-----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, JayTeMaBtUAcZGKaFrcdw4IYWUDqNJ4mmHxSCBZ+hYqybOhesEJNI2rrcDLaDSho EeuikqJZ8ZQ08LwWGRLdxg== 0000891804-08-000050.txt : 20080107 0000891804-08-000050.hdr.sgml : 20080107 20080107153343 ACCESSION NUMBER: 0000891804-08-000050 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20071031 FILED AS OF DATE: 20080107 DATE AS OF CHANGE: 20080107 EFFECTIVENESS DATE: 20080107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN INVESTMENT QUALITY MUNICIPAL FUND INC CENTRAL INDEX KEY: 0000862716 IRS NUMBER: 363703083 FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06091 FILM NUMBER: 08515005 BUSINESS ADDRESS: STREET 1: 333 WEST 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 INVESTMENT QUALITY MUNICIPAL 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 811-06091 --------------------- Nuveen Investment Quality Municipal Fund, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Kevin J. McCarthy Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (312) 917-7700 ------------------- Date of fiscal year end: October 31 ------------------ Date of reporting period: October 31, 2007 ------------------ Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ANNUAL REPORT October 31, 2007 Nuveen Investments MUNICIPAL CLOSED-END FUNDS Photo of: Small child NUVEEN INVESTMENT QUALITY MUNICIPAL FUND, INC. NQM NUVEEN SELECT QUALITY MUNICIPAL FUND, INC. NQS NUVEEN QUALITY INCOME MUNICIPAL FUND, INC. NQU NUVEEN PREMIER MUNICIPAL INCOME FUND, INC. NPF NUVEEN MUNICIPAL HIGH INCOME OPPORTUNITY FUND NMZ IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) LOGO: NUVEEN Investments Photo of: Man working on computer LIFE IS COMPLEX. NUVEEN MAKES THINGS E-simple. ---------------------------------------------------------------------------- It only takes a minute to sign up for e-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready--no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report and save it on your computer if you wish. FREE E-REPORTS RIGHT TO YOUR E-MAIL! www.investordelivery.com If you receive your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR www.nuveen.com/accountaccess If you receive your Nuveen Fund dividends and statements directly from Nuveen. Logo: NUVEEN Investments Photo of: Timothy R. Schwertfeger Chairman's LETTER TO SHAREHOLDERS Photo of: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Once again, I am pleased to report that over the twelve-month period covered by this report your Fund continued to provide you with attractive monthly tax-free income. For more details about the management strategy and performance of your Fund, please read the Portfolio Managers' Comments, the Dividend and Share Price Information, and the Performance Overview sections of this report. I also wanted to take this opportunity to report some important news about Nuveen Investments. The firm recently was acquired by a group led by Madison Dearborn Partners, LLC. While this affects the corporate structure of Nuveen Investments, it has no impact on the investment objectives, portfolio management strategies or dividend policy of your Fund. With the recent volatility in the stock market, many have begun to wonder which way the market is headed, and whether they need to adjust their holdings of investments. No one knows what the future will bring, which is why we think a well-balanced portfolio that is structured and carefully monitored with the help of an investment professional is an important component in achieving your long-term financial goals. A well-diversified portfolio may actually help to reduce your overall investment risk, and we believe that investments like your Nuveen Investments Fund can be important building blocks in a portfolio crafted to perform well through a variety of market conditions. We also are pleased to be able to offer you a choice concerning how you receive your shareholder reports and other Fund information. As an alternative to mailed copies, you can sign up to receive future Fund reports and other Fund information by e-mail and the internet. The inside front cover of this report contains information on how you can sign up. We are grateful that you have chosen us as a partner as you pursue your financial goals and we look forward to continuing to earn your trust in the months and years ahead. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering investment services and products that can help you to secure your financial objectives. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board December 14, 2007 Portfolio Managers' COMMENTS Nuveen Investments Municipal Closed-End Funds NQM, NQS, NQU, NPF, NMZ Portfolio managers Paul Brennan, Tom Spalding, and John Miller discuss U.S. economic and municipal market conditions, key investment strategies, and the annual performance of these five national Funds. With 18 years of industry experience, Paul assumed portfolio management responsibility for NQM and NPF in 2006. A 31-year veteran of Nuveen, Tom has managed NQS and NQU since 2003. John, who has 14 years of municipal market experience, has managed NMZ since its inception in 2003. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL REPORTING PERIOD ENDED OCTOBER 31, 2007? Between November 1, 2006, and October 31, 2007, the yield on the benchmark 10-year U.S. Treasury note dropped 14 basis points to end the reporting period at 4.47%. In the municipal bond interest rate market, the yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal bond interest market rates, fell to 4.67% at the end of October 2007, a decline of 11 basis points from the end of October 2006. These numbers, however, do not hint at the dynamic nature of these markets during this period, particularly during the summer of 2007, when financial developments led to increased price volatility in the bond markets, tightening liquidity and a flight to quality. This was particularly evident in August, when market concerns about defaults on subprime mortgages resulted in a liquidity crisis across all fixed income asset classes. After fourteen months of remaining on the sidelines, the Federal Reserve responded to credit market volatility by cutting the fed funds rate by 50 basis points--from 5.25% to 4.75%--in September 2007 and another 25 basis points--to 4.50%--in October 2007. A corresponding decline in short-term municipal bond interest rates helped produce a steepening of the yield curve late in the reporting period. For the annual period, bonds with longer maturities generally underperformed shorter maturity bonds. In addition, as the markets repriced risk, credit spreads (the difference in yield between higher-rated and lower-rated bonds) widened and higher quality bonds generally outperformed lower quality credits. Discussions of specific investments are for illustrative purposes only and are not intended as recommendations of individual investments. The views expressed in this commentary represent those of the portfolio managers as of the date of this report and are subject to change at any time, based on market conditions and other factors. The Funds disclaim any obligation to advise shareholders of such changes. 4 The U.S. gross domestic product (GDP), a closely watched measure of economic growth, expanded at below-trend levels of 2.1% in the fourth quarter of 2006 and 0.6% in the first quarter of 2007 before rebounding sharply to 3.8% in the second quarter of 2007 (all GDP numbers are annualized). In the third quarter of 2007, increases in consumer spending, business investment, and exports helped GDP growth climb to 4.9%, overcoming a 20% decline in residential investment. Driven largely by higher energy and food prices, the Consumer Price Index (CPI) registered a 3.5% year-over-year gain as of October 2007. The labor market continued to be tight. October 2007 marked the 50th consecutive month of employment growth, the longest such stretch in U.S. history. Over the twelve months ended October 2007, municipal bond issuance nationwide totaled $487.9 billion, an increase of 27% from the previous twelve months. One factor in this increased volume was an increase in advance refundings,1 driven by attractive borrowing rates for issuers during the earlier part of this period. For the majority of the period, the strength and diversity of demand for municipal bonds were as important as supply, as the surge in issuance was absorbed by a broad-based universe of traditional and nontraditional buyers, including retail investors, property and casualty insurance companies, hedge funds and arbitragers and overseas investors. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING PERIOD? With the substantial increase in municipal issuance nationwide during this reporting period, our investment strategies continued to focus on finding opportunities in undervalued sectors and individual securities with the potential to add value to the Funds and keep our portfolios well diversified. The majority of purchases were bonds at the longer end of the yield curve (i.e., bonds with at least 20 years to maturity). These purchases helped to offset the shortening of the Funds' portfolio durations due to bond calls and the natural tendency of bond durations to shorten as time passes. In addition, as the yield curve steepened, bonds at this end of the curve generally provided incremental yield to support the Funds' dividends. Given the market events over the past twelve months, the Funds generally placed greater priority on higher quality bonds. In NQM and NPF, for example, we added several new hospital issues, taking advantage of the number of uninsured health care credits--mostly rated AA--that came to market at attractive prices. As credit spreads widened, we believed that these AA rated hospital credits offered a good alternative to lower-rated bonds, providing us with an opportunity to add both quality and attractive yields that could help to support the Funds' income streams. 1 Advance refundings, also known as pre-refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund principal and interest payments of older existing bonds. This process often results in lower borrowing costs for bond issuers. 5 During the latter part of this period, we also took advantage of opportunities to add lower-quality credits. Since we viewed some of the recent widening of credit spreads as a function of liquidity constraints and supply/demand factors rather than credit risk, we believed this situation represented a good opportunity to find new issues for our portfolios at attractive values. All five Funds participated in the $5.5 billion Ohio Buckeye Tobacco Settlement Financing Authority offering, the largest tobacco settlement financing deal ever issued. Tobacco bonds in general were being offered at attractive spreads wider than the national norm, and NQM, NPF and NMZ purchased some additional tobacco securities in order to bring the tobacco exposure of these Funds closer to the market average. In addition to the purchases previously mentioned, NMZ, which was established as a high yield Fund that can invest up to 50% of its portfolio in sub-investment-grade quality municipal credits, also bought several hospital credits as well as charter schools, private schools and land-secured issues. To generate cash for purchases, all of these Funds selectively sold pre-refunded holdings. NQM and NPF also sold some bonds that were nearing their redemption dates. Overall, however, selling was more limited during this period, particularly in NQS and NQU, where the majority of new purchases were funded with proceeds from called or matured bonds and sinking fund payments. In all of these Funds, proceeds were reinvested out longer on the yield curve to help maintain the Funds' durations within our preferred strategic range and improve the Funds' overall call protection profile. In the municipal bond interest rate environment over the past twelve months, we also continued to emphasize a disciplined approach to duration2 management and yield curve positioning. As part of our duration management strategy, we used inverse floating rate securities,3 a type of derivative financial instrument, in all five of these Funds. These inverse floaters had the dual benefit of bringing the Funds' durations closer to our preferred strategic target and enhancing their income-generation capabilities. In addition, NPF used forward interest rate swaps, another type of derivative financial instrument. The goal of this strategy was to help us manage net asset value (NAV) volatility without having a negative impact on income streams or common share dividends over the short term. 2 Duration is a measure of a bond's price sensitivity as interest rates change, with longer duration bonds displaying more sensitivity to these changes than bonds with shorter durations. 3 An inverse floating rate security is a financial instrument designed to pay long-term tax-exempt interest at a rate that varies inversely with a short-term tax-exempt interest rate index. For the Nuveen Funds, the index typically used is the Securities Industry and Financial Markets (SIFM) Municipal Swap Index (previously referred to as the Bond Market Association Index or BMA). Inverse floaters, including those inverse floating rate securities in which the Funds invested during the reporting period, are further defined within the "Notes to Financial Statements" and "Glossary of Terms Used in This Report" sections of this shareholder report. 6 HOW DID THE FUNDS PERFORM? Individual results for these Funds, as well as relevant index and peer group information, are presented in the accompanying table. Total Returns on Net Asset Value* For periods ended 10/31/07 1-Year 5-Year 10-Year NQM 0.82% 5.60% 5.85% NQS 1.70% 6.36% 6.16% NQU 1.31% 6.34% 5.83% NPF 0.48% 5.39% 5.72% Lehman Brothers Municipal Bond Index4 2.91% 4.46% 5.29% Lipper General Leveraged Municipal Debt Funds Average5 0.70% 6.31% 5.76% NMZ 2.14% N/A N/A Lehman Brothers High-Yield Municipal Bond Index4 2.26% N/A N/A Lipper High-Yield Municipal Debt Funds Average5 1.44% N/A N/A For the twelve months ended October 31, 2007, the total returns on NAV for NQM, NQS, NQU and NPF underperformed the return on the Lehman Brothers Municipal Bond Index. NQM, NQS and NQU exceeded the average return for their Lipper General Municipal Debt Funds Average, while NPF trailed the peer group average. The return for NMZ slightly trailed the Lehman Brothers High-Yield Municipal Bond Index and outperformed the Lipper High-Yield Municipal Debt Funds Average for the period. We should note that the Lehman Brothers High-Yield Municipal Bond Index is composed of 100% high-yield bonds, while NMZ comprises a maximum of 50% subinvestment-grade bonds, with the remainder invested in investment-grade credits. This difference can have an effect on NMZ's performance relative to the index. One of the key factors in the performance of these Funds relative to that of the unleveraged Lehman Brothers Municipal Bond Index and Lehman Brothers High-Yield Municipal Bond Index over this period was the use of financial leverage. The returns of all of these Funds were negatively impacted by their use of leverage. Although leveraging provides opportunities for additional income and total returns for common shareholders, it can also expose shareholders to additional risk when market conditions *Annualized. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. For additional information, see the individual Performance Overview for your Fund in this report. 4 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of investment-grade municipal bonds. The Lehman Brothers High-Yield Municipal Bond Index is an unleveraged, unmanaged national index comprising municipal bonds rated below investment grade (i.e., below Baa by Moody's Investors Service and below BBB by Standard & Poor's or Fitch Ratings). Results for the Lehman indexes do not reflect any expenses. 