOTAL INVESTMENTS) 17,000 Wichita, Kansas, Hospital Facilities Revenue Refunding and 11/11 at 101.00 A+ 18,080,010 Improvement Bonds, Via Christi Health System Inc., Series 2001-III, 5.625%, 11/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 4.6% (3.1% OF TOTAL INVESTMENTS) 1,320 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 1,289,138 Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 18,825 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 20,050,320 Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ 20,145 Total Louisiana 21,339,458 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.0% (2.8% OF TOTAL INVESTMENTS) 2,875 Massachusetts Port Authority, Special Facilities Revenue Bonds, 7/07 at 102.00 AAA 2,968,524 BOSFUEL Corporation, Series 1997, 5.750%, 7/01/39 - MBIA Insured (Alternative Minimum Tax) 15,585 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 15,922,727 Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 18,460 Total Massachusetts 18,891,251 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 14.1% (9.7% OF TOTAL INVESTMENTS) Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, Series 2001A: 20,000 5.500%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 101.00 AAA 21,836,801 15,390 5.250%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 16,508,699 14,610 5.250%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 15,672,001 4,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 4,261,000 Revenue Bonds, Detroit Academy of Arts and Sciences Charter School, Series 2001A, 8.000%, 10/01/31 2,000 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 BB- 2,027,000 Bonds, Detroit Medical Center Obligated Group, Series 1998A, 5.125%, 8/15/18 Michigan State Hospital Finance Authority, Revenue Refunding Bonds, Detroit Medical Center Obligated Group, Series 1993A: 2,000 6.250%, 8/15/13 2/07 at 100.00 BB- 2,001,140 4,000 6.500%, 8/15/18 2/07 at 100.00 BB- 4,002,760 - ------------------------------------------------------------------------------------------------------------------------------------ 62,000 Total Michigan 66,309,401 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 3.1% (2.2% OF TOTAL INVESTMENTS) 14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,714,140 Minnesota, Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------
65 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 4.8% (3.3% OF TOTAL INVESTMENTS) $ 21,000 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA $ 22,634,221 Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.7% (0.5% OF TOTAL INVESTMENTS) 3,280 Montana Board of Housing, Single Family Program Bonds, Series 12/10 at 100.00 AA+ 3,355,440 2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.0% (2.8% OF TOTAL INVESTMENTS) 12,275 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 12,793,864 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 3,649,240 Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40 2,330 Henderson, Nevada, Healthcare Facility Revenue Bonds, Catholic 7/08 at 101.00 A 2,392,863 Healthcare West, Series 1998A, 5.250%, 7/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ 18,105 Total Nevada 18,835,967 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 2.1% (1.4% OF TOTAL INVESTMENTS) 8,000 New Hampshire Business Finance Authority, Pollution Control 10/08 at 102.00 Baa1 8,329,280 Remarketed Revenue Refunding Bonds, Connecticut Light and Power Company, Series 1992A, 5.850%, 12/01/22 1,420 New Hampshire Housing Finance Authority, Single Family Mortgage 5/11 at 100.00 Aa2 1,421,420 Acquisition Bonds, Series 2001A, 5.700%, 1/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 9,420 Total New Hampshire 9,750,700 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.4% (1.6% OF TOTAL INVESTMENTS) 3,995 New Jersey Economic Development Authority, Special Facilities 11/10 at 101.00 B 4,260,747 Revenue Bonds, Continental Airlines Inc., Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 465 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 BBB 494,221 Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 2,200 6.375%, 6/01/32 6/13 at 100.00 BBB 2,449,238 425 6.750%, 6/01/39 6/13 at 100.00 BBB 485,048 3,085 6.250%, 6/01/43 6/13 at 100.00 BBB 3,412,658 - ------------------------------------------------------------------------------------------------------------------------------------ 10,170 Total New Jersey 11,101,912 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 5.3% (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 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 13,057,680 10,800 5.500%, 8/01/30 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 11,751,912 - ------------------------------------------------------------------------------------------------------------------------------------ 22,800 Total New Mexico 24,809,592 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 6.4% (4.5% OF TOTAL INVESTMENTS) 1,300 Dormitory Authority of the State of New York, Revenue Bonds, 7/10 at 101.00 BBB 1,410,708 Mount Sinai NYU Health Obligated Group, Series 2000A, 6.625%, 7/01/19 3,600 Dormitory Authority of the State of New York, Revenue Bonds, 7/10 at 101.00 BBB (4) 3,992,472 Mount Sinai NYU Health Obligated Group, Series 2000A, 6.625%, 7/01/19 (Pre-refunded 7/01/10) 6,000 Long Island Power Authority, New York, Electric System General 5/11 at 100.00 A- 6,349,380 Revenue Bonds, Series 2001L, 5.375%, 5/01/33 5,000 New York City Industrial Development Agency, New York, Special 8/12 at 101.00 B 5,908,250 Facilities Revenue Bonds, JFK Airport - American Airlines Inc., Series 2002B, 8.500%, 8/01/28 (Alternative Minimum Tax) 12,000 New York City Municipal Water Finance Authority, New York, 6/11 at 101.00 AA+ 12,646,320 Water and Sewerage System Revenue Bonds, Fiscal Series 2001C, 5.125%, 6/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ 27,900 Total New York 30,307,130 - ------------------------------------------------------------------------------------------------------------------------------------
66
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS) $ 2,950 North Carolina Capital Facilities Financing Agency, Revenue 4/13 at 100.00 AAA $ 3,075,552 Bonds, Johnson and Wales University, Series 2003A, 5.000%, 4/01/33 - XLCA Insured 4,500 North Carolina Eastern Municipal Power Agency, Power System 1/09 at 102.00 BBB 4,734,180 Revenue Refunding Bonds, Series 1999B, 5.600%, 1/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 7,450 Total North Carolina 7,809,732 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.5% (0.4% OF TOTAL INVESTMENTS) 2,335 North Dakota Housing Finance Agency, Home Mortgage Finance 7/10 at 100.00 Aa1 2,386,860 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, General 6/13 at 100.00 AAA 1,993,799 Obligation Bonds, Series 2003, 5.000%, 12/01/28 (Pre-refunded 6/01/13) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.8% (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 8/15/09) 8/09 at 101.00 AAA 2,785,042 1,000 5.200%, 8/15/11 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 1,050,960 - ------------------------------------------------------------------------------------------------------------------------------------ 3,655 Total Oklahoma 3,836,002 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.8% (2.6% OF TOTAL INVESTMENTS) 8,000 Clackamas County Hospital Facility Authority, Oregon, Revenue 5/11 at 101.00 AA- 8,442,880 Refunding Bonds, Legacy Health System, Series 2001, 5.250%, 5/01/21 9,000 Oregon Department of Administrative Services, Certificates of 5/11 at 101.00 AAA 9,370,530 Participation, Series 2001D, 5.000%, 5/01/26 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 17,000 Total Oregon 17,813,410 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.6% (2.5% OF TOTAL INVESTMENTS) 5,000 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 Ba3 5,970,100 Revenue Bonds, West Penn Allegheny Health System, Series 2000B, 9.250%, 11/15/30 1,930 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 2,032,367 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 Aa3 8,742,640 Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ 14,930 Total Pennsylvania 16,745,107 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 24.7% (17.1% OF TOTAL INVESTMENTS) 7,500 Austin, Texas, Electric Utility System Revenue Refunding Bonds, 11/10 at 100.00 AAA 7,802,550 Series 2001, 5.000%, 11/15/30 - FSA Insured 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 15,435,900 1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,797,985 6,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise Regional 9/14 at 100.00 N/R 6,587,160 Health System, Series 2004A, 7.125%, 9/01/34 10,000 Gulf Coast Industrial Development Authority, Texas, Solid Waste 4/12 at 100.00 Ba1 11,231,300 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, Texas, 7/09 at 101.00 AAA 3,157,830 Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 (Pre-refunded 7/01/09) - MBIA Insured 30,980 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 32,861,416 Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured 40,000 Harris County-Houston Sports Authority, Texas, Senior Lien 11/30 at 54.04 AAA 7,092,400 Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/40 - MBIA Insured
67 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (CONTINUED) Hays Consolidated Independent School District, Hays County, Texas, General Obligation School Building Bonds, Series 2001: $ 10,715 0.000%, 8/15/25 (Pre-refunded 8/15/11) 8/11 at 43.18 AAA $ 3,870,472 12,940 0.000%, 8/15/26 (Pre-refunded 8/15/11) 8/11 at 40.60 AAA 4,395,589 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 1,755,600 5,000 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AAA 1,680,200 5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 B1 5,178,100 Hospital Revenue Bonds, Wilson N. Jones Memorial Hospital, Series 2001, 7.250%, 1/01/31 10,500 Texas, General Obligation Bonds, Water Financial Assistance 8/11 at 100.00 Aa1 11,103,855 Program, Series 2001, 5.250%, 8/01/35 2,000 Tom Green County Health Facilities Development Corporation, 5/11 at 101.00 Baa3 2,189,280 Texas, Hospital Revenue Bonds, Shannon Health System Project, Series 2001, 6.750%, 5/15/21 - ------------------------------------------------------------------------------------------------------------------------------------ 165,385 Total Texas 116,139,637 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.2% (0.1% OF TOTAL INVESTMENTS) 5,000 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 23.55 AAA 1,103,950 Bonds, Route 895 Connector Toll Road, Series 1998B, 0.000%, 8/15/33 (Pre-refunded 8/15/08) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 5.1% (3.5% 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 5,155,183 7,250 5.125%, 3/01/26 - FSA Insured 3/11 at 100.00 AAA 7,591,692 7,500 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 7,924,725 Bonds, Sisters of Providence Health System, Series 2001A, 5.250%, 10/01/21 - MBIA Insured 970 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 1,078,562 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 2,100 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,176,839 Convention and Trade Center, Series 1999, 5.125%, 7/01/13 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 22,640 Total Washington 23,927,001 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.1% (0.8% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,176,900 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, Revenue 5/12 at 100.00 N/R (4) 1,165,260 Bonds, Divine Savior Healthcare, Series 2002A, 7.375%, 5/01/26 (Pre-refunded 5/01/12) 2,100 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A- 2,179,023 Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ 3,100 Total Wisconsin 3,344,283 - ------------------------------------------------------------------------------------------------------------------------------------ $ 739,157 Total Municipal Bonds (cost $624,209,250) 680,859,208 ============------------------------------------------------------------------------------------------------------------------------
68
SHARES DESCRIPTION (1) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COMMON STOCKS - 0.0% (0.0% OF TOTAL INVESTMENTS) AIRLINES - 0.0% (0.0% OF TOTAL INVESTMENTS) 928 UAL Corporation (5) (7) $ 33,352 - ------------------------------------------------------------------------------------------------------------------------------------ Total Common Stocks (cost $29,169) 33,352 --------------------------------------------------------------------------------------------------------------------- Total Investments (cost $624,238,419) - 144.8% 680,892,560 --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.4% 11,296,731 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (47.2)% (222,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 470,189,291 =====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Non-income producing. (6) On December 9, 2002, UAL Corporation ("UAL"), 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 the bonds previously held and thus the Fund had stopped accruing interest on its UAL bonds. (7) On February 1, 2006, UAL emerged from federal bankruptcy with the acceptance of its reorganization plan by the bankruptcy court. Under the settlement agree- ment established to meet UAL's unsecured bond obligations, the bondholders, including the Fund, received distributions of UAL common stock over the subse- quent months, and the bankruptcy court dismissed all unsecured claims of bondholders, including those of the Fund. On May 3, 2006, the Fund liquidated such UAL common stock holdings. On October 5, 2006, the Fund received an additional distribution of UAL common stock as a result of its ownership of UAL bonds, which it still held at October 31, 2006. Subsequent to fiscal year-end, the Fund liquidated its UAL common stock holdings. N/R Not rated. WI/DD Purchased on a when-issued or delayed delivery basis. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 69 Nuveen Dividend Advantage Municipal Fund 3 (NZF) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MUNICIPAL BONDS - 147.8% (100.0% OF TOTAL INVESTMENTS) ALABAMA - 0.9% (0.6% OF TOTAL INVESTMENTS) $ 5,655 Alabama State Port Authority, Revenue Bonds, 10/11 at 100.00 AAA $ 5,925,026 State Docks Department Facilities, Series 2001, 5.250%, 10/01/26 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 2.7% (1.8% OF TOTAL INVESTMENTS) 4,000 Alaska Student Loan Corporation, Student 7/08 at 100.00 AAA 4,077,040 Loan Revenue Bonds, Series 1998A, 5.250%, 7/01/14 - AMBAC Insured (Alternative Minimum Tax) 12,500 Northern Tobacco Securitization Corporation, Alaska, 6/14 at 100.00 Baa3 12,668,750 Tobacco Settlement Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46 - ------------------------------------------------------------------------------------------------------------------------------------ 16,500 Total Alaska 16,745,790 - ------------------------------------------------------------------------------------------------------------------------------------ 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 Baa2 1,906,766 1,900 5.500%, 11/01/14 11/11 at 101.00 Baa2 2,001,802 1,745 5.250%, 11/01/21 11/11 at 101.00 Baa2 1,793,302 - ------------------------------------------------------------------------------------------------------------------------------------ 5,450 Total Arkansas 5,701,870 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 11.4% (7.7% OF TOTAL INVESTMENTS) California Health Facilities Financing Authority, Health Facility Revenue Bonds, Adventist Health System/West, Series 2003A: 855 5.000%, 3/01/28 3/13 at 100.00 A 882,326 55 5.000%, 3/01/33 3/13 at 100.00 A 56,543 3,335 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 4,715,457 Revenue Bonds, San Francisco Bay Area Toll Bridge, Series 2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded 1/01/28) - AMBAC Insured (IF) 5,000 California Infrastructure Economic Development Bank, 8/11 at 102.00 A+ 5,323,000 Revenue Bonds, Kaiser Hospital Assistance LLC, Series 2001A, 5.550%, 8/01/31 5,000 California Statewide Community Development Authority, No Opt. Call A+ 4,956,800 Revenue Bonds, Kaiser Permanente System, Series 2004G, 2.300%, 4/01/34 (Mandatory put 5/01/07) 18,850 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 19,144,249 Series 2001BZ, 5.350%, 12/01/21 - MBIA Insured (Alternative Minimum Tax) 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 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 15,100,845 5,000 5.375%, 1/01/21 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 5,229,600 1,500 5.250%, 1/01/23 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 1,554,750 10,000 5.500%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 10,483,900 10,000 San Joaquin Hills Transportation Corridor Agency, No Opt. Call AAA 2,803,500 Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured 3,000 San Mateo County Community College District, No Opt. Call AAA 1,055,820 California, General Obligation Bonds, Series 2006C, 0.000%, 9/01/30 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 76,550 Total California 71,306,790 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 5.1% (3.5% OF TOTAL INVESTMENTS) 2,250 Canterberry Crossing Metropolitan District II, 12/12 at 100.00 N/R 2,449,125 Parker, Colorado, Limited Tax General Obligation Bonds, Series 2002, 7.375%, 12/01/32