5 The Lipper General Leveraged Municipal Debt Funds Average category is calculated using the returns of all closed-end funds in this category for each period as follows: 1 year, 54 funds; 5 years, 52 funds; and 10 years, 38 funds. Fund and Lipper returns assume reinvestment of dividends. The Lipper High-Yield Municipal Debt Funds Average category is calculated using the returns of all 15 closed-end funds in this category for the one-year period. Fund and Lipper returns assume reinvestment of dividends. 7 are unfavorable. With the dramatic increases in yields on longer municipal bonds, the impact of valuation changes in these bonds was magnified by the use of leverage. However, we firmly believe that the use of this strategy should work to the benefit of the Funds over the long term. This is demonstrated by each Fund's longer-term return performance--both in absolute terms and relative to the unmanaged (and expense-free) Lehman Brothers Municipal Bond Index. Other factors that influenced the Funds' returns included sector allocations, advance refundings, yield curve and duration positioning, the use of derivatives and credit exposure. Sectors of the market that performed well during this twelve-month period included transportation, special tax-backed issues and water and sewer. We also continued to see positive contributions from advance refunding activity, which benefited these Funds through price appreciation and enhanced credit quality. NQM, NQS, NQU and NMZ saw pre-refundings of tobacco settlement holdings issued by New Jersey, and both NPF and NMZ had advance refundings of bonds issued by Golden State Tobacco Securitization Corporation (California). NMZ also benefited from the advance refunding of credits issued by West Penn Allegheny Health System and Pima County (Arizona) Heritage Elementary School. During this period, bonds in the Lehman Brothers Municipal Bond Index with maturities between one and eight years, especially those maturing in approximately three years, benefited the most from changes in the interest rate environment. As a result, these bonds generally outperformed credits with longer maturities. Bonds having the longest maturities (22 years and longer) posted the worst returns for the period. Varying levels of exposure to the longer part of the yield curve accounted for some of the performance differential among these five Funds. In general, the greater a Fund's exposure to the underperforming longer part of the curve, the greater the negative impact on the Fund's return for this period. Overall, NQS and NQU, which had relatively more exposure to the shorter end of the yield curve, were slightly better positioned in terms of duration than NQM, NPF and NMZ. Because they effectively increased duration during a period when shorter durations were in favor in the market, the inverse floaters in place in these five Funds had a negative overall impact on the return performance of these Funds for the period. At the same time, however, the inverse floaters benefited these Funds by helping to support their income streams. We believe that, over time, these derivative financial instruments should be positive contributors to the Funds. While yield curve and duration positioning played an important role in performance, especially during the last part of this period, credit exposure was also a dominant factor over this period. As the markets repriced risk lower credit quality bonds generally underperformed the municipal bond interest rate market as a whole for the first time in several years. As of October 31, 2007, allocations of bonds rated BBB and lower and non-rated bonds accounted for approximately 11% of NQU's portfolio, 12% of NPF, 8 13% of NQM and 16% of NQS. In addition to its 11% holding of bonds rated BBB, NMZ held approximately 18% in bonds rated BB or lower (sub-investment-grade) and 39% in non-rated bonds, some of which Nuveen has determined to be of investment-grade quality. The Funds' weightings in bonds rated AAA and AA were generally positive for performance during this twelve-month period. Bonds backed by the 1998 master tobacco settlement agreement performed poorly, due to the overall lower credit quality of the tobacco sector as well as the ample supply of these bonds in the marketplace. As of October 31, 2007, these bonds comprised approximately 4% to 6% of the portfolios of NQM, NQS, NQU, NPF and NMZ. NMZ held a non-rated multifamily housing credit--Pickwick Apartments in Kansas City, Missouri--that experienced some financial stress was subsequently sold out of the portfolio. 9 Dividend and Share Price INFORMATION As previously noted, all of the Funds in this report use leverage to potentially enhance opportunities for additional income for common shareholders. Although the Funds' use of this strategy continued to provide incremental income, the extent of this benefit was reduced due to short-term interest rates that remained relatively high during most of this period. This, in turn, kept the Funds' borrowing costs high. The Funds' income streams were also impacted as the proceeds from older, higher-yielding bonds that matured or were called were reinvested into bonds currently available in the market, which generally offered lower yields during the majority of this period. These factors resulted in one monthly dividend reduction in NQM, NQS and NQU over the twelve-month period ended October 31, 2007. The dividends of NPF and NMZ remained stable throughout this reporting period. Due to normal portfolio activity, common shareholders of NMZ received a long-term capital gains distribution of $0.0045 per share and a net ordinary income distribution of $0.0002 at the end of December 2006. All of the Funds in this report seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of October 31, 2007, NQM, NQU and NPF had negative UNII balances for financial statement purposes and positive UNII balances for tax purposes. NQS and NMZ had positive UNII balances for both financial statement and tax purposes. SHARE REPURCHASE AND SHARE PRICE INFORMATION On July 10, 2007, the Board of Directors of NPF approved an open market share repurchase program. This was part of a broad, ongoing effort designed to support the market prices of the Fund's common shares. Repurchases not only help to support the market price but, because such purchases are made at a discount to NAV, they have the effect of augmenting NAV. Under the terms of the program, NPF may repurchase up to 10% of its outstanding common shares. As of October 31, 2007, NPF had repurchased 182,300 common shares, representing 1% of the Fund's total common shares outstanding. 10 SHELF EQUITY PROGRAM On September 24, 2007, a registration statement filed by NMZ became effective. This registration statement permits the Fund to issue up to 2,400,000 of additional shares of common stock through a shelf offering. Under this equity shelf program, the Fund, subject to market conditions, may raise additional equity capital from time to time in varying amounts and offering methods at a net price at or above the Fund's net asset value per common share. NMZ issued 197,111 shares during the reporting period at an average price of $8.04 and an average premium to NAV of 4.32% per common share. As of October 31, 2007, the Funds' share prices were trading at premiums or discounts to their NAVs as shown in the accompanying chart: 10/31/07 Twelve-Month Premium/Discount Average Premium/Discount NQM -7.65% -0.77% NQS -0.33% +1.81% NQU -8.70% -3.96% NPF -10.07% -8.63% NMZ +2.99% +8.15% 11 NQM Performance OVERVIEW Nuveen Investment Quality Municipal Fund, Inc. as of October 31, 2007 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 68% AA 10% A 9% BBB 10% BB or Lower 1% N/R 2% Bar Chart: 2006-2007 Monthly Tax-Free Dividends Per Share Nov 0.0675 Dec 0.0675 Jan 0.0675 Feb 0.0675 Mar 0.0675 Apr 0.0675 May 0.0675 Jun 0.0675 Jul 0.0675 Aug 0.0675 Sep 0.0645 Oct 0.0645 Line Chart: Share Price Performance -- Weekly Closing Price 11/01/06 15.6 15.51 15.38 15.39 15.31 15.6199 15.73 15.58 15.44 15.47 15.56 15.53 15.42 15.55 15.68 15.5 15.51 15.51 15.73 15.76 15.62 15.68 15.62 15.63 15.55 15.56 15.73 15.7 15.66 15.62 15.48 15.46 15.13 14.89 14.92 14.89 14.877 14.75 14.75 14.67 14.7201 14.6 14.78 14.49 14.47 14.65 14.5 14.37 14.4 14.53 14.54 14.69 13.82 10/31/07 13.88 FUND SNAPSHOT - ------------------------------------ Common Share Price $13.88 - ------------------------------------ Common Share Net Asset Value $15.03 - ------------------------------------ Premium/(Discount) to NAV -7.65% - ------------------------------------ Market Yield 5.58% - ------------------------------------ Taxable-Equivalent Yield1 7.75% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $538,266 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.09 - ------------------------------------ Leverage-Adjusted Duration 10.62 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 6/21/90) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year -6.17% 0.82% - ------------------------------------ 5-Year 5.07% 5.60% - ------------------------------------ 10-Year 5.43% 5.85% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ California 13.3% - ------------------------------------ New York 10.4% - ------------------------------------ Texas 9.5% - ------------------------------------ Illinois 7.6% - ------------------------------------ Washington 5.5% - ------------------------------------ Minnesota 4.8% - ------------------------------------ District of Columbia 4.2% - ------------------------------------ Nevada 3.2% - ------------------------------------ Georgia 2.9% - ------------------------------------ Colorado 2.9% - ------------------------------------ Michigan 2.6% - ------------------------------------ Louisiana 2.5% - ------------------------------------ Florida 2.5% - ------------------------------------ Indiana 2.1% - ------------------------------------ Massachusetts 2.1% - ------------------------------------ Wisconsin 2.0% - ------------------------------------ Oklahoma 2.0% - ------------------------------------ Other 19.9% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ U.S. Guaranteed 26.8% - ------------------------------------ Health Care 14.6% - ------------------------------------ Tax Obligation/General 13.3% - ------------------------------------ Tax Obligation/Limited 10.8% - ------------------------------------ Transportation 10.6% - ------------------------------------ Water and Sewer 6.4% - ------------------------------------ Consumer Staples 4.4% - ------------------------------------ Other 13.1% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 12 NQS Performance OVERVIEW Nuveen Select Quality Municipal Fund, Inc. as of October 31, 2007 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 74% AA 6% A 4% BBB 11% BB or Lower 4% N/R 1% Bar Chart: 2006-2007 Monthly Tax-Free Dividends Per Share Nov 0.0705 Dec 0.0705 Jan 0.0705 Feb 0.0705 Mar 0.0705 Apr 0.0705 May 0.0705 Jun 0.067 Jul 0.067 Aug 0.067 Sep 0.067 Oct 0.067 Line Chart: Share Price Performance -- Weekly Closing Price 11/01/06 15.5 15.7 15.87 15.81 16 16.24 16.33 16.11 15.9 16.2 16.25 16.08 16 15.94 15.94 16.07 16.2 16.25 16.21 16.21 15.9299 15.88 15.81 16.16 16.19 16.45 16.31 16.6 16.6 16.36 16 15.84 15.54 14.96 14.84 14.97 14.84 14.76 15.01 14.77 14.74 14.62 14.4 14.5 14.83 14.93 14.76 14.72 14.86 14.8 14.74 15.1 15.15 10/31/07 15 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.00 - ------------------------------------ Common Share Net Asset Value $15.05 - ------------------------------------ Premium/(Discount) to NAV -0.33% - ------------------------------------ Market Yield 5.36% - ------------------------------------ Taxable-Equivalent Yield1 7.44% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $511,670 - ------------------------------------ Average Effective Maturity on Securities (Years) 14.50 - ------------------------------------ Leverage-Adjusted Duration 8.75 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/21/91) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 2.31% 1.70% - ------------------------------------ 5-Year 7.35% 6.36% - ------------------------------------ 10-Year 6.31% 6.16% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Illinois 11.6% - ------------------------------------ Texas 9.9% - ------------------------------------ Colorado 7.0% - ------------------------------------ New York 6.9% - ------------------------------------ South Carolina 6.1% - ------------------------------------ Michigan 5.1% - ------------------------------------ Nevada 4.7% - ------------------------------------ New Jersey 4.5% - ------------------------------------ California 4.1% - ------------------------------------ Ohio 4.0% - ------------------------------------ Tennessee 4.0% - ------------------------------------ New Mexico 3.0% - ------------------------------------ Utah 2.5% - ------------------------------------ North Carolina 2.4% - ------------------------------------ Washington 2.1% - ------------------------------------ District of Columbia 2.1% - ------------------------------------ Alabama 2.0% - ------------------------------------ Wisconsin 2.0% - ------------------------------------ Other 16.0% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ U.S. Guaranteed 32.1% - ------------------------------------ Utilities 14.7% - ------------------------------------ Health Care 13.0% - ------------------------------------ Transportation 12.5% - ------------------------------------ Tax Obligation/General 8.4% - ------------------------------------ Tax Obligation/Limited 6.5% - ------------------------------------ Consumer Staples 5.9% - ------------------------------------ Other 6.9% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 13 NQU Performance OVERVIEW Nuveen Quality Income Municipal Fund, Inc. as of October 31, 2007 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 79% AA 6% A 4% BBB 6% BB or Lower 4% N/R 1% Bar Chart: 2006-2007 Monthly Tax-Free Dividends Per Share Nov 0.0635 Dec 0.0635 Jan 0.0635 Feb 0.0635 Mar 0.0635 Apr 0.0635 May 0.0635 Jun 0.0605 Jul 0.0605 Aug 0.0605 Sep 0.0605 Oct 0.0605 Line Chart: Share Price Performance -- Weekly Closing Price 11/01/06 14.75 14.7 14.96 14.94 14.93 15.09 15.02 14.9 14.82 14.92 14.97 14.85 14.87 14.83 14.94 15 15.02 15.02 15.15 15.19 15.1 15.09 15.1 15.1 15.19 15.3 15.52 15.59 15.47 15.22 15.13 15.04 14.7 14.1 13.92 13.96 13.94 13.72 13.72 13.75 13.81 13.56 13.5 13.65 13.8 14.24 13.89 13.65 13.72 13.66 13.74 13.97 13.62 12/31/07 13.64 FUND SNAPSHOT - ------------------------------------ Common Share Price $13.64 - ------------------------------------ Common Share Net Asset Value $14.94 - ------------------------------------ Premium/(Discount) to NAV -8.70% - ------------------------------------ Market Yield 5.32% - ------------------------------------ Taxable-Equivalent Yield1 7.39% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $810,086 - ------------------------------------ Average Effective Maturity on Securities (Years) 12.89 - ------------------------------------ Leverage-Adjusted Duration 8.65 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 6/19/91) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year -2.54% 1.31% - ------------------------------------ 5-Year 5.67% 6.34% - ------------------------------------ 10-Year 4.69% 5.83% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Texas 11.4% - ------------------------------------ New York 10.9% - ------------------------------------ Illinois 9.6% - ------------------------------------ California 7.7% - ------------------------------------ Washington 6.5% - ------------------------------------ South Carolina 5.8% - ------------------------------------ Massachusetts 5.1% - ------------------------------------ Nevada 4.6% - ------------------------------------ Oklahoma 4.4% - ------------------------------------ New Jersey 3.2% - ------------------------------------ Ohio 2.7% - ------------------------------------ Pennsylvania 