70
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) $ 1,655 Colorado Educational and Cultural Facilities 3/12 at 100.00 N/R $ 1,728,366 Authority, Charter School Revenue Bonds, Belle Creek Education Center, Series 2002A, 7.625%, 3/15/32 3,240 Colorado Educational and Cultural Facilities 5/12 at 102.00 N/R 3,536,395 Authority, Charter School Revenue Bonds, Montessori Peaks Building Foundation, Series 2002A, 8.000%, 1,775 Colorado Educational and Cultural Facilities 6/11 at 100.00 Ba1 (4) 2,033,511 5/01/32 Authority, Charter School Revenue Bonds, Weld County School District 6 - Frontier Academy, Series 2001, 7.375%, 6/01/31 (Pre-refunded 6/01/11) 3,380 Colorado Housing Finance Authority, Multifamily 10/11 at 100.00 AAA 3,504,080 Project Bonds, Class I, Series 2001A-1, 5.500%, 4/01/31 (Alternative Minimum Tax) 10,100 Colorado Springs, Colorado, Utility System 11/07 at 100.00 AA 10,263,418 Revenue Refunding and Improvement Bonds, Series 1997A, 5.375%, 11/15/26 4,335 Denver City and County, Colorado, Airport Revenue Bonds, 11/16 at 100.00 AAA 5,244,830 Series 2006, 7.281%, 11/15/25 - FGIC Insured (IF) 2,000 Denver City and County, Colorado, Airport System 11/11 at 100.00 AAA 2,141,760 Revenue Refunding Bonds, Series 2001A, 5.500%, 11/15/16 - FGIC Insured (Alternative Minimum Tax) 1,000 Plaza Metropolitan District 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,110,290 Tax Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ 29,735 Total Colorado 32,011,775 - ------------------------------------------------------------------------------------------------------------------------------------ DELAWARE - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,560 Delaware Housing Authority, Multifamily Mortgage 7/12 at 100.00 Aa3 2,644,736 Revenue Bonds, Series 2001A, 5.400%, 7/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.0% (0.7% OF TOTAL INVESTMENTS) 6,000 District of Columbia, Revenue Bonds, Catholic University 10/09 at 101.00 AAA 6,368,580 of America, Series 1999, 5.625%, 10/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,000 Dade County, Florida, Water and Sewerage System Revenue 10/07 at 102.00 AAA 2,069,820 Bonds, Series 1997, 5.375%, 10/01/16 - FGIC Insured 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 1,141,134 2,195 5.450%, 12/01/41 - FSA Insured 12/11 at 100.00 AAA 2,264,164 4,175 Pace Property Finance Authority Inc., Florida, 9/07 at 102.00 AAA 4,311,731 Utility System Improvement and Revenue Refunding Bonds, Series 1997, 5.250%, 9/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,475 Total Florida 9,786,849 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.9% (1.3% OF TOTAL INVESTMENTS) 5,000 Atlanta, Georgia, Airport General Revenue Bonds, 1/10 at 101.00 AAA 5,276,350 Series 2000B, 5.625%, 1/01/30 - FGIC Insured (Alternative Minimum Tax) 2,700 Atlanta, Georgia, Tax Allocation Bonds, 12/11 at 101.00 N/R 3,006,693 Atlantic Station Project, Series 2001, 7.900%, 12/01/24 3,740 Gainesville and Hall County Hospital Authority, 5/11 at 100.00 A- 3,913,012 Georgia, Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 2001, 5.500%, 5/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ 11,440 Total Georgia 12,196,055 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 17.7% (12.0% OF TOTAL INVESTMENTS) 285 Chicago, Illinois, General Obligation Refunding Bonds, 11/06 at 102.00 AAA 289,027 Series 1996B, 5.125%, 1/01/25 - FGIC Insured 8,375 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1/11 at 101.00 AAA 8,914,936 2001A, 5.500%, 1/01/19 - FSA Insured (Alternative Minimum Tax) 1,750 Chicago, Illinois, Sales Tax Revenue Bonds, 7/08 at 102.00 AAA 1,822,800 Series 1998, 5.250%, 1/01/28 - FGIC Insured 10,800 Chicago, Illinois, Sales Tax Revenue Bonds, 1/09 at 101.00 AAA 11,301,336 Series 1999, 5.375%, 1/01/30 (Pre-refunded 1/01/09) - FGIC Insured
71 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 4,950 Chicago, Illinois, Second Lien Passenger Facility 1/11 at 101.00 AAA $ 5,181,957 Charge Revenue Bonds, O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) 8,610 Chicago, Illinois, Second Lien Wastewater 1/11 at 100.00 AAA 9,238,961 Transmission Revenue Bonds, Series 2001A, 5.500%, 1/01/26 (Pre-refunded 1/01/11) - AMBAC Insured 2,220 Chicago, Illinois, Second Lien Wastewater No Opt. Call AAA 2,505,115 Transmission Revenue Bonds, Series 2001A, 5.500%, 1/01/16 - MBIA Insured 10,000 Chicago, Illinois, Senior Lien Water 11/11 at 100.00 AAA 10,661,300 Revenue Bonds, Series 2001, 5.000%, 11/01/26 (Pre-refunded 11/01/11) - AMBAC Insured 1,665 Chicago, Illinois, Third Lien General Airport 1/16 at 100.00 AAA 1,758,240 Revenue Bonds, O'Hare International Airport, Series 2005A, 5.000%, 1/01/33 - FGIC Insured 2,415 Illinois Finance Authority, General Obligation 12/14 at 100.00 Aaa 2,555,505 Debt Certificates, Local Government Program - Kankakee County, Series 2005B, 5.000%, 12/01/24 - AMBAC Insured 1,100 Illinois Health Facilities Authority, Revenue 5/10 at 101.00 Baa2 1,184,535 Bonds, Condell Medical Center, Series 2000, 6.500%, 5/15/30 9,000 Illinois Health Facilities Authority, Revenue 12/11 at 101.00 BBB 9,508,410 Bonds, Covenant Retirement Communities Inc., Series 2001, 5.875%, 12/01/31 15,000 Illinois Health Facilities Authority, Revenue Bonds, 7/11 at 100.00 Baa1 16,014,600 Loyola University Health System, Series 2001A, 6.125%, 7/01/31 5,000 Lake County School District 38, Big Hallow, No Opt. Call Aaa 2,582,350 Illinois, General Obligation Bonds, Series 2005, 0.000%, 2/01/22 - AMBAC Insured 7,000 Lombard Public Facilities Corporation, Illinois, 1/16 at 100.00 N/R 7,529,410 First Tier Conference Center and Hotel Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36 16,900 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 17,764,604 Revenue Bonds, McCormick Place Expansion Project, Series 1999A, 5.250%, 12/15/28 - FGIC Insured 2,000 Metropolitan Pier and Exposition Authority, No Opt. Call AAA 2,388,660 Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%, 6/15/29 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 107,070 Total Illinois 111,201,746 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 5.8% (3.9% OF TOTAL INVESTMENTS) Clark-Pleasant Community School Building Corporation, Indiana, First Mortgage Bonds, Series 2001: 1,255 5.000%, 7/15/21 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AAA 1,340,240 1,000 5.000%, 1/15/26 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AAA 1,067,920 Evansville Vanderburgh Public Library Lease Corporation, Indiana, First Mortgage Bonds, Series 2001: 2,000 5.750%, 7/15/18 (Pre-refunded 1/15/12) - MBIA Insured 1/12 at 100.00 AAA 2,206,540 2,750 5.125%, 1/15/24 (Pre-refunded 1/15/12) - MBIA Insured 1/12 at 100.00 AAA 2,952,978 3,395 Gary, Indiana, GNMA/FHA Mortgage Revenue Bonds, 11/11 at 102.00 AAA 3,491,995 Windsor Square Project, Series 2001A, 5.375%, 10/20/41 (Alternative Minimum Tax) 1,250 Hamilton Southeastern Cumberland Campus School 1/12 at 100.00 AAA 1,323,250 Building Corporation, Indiana, First Mortgage Bonds, Series 2001, 5.125%, 1/15/23 - AMBAC Insured 9,500 Indiana Educational Facilities Authority, Revenue Bonds, Butler 2/11 at 100.00 AAA 10,123,865 University, Series 2001, 5.500%, 2/01/26 - MBIA Insured 4,230 Indiana Finance Authority, Educational Facilities Revenue 6/15 at 100.00 Aa3 4,448,268 Bonds, Tudor Park Foundation, Series 2005B, 5.000%, 6/01/24 2,800 Indiana Health Facility Financing Authority, 5/15 at 100.00 AAA 2,941,372 Revenue Bonds, Community Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 - AMBAC Insured 2,650 Indianapolis Airport Authority, Indiana, Special 11/06 at 101.00 N/R 151,055 Facility Revenue Bonds, AAR Corporation Assumed Lease, Series 1995, 6.500%, 11/15/31 (Alternative Minimum Tax) (6) 3,500 University of Southern Indiana, Student Fee Bonds, 10/11 at 100.00 Aaa 3,697,085 Series 2001H, 5.000%, 10/01/21 - AMBAC Insured
72
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) 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 $ 1,275,764 1,090 5.500%, 7/15/22 - AMBAC Insured 1/13 at 101.00 AAA 1,196,340 - ------------------------------------------------------------------------------------------------------------------------------------ 36,570 Total Indiana 36,216,672 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 5.8% (3.9% OF TOTAL INVESTMENTS) 2,000 Iowa Finance Authority, Healthcare Revenue Bonds, 5/11 at 100.00 Aaa 2,086,340 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 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 29,955,520 3,950 5.600%, 6/01/35 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 4,304,829 - ------------------------------------------------------------------------------------------------------------------------------------ 33,950 Total Iowa 36,346,689 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 3.1% (2.1% OF TOTAL INVESTMENTS) 18,500 Louisville and Jefferson County Metropolitan 11/11 at 101.00 AAA 19,653,475 Sewer District, Kentucky, Sewer and Drainage System Revenue Bonds, Series 2001A, 5.125%, 5/15/27 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.4% (2.3% OF TOTAL INVESTMENTS) 19,890 Tobacco Settlement Financing Corporation, 5/11 at 101.00 BBB 21,184,640 Louisiana, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.0% (0.7% OF TOTAL INVESTMENTS) Maine State Housing Authority, Single Family Mortgage Purchase Bonds, Series 2001B: 4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 4,752,495 1,745 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 1,774,019 - ------------------------------------------------------------------------------------------------------------------------------------ 6,355 Total Maine 6,526,514 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.3% (1.5% OF TOTAL INVESTMENTS) 1,570 Maryland Community Development Administration, 7/11 at 100.00 Aa2 1,617,304 Insured Multifamily Housing Mortgage Loan Revenue Bonds, Series 2001B, 5.250%, 7/01/21 (Alternative Minimum Tax) 2,000 Maryland Economic Development Corporation, Revenue 12/16 at 100.00 N/R 2,007,000 Bonds, Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%, 12/01/31 10,600 Maryland Energy Financing Administration, Revenue 9/07 at 100.00 N/R 10,683,316 Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 14,170 Total Maryland 14,307,620 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 0.8% (0.6% OF TOTAL INVESTMENTS) 5,000 Massachusetts Port Authority, Special Facilities 1/11 at 101.00 AAA 5,268,200 Revenue Bonds, Delta Air Lines Inc., Series 2001A, 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 9.1% (6.2% OF TOTAL INVESTMENTS) 15,000 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 18,809,100 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 7/11 at 101.00 AA (4) 11,992,090 Bonds, Spectrum Health, Series 2001A, 5.500%, 1/15/31 (Pre-refunded 7/15/11) 1,235 Michigan State Building Authority, Revenue Bonds, 10/11 at 100.00 AA- 1,333,924 Facilities Program, Series 2001I, 5.500%, 10/15/18 1,355 Michigan State Hospital Finance Authority, Hospital 8/08 at 101.00 BB- 1,373,997 Revenue Bonds, Detroit Medical Center Obligated Group, Series 1998A, 5.250%, 8/15/23 3,485 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 3,728,845 Refunding Bonds, Sisters of Mercy Health Corporation, Series 1993P, 5.375%, 8/15/14 - MBIA Insured (ETM) 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 A+ 1,487,640 2,500 5.625%, 11/15/31 11/11 at 101.00 A+ 2,657,675
73 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 12,640 Royal Oak Hospital Finance Authority, Michigan, 11/11 at 100.00 AAA $ 13,257,338 Hospital, Series 2001M, 5.250%, 11/15/31 - MBIA Insured Hospital Revenue Bonds, William Beaumont 2,395 Ypsilanti Community Utilities Authority, Washtenaw County, 5/11 at 100.00 AAA 2,515,804 Michigan, General Obligation Bonds, Sanitary Sewerage System 3, Series 2001, 5.100%, 5/01/31 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 51,010 Total Michigan 57,156,413 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,330 Dakota County Community Development Agency, Minnesota, GNMA 10/11 at 105.00 Aaa 2,484,619 Collateralized Multifamily Housing Revenue Bonds, Rose Apartments Project, Series 2001, 6.350%, 10/20/37 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,155 Mississippi Business Finance Corporation, GNMA Collateralized 5/09 at 103.00 AAA 2,236,437 Retirement Facility Mortgage Revenue Refunding Bonds, Aldersgate Retirement Community Inc. Project, Series 1999A, 5.450%, 5/20/34 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.5% (1.7% OF TOTAL INVESTMENTS) 1,825 Fenton, Missouri, Tax Increment Refunding and Improvement Revenue 10/12 at 100.00 N/R (4) 2,064,896 Bonds, Gravois Bluffs Redevelopment Project, Series 2002, 6.125%, 10/01/21 (Pre-refunded 10/01/12) 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 3,574,820 3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AAA 3,762,404 3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AAA 3,960,707 2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AAA 2,175,497 - ------------------------------------------------------------------------------------------------------------------------------------ 14,405 Total Missouri 15,538,324 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.8% (0.5% OF TOTAL INVESTMENTS) 5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 B2 5,215,400 Bonds, Stillwater Mining Company, Series 2000, 8.000%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.1% (0.8% OF TOTAL INVESTMENTS) Nebraska Investment Finance Authority, Single Family Housing Revenue Bonds, Series 2001D: 2,255 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 2,290,877 3,035 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 3,082,194 1,500 Omaha Public Power District, Nebraska, Electric System Revenue 2/17 at 100.00 AAA 1,746,780 Bonds, Nebraska City 2, Series 2006A, Residuals 1508-2, 7.530%, 2/01/49 (WI/DD, Settling 11/02/06) - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 6,790 Total Nebraska 7,119,851 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.8% (5.2% OF TOTAL INVESTMENTS) 35,000 Clark County, Nevada, Limited Tax General Obligation 7/10 at 100.00 AAA 37,331,347 Bank Bonds, Series 2000, 5.500%, 7/01/30 (Pre-refunded 7/01/10) - MBIA Insured 2,000 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 2,084,540 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 4,000 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 4,170,560 Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40 255 Nevada Housing Division, Single Family Mortgage Bonds, Senior 4/08 at 101.50 Aaa 256,443 Series 1998A-1, 5.300%, 4/01/18 (Alternative Minimum Tax) 4,290 University of Nevada, Revenue Bonds, Community College System, 1/12 at 100.00 AAA 4,554,264 Series 2001A, 5.250%, 7/01/26 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 45,545 Total Nevada 48,397,154 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aaa 2,166,780 Revenue Bonds, Concord Hospital, Series 2001, 5.500%, 10/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------
74
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.7% (2.5% OF TOTAL INVESTMENTS) $ 10,000 New Jersey Economic Development Authority, Water Facilities 11/12 at 101.00 Aaa $ 10,576,500 Revenue Bonds, American Water Company, Series 2002A, 5.250%, 11/01/32 - AMBAC Insured (Alternative Minimum Tax) 4,125 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,558,826 Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured 20,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 7,769,600 System Bonds, Series 2006C, 0.000%, 12/15/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 34,125 Total New Jersey 22,904,926 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 4.8% (3.2% OF TOTAL INVESTMENTS) 1,780 East Rochester Housing Authority, New York, GNMA 10/11 at 101.00 AAA 1,853,710 Secured Revenue Bonds, Gates Senior Housing Inc., Series 2001, 5.300%, 4/20/31 4,155 Monroe County Airport Authority, New York, Revenue Refunding No Opt. Call AAA 4,562,938 Bonds, Greater Rochester International Airport, Series 1999, 5.750%, 1/01/13 - MBIA Insured (Alternative Minimum Tax) 7,000 New York City Industrial Development Agency, New York, 8/16 at 101.00 B 8,471,330 American Airlines-JFK International Airport Special Facility Revenue Bonds, Series 2005, 7.750%, 8/01/31 (Alternative Minimum Tax) New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 2001A: 3,610 5.500%, 6/15/33 (Pre-refunded 6/15/10) - MBIA Insured 6/10 at 101.00 AAA 3,886,201 5,710 5.500%, 6/15/33 (Pre-refunded 6/15/10) - FGIC Insured 6/10 at 101.00 AAA 6,146,872 2,500 New York City, New York, General Obligation Bonds, 8/12 at 100.00 AAA 2,761,350 Fiscal Series 2002G, 5.625%, 8/01/20 - MBIA Insured 2,000 New York State Tobacco Settlement Financing Corporation, 6/11 at 100.00 AA- 2,147,380 Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 26,755 Total New York 29,829,781 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.1% (0.7% OF TOTAL INVESTMENTS) Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare System Revenue Bonds, DBA Carolinas Healthcare System, Series 2005A: 1,750 4.875%, 1/15/32 1/15 at 100.00 AA 1,801,153 3,000 5.000%, 1/15/45 1/15 at 100.00 AA 3,126,450 1,800 North Carolina Municipal Power Agency 1, Catawba No Opt. Call A3 1,952,820 Electric Revenue Bonds, Series 2003A, 5.500%, 1/01/13 - ------------------------------------------------------------------------------------------------------------------------------------ 6,550 Total North Carolina 6,880,423 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.2% (1.5% OF TOTAL INVESTMENTS) 2,170 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 3/08 at 101.50 AAA 2,222,796 Program Residential Mortgage Revenue Bonds, Series 1998A-1, 5.300%, 9/01/19 - FSA Insured (Alternative Minimum Tax) 7,400 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 7,673,430 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 1,979,432 1,775 5.000%, 12/01/23 - FGIC Insured 12/11 at 100.00 AAA 1,868,365 - ------------------------------------------------------------------------------------------------------------------------------------ 13,215 Total Ohio 13,744,023 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,500 Oklahoma Development Finance Authority, Revenue Refunding Bonds, 8/09 at 101.00 AAA 2,655,325 Hillcrest Healthcare System, Series 1999A, 5.625%, 8/15/29 (Pre-refunded 8/15/09) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.4% (1.7% OF TOTAL INVESTMENTS) 4,700 Oregon Health, Housing, Educational and Cultural Facilities 11/11 at 101.00 AAA 5,009,683 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 Aaa 10,334,100 Multifamily Housing Revenue Bonds, Series 2000A, 6.050%, 7/01/42 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 14,700 Total Oregon 15,343,783 - ------------------------------------------------------------------------------------------------------------------------------------
75 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ 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 Ba3 $ 2,392,160 2,000 9.250%, 11/15/30 11/10 at 102.00 Ba3 2,388,040 3,500 Pennsylvania Economic Development Financing Authority, Senior 1/07 at 100.00 B+ 3,540,040 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 Obligation 8/12 at 100.00 AAA 3,541,813 Bonds, Series 2002B, 5.625%, 8/01/16 (Pre-refunded 8/01/12) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,705 Total Pennsylvania 11,862,053 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,185 Greenville County, South Carolina, Special Source 4/11 at 101.00 AAA 2,359,625 Revenue Bonds, Road Improvement Project, Series 2001, 5.500%, 4/01/21 - AMBAC Insured 6,850 South Carolina Transportation Infrastructure Bank, 10/11 at 100.00 Aaa 7,429,853 Revenue Bonds, Series 2001A, 5.500%, 10/01/22 (Pre-refunded 10/01/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,035 Total South Carolina 9,789,478 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.3% (0.9% OF TOTAL INVESTMENTS) 5,210 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 5,516,088 Airport Revenue Bonds, Series 2001A, 5.500%, 3/01/14 - FSA Insured (Alternative Minimum Tax) 275 Sullivan County Health Educational and Housing Facilities Board, 9/16 at 100.00 BBB+ 289,218 Tennessee, Revenue Bonds, Wellmont Health System, Series 2006C, 5.250%, 9/01/36 (WI/DD, Settling 11/02/06) 1,130 Tennessee Housing Development Agency, Homeownership Program Bonds, 1/09 at 101.00 AA 1,154,205 Series 1998-2, 5.350%, 7/01/23 (Alternative Minimum Tax) 1,130 Tennessee Housing Development Agency, Homeownership Program Bonds, 7/11 at 100.00 AA 1,159,448 Series 2001-3A, 5.200%, 7/01/22 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 7,745 Total Tennessee 8,118,959 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 18.6% (12.6% OF TOTAL INVESTMENTS) 1,125 Brushy Creek Municipal Utility District, Williamson County, Texas, 6/09 at 100.00 Aaa 1,159,076 Combination Unlimited Tax and Revenue Refunding Bonds, Series 2001, 5.125%, 6/01/26 - FSA Insured 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 2,000,973 2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AAA 2,103,726 3,850 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 4,112,070 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 - FGIC Insured (Alternative Minimum Tax) 5,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 5,481,600 Regional Health System, Series 2004A, 7.000%, 9/01/25 4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AA+ 4,190,167 Obligation, Series 2001, 5.000%, 8/15/27 6,000 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 7,260,900 Revenue Refunding Bonds, Series 2001B, 5.500%, 12/01/29 - MBIA Insured (ETM) 7,000 Houston, Texas, Subordinate Lien Airport System Revenue 7/08 at 101.00 AAA 7,224,350 Bonds, Series 1998B, 5.250%, 7/01/14 - FGIC Insured (Alternative Minimum Tax) Houston, Texas, Subordinate Lien Airport System Revenue Refunding Bonds, Series 2001A: 2,525 5.500%, 7/01/13 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 2,704,932 2,905 5.500%, 7/01/14 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 3,135,250 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 9,015,695 8,500 5.500%, 8/15/41 - AMBAC Insured 8/11 at 100.00 AAA 9,061,595 10,700 Laredo Independent School District, Webb County, 8/11 at 100.00 AAA 11,224,193 Texas, General Obligation Refunding Bonds, Series 2001, 5.000%, 8/01/25
76
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 2,500 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA $ 2,782,025 Revenue Refunding Bonds, Houston Light and Power Company, Series 1997, 5.125%, 11/01/28 - AMBAC Insured (Alternative Minimum Tax) 1,540 Medina Valley Independent School District, Medina County, Texas, 2/11 at 100.00 Aaa 1,642,271 General Obligation Bonds, Series 2001, 5.250%, 2/15/26 (Pre-refunded 2/15/11) 5,430 Mineral Wells Independent School District, Pale Pinto and Parker 2/08 at 100.00 Aaa 5,474,255 Counties, Texas, Unlimited School Tax Building and Refunding Bonds, Series 1998, 4.750%, 2/15/22 2,905 North Central Texas Health Facilities Development 2/08 at 102.00 AAA 3,014,577 Corporation, Revenue Bonds, Texas Health Resources System, Series 1997B, 5.375%, 2/15/26 - MBIA Insured 95 North Central Texas Health Facilities Development 2/08 at 102.00 Aaa 98,982 Corporation, Revenue Bonds, Texas Health Resources System, Series 1997B, 5.375%, 2/15/26 (Pre-refunded 2/15/08) - MBIA Insured 3,045 Port of Houston Authority, Harris County, Texas, General 10/11 at 100.00 AAA 3,243,443 Obligation Port Improvement Bonds, Series 2001B, 5.500%, 10/01/17 - FGIC Insured (Alternative Minimum Tax) 10,665 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 11,052,033 Residential Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33 (Alternative Minimum Tax) 15,700 Texas Water Development Board, Senior Lien State Revolving 1/07 at 100.00 AAA 15,743,018 Fund Revenue Bonds, Series 1996B, 5.125%, 7/15/18 White Settlement Independent School District, Tarrant County, Texas, General Obligation Bonds, Series 2006: 9,110 0.000%, 8/15/37 8/15 at 31.98 AAA 1,934,964 9,110 0.000%, 8/15/40 8/15 at 27.11 AAA 1,634,698 7,110 0.000%, 8/15/44 8/15 at 21.88 AAA 1,028,248 - ------------------------------------------------------------------------------------------------------------------------------------ 131,270 Total Texas 116,323,041 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.9% (0.6% OF TOTAL INVESTMENTS) Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001E: 1,855 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 1,898,092 595 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 609,815 Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001F-1: 2,375 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 2,394,617 610 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 AA- 617,210 - ------------------------------------------------------------------------------------------------------------------------------------ 5,435 Total Utah 5,519,734 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS) 7,000 Pocahontas Parkway Association, Virginia, Senior Lien 8/08 at 77.58 AAA 5,090,890 Revenue Bonds, Route 895 Connector Toll Road, Series 1998B, 0.000%, 8/15/13 (Pre-refunded 8/15/08) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 15.4% (10.4% 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 1,075,010 2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 Aaa 2,159,940 1,500 Grays Harbor County Public Utility District 1, 1/11 at 100.00 AAA 1,574,670 Washington, Electric System Revenue Bonds, Series 2001, 5.125%, 1/01/22 - AMBAC Insured 2,475 Klickitat County Public Utility District 1, 12/11 at 100.00 AAA 2,641,097 Washington, Electric Revenue Bonds, Series 2001B, 5.000%, 12/01/26 (Pre-refunded 12/01/11) - AMBAC Insured 12,955 Port of Seattle, Washington, Passenger Facility 12/08 at 101.00 AAA 13,420,214 Charge Revenue Bonds, Series 1998B, 5.300%, 12/01/16 - AMBAC Insured (Alternative Minimum Tax) Port of Seattle, Washington, Revenue Bonds, Series 2001B: 2,535 5.625%, 4/01/18 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 2,723,553 16,000 5.100%, 4/01/24 - FGIC Insured (Alternative Minimum Tax) 10/08 at 100.00 AAA 16,225,120 2,090 Public Utility District 1, Benton County, Washington, 11/11 at 100.00 AAA 2,275,111 Electric Revenue Refunding Bonds, Series 2001A, 5.625%, 11/01/15 - FSA Insured
77 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 5,680 Seattle, Washington, Municipal Light and Power 3/11 at 100.00 AAA $ 6,074,987 Revenue Refunding and Improvement Bonds, Series 2001, 5.500%, 3/01/18 - FSA Insured 4,530 Tacoma, Washington, Solid Waste Utility Revenue 12/11 at 100.00 AAA 4,886,239 Refunding Bonds, Series 2001, 5.250%, 12/01/21 (Pre-refunded 12/01/11) - AMBAC Insured 3,720 Washington State Healthcare Facilities Authority, 10/11 at 100.00 Aaa 4,015,852 Revenue Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.375%, 10/01/18 (Pre-refunded 10/01/11) - 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 5,877,081 25,435 5.625%, 10/01/31 - RAAI Insured 10/11 at 101.00 AA 27,289,212 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 3,227,430 2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 3,127,853 - ------------------------------------------------------------------------------------------------------------------------------------ 91,320 Total Washington 96,593,369 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 4.4% (3.0% 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 3,991,508 1,850 5.000%, 1/01/21 - FGIC Insured 1/12 at 100.00 Aaa 1,956,283 1,735 Evansville Community School District, Dane, Green and Rock 4/11 at 100.00 AAA 1,872,481 Counties, Wisconsin, General Obligation Refunding Bonds, Series 2001, 5.500%, 4/01/20 (Pre-refunded 4/01/11) - FGIC Insured 12,250 La Crosse, Wisconsin, Pollution Control Revenue 12/08 at 102.00 AAA 12,929,875 Refunding Bonds, Dairyland Power Cooperative, Series 1997B, 5.550%, 2/01/15 - AMBAC Insured 350 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 AA- 375,827 Revenue Bonds, Froedtert and Community Health Obligated Group, Series 2001, 5.375%, 10/01/30 3,650 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 N/R (4) 3,960,615 Revenue Bonds, Froedtert and Community Health Obligated Group, Series 2001, 5.375%, 10/01/30 (Pre-refunded 10/01/11) 2,500 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Marshfield Clinic, 2/12 at 100.00 BBB+ 2,704,475 Series 2001B, 6.000%, 2/15/25 - ------------------------------------------------------------------------------------------------------------------------------------ 26,040 Total Wisconsin 27,791,064 - ------------------------------------------------------------------------------------------------------------------------------------ $ 920,500 Total Municipal Bonds (cost $875,036,226) 926,154,854 ============------------------------------------------------------------------------------------------------------------------------
78
SHARES DESCRIPTION (1) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COMMON STOCKS - 0.0% (0.0% OF TOTAL INVESTMENTS) AIRLINES - 0.0% (0.0% OF TOTAL INVESTMENTS) 791 UAL Corporation (5)(7) $ 28,429 - ------------------------------------------------------------------------------------------------------------------------------------ Total Common Stocks (cost $24,879) 28,429 --------------------------------------------------------------------------------------------------------------------- Total Investments (cost $875,061,105) - 147.8% 926,183,283 --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.0% 12,652,228 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.8)% (312,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 626,835,511 =====================================================================================================================
FORWARD SWAPS OUTSTANDING AT OCTOBER 31, 2006:
FUND FIXED RATE UNREALIZED NOTIONAL FLOATING RATE PAY/RECEIVE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION COUNTERPARTY AMOUNT INDEX FLOATING RATE (ANNUALIZED) FREQUENCY DATE (8) DATE (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Merrill Lynch $26,750,00 3-Month USD-LIBOR Pay 5.184% Semi-Annually 10/30/07 10/30/16 $ 140,960 - --------------------------------------------------------------------------------------------------------------------------------- USD-LIBOR (United States Dollar-London Inter-Bank Offered Rates)
FUTURES CONTRACTS OUTSTANDING AT OCTOBER 31, 2006:
UNREALIZED CONTRACT NUMBER OF CONTRACT ORIGINAL VALUE AT APPRECIATION TYPE POSITION CONTRACTS EXPIRATION VALUE OCTOBER 31, 2006 (DEPRECIATION) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. 30-Year Treasury Notes Long 159 12/06 $17,782,633 $17,912,344 $ 129,711 ====================================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Non-income producing. (6) On December 9, 2002, UAL Corporation ("UAL"), 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 the bonds previously held and thus the Fund had stopped accruing interest on its UAL bonds. (7) On February 1, 2006, UAL emerged from federal bankruptcy with the acceptance of its reorganization plan by the bankruptcy court. Under the settlement agreement established to meet UAL's unsecured bond obligations, the bondholders, including the Fund, received distributions of UAL common stock over the subsequent months, and the bankruptcy court dismissed all unsecured claims of bondholders, including those of the Fund. On March 31, 2006 and April 13, 2006, the Fund liquidated such UAL common stock holdings. On October 5, 2006, the Fund received an additional distribution of UAL common stock as a result of its ownership of UAL bonds, which it still held at October 31, 2006. Subsequent to fiscal year-end, the Fund liquidated its UAL common stock holdings. (8) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each forward swap contract. N/R Not rated. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 79 Statement of ASSETS AND LIABILITIES October 31, 2006