2.4% - ------------------------------------ Colorado 2.3% - ------------------------------------ Louisiana 2.2% - ------------------------------------ Alabama 2.0% - ------------------------------------ Other 19.2% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ U.S. Guaranteed 38.9% - ------------------------------------ Tax Obligation/General 14.7% - ------------------------------------ Transportation 13.2% - ------------------------------------ Utilities 9.5% - ------------------------------------ Health Care 7.9% - ------------------------------------ Consumer Staples 4.1% - ------------------------------------ Other 11.7% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 14 NPF Performance OVERVIEW Nuveen Premier Municipal Income Fund, Inc. as of October 31, 2007 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 62% AA 15% A 11% BBB 11% N/R 1% Bar Chart: 2006-2007 Monthly Tax-Free Dividends Per Share Nov 0.056 Dec 0.056 Jan 0.056 Feb 0.056 Mar 0.056 Apr 0.056 May 0.056 Jun 0.056 Jul 0.056 Aug 0.056 Sep 0.056 Oct 0.056 Line Chart: Share Price Performance -- Weekly Closing Price 11/01/06 13.68 13.75 13.85 13.8699 13.87 14.02 14.06 13.8001 13.73 13.85 13.85 13.8233 13.94 13.87 13.95 14.01 14.16 14.14 14.27 14.33 14.21 14.15 14.12 14.2 14.23 14.17 14.13 14.19 14.16 14.12 13.93 13.88 13.61 13.48 13.5 13.61 13.5 13.43 13.461 13.49 13.66 13.25 13.15 13.05 13.4 13.58 13.54 13.28 13.3 13.26 13.2 13.21 13.2109 10/31/07 13.3 FUND SNAPSHOT - ------------------------------------ Common Share Price $13.30 - ------------------------------------ Common Share Net Asset Value $14.79 - ------------------------------------ Premium/(Discount) to NAV -10.07% - ------------------------------------ Market Yield 5.05% - ------------------------------------ Taxable-Equivalent Yield1 7.01% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $294,378 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.92 - ------------------------------------ Leverage-Adjusted Duration 11.14 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/91) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 2.28% 0.48% - ------------------------------------ 5-Year 4.59% 5.39% - ------------------------------------ 10-Year 4.27% 5.72% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ California 13.2% - ------------------------------------ New York 13.1% - ------------------------------------ Illinois 7.9% - ------------------------------------ Washington 5.2% - ------------------------------------ South Carolina 4.7% - ------------------------------------ Colorado 4.1% - ------------------------------------ Arizona 4.1% - ------------------------------------ Texas 3.7% - ------------------------------------ Louisiana 3.6% - ------------------------------------ New Jersey 3.5% - ------------------------------------ Wisconsin 3.5% - ------------------------------------ Minnesota 3.0% - ------------------------------------ Georgia 2.5% - ------------------------------------ North Carolina 2.4% - ------------------------------------ Michigan 2.4% - ------------------------------------ Indiana 1.9% - ------------------------------------ Florida 1.9% - ------------------------------------ Other 19.3% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 16.1% - ------------------------------------ Utilities 13.8% - ------------------------------------ U.S. Guaranteed 13.6% - ------------------------------------ Tax Obligation/General 13.5% - ------------------------------------ Health Care 13.1% - ------------------------------------ Transportation 9.1% - ------------------------------------ Water and Sewer 5.5% - ------------------------------------ Consumer Staples 4.5% - ------------------------------------ Other 10.8% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 15 NMZ Performance OVERVIEW Nuveen Municipal High Income Opportunity Fund as of October 31, 2007 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 23% A 9% BBB 11% BB or Lower 18% N/R 39% Bar Chart: 2006-2007 Monthly Tax-Free Dividends Per Share Nov 0.0815 Dec 0.0815 Jan 0.0815 Feb 0.0815 Mar 0.0815 Apr 0.0815 May 0.0815 Jun 0.0815 Jul 0.0815 Aug 0.0815 Sep 0.0815 Oct 0.0815 Line Chart: 2006-2007 Monthly Tax-Free Dividends Per Share(2) 11/01/06 17.23 17.15 17.25 17.1 17.19 16.93 17.3 17.3 17.71 17.71 17.49 17.49 17.51 17.64 17.55 17.62 17.7 17.6599 17.89 17.82 17.72 17.6799 17.75 17.67 18.05 18.06 18.2 18.1112 18.16 17.82 17.69 17.6 16.65 16.44 16.9 17.06 16.99 16.74 16.31 16.15 16.2001 16.29 15.33 16.01 16.5 16.81 16.45 16.21 16.17 16.07 16.11 16 15.85 10/31/07 15.82 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.82 - ------------------------------------ Common Share Net Asset Value $15.36 - ------------------------------------ Premium/(Discount) to NAV 2.99% - ------------------------------------ Market Yield 6.18% - ------------------------------------ Taxable-Equivalent Yield1 8.58% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $361,484 - ------------------------------------ Average Effective Maturity on Securities (Years) 19.10 - ------------------------------------ Leverage-Adjusted Duration 10.22 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 11/19/03) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year -2.68% 2.14% - ------------------------------------ Since Inception 8.10% 8.81% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ California 9.2% - ------------------------------------ Texas 7.2% - ------------------------------------ Indiana 6.3% - ------------------------------------ Ohio 5.8% - ------------------------------------ Colorado 5.7% - ------------------------------------ Florida 5.7% - ------------------------------------ Illinois 4.7% - ------------------------------------ Louisiana 4.1% - ------------------------------------ Wisconsin 4.0% - ------------------------------------ Arizona 3.6% - ------------------------------------ Michigan 3.5% - ------------------------------------ New Jersey 3.3% - ------------------------------------ Virginia 3.2% - ------------------------------------ Pennsylvania 3.2% - ------------------------------------ Oklahoma 2.4% - ------------------------------------ Washington 2.3% - ------------------------------------ Nebraska 2.3% - ------------------------------------ Maryland 2.2% - ------------------------------------ Nevada 2.2% - ------------------------------------ Other 19.1% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Health Care 17.0% - ------------------------------------ U.S. Guaranteed 16.5% - ------------------------------------ Tax Obligation/Limited 15.6% - ------------------------------------ Housing/Multifamily 7.8% - ------------------------------------ Utilities 7.7% - ------------------------------------ Transportation 7.0% - ------------------------------------ Education and Civic Organizations 4.9% - ------------------------------------ Materials 4.5% - ------------------------------------ Industrials 4.3% - ------------------------------------ Other 14.7% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders capital gains and net ordinary income distributions in December 2006 of $0.0047 per share. 16 NQM NQS NQU Shareholder MEETING REPORT The annual meeting of shareholders was held on July 31, 2007, at The Northern Trust Company, 50 South La Salle Street, Chicago, IL 60675; at this meeting shareholders were asked to vote on the election of Board Members. Additionally a special meeting of shareholders was held in the offices of Nuveen Investments on October 12, 2007; at this meeting shareholders were asked to vote on a New Investment Management Agreement and to ratify the selection of Ernst and Young LLP as the fund's independent registered public accounting firm; the meetings for Nuveen Premier Municipal Income Fund (NPF) and Nuveen Municipal High Income Opportunity Fund (NMZ) were subsequently adjourned to October 22, 2007.
NQM NQS NQU - ------------------------------------------------------------------------------------------------------------------------------------ TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting shares voting together together together together together together as a class as a class as a class as a class as a class and as a class ==================================================================================================================================== For 18,710,215 -- 17,412,252 -- 27,796,332 -- Against 742,905 -- 822,446 -- 1,303,489 -- Abstain 627,387 -- 676,277 -- 1,034,593 -- Broker Non-Votes 5,433,261 -- 5,232,193 -- 8,545,494 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,513,768 -- 24,143,168 -- 38,679,908 -- ==================================================================================================================================== APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Robert P. Bremner For 31,784,243 -- 30,577,770 -- 48,217,096 -- Withhold 453,120 -- 560,139 -- 796,320 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,237,363 -- 31,137,909 -- 49,013,416 -- ==================================================================================================================================== Jack B. Evans For 31,797,350 -- 30,586,990 -- 48,208,590 -- Withhold 440,013 -- 550,919 -- 804,826 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,237,363 -- 31,137,909 -- 49,013,416 -- ==================================================================================================================================== William C. Hunter For 31,797,389 -- 30,589,958 -- 48,219,424 -- Withhold 439,974 -- 547,951 -- 793,992 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,237,363 -- 31,137,909 -- 49,013,416 -- ==================================================================================================================================== David J. Kundert For 31,792,378 -- 30,590,909 -- 48,219,278 -- Withhold 444,985 -- 547,000 -- 794,138 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,237,363 -- 31,137,909 -- 49,013,416 -- ==================================================================================================================================== William J. Schneider For -- 11,138 -- 10,348 -- 16,325 Withhold -- 29 -- 50 -- 517 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,167 -- 10,398 -- 16,842 ==================================================================================================================================== Timothy R. Schwertfeger For -- 11,138 -- 10,342 -- 16,325 Withhold -- 29 -- 56 -- 517 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,167 -- 10,398 -- 16,842 ==================================================================================================================================== Judith M. Stockdale For 31,819,307 -- 30,564,356 -- 48,204,941 -- Withhold 418,056 -- 573,553 -- 808,475 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,237,363 -- 31,137,909 -- 49,013,416 -- ==================================================================================================================================== Carole E. Stone For 31,816,728 -- 30,566,419 -- 48,207,322 -- Withhold 420,635 -- 571,490 -- 806,094 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,237,363 -- 31,137,909 -- 49,013,416 -- ==================================================================================================================================== Eugene S. Sunshine(1) For 31,788,442 -- 30,588,455 -- 48,208,070 -- Withhold 448,921 -- 549,454 -- 805,346 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,237,363 -- 31,137,909 -- 49,013,416 -- ==================================================================================================================================== TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR: For 24,840,169 -- 23,455,004 -- 37,590,468 -- Against 335,618 -- 365,690 -- 516,701 -- Abstain 337,981 -- 322,474 -- 572,739 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,513,768 -- 24,143,168 -- 38,679,908 -- ==================================================================================================================================== (1) Mr. Sunshine resigned from the Funds' Board of Directors on July 31, 2007.
17 NPF NMZ Shareholder MEETING REPORT (continued)
NPF NMZ - ------------------------------------------------------------------------------------------------------------------------------------ TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT: Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting together together together together as a class as a class as a class and as a class ==================================================================================================================================== For 9,914,117 -- 12,109,311 -- Against 890,905 -- 600,024 -- Abstain 385,987 -- 490,749 -- Broker Non-Votes 3,277,510 -- 4,708,127 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 14,468,519 -- 17,908,211 -- ==================================================================================================================================== APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Robert P. Bremner For 17,020,180 -- -- -- Withhold 651,312 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 17,671,492 -- -- -- ==================================================================================================================================== Jack B. Evans For 17,018,050 -- -- -- Withhold 653,442 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 17,671,492 -- -- -- ==================================================================================================================================== William C. Hunter For 17,032,053 -- -- -- Withhold 639,439 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 17,671,492 -- -- -- ==================================================================================================================================== David J. Kundert For 17,024,698 -- -- -- Withhold 646,794 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 17,671,492 -- -- -- ==================================================================================================================================== William J. Schneider For -- 5,898 -- 5,425 Withhold -- 67 -- 213 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 5,965 -- 5,638 ==================================================================================================================================== Timothy R. Schwertfeger For -- 5,898 -- 5,425 Withhold -- 67 -- 213 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 5,965 -- 5,638 ==================================================================================================================================== Judith M. Stockdale For 17,027,993 -- 22,398,385 -- Withhold 643,499 -- 261,737 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 17,671,492 -- 22,660,122 -- ==================================================================================================================================== Carole E. Stone For 17,024,913 -- 22,391,658 -- Withhold 646,579 -- 268,464 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 17,671,492 -- 22,660,122 -- ==================================================================================================================================== Eugene S. Sunshine(1) For 17,023,669 -- -- -- Withhold 647,823 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 17,671,492 -- -- -- ==================================================================================================================================== TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR: For 14,074,606 -- 17,333,691 -- Against 178,064 -- 270,283 -- Abstain 215,849 -- 304,237 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 14,468,519 -- 17,908,211 -- ==================================================================================================================================== (1) Mr. Sunshine resigned from the Funds' Board of Directors on July 31, 2007.
18 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS NUVEEN INVESTMENT QUALITY MUNICIPAL FUND, INC. NUVEEN SELECT QUALITY MUNICIPAL FUND, INC. NUVEEN QUALITY INCOME MUNICIPAL FUND, INC. NUVEEN PREMIER MUNICIPAL INCOME FUND, INC. NUVEEN MUNICIPAL HIGH INCOME OPPORTUNITY FUND We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Investment Quality Municipal Fund, Inc., Nuveen Select Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc. and Nuveen Municipal High Income Opportunity Fund (the "Funds") as of October 31, 2007, and the related statements of operations and cash flows (Nuveen Premier Municipal Income Fund, Inc. only) for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2007, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen Investment Quality Municipal Fund, Inc., Nuveen Select Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., and Nuveen Municipal High Income Opportunity Fund at October 31, 2007, the results of their operations and cash flows (Nuveen Premier Municipal Income Fund, Inc. only) for the year then ended, changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Chicago, Illinois December 21, 2007 19 NQM Nuveen Investment Quality Municipal Fund, Inc. Portfolio of INVESTMENTS October 31, 2007
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.3% (0.8% OF TOTAL INVESTMENTS) $ 3,800 Alabama Special Care Facilities Financing Authority, Revenue 11/16 at 100.00 AA $ 3,820,520 Bonds, Ascension Health, Series 2006C-2, 5.000%, 11/15/36 Birmingham Special Care Facilities Financing Authority, Alabama, Revenue Bonds, Baptist Health System Inc., Series 2005A: 1,200 5.250%, 11/15/20 11/15 at 100.00 Baa1 1,230,408 800 5.000%, 11/15/30 11/15 at 100.00 Baa1 779,168 1,250 Courtland Industrial Development Board, Alabama, Pollution 6/15 at 100.00 BBB 1,227,713 Control Revenue Bonds, International Paper Company, Series 2005A, 5.000%, 6/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ 7,050 Total Alabama 7,057,809 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 1.7% (1.1% OF TOTAL INVESTMENTS) 4,000 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/10 at 100.00 AAA 4,299,440 Settlement Asset-Backed Bonds, Series 2000, 6.500%, 6/01/31 (Pre-refunded 6/01/10) Northern Tobacco Securitization Corporation, Alaska, Tobacco Settlement Asset-Backed Bonds, Series 2006A: 4,000 5.000%, 6/01/32 6/14 at 100.00 Baa3 3,538,080 1,500 5.000%, 6/01/46 6/14 at 100.00 Baa3 1,276,455 - ------------------------------------------------------------------------------------------------------------------------------------ 9,500 Total Alaska 9,113,975 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.6% (0.4% OF TOTAL INVESTMENTS) Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health Network, Series 2005B: 200 5.250%, 12/01/24 12/15 at 100.00 BBB 202,950 265 5.250%, 12/01/25 12/15 at 100.00 BBB 268,381 3,335 Mesa, Arizona, Utility System Revenue Bonds, Reset Option 7/17 at 100.00 AAA 2,762,481 Longs, Series 11032- 11034, 5.258%, 7/01/31 (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 3,800 Total Arizona 3,233,812 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 2.3% (1.5% OF TOTAL INVESTMENTS) 1,295 Arkansas Development Finance Authority, Home Mortgage 7/08 at 101.50 AAA 1,309,167 Revenue Bonds, FNMA/GNMA Mortgage-Backed Securities Program, Series 1998A, 5.150%, 7/01/17 University of Arkansas, Pine Bluff Campus, Revenue Bonds, Series 2005A: 3,290 5.000%, 12/01/30 - AMBAC Insured 12/15 at 100.00 Aaa 3,424,068 2,000 5.000%, 12/01/35 - AMBAC Insured 12/15 at 100.00 Aaa 2,069,120 Van Buren County, Arkansas, Sales and Use Tax Revenue Refunding and Construction Bonds, Series 2000: 1,055 5.600%, 12/01/25 - AMBAC Insured 12/10 at 100.00 Aaa 1,104,152 3,545 5.650%, 12/01/31 - AMBAC Insured 12/10 at 100.00 Aaa 3,716,543 1,000 Washington County, Arkansas, Hospital Revenue Bonds, 2/15 at 100.00 BBB 982,140 Washington Regional Medical Center, Series 2005B, 5.000%, 2/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ 12,185 Total Arkansas 12,605,190 - ------------------------------------------------------------------------------------------------------------------------------------ 20 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 21.0% (13.3% OF TOTAL INVESTMENTS) $ 3,000 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 AA+ $ 3,046,380 University of Southern California, Series 2005, 4.750%, 10/01/28 1,000 California Educational Facilities Authority, Revenue Bonds, 11/15 at 100.00 A2 1,016,810 University of the Pacific, Series 2006, 5.000%, 11/01/30 2,500 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 2,530,475 Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/27 4,285 California Health Facilities Financing Authority, Revenue Bonds, 4/16 at 100.00 A+ 4,289,199 Kaiser Permanante System, Series 2006, 5.000%, 4/01/37 5,500 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 5,501,870 Sutter Health, Series 2007A, 5.000%, 11/15/42 California Statewide Community Development Authority, Revenue Bonds, Daughters of Charity Health System, Series 2005A: 1,000 5.250%, 7/01/30 7/15 at 100.00 BBB+ 1,003,990 1,000 5.000%, 7/01/39 7/15 at 100.00 BBB+ 951,920 10,000 California, General Obligation Bonds, Series 2003, 5.250%, 2/01/25 8/13 at 100.00 A+ 10,517,700 1,900 Chula Vista, California, Industrial Development Revenue Bonds, 6/14 at 102.00 A2 1,969,369 San Diego Gas and Electric Company, Series 1996A, 5.300%, 7/01/21 2,675 Commerce Joint Power Financing Authority, California, No Opt. Call AA 2,677,434 Tax Allocation Refunding Bonds, Redevelopment Projects 2 and 3, Series 2003A, 5.000%, 8/01/28 - RAAI Insured Golden State Tobacco Securitization Corporation, California, Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1: 3,000 5.000%, 6/01/33 6/17 at 100.00 BBB 2,672,760 610 5.125%, 6/01/47 6/17 at 100.00 BBB 536,605 9,740 Huntington Park Redevelopment Agency, California, No Opt. Call AAA 13,426,785 Single Family Residential Mortgage Revenue Refunding Bonds, Series 1986A, 8.000%, 12/01/19 (ETM) 1,030 Natomas Union School District, Sacramento County, California, No Opt. Call AAA 1,201,165 General Obligation Refunding Bonds, Series 1999, 5.950%, 9/01/21 - MBIA Insured 15,770 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 21,078,495 County, California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured 13,145 Perris, California, GNMA Mortgage-Backed Securities Program No Opt. Call AAA 18,257,616 Single Family Mortgage Revenue Bonds, Series 1988B, 8.200%, 9/01/23 (Alternative Minimum Tax) (ETM) 3,415 Rancho Mirage Joint Powers Financing Authority, California, 7/14 at 100.00 A3 (4) 3,881,387 Revenue Bonds, Eisenhower Medical Center, Series 2004, 5.875%, 7/01/26 (Pre-refunded 7/01/14) 5,000 Riverside Unified School District, Riverside County, California, 2/12 at 101.00 AAA 5,199,550 General Obligation Bonds, Series 2002A, 5.000%, 2/01/27 - FGIC Insured San Diego County, California, Certificates of Participation, Burnham Institute, Series 2006: 250 5.000%, 9/01/21 9/15 at 102.00 Baa3 250,908 275 5.000%, 9/01/23 9/15 at 102.00 Baa3 274,236 San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A: 6,175 0.000%, 1/15/28 - MBIA Insured No Opt. Call AAA 2,372,806 8,135 0.000%, 1/15/34 - MBIA Insured No Opt. Call AAA 2,305,378 17,195 0.000%, 1/15/35 - MBIA Insured No Opt. Call AAA 4,644,026 3,185 University of California, General Revenue Bonds, Series 2005G, 5/13 at 101.00 AAA 3,216,117 4.750%, 5/15/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 119,785 Total California 112,822,981 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.5% (2.9% OF TOTAL INVESTMENTS) 1,000 Colorado Health Facilities Authority, Revenue Bonds, Evangelical 6/16 at 100.00 A- 990,190 Lutheran Good Samaritan Society, Series 2005, 5.000%, 6/01/29 400 Colorado Health Facilities Authority, Revenue Bonds, Poudre 3/15 at 100.00 BBB+ 393,824 Valley Health Care, Series 2005F, 5.000%, 3/01/25 21 NQM Nuveen Investment Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) $ 20 Colorado Housing Finance Authority, Single Family Program 11/07 at 105.00 Aaa $ 20,322 Senior Bonds, Series 1996B, 7.450%, 11/01/27 12,450 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 13,106,489 Refunding Bonds, Series 2000A, 6.000%, 11/15/19 - AMBAC Insured (Alternative Minimum Tax) 7,865 El Paso County School District 11, Colorado Springs, Colorado, 12/07 at 125.00 AA- (4) 9,847,295 General Obligation Improvement Bonds, Series 1996, 7.125%, 12/01/21 (Pre-refunded 12/01/07) - ------------------------------------------------------------------------------------------------------------------------------------ 21,735 Total Colorado 24,358,120 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 6.6% (4.2% OF TOTAL INVESTMENTS) 23,745 District of Columbia Water and Sewerage Authority, Public 4/09 at 160.00 AAA 26,874,589 Utility Revenue Bonds, Series 1998, 5.500%, 10/01/23 - FSA Insured 3,000 District of Columbia, General Obligation Bonds, Series 1998B, No Opt. Call AAA 3,450,270 6.000%, 6/01/16 - MBIA Insured 15,950 District of Columbia, Revenue Bonds, Georgetown University, 4/11 at 31.03 AAA 4,351,479 Series 2001A, 0.000%, 4/01/31 (Pre-refunded 4/01/11) - MBIA Insured 1,200 Washington Convention Center Authority, District of Columbia, 10/16 at 100.00 AAA 1,106,916 Senior Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606, 6.094%, 10/01/30 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 43,895 Total District of Columbia 35,783,254 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 3.9% (2.5% OF TOTAL INVESTMENTS) 1,000 Board of Regents, Florida State University, Housing Facility 5/15 at 101.00 AAA 1,038,210 Revenue Bonds, Series 2005A, 5.000%, 5/01/27 - MBIA Insured 4,230 Brevard County Health Facilities Authority, Florida, Revenue 4/16 at 100.00 A 4,299,541 Bonds, Health First Inc. Project, Series 2005, 5.000%, 4/01/24 1,580 Escambia County Health Facilities Authority, Florida, Health 10/08 at 101.00 BBB+ 1,591,834 Facility Revenue Refunding Bonds, Baptist Hospital and Baptist Manor, Series 1998, 5.125%, 10/01/19 3,200 Hillsborough County Industrial Development Authority, Florida, 4/10 at 101.00 N/R 3,354,016 Exempt Facilities Remarketed Revenue Bonds, National Gypsum Company, Apollo Beach Project, Series 2000B, 7.125%, 4/01/30 (Alternative Minimum Tax) 1,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/17 at 100.00 AAA 961,000 International Airport Hub, Series 2007B, 4.500%, 10/01/31 - MBIA Insured 4,335 Miami-Dade County, Florida, Aviation Revenue Bonds, Residuals 10/17 at 100.00 AAA 3,827,892 Series 1016, 6.002%, 10/01/31 - MBIA Insured (IF) 5,895 South Miami Health Facilities Authority, Florida, Hospital Revenue, 8/17 at 100.00 AA- 5,860,868 Baptist Health System Obligation Group, Series 2007, 5.000%, 8/15/42 - ------------------------------------------------------------------------------------------------------------------------------------ 21,240 Total Florida 20,933,361 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 4.6% (2.9% OF TOTAL INVESTMENTS) 10,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 10,542,900 Series 2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) - FGIC Insured 2,710 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 11/14 at 100.00 AAA 2,822,790 Series 2004, 5.000%, 11/01/23 - FSA Insured 2,000 Dalton Development Authority, Georgia, Revenue Certificates, No Opt. Call AAA 2,239,460 Hamilton Health Care System Inc., Series 1996, 5.500%, 8/15/26 - MBIA Insured 5,980 Fulton County Development Authority, Georgia, Revenue Bonds, 9/11 at 102.00 AAA 6,407,092 Georgia State University - TUFF/Atlanta Housing LLC, Series 2001A, 5.500%, 9/01/22 - AMBAC Insured 2,250 Georgia Municipal Electric Authority, Project One Special No Opt. Call A+ 2,645,910 Obligation Bonds, Fourth Crossover Series 1997E, 6.500%, 1/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ 22,940 Total Georgia 24,658,152 - ------------------------------------------------------------------------------------------------------------------------------------ 22 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 1.1% (0.7% OF TOTAL INVESTMENTS) $ 4,810 Boise City, Idaho, Revenue Refunding Bonds, Series 2001A, 12/11 at 100.00 Aaa $ 5,060,409 5.375%, 12/01/31 - MBIA Insured Madison County, Idaho, Hospital Revenue Certificates of Participation, Madison