PERFORMANCE MUNICIPAL MARKET PLUS ADVANTAGE OPPORTUNITY (NPP) (NMA) (NMO) - ------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $1,303,450,908, $927,999,902 $991,270,192, $821,317,947, $624,238,419 and $875,061,105, respectively) $ 1,406,801,730 $ 1,006,727,683 $ 1,067,228,139 Cash -- -- -- Deposits with brokers for open futures contracts -- -- -- Receivables: Interest 20,354,169 16,250,336 15,983,266 Investments sold 707,817 74,885,545 170,000 Variation margin on futures contracts -- -- -- Unrealized appreciation on forward swaps -- -- -- Other assets 112,468 87,855 93,928 - ------------------------------------------------------------------------------------------------------------- Total assets 1,427,976,184 1,097,951,419 1,083,475,333 - ------------------------------------------------------------------------------------------------------------- LIABILITIES Cash overdraft 2,560,051 3,805,173 999,910 Payable for investments purchased -- 51,564,798 -- Accrued expenses: Management fees 723,677 534,777 554,399 Other 292,152 238,992 223,694 Preferred share dividends payable 178,075 133,133 138,069 - ------------------------------------------------------------------------------------------------------------- Total liabilities 3,753,955 56,276,873 1,916,072 - ------------------------------------------------------------------------------------------------------------- Preferred shares, at liquidation value 479,000,000 358,000,000 380,000,000 - ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 945,222,229 $ 683,674,546 $ 701,559,261 ============================================================================================================= Common shares outstanding 59,914,073 43,065,903 45,540,872 ============================================================================================================= Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.78 $ 15.88 $ 15.41 ============================================================================================================= NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------- Common shares, $.01 par value per share $ 599,141 $ 430,659 $ 455,409 Paid-in surplus 836,423,631 601,673,644 635,499,922 Undistributed (Over-distribution of) net investment income 1,230,581 2,927,826 919,444 Accumulated net realized gain (loss) from investments and derivative transactions 3,618,054 (85,364) (11,273,461) Net unrealized appreciation (depreciation) of investments and derivative transactions 103,350,822 78,727,781 75,957,947 - ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 945,222,229 $ 683,674,546 $ 701,559,261 ============================================================================================================= Authorized shares: Common 200,000,000 200,000,000 200,000,000 Preferred 1,000,000 1,000,000 1,000,000 ============================================================================================================= DIVIDEND DIVIDEND DIVIDEND ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $1,303,450,908, $927,999,902 $991,270,192, $821,317,947, $624,238,419 and $875,061,105, respectively) $ 888,546,080 $ 680,892,560 $ 926,183,283 Cash -- 1,505,923 60,667 Deposits with brokers for open futures contracts -- -- 10,461 Receivables: Interest 12,716,081 11,307,407 14,858,791 Investments sold 15,764,372 4,005,394 4,768,806 Variation margin on futures contracts -- -- 119,250 Unrealized appreciation on forward swaps -- -- 140,960 Other assets 78,455 50,585 43,038 - ------------------------------------------------------------------------------------------------------------- Total assets 917,104,988 697,761,869 946,185,256 - ------------------------------------------------------------------------------------------------------------- LIABILITIES Cash overdraft 2,235,783 -- -- Payable for investments purchased 8,912,198 5,178,245 6,773,411 Accrued expenses: Management fees 351,783 212,997 285,486 Other 169,407 114,630 173,048 Preferred share dividends payable 119,956 66,706 117,800 - ------------------------------------------------------------------------------------------------------------- Total liabilities 11,789,127 5,572,578 7,349,745 - ------------------------------------------------------------------------------------------------------------- Preferred shares, at liquidation value 295,000,000 222,000,000 312,000,000 - ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 610,315,861 $ 470,189,291 $ 626,835,511 ============================================================================================================= Common shares outstanding 39,267,491 29,346,032 40,331,841 ============================================================================================================= Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.54 $ 16.02 $ 15.54 ============================================================================================================= NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------- Common shares, $.01 par value per share $ 392,675 $ 293,460 $ 403,318 Paid-in surplus 558,149,941 417,184,977 573,181,990 Undistributed (Over-distribution of) net investment income 1,374,504 1,988,926 962,737 Accumulated net realized gain (loss) from investments and derivative transactions (16,829,392) (5,932,213) 894,617 Net unrealized appreciation (depreciation) of investments and derivative transactions 67,228,133 56,654,141 51,392,849 - ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 610,315,861 $ 470,189,291 $ 626,835,511 ============================================================================================================= Authorized shares: Common Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited =============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 80 Statement of OPERATIONS Year Ended October 31, 2006
PERFORMANCE MUNICIPAL MARKET PLUS ADVANTAGE OPPORTUNITY (NPP) (NMA) (NMO) - ------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME $ 70,383,602 $ 54,519,113 $ 54,633,443 - ------------------------------------------------------------------------------------------------------------- EXPENSES Management fees 8,507,546 6,300,897 6,525,239 Preferred shares - auction fees 1,198,070 895,425 950,418 Preferred shares - dividend disbursing agent fees 50,000 50,000 40,000 Shareholders' servicing agent fees and expenses 168,084 103,742 112,118 Custodian's fees and expenses 314,859 257,622 235,153 Directors'/Trustees' fees and expenses 32,407 23,523 23,929 Professional fees 63,762 54,942 42,535 Shareholders' reports - printing and mailing expenses 126,850 95,246 99,399 Stock exchange listing fees 22,103 15,884 16,800 Investor relations expense 134,145 99,136 103,271 Other expenses 64,075 53,914 56,714 - ------------------------------------------------------------------------------------------------------------- Total expenses before custodian fee credit, expense reimbursement and legal fee refund 10,681,901 7,950,331 8,205,576 Custodian fee credit (125,173) (56,934) (75,010) Expense reimbursement -- -- -- Legal fee refund -- (9,485) -- - ------------------------------------------------------------------------------------------------------------- Net expenses 10,556,728 7,883,912 8,130,566 - ------------------------------------------------------------------------------------------------------------- Net investment income 59,826,874 46,635,201 46,502,877 - ------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 3,609,041 (38,686) (3,186,736) Change in net unrealized appreciation (depreciation) of investments 18,585,165 11,410,086 18,252,758 Change in net unrealized appreciation (depreciation) of futures -- -- -- Change in net unrealized appreciation (depreciation) of forward swaps -- -- -- - ------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 22,194,206 11,371,400 15,066,022 - ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (14,851,985) (11,096,228) (11,933,888) From accumulated net realized gains (204,889) (95,203) -- - ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (15,056,874) (11,191,431) (11,933,888) - ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations $ 66,964,206 $ 46,815,170 $ 49,635,011 ============================================================================================================= DIVIDEND DIVIDEND DIVIDEND ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME $ 45,958,483 $ 36,217,116 $ 47,234,239 - ------------------------------------------------------------------------------------------------------------- EXPENSES Management fees 5,485,410 4,228,760 5,696,085 Preferred shares - auction fees 737,955 553,679 780,307 Preferred shares - dividend disbursing agent fees 30,000 30,000 30,000 Shareholders' servicing agent fees and expenses 16,247 6,597 8,677 Custodian's fees and expenses 191,350 134,735 226,548 Directors'/Trustees' fees and expenses 19,277 15,264 20,741 Professional fees 54,231 35,898 42,843 Shareholders' reports - printing and mailing expenses 77,901 56,746 75,531 Stock exchange listing fees 14,504 3,629 3,429 Investor relations expense 85,550 66,671 85,077 Other expenses 40,463 33,001 35,991 - ------------------------------------------------------------------------------------------------------------- Total expenses before custodian fee credit, expense reimbursement and legal fee refund 6,752,888 5,164,980 7,005,229 Custodian fee credit (98,224) (80,443) (26,719) Expense reimbursement (1,676,403) (1,856,261) (2,749,865) Legal fee refund (13,354) (3,329) -- - ------------------------------------------------------------------------------------------------------------- Net expenses 4,964,907 3,224,947 4,228,645 - ------------------------------------------------------------------------------------------------------------- Net investment income 40,993,576 32,992,169 43,005,594 - ------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 4,172,514 (1,053,678) 1,509,431 Change in net unrealized appreciation (depreciation) of investments 8,567,260 10,301,195 10,632,281 Change in net unrealized appreciation (depreciation) of futures -- -- 129,711 Change in net unrealized appreciation (depreciation) of forward swaps -- -- 140,960 - ------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 12,739,774 9,247,517 12,412,383 - ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (9,396,656) (7,047,610) (9,830,888) From accumulated net realized gains -- -- -- - ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (9,396,656) (7,047,610) (9,830,888) - ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations $ 44,336,694 $ 35,192,076 $ 45,587,089 =============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 81 Statement of CHANGES IN NET ASSETS
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) ---------------------------------- ----------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/06 10/31/05 10/31/06 10/31/05 - -------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 59,826,874 $ 61,211,198 $ 46,635,201 $ 46,918,021 Net realized gain (loss) from investments 3,609,041 1,174,258 (38,686) 739,548 Net realized gain (loss) from forward swaps -- -- -- -- Change in net unrealized appreciation (depreciation) of investments 18,585,165 (16,746,198) 11,410,086 (10,417,790) Change in net unrealized appreciation (depreciation) of futures -- -- -- -- Change in net unrealized appreciation (depreciation) of forward swaps -- -- -- -- Distributions to Preferred shareholders: From net investment income (14,851,985) (9,513,192) (11,096,228) (6,994,789) From accumulated net realized gains (204,889) (69,318) (95,203) (47,587) - -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 66,964,206 36,056,748 46,815,170 30,197,403 - -------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (50,243,956) (56,600,807) (38,834,236) (43,068,628) From accumulated net realized gains (1,042,505) (904,764) (628,192) (641,084) - -------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (51,286,461) (57,505,571) (39,462,428) (43,709,712) - -------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- 643,731 -- - -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- 643,731 -- - -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 15,677,745 (21,448,823) 7,996,473 (13,512,309) Net assets applicable to Common shares at the beginning of year 929,544,484 950,993,307 675,678,073 689,190,382 - -------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 945,222,229 $ 929,544,484 $ 683,674,546 $ 675,678,073 ================================================================================================================================ Undistributed (Over-distribution of) net investment income at the end of year $ 1,230,581 $ 6,510,536 $ 2,927,826 $ 6,201,663 ================================================================================================================================ MARKET OPPORTUNITY (NMO) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 - ------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 46,502,877 $ 46,851,160 Net realized gain (loss) from investments (3,186,736) 6,140,447 Net realized gain (loss) from forward swaps -- -- Change in net unrealized appreciation (depreciation) of investments 18,252,758 (18,854,854) Change in net unrealized appreciation (depreciation) of futures -- -- Change in net unrealized appreciation (depreciation) of forward swaps -- -- Distributions to Preferred shareholders: From net investment income (11,933,888) (7,453,196) From accumulated net realized gains -- -- - ------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 49,635,011 26,683,557 - ------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (37,757,943) (41,760,989) From accumulated net realized gains -- -- - ------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (37,757,943) (41,760,989) - ------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- - ------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- - ------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 11,877,068 (15,077,432) Net assets applicable to Common shares at the beginning of year 689,682,193 704,759,625 - ------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $ 701,559,261 $ 689,682,193 ========================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 919,444 $ 4,150,977 ==========================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 82