Memorial Hospital, Series 2006: 500 5.250%, 9/01/26 9/16 at 100.00 BBB- 496,710 500 5.250%, 9/01/30 9/16 at 100.00 BBB- 488,585 - ------------------------------------------------------------------------------------------------------------------------------------ 5,810 Total Idaho 6,045,704 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 12.0% (7.6% OF TOTAL INVESTMENTS) 4,705 Bourbonnais, Illinois, Revenue Bonds, Olivet Nazarene University, 3/10 at 101.00 AA (4) 5,029,598 Series 2000, 6.250%, 3/01/20 (Pre-refunded 3/01/10) - RAAI Insured 14,600 Chicago Greater Metropolitan Area Sanitary District, Illinois, 12/16 at 100.00 AAA 15,975,758 General Obligation Bonds, Series 2006, 5.000%, 12/01/35 (UB) 4,775 Chicago Public Building Commission, Illinois, General Obligation 3/13 at 100.00 AAA 5,162,396 Lease Bonds, Chicago Transit Authority, Series 2003, 5.250%, 3/01/23 (Pre-refunded 3/01/13) - AMBAC Insured 2,110 Illinois Development Finance Authority, Local Government 1/11 at 100.00 Aaa 2,267,026 Program Revenue Bonds, DuPage and Cook Counties Community Unit School District 205 - Elmhurst, Series 2000, 6.000%, 1/01/19 (Pre-refunded 1/01/11) - FSA Insured Illinois Finance Authority, Revenue Bonds, OSF Healthcare System, Series 2004: 2,500 5.250%, 11/15/21 5/14 at 100.00 A 2,576,575 1,000 5.250%, 11/15/22 5/14 at 100.00 A 1,028,370 395 Illinois Finance Authority, Revenue Bonds, Proctor Hospital, 1/16 at 100.00 BBB- 387,025 Series 2006, 5.125%, 1/01/25 2,600 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 2,620,150 Medical Center, Series 2002, 5.500%, 5/15/32 12,725 Kane, Cook and DuPage Counties School District 46, Elgin, No Opt. Call Aaa 14,756,165 Illinois, General Obligation School Bonds, Series 1997, 7.800%, 1/01/12 - FSA Insured 6,300 Madison County Community Unit School District 7, No Opt. Call AAA 6,858,684 Edwardsville, Illinois, School Building Bonds, Series 1994, 5.850%, 2/01/13 - FGIC Insured (ETM) 6,015 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 3,204,070 Refunding Bonds, McCormick Place Expansion Project, Series 1996A, 0.000%, 12/15/21 - MBIA Insured Will County High School District 204, Joliet, Illinois, General Obligation Bonds, Series 2001: 1,145 8.700%, 12/01/13 - FSA Insured No Opt. Call AAA 1,453,326 1,300 8.700%, 12/01/14 - FSA Insured No Opt. Call AAA 1,694,810 1,180 Will County School District 17, Channahon, Illinois, General No Opt. Call Aaa 1,478,634 Obligation School Building Bonds, Series 2001, 8.400%, 12/01/13 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 61,350 Total Illinois 64,492,587 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.3% (2.1% OF TOTAL INVESTMENTS) 5,530 Allen County Jail Building Corporation, Indiana, First Mortgage 4/11 at 101.00 Aa3 (4) 5,977,266 Bonds, Series 2000, 5.750%, 4/01/20 (Pre-refunded 4/01/11) 1,880 Indianapolis, Indiana, GNMA Collateralized Multifamily Housing 7/10 at 102.00 Aaa 1,966,574 Mortgage Revenue Bonds, Cloverleaf Apartments Project Phase I, Series 2000, 6.000%, 1/20/31 2,495 Shelbyville, Indiana, GNMA Collateralized Multifamily Housing 7/10 at 102.00 Aaa 2,609,121 Revenue Bonds, Blueridge Terrace Project, Series 2000, 6.050%, 1/20/36 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, Madison Center Inc., Series 2005: 1,550 5.250%, 2/15/23 2/15 at 100.00 BBB 1,564,353 2,500 5.375%, 2/15/34 2/15 at 100.00 BBB 2,507,250 2,765 Wayne County Jail Holding Corporation, Indiana, First Mortgage 1/13 at 101.00 AAA 3,069,786 Bonds, Series 2001, 5.750%, 7/15/14 (Pre-refunded 1/15/13) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 16,720 Total Indiana 17,694,350 - ------------------------------------------------------------------------------------------------------------------------------------ 23 NQM Nuveen Investment Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.4% (0.9% OF TOTAL INVESTMENTS) $ 8,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB $ 7,424,640 Revenue Bonds, Series 2005C, 5.500%, 6/01/42 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.1% (0.7% OF TOTAL INVESTMENTS) 1,000 Kansas Development Finance Authority, Health Facilities Revenue 11/15 at 100.00 A2 1,022,220 Bonds, Hays Medical Center Inc., Series 2005L, 5.000%, 11/15/22 620 Sedgwick and Shawnee Counties, Kansas, GNMA No Opt. Call Aaa 650,380 Mortgage-Backed Securities Program Single Family Revenue Bonds, Series 1997A-1, 6.950%, 6/01/29 (Alternative Minimum Tax) 3,400 Topeka, Kansas, Industrial Revenue Refunding Bonds, Sunwest 8/16 at 100.00 AAA 4,300,796 Hotel Corporation, Series 1988, 9.500%, 10/01/16 (Pre-refunded 8/15/16) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 5,020 Total Kansas 5,973,396 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,000 Jefferson County, Kentucky, Health Facilities Revenue Refunding 1/08 at 101.00 AAA 2,040,360 Bonds, Jewish Hospital HealthCare Services Inc., Series 1996, 5.700%, 1/01/21 - AMBAC Insured 510 Louisville and Jefferson County Metropolitan Government, 10/16 at 100.00 N/R 498,347 Kentucky, Industrial Building Revenue Bonds, Sisters of Mercy of the Americas, Series 2006, 5.000%, 10/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ 2,510 Total Kentucky 2,538,707 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.9% (2.5% OF TOTAL INVESTMENTS) 870 East Baton Rouge Mortgage Finance Authority, Louisiana, 4/08 at 102.00 Aaa 878,378 GNMA/FNMA Mortgage-Backed Securities Program Family Mortgage Revenue Refunding Bonds, Series 1997D, 5.900%, 10/01/30 (Alternative Minimum Tax) Jefferson Parish Home Mortgage Authority, Louisiana, Single Family Mortgage Revenue Bonds, Series 2000G-2: 1,030 6.300%, 6/01/32 (Alternative Minimum Tax) 12/10 at 102.00 Aaa 1,073,456 685 5.550%, 6/01/32 (Alternative Minimum Tax) 12/10 at 102.00 Aaa 690,720 445 Jefferson Parish Home Mortgage Authority, Louisiana, 12/09 at 103.00 Aaa 465,617 Single Family Mortgage Revenue Refunding Bonds, Series 2000A-2, 7.500%, 12/01/30 (Alternative Minimum Tax) 3,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds, 8/15 at 100.00 A+ 3,054,450 Franciscan Missionaries of Our Lady Health System, Series 2005A, 5.250%, 8/15/31 2,500 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner 5/17 at 100.00 A3 2,519,875 Clinic Foundation Project, Series 2007A, 5.500%, 5/15/47 11,545 Orleans Parish School Board, Louisiana, General Obligation No Opt. Call AAA 12,313,204 Refunding Bonds, Series 1987, 9.000%, 2/01/09 - MBIA Insured (ETM) - ------------------------------------------------------------------------------------------------------------------------------------ 20,075 Total Louisiana 20,995,700 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,500 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 2,573,500 Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.3% (2.1% OF TOTAL INVESTMENTS) 5,010 Massachusetts Development Financing Authority, Assisted 12/09 at 102.00 N/R 5,151,382 Living Revenue Bonds, Prospect House Apartments, Series 1999, 7.000%, 12/01/31 1,105 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 BBB 1,120,879 Revenue Bonds, Caritas Christi Obligated Group, Series 1999A, 5.625%, 7/01/20 1,875 Massachusetts Health and Educational Facilities Authority, 7/11 at 100.00 BBB 1,974,731 Revenue Bonds, UMass Memorial Health Care, Series 2001C, 6.500%, 7/01/21 2,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 2,044,860 Revenue Refunding Bonds, Ogden Haverhill Project, Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax) 5,100 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 5,356,224 Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured 24 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS (continued) $ 1,000 Massachusetts Water Resources Authority, General Revenue 8/17 at 100.00 AAA $ 1,079,490 Bonds, Series 2005A, 5.250%, 8/01/26 - MBIA Insured 1,040 Massachusetts Water Resources Authority, General Revenue 2/17 at 100.00 AAA 888,992 Bonds, Series 2007, Residual Trust 7039, 6.272%, 8/01/46 - FSA Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 17,130 Total Massachusetts 17,616,558 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 4.1% (2.6% OF TOTAL INVESTMENTS) 4,250 Detroit City School District, Wayne County, Michigan, Unlimited 5/12 at 100.00 AAA 4,596,460 Tax School Building and Site Improvement Bonds, Series 2001A, 5.500%, 5/01/20 (Pre-refunded 5/01/12) - FSA Insured 10,215 Detroit, Michigan, Water Supply System Revenue Refunding No Opt. Call AAA 11,911,814 Bonds, Series 1993, 6.500%, 7/01/15 - FGIC Insured 1,800 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/15 at 100.00 BBB 1,885,896 Metropolitan Hospital, Series 2005A, 6.000%, 7/01/35 1,350 Michigan State Building Authority, Revenue Bonds, Facilities 10/15 at 100.00 AAA 1,423,305 Program, Series 2005II, 5.000%, 10/15/22 - AMBAC Insured 2,000 Michigan State Hospital Finance Authority, Revenue Bonds, 12/16 at 100.00 Aa2 2,026,880 Trinity Health Care Group, Series 2006A, 5.000%, 12/01/31 340 Monroe County Hospital Finance Authority, Michigan, 6/16 at 100.00 BBB- 336,413 Mercy Memorial Hospital Corporation Revenue Bonds, Series 2006, 5.500%, 6/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ 19,955 Total Michigan 22,180,768 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 7.5% (4.8% OF TOTAL INVESTMENTS) 8,250 Cohasset, Minnesota, Pollution Control Revenue Bonds, 7/14 at 100.00 A- 8,292,240 Allete Inc., Series 2004, 4.950%, 7/01/22 5,000 Dakota and Washington Counties Housing and Redevelopment No Opt. Call AAA 6,972,050 Authority, Minnesota, GNMA Mortgage-Backed Securities Program Single Family Residential Mortgage Revenue Bonds, Series 1988, 8.450%, 9/01/19 (Alternative Minimum Tax) (ETM) 620 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 654,007 Healthcare System Revenue Bonds, Fairview Hospital and Healthcare Services, Series 2000A, 6.375%, 11/15/29 19,380 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A (4) 21,173,617 Healthcare System Revenue Bonds, Fairview Hospital and Healthcare Services, Series 2000A, 6.375%, 11/15/29 (Pre-refunded 11/15/10) 700 Minnesota Higher Education Facilities Authority, St. John's 10/15 at 100.00 A2 724,955 University Revenue Bonds, Series 2005-6G, 5.000%, 10/01/22 1,665 Rochester, Minnesota, Health Care Facilities Revenue Bonds, 5/16 at 100.00 AA 1,695,669 Series 2006, 5.000%, 11/15/36 1,000 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 100.00 Baa3 1,051,660 Revenue Bonds, Healtheast Inc., Series 2005, 6.000%, 11/15/25 - ------------------------------------------------------------------------------------------------------------------------------------ 36,615 Total Minnesota 40,564,198 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,275 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 N/R 2,305,713 Revenue Bonds, Baptist Memorial Healthcare, Series 2004B-1, 5.000%, 9/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.6% (0.4% OF TOTAL INVESTMENTS) 200 Hannibal Industrial Development Authority, Missouri, Health 3/16 at 100.00 BBB+ 198,672 Facilities Revenue Bonds, Hannibal Regional Hospital, Series 2006, 5.000%, 3/01/22 1,000 Jackson County Reorganized School District R-7, Lees Summit, 3/16 at 100.00 Aaa 1,069,140 Missouri, General Obligation Bonds, Series 2006, 5.250%, 3/01/26 - MBIA Insured Missouri Development Finance Board, Infrastructure Facilities Revenue Bonds, Branson Landing Project, Series 2005A: 780 6.000%, 6/01/20 No Opt. Call BBB+ 859,451 1,225 5.000%, 6/01/35 6/15 at 100.00 BBB+ 1,171,137 - ------------------------------------------------------------------------------------------------------------------------------------ 3,205 Total Missouri 3,298,400 - ------------------------------------------------------------------------------------------------------------------------------------ 25 NQM Nuveen Investment Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.5% (0.3% OF TOTAL INVESTMENTS) $ 3,000 Montana Board of Housing, Single Family Program Bonds, 6/14 at 100.00 AA+ $ 2,956,320 Series 2005-RA-1, 4.750%, 6/01/44 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.1% (0.7% OF TOTAL INVESTMENTS) 4,000 Lincoln Electric System, Nebraska, Electric System Revenue 9/17 at 100.00 AAA 3,644,520 Bonds, Series 2007A, Residuals 07-1007-9, 5.973%, 9/01/37 - FGIC Insured (IF) 2,145 NebHelp Inc., Nebraska, Revenue Bonds, Student Loan Program, 3/08 at 100.00 AAA 