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) ---------------------------------- ----------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/06 10/31/05 10/31/06 10/31/05 - -------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 40,993,576 $ 41,783,665 $ 32,992,169 $ 33,182,825 Net realized gain (loss) from investments 4,172,514 (176,759) (1,053,678) 365,453 Net realized gain (loss) from forward swaps -- -- -- (5,034,851) Change in net unrealized appreciation (depreciation) of investments 8,567,260 (10,221,934) 10,301,195 7,731,035 Change in net unrealized appreciation (depreciation) of futures -- -- -- -- Change in net unrealized appreciation (depreciation) of forward swaps -- -- -- 3,532,408 Distributions to Preferred shareholders: From net investment income (9,396,656) (5,755,365) (7,047,610) (4,391,879) From accumulated net realized gains -- -- -- -- - -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 44,336,694 25,629,607 35,192,076 35,384,991 - -------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (33,907,479) (39,071,157) (28,774,873) (30,220,159) From accumulated net realized gains -- -- -- -- - -------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (33,907,479) (39,071,157) (28,774,873) (30,220,159) - -------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- 909,885 145,668 - -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- 909,885 145,668 - -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 10,429,215 (13,441,550) 7,327,088 5,310,500 Net assets applicable to Common shares at the beginning of year 599,886,646 613,328,196 462,862,203 457,551,703 - -------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 610,315,861 $ 599,886,646 $ 470,189,291 $ 462,862,203 ================================================================================================================================ Undistributed (Over-distribution of) net investment income at the end of ye $ 1,374,504 $ 3,699,460 $ 1,988,926 $ 4,862,141 ================================================================================================================================ DIVIDEND ADVANTAGE 3 (NZF) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 - ------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 43,005,594 $ 42,749,145 Net realized gain (loss) from investments 1,509,431 60,740 Net realized gain (loss) from forward swaps -- -- Change in net unrealized appreciation (depreciation) of investments 10,632,281 133,784 Change in net unrealized appreciation (depreciation) of futures 129,711 -- Change in net unrealized appreciation (depreciation) of forward swaps 140,960 -- Distributions to Preferred shareholders: From net investment income (9,830,888) (6,046,697) From accumulated net realized gains -- -- - ------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 45,587,089 36,896,972 - ------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (36,446,494) (38,657,406) From accumulated net realized gains -- -- - ------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (36,446,494) (38,657,406) - ------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 337,160 -- - ------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions 337,160 -- - ------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 9,477,755 (1,760,434) Net assets applicable to Common shares at the beginning of year 617,357,756 619,118,190 - ------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $ 626,835,511 $ 617,357,756 ========================================================================================== Undistributed (Over-distribution of) net investment income at the end of ye $ 962,737 $ 4,240,488 ==========================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 83 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 or certain U.S. territories. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. INVESTMENT VALUATION The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When market price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. Prices of forward swap contracts are also provided by an independent pricing service approved by each Fund's Board of Directors/Trustees. Futures contracts are valued using the closing settlement price, or, in the absence of such a price, at the mean of the bid and asked prices. If the pricing service is unable to supply a price for a municipal bond, forward swap contract or futures contract, each Fund may use a market price or fair market value quote provided by a major broker/dealer in such investments. If it is determined that the market price or fair market value for an investment is unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish a fair value for the investment. Exchange-listed securities are generally valued at the last sales price on the securities exchange on which such securities are primarily traded. Securities traded on a securities exchange for which there are no transactions on a given day or securities not listed on a securities exchange are valued at the mean of the closing bid and asked prices. Securities traded on Nasdaq are valued at the Nasdaq Official Closing Price. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value. INVESTMENT TRANSACTIONS Investment transactions are recorded on a trade date basis. Realized gains and losses from transactions are determined on the specific identification method. Investments purchased on a when-issued or delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At October 31, 2006, Municipal Advantage (NMA), Dividend Advantage (NAD), Dividend Advantage 2 (NXZ) and Dividend Advantage 3 (NZF) had outstanding when-issued/delayed delivery purchase commitments of $21,251,553, $3,587,721, $1,172,852 and $2,005,021, respectively. There were no such outstanding purchase commitments in either Performance Plus (NPP) or Market Opportunity (NMO) at October 31, 2006. 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. Dividend income, if any, is recorded on the ex-dividend date. PROFESSIONAL FEES Professional fees presented in the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment, or to pursue other claims or legal actions on behalf of Fund shareholders. Legal fee refunds presented on the Statement of Operations for Municipal Advantage (NMA), Dividend Advantage (NAD) and Dividend Advantage 2 (NXZ) reflect a refund of workout expenditures paid in a prior reporting period. 84 FEDERAL INCOME TAXES Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended October 31, 2006, have been designated Exempt Interest Dividends. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation. DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. PREFERRED SHARES The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in more than one Series. The dividend rate paid by the Funds on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable at the end of each rate period. 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 ====================================================================================================
INVERSE FLOATING RATE SECURITIES The Funds are authorized to invest in inverse floating rate securities. During the year ended October 31, 2006, Municipal Advantage (NMA), Market Opportunity (NMO), Dividend Advantage (NAD), Dividend Advantage 2 (NXZ) and Dividend Advantage 3 (NZF) invested in inverse floating rate securities for the purpose of enhancing portfolio yield. Inverse floating rate securities are identified in the Portfolio of Investments and are valued daily. The interest rate of an inverse floating rate security has an inverse relationship to the interest rate of a short-term floating rate security. Consequently, as the interest rate of the floating rate security rises, the interest rate on the inverse floating rate security declines. Conversely, as the interest rate of the floating rate security declines, the interest rate on the inverse floating rate security rises. The price of an inverse floating rate security will be more volatile than that of an otherwise comparable fixed rate security since the interest rate is dependent on an underlying fixed coupon rate or the general level of long-term interest rates as well as the short-term interest paid on the floating rate security, and because the inverse floating rate security typically bears the risk of loss of a greater face value of an underlying bond. Performance Plus (NPP) did not invest in any such securities during the year ended October 31, 2006. FORWARD SWAP TRANSACTIONS The Funds are authorized to invest in certain derivative financial instruments. The Funds' use of forward interest rate swap transactions is intended to help the Fund manage its overall interest rate sensitivity, either shorter or longer, generally to more closely align the Fund's interest rate sensitivity with that of the broader municipal market. Forward interest rate swap transactions involve each Fund's agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed rate payment, the accruals for which would begin at a specified date in the future (the "effective date"). The amount of the payment obligation is based on the notional amount of the forward swap contract and the termination date of the swap (which is akin to a bond's maturity). The value of the Fund's swap commitment would increase or decrease based primarily on the extent to which long-term interest rates for bonds having a maturity of the swap's termination date increases or decreases. The Funds may terminate a swap contract prior to the effective date, at which point a realized gain or loss is recognized. When a forward swap is terminated, it ordinarily does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Each Fund intends, but is not obligated, to terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment to pay any realized gain to the Fund upon termination. To reduce such credit risk, all counterparties are required to pledge collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate, either up or down, by at least the predetermined threshold amount. 85 Notes to FINANCIAL STATEMENTS (continued) FUTURES CONTRACTS The Funds are authorized to invest in futures contracts. Upon entering into a futures contract, a Fund is required to deposit with th broker an amount of cash or liquid securities equal to a specified percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by a Fund each day, depending on the daily fluctuation of the value of the contract. During the period the futures contract is open, changes in the value of the contract are recognized as an unrealized gain or loss by "marking-to-market" on a daily basis to reflect the changes in market value of the contract. When the contract is closed or expired, a Fund records a realized gain or loss equal to the difference between the value of the contract on the closing date and value of the contract when originally entered into. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Additionally, the Statement of Assets and Liabilities reflects a receivable or payable for the variation margin as of October 31, 2006. Risks of investments in futures contracts include the possible adverse movement of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts and/or that a change in the value of the contract may not correlate with a change in the value of the underlying securities or indices. 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, their 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 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 10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05 - ------------------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions -- -- 40,309 -- -- -- =========================================================================================================================
DIVIDEND DIVIDEND DIVIDEND ADVANTAGE (NAD) ADVANTAGE 2 (NXZ) ADVANTAGE 3 (NZF) ---------------------- ------------------------ ------------------------ YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05 - ------------------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions -- -- 55,164 8,868 21,722 -- =========================================================================================================================
86 3. INVESTMENT TRANSACTIONS Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the fiscal year ended October 31, 2006, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - -------------------------------------------------------------------------------------------------------------------------------- Purchases $ 124,700,213 $ 110,329,689 $143,527,048 $ 73,599,563 $ 30,502,860 $ 87,150,874 Sales and maturities 130,956,915 134,169,212 146,276,417 71,583,836 35,008,446 89,194,902 ================================================================================================================================
4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to the treatment of paydown gains and losses, timing differences in recognizing taxable market discount and timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their Federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds. At October 31, 2006, 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 $1,302,691,978 $ 926,556,989 $990,943,730 $820,149,454 $625,826,312 $874,774,926 ================================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2006, 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 $ 104,622,164 $ 80,233,431 $ 80,162,904 $ 68,571,746 $ 58,673,722 $ 52,710,665 Depreciation (512,412) (62,737) (3,878,495) (175,120) (3,607,474) (1,302,308) - -------------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments $ 104,109,752 $ 80,170,694 $ 76,284,409 $ 68,396,626 $ 55,066,248 $ 51,408,357 ================================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at October 31, 2006, the Funds' tax year end, 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 * $ 4,425,692 $ 4,620,835 $ 3,659,265 $ 2,916,963 $ 3,653,096 $ 3,738,588 Undistributed net ordinary income ** 58,535 26,427 77,487 118,459 23,339 -- Undistributed net long-term capital gains 3,618,054 -- -- -- -- 1,024,327 ================================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on October 2, 2006, paid on November 1, 2006. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. The tax character of distributions paid during the tax years ended October 31, 2006 and October 31, 2005, 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 2006 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - -------------------------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $ 65,689,928 $ 50,218,101 $ 49,767,991 $ 43,683,872 $ 36,096,315 $ 46,380,901 Distributions from net ordinary income ** 6,686 154,403 196,171 -- -- -- Distributions from net long-term capital gains*** 1,247,394 593,511 -- -- -- -- ================================================================================================================================
87 Notes to FINANCIAL STATEMENTS (continued)
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2005 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - -------------------------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $ 66,204,330 $ 50,312,299 $ 49,472,483 $ 45,021,305 $ 34,591,779 $ 44,838,770 Distributions from net ordinary income ** 238,651 -- -- -- -- -- Distributions from net long-term capital gains 974,082 688,671 -- -- -- -- ================================================================================================================================
** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. *** The Funds designated as a long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Funds related to net capital gain to zero for the tax year ended October 31, 2006. At October 31, 2006, 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:
MUNICIPAL MARKET DIVIDEND DIVIDEND ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 (NMA) (NMO) (NAD) (NXZ) - ------------------------------------------------------------------------------------------------------------------------------- Expiration year: 2008 $ -- $ -- $12,130,329 $ -- 2009 -- -- -- -- 2010 -- -- -- -- 2011 -- 7,158,110 4,594,300 -- 2012 -- 973,824 -- 246,691 2013 -- -- 104,762 1,591,323 2014 35,364 3,141,529 -- 1,882,135 - ------------------------------------------------------------------------------------------------------------------------------- Total $ 35,364 $11,273,463 $16,829,391 $ 3,720,149 ===============================================================================================================================
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Each Fund's management fee is separated into two components - a complex-level component, based on the aggregate amount of all fund assets managed by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc., ("Nuveen"), and a specific fund-level component, based only on the amount of assets within each individual Fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser. The annual fund-level fee, payable monthly, for each Fund is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows:
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) MARKET OPPORTUNITY (NMO) AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ================================================================================================================================
88
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF) AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For net assets over $2 billion .3750 ================================================================================================================================
The annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as stated in the table below. As of October 31, 2006, the complex-level fee rate was .1852%.