2,160,616 Series 1993B, 5.875%, 6/01/14 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 6,145 Total Nebraska 5,805,136 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 5.1% (3.2% OF TOTAL INVESTMENTS) 11,000 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 11,918,720 Series 2002C, 5.500%, 6/15/19 (Pre-refunded 6/15/12) - MBIA Insured 14,530 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 AAA 15,268,851 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.625%, 1/01/34 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 25,530 Total Nevada 27,187,571 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.3% (1.5% OF TOTAL INVESTMENTS) New Jersey Economic Development Authority, School Facilities Construction Bonds, Series 2005P: 1,325 5.250%, 9/01/24 9/15 at 100.00 AA- 1,410,145 1,000 5.250%, 9/01/26 9/15 at 100.00 AA- 1,060,160 1,080 New Jersey Educational Facilities Authority, Revenue Bonds, 7/17 at 100.00 AAA 1,026,346 Rowan College, Series 2007B, 4.250%, 7/01/34 - FGIC Insured 3,425 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 3,775,686 System Bonds, Series 2006A, 5.250%, 12/15/20 1,645 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 AAA 1,764,756 Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 (Pre-refunded 6/01/12) 4,000 Tobacco Settlement Financing Corporation, New Jersey, 6/17 at 100.00 BBB 3,337,280 Tobacco Settlement Asset-Backed Bonds, Series 2007-1A, 4.750%, 6/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 12,475 Total New Jersey 12,374,373 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.4% (0.3% OF TOTAL INVESTMENTS) Farmington, New Mexico, Hospital Revenue Bonds, San Juan Regional Medical Center Inc., Series 2004A: 880 5.125%, 6/01/17 6/14 at 100.00 A3 909,990 1,295 5.125%, 6/01/19 6/14 at 100.00 A3 1,328,010 - ------------------------------------------------------------------------------------------------------------------------------------ 2,175 Total New Mexico 2,238,000 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 16.5% (10.4% OF TOTAL INVESTMENTS) 1,665 Dormitory Authority of the State of New York, State Personal 3/15 at 100.00 AAA 1,742,706 Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 - AMBAC Insured 25 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 21,608 Bonds, Driver Trust 1649, 2006, 6.058%, 2/15/47 - MBIA Insured (IF) 3,980 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 3,799,985 Bonds, Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB) 3,000 Long Island Power Authority, New York, Electric System 11/16 at 100.00 AAA 2,801,070 Revenue Bonds, Series 2006F, 4.250%, 5/01/33 - MBIA Insured (UB) 2,250 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 AAA 2,339,753 Revenue Bonds, Series 2005B, 5.000%, 11/15/30 - AMBAC Insured 3,200 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 A 3,310,144 Revenue Bonds, Series 2005F, 5.000%, 11/15/30 7,800 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 8,114,574 Water and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%, 6/15/28 - AMBAC Insured 26 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 5,570 New York City Transitional Finance Authority, New York, Future 2/14 at 100.00 AAA $ 5,872,451 Tax Secured Bonds, Fiscal Series 2004C, 5.000%, 2/01/22 1,745 New York City, New York, General Obligation Bonds, Fiscal 6/13 at 100.00 AA 1,880,185 Series 2003J, 5.500%, 6/01/20 3,255 New York City, New York, General Obligation Bonds, Fiscal 6/13 at 100.00 Aa3 (4) 3,579,882 Series 2003J, 5.500%, 6/01/20 (Pre-refunded 6/01/13) 5,000 New York City, New York, General Obligation Bonds, Fiscal 8/14 at 100.00 AA 5,308,500 Series 2004C, 5.250%, 8/15/20 4,200 New York City, New York, General Obligation Bonds, Fiscal 3/15 at 100.00 AA 4,341,624 Series 2005J, 5.000%, 3/01/25 7,000 New York City, New York, General Obligation Bonds, Fiscal 4/15 at 100.00 AA 7,247,380 Series 2005M, 5.000%, 4/01/24 5,000 New York State Municipal Bond Bank Agency, Special School 6/13 at 100.00 A+ 5,318,800 Purpose Revenue Bonds, Series 2003C, 5.250%, 12/01/19 3,000 New York State Thruway Authority, General Revenue Bonds, 7/15 at 100.00 AAA 3,045,090 Series 2005G, 4.750%, 1/01/29 - FSA Insured 5,400 New York State Tobacco Settlement Financing Corporation, 6/10 at 100.00 AA- 5,617,620 Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003A-1, 5.500%, 6/01/16 4,205 New York State Urban Development Corporation, State Personal 3/14 at 100.00 AAA 4,380,433 Income Tax Revenue Bonds, Series 2004A-1, 5.000%, 3/15/23 - FGIC Insured 16,445 Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call AAA 18,800,580 JFK International Air Terminal LLC, Sixth Series 1997, 7.000%, 12/01/12 - MBIA Insured (Alternative Minimum Tax) 1,000 Rensselaer County Industrial Development Agency, New York, 3/16 at 100.00 A 1,041,780 Civic Facility Revenue Bonds, Rensselaer Polytechnic Institute, Series 2006, 5.000%, 3/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ 83,740 Total New York 88,564,165 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.5% (0.9% OF TOTAL INVESTMENTS) 7,420 North Carolina Medical Care Commission, Health System 10/11 at 101.00 AA (4) 7,954,537 Revenue Bonds, Mission St. Joseph's Health System, Series 2001, 5.250%, 10/01/26 (Pre-refunded 10/01/11) - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.8% (1.7% OF TOTAL INVESTMENTS) Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2: 3,520 5.125%, 6/01/24 6/17 at 100.00 BBB 3,397,856 530 5.875%, 6/01/30 6/17 at 100.00 BBB 523,444 525 5.750%, 6/01/34 6/17 at 100.00 BBB 506,625 1,180 5.875%, 6/01/47 6/17 at 100.00 BBB 1,145,579 8,650 Cuyahoga County, Ohio, Hospital Revenue and Improvement Bonds, 2/09 at 101.00 A- (4) 9,022,469 MetroHealth System, Series 1999, 6.150%, 2/15/29 (Pre-refunded 2/15/09) 250 Port of Greater Cincinnati Development Authority, Ohio, Economic 10/16 at 100.00 N/R 250,793 Development Revenue Bonds, Sisters of Mercy of the Americas, Series 2006, 5.000%, 10/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ 14,655 Total Ohio 14,846,766 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 3.2% (2.0% OF TOTAL INVESTMENTS) Norman Regional Hospital Authority, Oklahoma, Hospital Revenue Bonds, Series 2005: 500 5.375%, 9/01/29 9/16 at 100.00 BBB 502,055 750 5.375%, 9/01/36 9/16 at 100.00 BBB 746,670 Oklahoma Development Finance Authority, Revenue Bonds, Saint John Health System, Series 2007: 6,100 5.000%, 2/15/37 2/17 at 100.00 AA- 6,133,306 2,480 5.000%, 2/15/42 2/17 at 100.00 AA- 2,482,554 3,940 Tulsa County Industrial Authority, Oklahoma, Health Care 12/16 at 100.00 AA 3,961,276 Revenue Bonds, Saint Francis Health System, Series 2006, 5.000%, 12/15/36 3,300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 3,301,683 Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Mandatory put 12/01/08) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 17,070 Total Oklahoma 17,127,544 - ------------------------------------------------------------------------------------------------------------------------------------ 27 NQM Nuveen Investment Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.8% (1.8% OF TOTAL INVESTMENTS) $ 500 Bucks County Industrial Development Authority, Pennsylvania, 3/17 at 100.00 BBB $ 463,405 Charter School Revenue Bonds, School Lane Charter School, Series 2007A, 5.000%, 3/15/37 3,000 Commonwealth Financing Authority, Pennsylvania, State 6/16 at 100.00 AAA 3,137,249 Appropriation Lease Bonds, Series 2006A, 5.000%, 6/01/26 - FSA Insured 5,125 Pennsylvania Public School Building Authority, Lease Revenue 12/16 at 100.00 AAA 5,009,227 Bonds, School District of Philadelphia, Series 2006B, 4.500%, 6/01/32 - FSA Insured (UB) 5,000 Philadelphia, Pennsylvania, General Obligation Bonds, 3/11 at 100.00 AAA 5,228,000 Series 2001, 5.250%, 9/15/18 - FSA Insured 1,000 St. Mary Hospital Authority, Pennsylvania, Health System 11/14 at 100.00 A1 (4) 1,109,650 Revenue Bonds, Catholic Health East, Series 2004B, 5.500%, 11/15/24 (Pre-refunded 11/15/14) - ------------------------------------------------------------------------------------------------------------------------------------ 14,625 Total Pennsylvania 14,947,531 - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS) 1,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,582,530 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 1,225 Puerto Rico Municipal Finance Agency, Series 2005C, No Opt. Call AAA 1,365,716 5.250%, 8/01/21 - CIFG Insured - ------------------------------------------------------------------------------------------------------------------------------------ 2,725 Total Puerto Rico 2,948,246 - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.5% (1.0% OF TOTAL INVESTMENTS) 2,410 Rhode Island Health and Educational Building Corporation, 11/07 at 102.00 AAA 2,461,839 Hospital Financing Revenue Bonds, Lifespan Obligated Group, Series 1996, 5.750%, 5/15/23 - MBIA Insured 5,610 Rhode Island Tobacco Settlement Financing Corporation, Tobacco 6/12 at 100.00 BBB 5,763,770 Settlement Asset-Backed Bonds, Series 2002A, 6.000%, 6/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ 8,020 Total Rhode Island 8,225,609 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 2.5% (1.6% OF TOTAL INVESTMENTS) 2,000 Berkeley County School District, South Carolina, Installment 12/13 at 100.00 A- 2,068,220 Purchase Revenue Bonds, Securing Assets for Education, Series 2003, 5.250%, 12/01/24 4,405 Dorchester County School District 2, South Carolina, Installment 12/14 at 100.00 A 4,565,474 Purchase Revenue Bonds, GROWTH, Series 2004, 5.250%, 12/01/23 6,500 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A- 6,705,075 Development Revenue Bonds, Bon Secours Health System Inc., Series 2002A, 5.625%, 11/15/30 - ------------------------------------------------------------------------------------------------------------------------------------ 12,905 Total South Carolina 13,338,769 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH DAKOTA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,750 South Dakota Health and Educational Facilities Authority, 11/14 at 100.00 AA- 1,826,335 Revenue Bonds, Sioux Valley Hospitals, Series 2004A, 5.500%, 11/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.6% (1.0% OF TOTAL INVESTMENTS) 3,200 Johnson City Health and Educational Facilities Board, Tennessee, 7/16 at 100.00 BBB+ 3,244,864 Revenue Bonds, Mountain States Health Alliance, Series 2006A, 5.500%, 7/01/36 3,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 3,058,350 Tennessee, Hospital Revenue Bonds, Baptist Health System of East Tennessee Inc., Series 2002, 6.500%, 4/15/31 Sumner County Health, Educational, and Housing Facilities Board, Tennessee, Revenue Refunding Bonds, Sumner Regional Health System Inc., Series 2007: 700 5.500%, 11/01/37 11/17 at 100.00 N/R 708,323 1,700 5.500%, 11/01/46 11/17 at 100.00 N/R - ------------------------------------------------------------------------------------------------------------------------------------ 8,600 Total Tennessee 8,717,113 - ------------------------------------------------------------------------------------------------------------------------------------ 28 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 14.9% (9.5% OF TOTAL INVESTMENTS) $ 3,135 Austin Housing Finance Corporation, Texas, GNMA Collateralized 12/10 at 105.00 Aaa $ 3,399,252 Mortgage Loan Multifamily Housing Revenue Bonds, Santa Maria Village Project, Series 2000A, 7.375%, 6/20/35 (Alternative Minimum Tax) 5,000 Board of Regents, University of Texas System, Financing System 2/17 at 100.00 AAA 4,578,150 Revenue Bonds, Series 2006F, 4.250%, 8/15/36 (UB) 635 Clear Creek Independent School District, Galveston and Harris 2/10 at 100.00 AAA 657,286 Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds, Series 2000, 5.500%, 2/15/22 18,075 Clear Creek Independent School District, Galveston and Harris 2/10 at 100.00 AAA 18,892,892 Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds, Series 2000, 5.500%, 2/15/22 (Pre-refunded 2/15/10) 3,865 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 4,044,645 Series 1990, 7.400%, 2/15/10 - AMBAC Insured 1,310 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 1,355,156 Series 1990, 7.400%, 2/15/10 - AMBAC Insured (ETM) 2,256 Heart of Texas Housing Finance Corporation, GNMA Collateralized 6/10 at 105.00 Aaa 2,428,900 Mortgage Loan Revenue Bonds, Robinson Garden Project, Series 2000A, 7.375%, 6/20/35 (Alternative Minimum Tax) 11,950 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 6,044,669 Revenue Refunding Bonds, Series 1998A, 0.000%, 12/01/22 - FSA Insured (ETM) 4,680 Houston, Texas, Junior Lien Water and Sewerage System Revenue No Opt. Call AAA 2,356,848 Refunding Bonds, Series 1998A, 0.000%, 12/01/22 - FSA Insured Kerrville Health Facilities Development Corporation, Texas, Revenue Bonds, Sid Peterson Memorial Hospital Project, Series 2005: 800 5.250%, 8/15/21 No Opt. Call BBB- 808,232 1,000 5.125%, 8/15/26 No Opt. Call BBB- 982,170 1,000 Sabine River Authority, Texas, Pollution Control Revenue Bonds, 11/15 at 100.00 Caa1 902,860 TXU Electric Company, Series 2001C, 5.200%, 5/01/28 3,960 Stafford Economic Development Corporation, Texas, Sales Tax 9/15 at 100.00 AAA 4,268,840 Revenue Bonds, Series 2000, 5.500%, 9/01/30 - FGIC Insured 6,100 Tarrant County Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 6,124,278 Corporation, Texas, Revenue Bonds, Series 2007A, 5.000%, 2/15/36 5,215 Tarrant County Health Facilities Development Corporation, Texas, 12/10 at 105.00 Aaa 5,780,306 GNMA Collateralized Mortgage Loan Revenue Bonds, Eastview Nursing Home, Ebony Lake Nursing Center, Ft. Stockton Nursing Center, Lynnhaven Nursing Center and Mission Oaks Manor, Series 2000A-1, 7.500%, 12/20/22 Texas Turnpike Authority, First Tier Revenue Bonds, Central Texas Turnpike System, Series 2002A: 10,000 0.000%, 8/15/21 - AMBAC Insured No Opt. Call AAA 5,406,600 12,000 0.000%, 8/15/23 - AMBAC Insured No Opt. Call AAA 5,843,280 2,500 Tomball Hospital Authority, Texas, Hospital Revenue Bonds, 7/15 at 100.00 Baa3 2,470,975 Tomball Regional Hospital, Series 2005, 5.000%, 7/01/20 3,965 Tyler Health Facilities Development Corporation, Texas, Hospital 12/07 at 102.00 AAA 4,050,922 Revenue Bonds, East Texas Medical Center Regional Healthcare Center, Series 1997C, 5.600%, 11/01/27 (Pre-refunded 12/05/07) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 97,446 Total Texas 80,396,261 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 1,000 Amherst Industrial Development Authority, Virginia, Revenue 9/16 at 100.00 BBB 999,330 Bonds, Sweet Briar College, Series 2006, 5.000%, 9/01/26 1,905 Virginia Beach Development Authority, Virginia, Multifamily 10/14 at 102.00 N/R 2,097,405 Residential Rental Housing Revenue Bonds, Hamptons and Hampton Court Apartments, Series 1999, 7.500%, 10/01/39 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,905 Total Virginia 3,096,735 - ------------------------------------------------------------------------------------------------------------------------------------ 29 NQM Nuveen Investment Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 8.8% (5.5% OF TOTAL INVESTMENTS) $ 11,345 Chelan County Public Utility District 1, Washington, Columbia No Opt. Call AAA $ 6,737,228 River-Rock Island Hydro-Electric System Revenue Refunding Bonds, Series 1997A, 0.000%, 6/01/19 - MBIA Insured 17,075 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AAA 17,819,641 Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative Minimum Tax) 16,750 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 8/10 at 100.00 AAA 17,697,883 5.625%, 2/01/30 (Pre-refunded 8/01/10) - MBIA Insured 5,000 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 10/11 at 100.00 AAA 5,264,800 5.625%, 4/01/17 - FGIC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 50,170 Total Washington 47,519,552 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.9% (0.5% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,049,650 Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 3.3% (2.0% OF TOTAL INVESTMENTS) 6,790 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 7,021,879 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 315 Wisconsin Health and Educational Facilities Authority, Revenue 5/16 at 100.00 BBB 292,147 Bonds, Divine Savior Healthcare, Series 2006, 5.000%, 5/01/32 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Eagle River Memorial Hospital Inc., Series 2000: 1,000 5.750%, 8/15/20 - RAAI Insured 8/10 at 101.00 AA 1,035,320 3,000 5.875%, 8/15/30 - RAAI Insured 8/10 at 101.00 AA 3,098,160 1,150 Wisconsin Health and Educational Facilities Authority, Revenue 5/14 at 100.00 BBB+ 1,192,527 Bonds, Fort Healthcare Inc., Series 2004, 5.750%, 5/01/24 4,600 Wisconsin State, General Obligation Bonds, Series 2006A, 5/16 at 100.00 AAA 4,714,770 4.750%, 5/01/25 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 16,855 Total Wisconsin 17,354,803 - ------------------------------------------------------------------------------------------------------------------------------------ WYOMING - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,500 Sweetwater County, Wyoming, Solid Waste Disposal Revenue 12/15 at 100.00 BBB 2,546,200 Bonds, FMC Corporation, Series 2005, 5.600%, 12/01/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ $ 859,006 Total Investments (cost $810,344,010) - 157.8% 849,292,091 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (3.9)% (21,105,000) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.0% 11,078,804 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (55.9)% (301,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 538,265,895 ====================================================================================================================
The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the Portfolio of Investments with a 0.000% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 30 NQS Nuveen Select Quality Municipal Fund, Inc. Portfolio of INVESTMENTS October 31, 2007
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.1% (2.0% OF TOTAL INVESTMENTS) $ 10,000 Lauderdale County and Florence Health Authority, Alabama, 7/10 at 102.00 AAA $ 10,683,100 Revenue Bonds, Coffee Health Group, Series 2000A, 6.000%, 7/01/29 - MBIA Insured 5,155 Phenix City Industrial Development Board, Alabama, 5/12 at 100.00 BBB 5,338,157 Environmental Improvement Revenue Bonds, MeadWestvaco Corporation, Series 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 15,155 Total Alabama 16,021,257 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,000 Kenai Peninsula Borough, Alaska, Revenue Bonds, Central 8/13 at 100.00 Aaa 2,088,640 Kenai Peninsula Hospital Service Area, Series 2003, 5.000%, 8/01/23 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.7% (1.1% OF TOTAL INVESTMENTS) 3,750 Salt River Project Agricultural Improvement and Power District, 12/13 at 100.00 AAA 3,925,013 Arizona, Electric System Revenue Bonds, Series 2003, 5.000%, 12/01/18 - MBIA Insured 5,000 Salt Verde Financial Corporation, Arizona, Senior Gas Revenue No Opt. Call Aa1 4,793,550 Bonds, Series 2007, 5.000%, 12/01/37 - ------------------------------------------------------------------------------------------------------------------------------------ 8,750 Total Arizona 8,718,563 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.0% (0.7% OF TOTAL INVESTMENTS) 4,500 Little Rock, Arkansas, Hotel and Restaurant Gross Receipts No Opt. Call A3 5,202,990 Tax Refunding Bonds, Series 1993, 7.375%, 8/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 6.2% (4.1% OF TOTAL INVESTMENTS) Calexico Unified School District, Imperial County, California, General Obligation Bonds, Series 2005B: 3,685 0.000%, 8/01/31 - FGIC Insured No Opt. Call AAA 1,188,965 4,505 0.000%, 8/01/33 - FGIC Insured No Opt. Call AAA 1,314,874 550 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 578,397 Revenue Bonds, Pacific Gas and Electric Company, Series 1996A, 5.350%, 12/01/16 - MBIA Insured (Alternative Minimum Tax) 1,000 Coachella Valley Unified School District, Riverside County, No Opt. Call AAA 339,900 California, General Obligation Bonds, Series 2005A, 0.000%, 8/01/30 - FGIC Insured Colton Joint Unified School District, San Bernardino County, California, General Obligation Bonds, Series 2006C: 3,200 0.000%, 2/01/30 - FGIC Insured 2/15 at 45.69 AAA 1,014,240 6,800 0.000%, 2/01/35 - FGIC Insured 2/15 at 34.85 AAA 1,636,964 Cupertino Union School District, Santa Clara County, California, General Obligation Bonds, Series 2003B: 8,100 0.000%, 8/01/24 - FGIC Insured 8/13 at 58.68 AAA 3,565,134 11,430 0.000%, 8/01/27 - FGIC Insured 8/13 at 49.98 AAA 4,268,419 7,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 7,377,020 Enhanced Tobacco Settlement Revenue Bonds, Residual Series 2040, 7.550%, 6/01/45 - FGIC Insured (IF) 1,045 Lake Tahoe Unified School District, El Dorado County, California, No Opt. Call Aaa 350,733 General Obligation Bonds, Series 2001B, 0.000%, 8/01/31 - MBIA Insured 6,000 Placentia-Yorba Linda Unified School District, Orange County, No Opt. Call AAA 1,638,840 California, Certificates of Participation, Series 2006, 0.000%, 10/01/34 - FGIC Insured 31 NQS Nuveen Select Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 5,000 Riverside County Asset Leasing Corporation, California, Leasehold No Opt. Call AAA $ 2,171,500 Revenue Bonds, Riverside County Hospital Project, Series 1997, 0.000%, 6/01/25 - MBIA Insured 14,605 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 3,944,518 California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured 5,000 Santa Monica Community College District, Los Angeles County, No Opt. Call AAA 1,973,500 California, General Obligation Bonds, Series 2005C, 0.000%, 8/01/26 - MBIA Insured 2,000 Yuma Community College District, California, General Obligation 8/17 at 45.45 AAA 540,000 Bonds, B.Series 200, 0.000%, 8/01/33 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 79,920 Total California 31,903,004 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 10.7% (7.0% OF TOTAL INVESTMENTS) 11,000 Colorado Department of Transportation, Revenue Anticipation 6/10 at 100.50 AAA 11,754,380 Bonds, Series 2000, 6.000%, 6/15/15 (Pre-refunded 6/15/10) - AMBAC Insured 9,250 Colorado Health Facilities Authority, Remarketed Revenue Bonds, 12/07 at 101.50 AAA 9,401,423 Kaiser Permanente System, Series 1994A, 5.350%, 11/01/16 (ETM) 16,995 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 17,651,857 Refunding Bonds, Series 2000A, 5.625%, 11/15/23 - AMBAC Insured (Alternative Minimum Tax) 1,500 Denver Convention Center Hotel Authority, Colorado, Senior 11/16 at 100.00 AAA 1,468,680 Revenue Bonds, Convention Center Hotel, Series 2006, 4.625%, 12/01/30 - XLCA Insured E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series 1997B: 1,420 0.000%, 9/01/23 - MBIA Insured No Opt. Call AAA 686,868 8,515 0.000%, 9/01/25 - MBIA Insured No Opt. Call AAA 3,718,671 7,500 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 2,651,250 Bonds, Series 2000B, 0.000%, 9/01/29 - MBIA Insured 13,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, 9/20 at 45.40 AAA 3,120,000 Series 2004B, 0.000%, 9/01/34 - MBIA Insured 12,355 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 40.52 AAA 4,283,726 Senior Lien Revenue Bonds, Series 2001B, 0.000%, 6/15/26 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 81,535 Total Colorado 54,736,855 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 3.2% (2.1% OF TOTAL INVESTMENTS) 2,865 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB 2,968,885 Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 District of Columbia, General Obligation Bonds, Series 1998B: 5,000 6.000%, 6/01/19 - MBIA Insured No Opt. Call AAA 5,831,100 7,265 5.250%, 6/01/26 - FSA Insured 6/08 at 101.00 AAA 7,387,996 - ------------------------------------------------------------------------------------------------------------------------------------ 15,130 Total District of Columbia 16,187,981 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 2.3% (1.5% OF TOTAL INVESTMENTS) Lee County, Florida, Airport Revenue Bonds, Series 2000A: 3,075 5.875%, 10/01/18 - FSA Insured (Alternative Minimum Tax) 10/10 at 101.00 AAA 3,246,893 4,860 5.875%, 10/01/19 - FSA Insured (Alternative Minimum Tax) 10/10 at 101.00 AAA 5,131,674 3,335 South Miami Health Facilities Authority, Florida, Revenue Bonds, 8/17 at 100.00 AA- 3,277,071 Baptist Health Systems of South Florida, Series 2007, ROLS 11151, 7.568%, 8/15/42 (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 11,270 Total Florida 11,655,638 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.8% (0.5% OF