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. The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to its Officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds. For the first ten years of 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 JULY 31, - ----------------------------------------------------- 1999* .30% 2000 .30 2001 .30 2002 .30 2003 .30 2004 .30 2005 .25% 2006 .20 2007 .15 2008 .10 2009 .05 ===================================================== * 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 MARCH 31, - ----------------------------------------------------- 2001* .30% 2002 .30 2003 .30 2004 .30 2005 .30 2006 .30 2007 .25% 2008 .20 2009 .15 2010 .10 2011 .05 ===================================================== * From the commencement of operations. 89 Notes to FINANCIAL STATEMENTS (continued) 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 SEPTEMBER 30, - ----------------------------------------------------- 2001* .30% 2002 .30 2003 .30 2004 .30 2005 .30 2006 .30 2007 .25% 2008 .20 2009 .15 2010 .10 2011 .05 ===================================================== * 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. NEW ACCOUNTING PRONOUNCEMENTS FINANCIAL ACCOUNTING STANDARDS BOARD INTERPRETATION NO. 48 On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and does not expect the adoption of FIN 48 will have a significant impact on the net assets or results of operations of the Funds. FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT ON FINANCIAL ACCOUNTING STANDARDS NO. 157 In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this standard relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of October 31, 2006, the Funds do not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements included within the Statement of Operations for the period. 7. SUBSEQUENT EVENT DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 1, 2006, to shareholders of record on November 15, 2006, 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 $.0640 $.0715 $.0660 $.0690 $.0765 $.0730 ================================================================================================================================
90 Financial HIGHLIGHTS 91 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions ---------------------------------------------------------------- ------------------------------- Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total - ------------------------------------------------------------------------------------------------------------------------------- PERFORMANCE PLUS (NPP) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 $15.51 $1.00 $ .38 $(.25) $ -- $1.13 $ (.84) $(.02) $ (.86) 2005 15.87 1.02 (.26) (.16) -- .60 (.94) (.02) (.96) 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) MUNICIPAL ADVANTAGE (NMA) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 15.70 1.08 .27 (.26) -- 1.09 (.90) (.01) (.91) 2005 16.02 1.09 (.24) (.16) -- .69 (1.00) (.01) (1.01) 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) MARKET OPPORTUNITY (NMO) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 15.14 1.02 .34 (.26) -- 1.10 (.83) -- (.83) 2005 15.48 1.03 (.29) (.16) -- .58 (.92) -- (.92) 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) DIVIDEND ADVANTAGE (NAD) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 15.28 1.04 .32 (.24) -- 1.12 (.86) -- (.86) 2005 15.62 1.06 (.25) (.15) -- .66 (1.00) -- (1.00) 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) DIVIDEND ADVANTAGE 2 (NXZ) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 15.80 1.12 .32 (.24) -- 1.20 (.98) -- (.98) 2005 15.63 1.13 .22 (.15) -- 1.20 (1.03) -- (1.03) 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) DIVIDEND ADVANTAGE 3 (NZF) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 15.32 1.07 .29 (.24) -- 1.12 (.90) -- (.90) 2005 15.36 1.06 .01 (.15) -- .92 (.96) -- (.96) 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) =============================================================================================================================== 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: 2006 $ -- $15.78 $15.09 10.78% 7.50% 2005 -- 15.51 14.43 3.02 3.83 2004 -- 15.87 14.95 9.10 9.30 2003 -- 15.45 14.64 9.58 6.97 2002 (.01) 15.38 14.28 4.51 5.03 MUNICIPAL ADVANTAGE (NMA) - -------------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 15.88 15.85 10.68 7.16 2005 -- 15.70 15.19 3.29 4.42 2004 -- 16.02 15.70 8.82 9.57 2003 -- 15.62 15.44 13.17 8.71 2002 -- 15.41 14.66 5.89 5.39 MARKET OPPORTUNITY (NMO) - -------------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 15.41 15.00 11.92 7.49 2005 -- 15.14 14.19 4.70 3.78 2004 -- 15.48 14.44 7.97 9.00 2003 -- 15.11 14.29 10.62 10.24 2002 -- 14.60 13.80 .49 2.03 DIVIDEND ADVANTAGE (NAD) - -------------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 15.54 15.30 11.19 7.59 2005 -- 15.28 14.58 1.77 4.27 2004 -- 15.62 15.31 8.37 10.06 2003 -- 15.17 15.12 11.41 8.41 2002 -- 14.94 14.50 2.01 7.26 DIVIDEND ADVANTAGE 2 (NXZ) - -------------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 16.02 16.50 11.95 7.86 2005 -- 15.80 15.64 8.58 7.83 2004 -- 15.63 15.38 11.16 10.67 2003 -- 15.13 14.85 14.39 8.67 2002 .01 14.89 13.91 (.81) 5.16 DIVIDEND ADVANTAGE 3 (NZF) - -------------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 15.54 15.88 16.90 7.57 2005 -- 15.32 14.41 6.11 6.09 2004 -- 15.36 14.50 12.45 11.10 2003 .01 14.74 13.80 9.04 7.82 2002 (.09) 14.56 13.53 (4.26) 7.20 ====================================================================================== Ratios/Supplemental Data --------------------------------------------------------------------------------- Before Credit/ After Credit/ Reimbursement/Refund 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: 2006 $945,222 1.15% 6.44% 1.14% 6.45% 9% 2005 929,544 1.15 6.45 1.14 6.46 6 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 MUNICIPAL ADVANTAGE (NMA) - ------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 683,675 1.18 6.92 1.17 6.93 11 2005 675,678 1.17 6.81 1.16 6.82 8 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 MARKET OPPORTUNITY (NMO) - ------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 701,559 1.19 6.73 1.18 6.74 14 2005 689,682 1.19 6.66 1.18 6.67 7 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 DIVIDEND ADVANTAGE (NAD) - ------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 610,316 1.12 6.54 .83 6.83 8 2005 599,887 1.17 6.48 .80 6.84 11 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 DIVIDEND ADVANTAGE 2 (NXZ) - ------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 470,189 1.11 6.70 .70 7.11 5 2005 462,862 1.12 6.66 .67 7.12 2 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 DIVIDEND ADVANTAGE 3 (NZF) - ------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 626,836 1.13 6.51 .68 6.96 9 2005 617,358 1.13 6.39 .68 6.84 3 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 ============================================================================================================ 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: 2006 $479,000 $25,000 $74,333 2005 479,000 25,000 73,515 2004 479,000 25,000 74,634 2003 479,000 25,000 73,305 2002 479,000 25,000 73,089 MUNICIPAL ADVANTAGE (NMA) - ------------------------------------------------------------------ Year Ended 10/31: 2006 358,000 25,000 72,743 2005 358,000 25,000 72,184 2004 358,000 25,000 73,128 2003 358,000 25,000 71,868 2002 358,000 25,000 71,248 MARKET OPPORTUNITY (NMO) - ------------------------------------------------------------------ Year Ended 10/31: 2006 380,000 25,000 71,155 2005 380,000 25,000 70,374 2004 380,000 25,000 71,366 2003 380,000 25,000 70,260 2002 380,000 25,000 68,744 DIVIDEND ADVANTAGE (NAD) - ------------------------------------------------------------------ Year Ended 10/31: 2006 295,000 25,000 76,722 2005 295,000 25,000 75,838 2004 295,000 25,000 76,977 2003 295,000 25,000 75,446 2002 295,000 25,000 74,665 DIVIDEND ADVANTAGE 2 (NXZ) - ------------------------------------------------------------------ Year Ended 10/31: 2006 222,000 25,000 77,949 2005 222,000 25,000 77,124 2004 222,000 25,000 76,526 2003 222,000 25,000 74,899 2002 222,000 25,000 74,089 DIVIDEND ADVANTAGE 3 (NZF) - ------------------------------------------------------------------ Year Ended 10/31: 2006 312,000 25,000 75,227 2005 312,000 25,000 74,468 2004 312,000 25,000 74,609 2003 312,000 25,000 72,608 2002 312,000 25,000 72,019 ==================================================================
* Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. 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. Spread 92-93 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 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 Fund is currently set at nine. 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 PRINCIPAL OCCUPATION(S) IN FUND COMPLEX NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUNDS OR 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 (since 1996) and Director of 171 3/28/49 the Board Nuveen Investments, Inc., Nuveen 333 W. Wacker Drive and Board Investments, LLC, Nuveen Advisory Corp. Chicago, IL 60606 Member and Nuveen Institutional Advisory Corp.(3); formerly, Director (1996-2006) of Institutional Capital Corporation; Chairman and Director (since 1997) of Nuveen Asset Management; Chairman and Director of Rittenhouse Asset Management, Inc. (since 1999); Chairman of Nuveen Investments Advisers Inc. (since 2002). BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Lead Independent 1997 Private Investor and Management 171 8/22/40 Board member Consultant. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice 171 7/29/34 President of The Northern Trust Company; 333 W. Wacker Drive Director (since 2002) Community Advisory Chicago, IL 60606 Board for Highland Park and Highwood, United Way of the North Shore; Director (since 2006) of the Michael Rolfe Pancreatic Cancer Foundation. - ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, 171 10/22/48 a private philanthropic corporation 333 W. Wacker Drive (since 1996); Director and Vice Chicago, IL 60606 Chairman, United Fire Group, a publicly held company; Adjunct Faculty Member, University of Iowa; Director, Gazette Companies; Life Trustee of Coe College and Iowa College Foundation; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. - ------------------------------------------------------------------------------------------------------------------------------------ William C. Hunter Board member 2004 Dean, Tippie College of Business, 171 3/6/48 University of Iowa (since June 2006); 333 W. Wacker Drive formerly, Dean and Distinguished Chicago, IL 60606 Professor of Finance, School of Business at the University of Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); Director (since 1997), Credit Research Center at Georgetown University; Director (since 2004) of Xerox Corporation; Director, SS&C Technologies, Inc. (May 2005 - October 2005). - ------------------------------------------------------------------------------------------------------------------------------------ David J. Kundert Board member 2005 Retired (since 2004) as Chairman, 169 10/28/42 JPMorgan Fleming Asset Management, 333 W. Wacker Drive President and CEO, Banc One Investment Chicago, IL 60606 Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens.
94
NUMBER OF PORTFOLIOS PRINCIPAL OCCUPATION(S) IN FUND COMPLEX NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUNDS OR 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 Chairman of Miller-Valentine Partners 171 9/24/44 Ltd., a real estate investment company; 333 W. Wacker Drive formerly, Senior Partner and Chief Chicago, IL 60606 Operating Officer (retired, 2004) of Miller-Valentine Group; formerly, Vice President, Miller-Valentine Realty; Board Member, Chair of the Finance Committee and member of the Audit Committee of Premier Health Partners, the not-for-profit company of Miami Valley Hospital; Vice President, Dayton Philharmonic Orchestra Association; Board Member, Regional Leaders Forum, which promotes cooperation on economic development issues; Director, Dayton 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 171 12/29/47 Donnelley Foundation (since 1994); prior 333 W. Wacker Drive thereto, Executive Director, Great Lakes Chicago, IL 60606 Protection Fund (from 1990 to 1994). - ------------------------------------------------------------------------------------------------------------------------------------ Eugene S. Sunshine Board member 2005 Senior Vice President for Business and 171 1/22/50 Finance, Northwestern University (since 333 W. Wacker Drive 1997); Director (since 2003), Chicago Chicago, IL 60606 Board Options Exchange; formerly, Director (2003-2006), National Mentor Holdings, a privately-held, national provider of home and community-based services; Chairman (since 1997), Board of Directors, Rubicon, a pure captive insurance company owned by Northwestern University; Director (since 1997), Evanston Chamber of Commerce and Evanston Inventure, a business development organization.
NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUND: - ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), 171 9/9/56 Administrative Assistant Secretary and Associate 333 W. Wacker Drive Officer General Counsel, formerly, Vice Chicago, IL 60606 President and Assistant General Counsel, of Nuveen Investments, LLC; Managing Director (2002-2004), General Counsel (1998-2004) and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2002) and Assistant Secretary and Associate General Counsel, formerly, Vice President (since 1997), of Nuveen Asset Management; 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.; Assistant Secretary of Symphony Asset Management LLC (since 2003), Tradewinds NWQ Global Investors, LLC and Santa Barbara Asset Management, LLC; (since 2006); Chartered Financial Analyst.
95 Board Members AND OFFICERS (continued)
NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Julia L. Antonatos Vice President 2004 Managing Director (since 2005), formerly 171 9/22/63 Vice President (since 2002); formerly, 333 W. Wacker Drive Assistant Vice President (since 2000) of Chicago, IL 60606 Nuveen Investments, LLC; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, 171 2/3/66 and Assistant Assistant Vice President (since 2000) of 333 W. Wacker Drive Secretary Nuveen Investments, LLC. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President and Treasurer of Nuveen 171 11/28/67 Investments, LLC and of Nuveen 333 W. Wacker Drive Investments, Inc. (since 1999); Vice Chicago, IL 60606 President and Treasurer of Nuveen Asset Management (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); Treasurer of Symphony Asset Management LLC (since 2003) and Santa Barbara Asset Management, LLC (since 2006); Assistant Treasurer, Tradewinds NWQ Global Investors, LLC (since 2006); formerly, Vice President and Treasurer (1999-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ John N. Desmond Vice President 2005 Vice President, Director of Investment 171 8/24/61 Operations, Nuveen Investments, LLC 333 W. Wacker Drive (since January 2005); formerly, Chicago, IL 60606 Director, Business Manager, Deutsche Asset Management (2003-2004), Director, Business Development and Transformation, Deutsche Trust Bank Japan (2002-2003); previously, Senior Vice President, Head of Investment Operations and Systems, Scudder Investments Japan, (2000-2002), Senior Vice President, Head of Plan Administration and Participant Services, Scudder Investments (1995-2002). - ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant 171 9/24/64 and Secretary Secretary and Assistant General Counsel 333 W. Wacker Drive (since 1998) formerly, Assistant Vice Chicago, IL 60606 President (since 1998) of Nuveen Investments, LLC; Vice President (2002-2004) and Assistant Secretary (1998-2004) formerly, Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President and Assistant Secretary (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------------ Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), 171 10/24/45 formerly, Vice President of Nuveen 333 W. Wacker Drive Investments, LLC, Managing Director Chicago, IL 60606 (2004) formerly, Vice President (1998-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002), 171 3/2/64 formerly, Vice President of Nuveen 333 W. Wacker Drive Investments; Managing Director Chicago, IL 60606 (1997-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2001) of Nuveen Asset Management; Vice President (since 2002) of Nuveen Investments Advisers Inc.; Chartered Financial Analyst.
96
NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds 171 5/31/54 and Controller Controller (since 1998) of Nuveen 333 W. Wacker Drive Investments, LLC; formerly, Vice Chicago, IL 60606 President and Funds Controller (1998-2004) of Nuveen Investments, Inc.; Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Walter M. Kelly Chief 2003 Vice President and Assistant Secretary 171 2/24/70 Officer and (since 2006) formerly, Assistant Vice 333 West Wacker Drive Vice President President and Assistant General Counsel Chicago, IL 60606 (since 2003) of Nuveen Investments, LLC; Vice President (since 2006) and Assistant Secretary (since 2003) formerly, Assistant Vice President of Nuveen Asset Management; previously, Associate (2001-2003) at the law firm of Vedder, Price, Kaufman & Kammholz. - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen 171 3/22/63 Investments, LLC; Certified Public 333 W. Wacker Drive Accountant. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, 171 8/27/61 LLC (since 1999). 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and 171 7/27/51 and Assistant Assistant General Counsel of Nuveen 333 W. Wacker Drive Secretary Investments, LLC; formerly, Vice Chicago, IL 60606 President and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President (since 2005) and Assistant Secretary of Nuveen Investments, Inc.; Vice President (since 2005) and Assistant Secretary (since 1997) of Nuveen Asset Management; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002), Symphony Asset Management LLC (since 2003) and Tradewinds NWQ Global Investors, LLC and Santa Barbara Asset Management, LLC (since 2006).
(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) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were reorganized into Nuveen Asset Management, effective January 1, 2005. (4) Officers serve one year terms through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 97 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS The Board of Trustees is responsible for overseeing the performance of the investment adviser to the Funds and determining whether to continue the advisory arrangements. At a meeting held on May 23-25, 2006 (the "MAY MEETING"), the Board of Trustees of the Funds, including the independent Trustees, unanimously approved the continuance of the Investment Management Agreement between each Fund and NAM (the "FUND ADVISER"). THE APPROVAL PROCESS During the course of the year, the Board received a wide variety of materials relating to the services provided by the Fund Adviser and the performance of each Fund. To assist the Board in its evaluation of the advisory contract with the Fund Adviser at the May Meeting, the independent Trustees received extensive materials in advance of their meeting which outlined, among other things: o the nature, extent and quality of services provided by the Fund Adviser; o the organization and business operations of the Fund Adviser, including the responsibilities of various departments and key personnel; o the Fund's past performance, the Fund's performance compared to funds of similar investment objectives compiled by an independent third party and to customized benchmarks; o the profitability of the Fund Adviser and certain industry profitability analyses for unaffiliated advisers; o the expenses of the Fund Adviser in providing the various services; o the advisory fees (gross and net management fees) and total expense ratios of the Fund, including comparisons of such fees and expenses with those of comparable, unaffiliated funds based on information and data provided by Lipper (the "PEER UNIVERSE") as well as compared to a subset of funds within the Peer Universe (the "PEER GROUP") to the respective Fund (as applicable); o the advisory fees the Fund Adviser assesses to other types of investment products or clients; o the soft dollar practices of the Fund Adviser, if any; and o from independent legal counsel, a legal memorandum describing, among other things, the duties of the Trustees under the Investment Company Act of 1940 (the "1940 ACT") as well as the general principles of relevant state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; an adviser's fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of directors have fulfilled their duties; and factors to be considered by the Board in voting on advisory agreements. At the May Meeting, the Fund Adviser made a presentation to and responded to questions from the Board. After the presentations and after reviewing the written materials, the independent Trustees met privately with their legal counsel to review the Board's duties in reviewing advisory contracts and consider the renewal of the advisory contracts. It is with this background that the Trustees considered the advisory contract with the Fund Adviser. The independent Trustees, in consultation with independent counsel, reviewed the factors set out in judicial decisions and SEC directives relating to the renewal of advisory contracts. As outlined in more detail below, the Trustees considered all factors they believed relevant with respect to each Fund, including the following: (a) the nature, extent and quality of the services to be provided by the Fund Adviser; (b) the investment performance of the Fund and the Fund Adviser; (c) the costs of the services to be provided and profitability of the Fund Adviser and its affiliates; (d) the extent to which economies of scale would be realized as the Fund grows; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors. A. NATURE, EXTENT AND QUALITY OF SERVICES In reviewing the Fund Adviser, the Trustees considered the nature, extent and quality of the Fund Adviser's services. The Trustees reviewed materials outlining, among other things, the Fund Adviser's organization and business; the types of services that the Fund Adviser or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and any initiatives and enhancements Nuveen has taken for its municipal fund product line. In connection with their continued service as Trustees, the Trustees also have a good understanding of the Fund Adviser's organization, operations and personnel. In this regard, the Trustees are familiar with and have evaluated the professional experience, qualifications and credentials of the Fund Adviser's personnel. The Trustees further reviewed materials describing, among other things, the teams and 98 personnel involved in the investment, research, risk-management and operational processes involved in managing municipal funds and their respective functions. Given the Trustees' experience with the Funds and Fund Adviser, the Trustees recognized the demonstrated history of care and depth of experience of the respective personnel in managing these Funds. In this regard, the Trustees considered the continued quality of the Fund Adviser's investment process in making portfolio management decisions as well as additional refinements and improvements adopted to the portfolio management processes noted below. With respect to the services provided to municipal funds, including the Funds, the Trustees noted that the Fund Adviser continues to make refinements to its portfolio management process including, among other things, the increased use of derivatives to enhance management of risk, additional analytical software for research staff and improved municipal pricing processes. In addition to advisory services, the independent Trustees considered the quality of any administrative or non-advisory services provided. The Fund Adviser provides the Funds with such administrative and other services (exclusive of, and in addition to, any such services provided by others for the Funds) and officers and other personnel as are necessary for the operations of the respective Fund. In connection with the review of the Investment Management Agreement, the Trustees considered the extent and quality of these other services which include, among other things, providing: product management (E.G., product positioning, performance benchmarking, risk management); fund administration (E.G., daily net asset value pricing and reconciliation, tax reporting, fulfilling regulatory filing requirements); oversight of third party service providers; administration of board relations (E.G., organizing board meetings and preparing related materials); compliance (E.G., monitoring compliance with investment policies and guidelines and regulatory requirements); and legal support (E.G., helping prepare and file registration statements, amendments thereto, proxy statements and responding to regulatory requests and/or inquiries). As the Funds operate in a highly regulated industry and given the importance of compliance, the Trustees considered, in particular, the additions of experienced personnel to the compliance teams and the enhancements to technology and related systems to support the compliance activities for the Funds (including a new reporting system for quarterly portfolio holdings). In addition to the foregoing, the Trustees also noted the additional services that the Fund Adviser or its affiliates provide to closed-end funds, including, in particular, secondary market support activities. The Trustees recognized Nuveen's continued commitment to supporting the secondary market for the common shares of its closed-end funds through a variety of initiatives designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include providing advertising and other media relations programs, continued contact with analysts, maintaining and enhancing its website for closed-end funds, and targeted advisor communication programs. With respect to funds that utilize leverage through the issuance of preferred shares, the Trustees noted Nuveen's continued support for the preferred shares by maintaining, among other things, an in-house preferred trading desk; designating a product manager whose responsibilities include creating and disseminating product information and managing relations in connection with the preferred share auction; and maintaining systems necessary to test compliance with rating agency requirements. Based on their review, the Trustees found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Investment Management Agreement were of a high level and were satisfactory. B. THE INVESTMENT PERFORMANCE OF THE FUND AND FUND ADVISER The Board considered the investment performance for each Fund, including the Fund's historic performance as well as its performance compared to funds with similar investment objectives identified by an independent third party (the "PERFORMANCE PEER GROUP") and portfolio level performance against customized benchmarks, as described below. In evaluating the performance information, in certain instances, the Trustees noted that the closest Performance Peer Group for a fund still may not adequately reflect such fund's investment objectives, strategies and portfolio duration, thereby limiting the usefulness of the comparisons of such fund's performance with that of the Performance Peer Group. With respect to state specific municipal funds, the Trustees recognized that certain state municipal funds do not have a corresponding state specific Performance Peer Group in which case their performance is measured against a more general municipal category for various states. The closed-end state municipal funds that do not have corresponding state-specific Performance Peer Groups are from Arizona, Connecticut, Georgia, Maryland, Massachusetts, Missouri, North Carolina, Ohio, Texas, and Virginia. Further, due to a lack of state-specific unleveraged categories, certain unleveraged state municipal funds are included in their leveraged state category (such as, the Nuveen California Select Tax-Free Income Fund, Nuveen California Municipal Value Fund, Nuveen New York Select Tax-Free Income Fund and Nuveen New York Municipal Value Fund). In reviewing performance, the Trustees reviewed performance information including, among other things, total return information compared with the Fund's Performance Peer Group for the one-, three- and five-year periods (as applicable) ending December 31, 2005. The Trustees also reviewed the Fund's portfolio level performance (which does not reflect fund level fees and expenses) compared to customized portfolio-level benchmarks for the one- and three-year periods ending December 31, 2005 (as applicable). This analysis is designed to assess the efficacy of investment decisions against appropriate measures of risk and total return, within specific market segments. This information supplements the Fund performance information provided to the Board at each of their quarterly meetings. Based on their review, the Trustees determined that the respective Fund's absolute and relative investment performance over time had been satisfactory. C. FEES, EXPENSES AND PROFITABILITY 1. FEES AND EXPENSES In evaluating the management fees and expenses of a Fund, the Board reviewed, among other things, the Fund's advisory fees (net and gross management fees) and total expense ratios (before and after expense reimbursements and/or waivers) in absolute terms as well as comparisons to the gross management fees (before waivers), net management fees (after waivers) and total expense ratios (before and after waivers) of comparable funds in the Peer Universe and the Peer Group. The Trustees reviewed data regarding the construction of Peer Groups as well as the methods of measurement for the fee and expense analysis and the performance analysis. In certain cases, due to the small number of peers in the Peer Universe, the Peer Universe and Peer Group 99 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) may be the same. Further, the Trustees recognized that in certain cases the closest Peer Universe and/or Peer Group did not adequately reflect a fund's investment objectives and strategies limiting the usefulness of comparisons. In reviewing comparisons, the Trustees also considered the size of the Peer Universe and/or Peer Group, the composition of the Peer Group (including differences in the use of leverage and insurance) as well as differing levels of fee waivers and/or expense reimbursements. In this regard, the Trustees considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain funds launched since 1999). Based on their review of the fee and expense information provided, the Trustees determined that each Fund's net total expense ratio was within an acceptable range compared to peers. 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS The Trustees further reviewed data comparing the advisory fees of the Fund Adviser with fees the Fund Adviser charges to other clients, including municipal managed accounts. In general, the fees charged for separate accounts are somewhat lower than the fees assessed to the Funds. The Trustees recognized that the differences in fees are attributable to a variety of factors, including the differences in services provided, product distribution, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Trustees noted, in particular, that the range of services provided to the Funds is more extensive than that provided to managed separate accounts. As described in further detail above, such additional services include, but are not limited to, providing: product management, fund administration, oversight of third party service providers, administration of board relations, and legal support. Funds further operate in a highly regulated industry requiring extensive compliance functions compared to the other investment products. In addition to the costs of the additional services, administrative costs may also be greater for funds as the average account size for separate accounts is notably larger than the retail accounts of funds. Given the differences in the product structures, particularly the extensive services provided to closed-end municipal funds, the Trustees believe such facts justify the different levels of fees. 3. PROFITABILITY OF FUND ADVISER In conjunction with its review of fees, the Trustees also considered the profitability of Nuveen Investments for advisory activities (which incorporated Nuveen's wholly-owned affiliated sub-advisers). The Trustees reviewed data comparing Nuveen's profitability with other fund sponsors prepared by three independent third party service providers as well as comparisons of the revenues, expenses and profits margins of various unaffiliated management firms with similar amounts of assets under management prepared by Nuveen. The Trustees further reviewed the 2005 Annual Report for Nuveen Investments. In considering profitability, the Trustees recognized the inherent limitations in determining profitability as well as the difficulties in comparing the profitability of other unaffiliated advisers. Profitability may be affected by numerous factors, including the methodology for allocating expenses, the adviser's business mix, the types of funds managed, the adviser's capital structure and cost of capital. Further, individual fund or product line profitability of other sponsors is generally not publicly available. Accordingly, the profitability information that is publicly available from various investment advisory or management firms may not be representative of the industry. Notwithstanding the foregoing, in reviewing profitability, the Trustees reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. In this regard, the methods of allocation used appeared reasonable. The Trustees also, to the extent available, compared Nuveen's profitability margins (including pre- and post-marketing profit margins) with the profitability of various unaffiliated management firms. The Trustees noted that Nuveen's profitability is enhanced due to its efficient internal business model. The Trustees also recognized that while a number of factors affect profitability, Nuveen's profitability may change as fee waivers and/or expense reimbursement commitments of Nuveen to various funds in the Nuveen complex expire. To keep apprised of profitability and developments that may affect profitability, the Trustees have requested profitability analysis be provided periodically during the year. Based on their review, the Trustees were satisfied that the Fund Adviser's level of profitability was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Trustees also considered any other revenues paid to the Fund Adviser as well as any indirect benefits (such as soft dollar arrangements, if any) the Fund Adviser and its affiliates are expected to receive that are directly attributable to their management of the Funds, if any. See Section E below for additional information. Based on their review of the overall fee arrangements of the applicable Fund, the Trustees determined that the advisory fees and expenses of the respective Fund were reasonable. 100 D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE With respect to economies of scale, the Trustees recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base as a fund grows. To help ensure the shareholders share in these benefits, the Trustees have reviewed and considered the breakpoints in the advisory fee schedules that reduce advisory fees as the applicable Fund's assets grow. In addition to advisory fee breakpoints as assets in a respective Fund rise, after lengthy discussions with management, the Board also approved a complex-wide fee arrangement that was introduced on August 1, 2004. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. In evaluating the complex-wide fee arrangement, the Trustees considered, among other things, the historic and expected fee savings to shareholders as assets grow, the amount of fee reductions at various asset levels, and that the arrangement would extend to all funds in the Nuveen complex. The Trustees noted that 2005 was the first full year to reflect the fee reductions from the complex wide fee arrangement. The Trustees also considered the impact, if any, the complex-wide fee arrangement may have on the level of services provided. Based on their review, the Trustees concluded that the breakpoint schedule and complex-wide fee arrangement currently was acceptable and desirable in providing benefits from economies of scale to shareholders. E. INDIRECT BENEFITS In evaluating fees, the Trustees also considered any indirect benefits or profits the Fund Adviser or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Trustees considered revenues received by affiliates of the Fund Adviser for serving as agent at Nuveen's preferred trading desk and for serving as a co-manager in the initial public offering of new closed-end exchange traded funds. In addition to the above, the Trustees considered whether the Fund Adviser received any benefits from soft dollar arrangements. With respect to NAM, the Trustees noted that NAM does not currently have any soft dollar arrangements and does not pay excess brokerage commissions (or spreads on principal transactions) in order to receive research services; however, the Fund Adviser may from time to time receive and have access to research generally provided to institutional clients. F. APPROVAL The Trustees did not identify any single factor discussed previously as all-important or controlling. The Trustees, including a majority of independent Trustees, concluded that the terms of the Investment Management Agreements were fair and reasonable, that the Fund Adviser's fees are reasonable in light of the services provided to each Fund, and that the renewal of the Investment Management Agreements should be approved. 101 Reinvest Automatically EASILY AND CONVENIENTLY NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. FLEXIBLE You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 102 Automatic Dividend REINVESTMENT PLAN NOTICE OF AMENDMENT TO THE TERMS AND CONDITIONS These Funds are amending the terms and conditions of their Automatic Dividend Reinvestment Plan (the `'Plan") as further described below effective with the close of business on February 1, 2007. THESE CHANGES ARE INTENDED TO ENABLE PLAN PARTICIPANTS UNDER CERTAIN CIRCUMSTANCES TO REINVEST FUND DISTRIBUTIONS AT A LOWER AGGREGATE COST THAN IS POSSIBLE UNDER THE EXISTING PLAN. Shareholders who do not wish to continue as participants under the amended Plan may withdraw from the Plan by notifying the Plan Agent prior to the effective date of the amendments. Participants should refer to their Plan document for notification instructions, or may simply call Nuveen at (800) 257-8787. Fund shareholders who elect to participate in the Plan are able to have Fund distributions consisting of income dividends, realized capital gains and returns of capital automatically reinvested in additional Fund shares. Under the Plan's existing terms, the Plan Agent purchases Fund shares in the open market if the Fund's shares are trading at a discount to their net asset value on the payable date for the distribution. If the Fund's shares are trading at or above their net asset value on the payable date for the distribution, the Plan Agent purchases newly-issued Fund shares directly from the Fund at a price equal to the greater of the shares' net asset value or 95% of the shares' market value. Under the Plan's amended terms, if the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund's shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares' net asset value or 95% of the shares' market value. This change will permit Plan participants under these circumstances to reinvest Fund distributions at a lower aggregate cost than is possible under the existing Plan. 103 Notes 104 Notes 105 Notes 106 Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION Each Fund's (i) quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the 12-month period ended June 30, 2006, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 450 Fifth Street NW, Washington, D.C. 20549. 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. MODIFIED DURATION: Duration is a measure of the expected period over which a bond's principal and interest will be paid, and consequently is a measure of the sensitivity of a bond's or bond Fund's value to changes when market interest rates change. Generally, the longer a bond's or Fund's duration, the more the price of the bond or Fund will change as interest rates change. 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 David J. Kundert William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Eugene S. Sunshine FUND MANAGER Nuveen Asset Management 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Company Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Company Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Chicago, IL EACH FUND INTENDS TO REPURCHASE SHARES OF ITS OWN COMMON OR PREFERRED STOCK IN THE FUTURE AT SUCH TIMES AND IN SUCH AMOUNTS AS IS DEEMED ADVISABLE. NO SHARES WERE REPURCHASED DURING THE PERIOD COVERED BY THIS REPORT. ANY FUTURE REPURCHASES WILL BE REPORTED TO SHAREHOLDERS IN THE NEXT ANNUAL OR SEMIANNUAL REPORT. 107 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 more than $154 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 fixed-income 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, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. BE SURE TO OBTAIN A PROSPECTUS, WHERE APPLICABLE. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVE AND POLICIES, RISK CONSIDERATIONS, CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION RELEVANT TO AN INVESTMENT IN THE FUND. FOR A PROSPECTUS, PLEASE CONTACT YOUR SECURITIES REPRESENTATIVE OR NUVEEN INVESTMENTS, 333 W. WACKER DR., CHICAGO, IL 60606. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. o Share prices Learn more o Fund details about Nuveen Funds at o Daily financial news www.nuveen.com/cef o Investor education o Interactive planning tools [LOGO] NUVEEN INVESTMEMNTS EAN-B-1006D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There were no amendments to or waivers from the Code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/etf. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then click on Code of Conduct.) ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors or Trustees determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit committee financial expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Nuveen Municipal 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 the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4) - ---------------------------------------------------------------------------------------------------------------------- October 31, 2006 $ 32,827 $ 0 $ 400 $ 2,950 - ---------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------- October 31, 2005 $ 30,822 $ 0 $ 520 $ 2,750 - ---------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ----------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for the audit of the Fund's annual financial statements and services provided in connection with statutory and regulatory filings or engagements. (2) "Audit Related Fees" are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements and are not reported under "Audit Fees". (3) "Tax Fees" are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. (4) "All Other Fees" are the aggregate fees billed for products and services other than "Audit Fees", "Audit Related Fees", and "Tax Fees". SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling, controlled by or under common control with NAM ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS (1) SERVICE PROVIDERS - ----------------------------------------------------------------------------------------------------- October 31, 2006 $ 0 $ 2,200 $ 0 - ----------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - ----------------------------------------------------------------------------------------------------- October 31, 2005 $ 0 $ 2,200 $ 0 - ----------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - -----------------------------------------------------------------------------------------------------
(1) The amounts reported for the Fund under the column heading "Tax Fees" represents amounts billed to the Adviser exclusively for the preparation for the Fund's tax return, the cost of which is borne by the Adviser. In the aggregate, for all Nuveen funds for which Ernst & Young LLP serves as independent registered public accounting firm, these fees amounted to $275,000 in 2006 and $282,575 in 2005. NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES 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, 2006 $ 3,350 $ 2,200 $ 0 $ 5,550 October 31, 2005 $ 3,270 $ 2,200 $ 0 $ 5,470
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax Fees" billed to Adviser in their respective amounts from the previous table. Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B. Evans, William J. Schneider and Eugene S. Sunshine. ITEM 6. SCHEDULE OF INVESTMENTS. See Portfolio of Investments in Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The registrant invests its assets primarily in municipal bonds and cash management securities. On rare occasions the registrant may acquire, directly or through a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the registrant already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer's credit problem. In the course of exercising control of a distressed municipal issuer, NAM may pursue the registrant's interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the issuer. NAM does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the registrant's Board of Trustees on its control activities on a quarterly basis. In the rare event that a municipal issuer were to issue a proxy or that the registrant were to receive a proxy issued by a cash management security, NAM would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the registrant's Board of Trustees or its representative. A member of NAM's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and the results provided to the registrant's Board of Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. THE PORTFOLIO MANAGER The following individual has primary responsibility for the day-to-day implementation of the registrant's investment strategies: NAME FUND Thomas Spalding Nuveen Municipal Market Opportunity Fund, Inc. Other Accounts Managed. In addition to managing the registrant, the portfolio manager is also primarily responsible for the day-to-day portfolio management of the following accounts: NUMBER OF PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS - -------------------------------------------------------------------------------- Thomas Spalding Registered Investment Company 11 $8.956 billion Other Pooled Investment Vehicles 0 $0.00 Other Accounts 5 $10 million * Assets are as of October 31, 2006. None of the assets in these accounts are subject to an advisory fee based on performance. Compensation. Each portfolio manager's compensation consists of three basic elements--base salary, cash bonus and long-term incentive compensation. The compensation strategy is to annually compare overall compensation, including these three elements, to the market in order to create a compensation structure that is competitive and consistent with similar financial services companies. As discussed below, several factors are considered in determining each portfolio manager's total compensation. In any year these factors may include, among others, the effectiveness of the investment strategies recommended by the portfolio manager's investment team, the investment performance of the accounts managed by the portfolio manager, and the overall performance of Nuveen Investments, Inc. (the parent company of NAM). Although investment performance is a factor in determining the portfolio manager's compensation, it is not necessarily a decisive factor. The portfolio manager's performance is evaluated in part by comparing manager's performance against a specified investment benchmark. This fund-specific benchmark is a customized subset (limited to bonds in each Fund's specific state and with certain maturity parameters) of the S&P/Investortools Municipal Bond index, an index comprised of bonds held by managed municipal bond fund customers of Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund holdings aggregate at least $2 million. As of October 31, 2006, the S&P/Investortools Municipal Bond index was comprised of 48,513 securities with an aggregate current market value of $ 923,532 billion. Base salary. Each portfolio manager is paid a base salary that is set at a level determined by NAM in accordance with its overall compensation strategy discussed above. NAM is not under any current contractual obligation to increase a portfolio manager's base salary. Cash bonus. Each portfolio manager is also eligible to receive an annual cash bonus. The level of this bonus is based upon evaluations and determinations made by each portfolio manager's supervisors, along with reviews submitted by his peers. These reviews and evaluations often take into account a number of factors, including the effectiveness of the investment strategies recommended to the NAM's investment team, the performance of the accounts for which he serves as portfolio manager relative to any benchmarks established for those accounts, his effectiveness in communicating investment performance to stockholders and their representatives, and his contribution to the NAM's investment process and to the execution of investment strategies. The cash bonus component is also impacted by the overall performance of Nuveen Investments, Inc. in achieving its business objectives. Long-term incentive compensation. Each portfolio manager is eligible to receive bonus compensation in the form of equity-based awards issued in securities issued by Nuveen Investments, Inc. The amount of such compensation is dependent upon the same factors articulated for cash bonus awards but also factors in his long-term potential with the firm. Material Conflicts of Interest. Each portfolio manager's simultaneous management of the registrant and the other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of the Registrant and the other account. NAM, however, believes that such potential conflicts are mitigated by the fact that the NAM has adopted several policies that address potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager. In addition, NAM has adopted a Code of Conduct that sets forth policies regarding conflicts of interest. Beneficial Ownership of Securities. As of the October 31, 2006, the portfolio manager beneficially owned the following dollar range of equity securities issued by the Registrant and other Nuveen Funds managed by NAM's municipal investment team.
- ----------------------------------------------------------------------------------------------------------------------- DOLLAR RANGE OF DOLLAR EQUITY RANGE OF SECURITIES EQUITY BENEFICIALLY SECURITIES OWNED IN BENEFICIALLY THE OWNED IN REMAINDER FUND OF NUVEEN FUNDS MANAGED BY NAM'S MUNICIPAL NAME OF PORTFOLIO INVESTMENT MANAGER FUND TEAM - ----------------------------------------------------------------------------------------------------------------------- Thomas Spalding Nuveen Municipal Market Opportunity Fund, Inc. $100,001 - $100,001 - $250,000 $250,000 - -----------------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGER BIO: Thomas Spalding, CFA is Vice President and Senior Investment Officer of Nuveen Investments. He has direct investment responsibility for the National Long Term funds. He joined Nuveen in 1976 as assistant portfolio manager and has been the portfolio manager of the Nuveen Municipal Value Fund, Nuveen's first closed-end exchange traded fund, since its inception in 1987. He received his undergraduate degree and MBA from the University of Michigan and attained the CFA designation in 1979. Currently, he manages investments for 12 Nuveen-sponsored investment companies. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrants Board implemented after the registrant last provided disclosure in response to this item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because the code is posted on registrant's website at www.nuveen.com/etf and there were no amendments during the period covered by this report. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then Code of Conduct.) (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Nuveen Municipal Market Opportunity Fund, Inc. ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: January 5, 2007 ------------------------------------------------------------------- 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 5, 2007 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: January 5, 2007 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 file002.txt CERTIFICATIONS CERTIFICATION I, Gifford R. Zimmerman, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Municipal Market Opportunity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting 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; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 5, 2007 /s/ Gifford R. Zimmerman ------------------------- -------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) CERTIFICATION I, Stephen D. Foy, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Municipal Market Opportunity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting 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; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 5, 2007 /s/ Stephen D. Foy ------------------------- -------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) EX-99.906CERT 3 file003.txt CERTIFICATIONS Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002; provided by the Chief Executive Officer and Chief Financial Officer, based on each such officer's knowledge and belief. The undersigned officers of Nuveen Municipal Market Opportunity Fund, Inc. (the "Fund"), certify that, to the best of each such officer's knowledge and belief: 1. The Form N-CSR of the Fund for the period ended October 31, 2006 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Date: January 5, 2007 ----------------------- /s/ Gifford R. Zimmerman --------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) /s/ Stephen D. Foy --------------------------------- Stephen D. Foy Vice President, Controller (principal financial officer) -----END PRIVACY-ENHANCED MESSAGE-----