TOTAL INVESTMENTS) 3,750 Atlanta, Georgia, Airport General Revenue Bonds, Series 2000B, 1/10 at 101.00 AAA 3,887,663 5.625%, 1/01/30 - FGIC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 32 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 17.9% (11.6% OF TOTAL INVESTMENTS) $ 7,555 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA $ 7,715,317 Obligation Bonds, Dedicated Tax Revenues, Series 1997A, 5.250%, 12/01/27 (Pre-refunded 12/01/07) - AMBAC Insured Chicago Board of Education, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1997: 4,000 5.750%, 12/01/20 (Pre-refunded 12/01/07) - AMBAC Insured 12/07 at 102.00 AAA 4,086,520 9,230 5.750%, 12/01/27 (Pre-refunded 12/01/07) - AMBAC Insured 12/07 at 102.00 AAA 9,429,645 1,070 5.750%, 12/01/27 (Pre-refunded 12/01/07) - AMBAC Insured 12/07 at 102.00 AAA 1,093,144 Chicago Board of Education, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1: 3,855 0.000%, 12/01/25 - FGIC Insured No Opt. Call AAA 1,678,891 2,925 0.000%, 12/01/31 - FGIC Insured No Opt. Call AAA 933,280 5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods 7/10 at 101.00 AAA 6,374,141 Alive 21 Program, Series 2000A, 6.500%, 1/01/35 (Pre-refunded 7/01/10) - FGIC Insured 15,000 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue 1/11 at 101.00 AAA 15,319,500 Bonds, O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, O'Hare International Airport, Series 2001C: 3,770 5.100%, 1/01/26 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 3,821,951 5,460 5.250%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 5,536,986 3,975 Illinois Finance Authority, Revenue Bonds, Sherman Health 8/17 at 100.00 A- 3,991,019 Systems, Series 2007A, 5.500%, 8/01/37 10,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 10,286,700 Medical Center, Series 2002, 5.750%, 5/15/22 2,000 Illinois Health Facilities Authority, Revenue Bonds, Midwest Care 2/11 at 102.00 Aaa 2,103,260 Center I Inc., Series 2001, 5.950%, 2/20/36 8,945 Lake and McHenry Counties Community Unit School District 118, 1/15 at 74.44 Aaa 4,756,504 Wauconda, Illinois, General Obligation Bonds, Series 2005B, 0.000%, 1/01/21 - FSA Insured 9,000 McHenry County Community Unit School District 200, Woodstock, No Opt. Call Aaa 4,467,240 Illinois, General Obligation Bonds, Series 2006B, 0.000%, 1/15/23 - FGIC Insured Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, McCormick Place Expansion Project, Series 2002A: 6,700 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 3,223,504 2,920 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 3,002,607 1,100 0.000%, 12/15/35 - MBIA Insured No Opt. Call AAA 286,616 7,500 Valley View Public Schools, Community Unit School District 365U No Opt. Call AAA 3,267,300 of Will County, Illinois, General Obligation Bonds, Series 2005, 0.000%, 11/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 110,870 Total Illinois 91,374,125 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 2.2% (1.4% OF TOTAL INVESTMENTS) 765 Indiana Housing Finance Authority, Single Family Mortgage 1/10 at 100.00 Aaa 774,501 Revenue Bonds, Series 2000D-3, 5.950%, 7/01/26 (Alternative Minimum Tax) 2,225 Indiana Municipal Power Agency, Power Supply Revenue Bonds, 1/17 at 100.00 AAA 2,279,935 Series 2007A, 5.000%, 1/01/42 - MBIA Insured 7,660 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/11 at 100.00 AAA 8,157,440 Memorial Health System, Series 2000, 5.625%, 8/15/33 (Pre-refunded 2/15/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,650 Total Indiana 11,211,876 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS) 3,790 Kansas Department of Transportation, Highway Revenue Bonds, 3/14 at 100.00 AAA 3,951,530 Series 2004A, 5.000%, 3/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ 33 NQS Nuveen Select Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.5% (1.0% OF TOTAL INVESTMENTS) $ 7,500 Maryland Health and Higher Educational Facilities Authority, 7/09 at 101.00 AA (4) $ 7,883,250 Revenue Bonds, Johns Hopkins University, Series 1999, 6.000%, 7/01/39 (Pre-refunded 7/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 0.1% (0.1% OF TOTAL INVESTMENTS) 950 Massachusetts Educational Finance Authority, Student Loan 12/09 at 101.00 AAA 971,461 Revenue Refunding Bonds, Series 2000G, 5.700%, 12/01/11 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 7.9% (5.1% OF TOTAL INVESTMENTS) 10,000 Detroit, Michigan, Sewerage Disposal System Revenue Bonds, 1/10 at 101.00 AAA 10,569,600 Series 1999A, 5.750%, 7/01/26 (Pre-refunded 1/01/10) - FGIC Insured 6,475 Michigan State Hospital Finance Authority, Hospital Revenue 11/09 at 101.00 AAA 6,824,067 Bonds, Ascension Health Credit Group, Series 1999A, 5.750%, 11/15/16 (Pre-refunded 11/15/09) - MBIA Insured 3,275 Michigan State Hospital Finance Authority, Revenue Refunding 2/08 at 100.00 BB- 3,276,146 Bonds, Detroit Medical Center Obligated Group, Series 1993A, 6.500%, 8/15/18 6,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/11 at 100.00 A3 6,160,980 Pollution Control Revenue Refunding Bonds, Fixed Rate Conversion, Detroit Edison Company, Series 1999C, 5.650%, 9/01/29 (Alternative Minimum Tax) 7,500 Michigan Strategic Fund, Limited Obligation Revenue Refunding 12/12 at 100.00 AAA 7,736,850 Bonds, Detroit Edison Company, Series 2002C, 5.450%, 12/15/32 - XLCA Insured (Alternative Minimum Tax) 5,900 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 6,040,833 Revenue Bonds, William Beaumont Hospital, Series 2001M, 5.250%, 11/15/35 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 39,150 Total Michigan 40,608,476 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 2.0% (1.3% OF TOTAL INVESTMENTS) 7,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 7,364,910 Minnesota, Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32 (Pre-refunded 1/01/11) - FGIC Insured 2,545 Minnesota Housing Finance Agency, Single Family Mortgage 7/09 at 100.00 AA+ 2,643,822 Revenue Bonds, Series 2000C, 6.100%, 7/01/30 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 9,545 Total Minnesota 10,008,732 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,475 Mississippi Hospital Equipment and Facilities Authority, Revenue 9/14 at 100.00 N/R 2,508,413 Bonds, Baptist Memorial Healthcare, Series 2004B-1, 5.000%, 9/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.7% (0.4% OF TOTAL INVESTMENTS) 5,000 Kansas City Municipal Assistance Corporation, Missouri, No Opt. Call AAA 1,917,750 Leasehold Revenue Bonds, Series 2004B-1, 0.000%, 4/15/28 - AMBAC Insured 1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,540,095 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,500 Total Missouri 3,457,845 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.2% (4.7% OF TOTAL INVESTMENTS) 4,885 Clark County, Nevada, Limited Tax General Obligation Bank Bonds, 7/10 at 100.00 AA+ (4) 5,140,974 Series 2000, 5.500%, 7/01/18 (Pre-refunded 7/01/10) 7,500 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/10 at 101.00 AAA 8,056,275 Series 1999A, 6.000%, 7/01/29 (Pre-refunded 7/01/10) - MBIA Insured 1,950 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 AAA 2,049,158 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.625%, 1/01/32 - AMBAC Insured 10,000 Reno, Nevada, Health Facilities, Revenue Bonds, Catholic 7/17 at 100.00 A 10,196,800 Healthcare West, Series 2007A, 5.250%, 7/01/31 (UB) 34 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA (continued) $ 10,750 Truckee Meadows Water Authority, Nevada, Water Revenue Bonds, 7/11 at 100.00 AAA $ 11,393,495 Series 2001A, 5.250%, 7/01/34 (Pre-refunded 7/01/11) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 35,085 Total Nevada 36,836,702 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 7.0% (4.5% OF TOTAL INVESTMENTS) 2,400 New Jersey Health Care Facilities Financing Authority, Revenue 7/10 at 101.00 BBB- (4) 2,659,248 Bonds, Trinitas Hospital Obligated Group, Series 2000, 7.500%, 7/01/30 (Pre-refunded 7/01/10) 14,865 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/10 at 100.00 AAA 15,384,532 Program Revenue Bonds, Series 2000CC, 5.850%, 10/01/25 - MBIA Insured (Alternative Minimum Tax) 1,905 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/07 at 101.50 AAA 1,935,804 Housing Revenue Bonds, Series 1997A, 5.550%, 5/01/27 - AMBAC Insured (Alternative Minimum Tax) 20,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 5,778,400 System Bonds, Series 2006C, 0.000%, 12/15/33 - FSA Insured 7,690 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 AAA 8,249,832 Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 (Pre-refunded 6/01/12) 2,000 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/17 at 100.00 BBB 1,716,160 Settlement Asset-Backed Bonds, Series 2007-1A, 5.000%, 6/01/41 - ------------------------------------------------------------------------------------------------------------------------------------ 48,860 Total New Jersey 35,723,976 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 4.7% (3.0% OF TOTAL INVESTMENTS) 8,500 Farmington, New Mexico, Pollution Control Revenue Refunding 4/08 at 100.00 BBB 8,550,915 Bonds, Public Service Company of New Mexico - San Juan Project, Series 1997B, 5.800%, 4/01/22 New Mexico Hospital Equipment Loan Council, Hospital Revenue Bonds, Presbyterian Healthcare Services, Series 2001A: 8,000 5.500%, 8/01/25 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 8,611,440 6,200 5.500%, 8/01/30 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 6,673,866 - ------------------------------------------------------------------------------------------------------------------------------------ 22,700 Total New Mexico 23,836,221 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 10.7% (6.9% OF TOTAL INVESTMENTS) 5,650 Dormitory Authority of the State of New York, Improvement 8/09 at 101.00 AAA 5,848,824 Revenue Bonds, Mental Health Services Facilities, Series 1999D, 5.250%, 8/15/24 - FSA Insured 10,000 Dormitory Authority of the State of New York, New York City, 5/10 at 101.00 AA- (4) 10,722,700 Lease Revenue Bonds, Court Facilities, Series 1999, 6.000%, 5/15/39 (Pre-refunded 5/15/10) 7,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AA- 7,211,540 Contract Refunding Bonds, Series 2002A, 5.125%, 1/01/29 5,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 5,116,950 Water and Sewerage System Revenue Bonds, Fiscal Series 1999B, 5.000%, 6/15/29 - FSA Insured 2,255 New York City Transit Authority, New York, Metropolitan 1/10 at 101.00 AAA 2,386,354 Transportation Authority, Triborough Bridge and Tunnel Authority, Certificates of Participation, Series 2000A, 5.750%, 1/01/20 (Pre-refunded 1/01/10) -AMBAC Insured 9,750 New York City Transitional Finance Authority, New York, Future 5/10 at 101.00 AAA 10,454,633 Tax Secured Bonds, Fiscal Series 2000B, 6.000%, 11/15/29 (Pre-refunded 5/15/10) 5,400 New York State Mortgage Agency, Homeowner Mortgage 3/09 at 101.00 Aa1 5,511,834 Revenue Bonds, Series 79, 5.300%, 4/01/29 (Alternative Minimum Tax) New York State Urban Development Corporation, Subordinate Lien Corporate Purpose Refunding Bonds, Series 1996: 4,490 5.500%, 7/01/26 (Pre-refunded 7/01/08) 7/08 at 100.00 Aaa 4,551,872 3,055 5.500%, 7/01/26 (Pre-refunded 7/01/08) 7/08 at 100.00 AAA 3,097,098 - ------------------------------------------------------------------------------------------------------------------------------------ 52,600 Total New York 54,901,805 - ------------------------------------------------------------------------------------------------------------------------------------ 35 NQS Nuveen Select Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.6% (2.4% OF TOTAL INVESTMENTS) $ 18,555 North Carolina Eastern Municipal Power Agency, Power System 1/08 at 100.00 AAA $ 18,582,272 Revenue Refunding Bonds, Series 1993B, 5.500%, 1/01/17 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 2.1% (1.3% OF TOTAL INVESTMENTS) 10,490 Grand Forks, North Dakota, Sales Tax Revenue Bonds, Aurora 12/07 at 100.00 AAA 10,514,652 Project, Series 1997A, 5.625%, 12/15/29 (Pre-refunded 12/15/07) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 6.2% (4.0% OF TOTAL INVESTMENTS) Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2: 270 5.125%, 6/01/24 6/17 at 100.00 BBB 260,631 2,700 5.875%, 6/01/30 6/17 at 100.00 BBB 2,666,601 2,635 5.750%, 6/01/34 6/17 at 100.00 BBB 2,542,775 5,895 5.875%, 6/01/47 6/17 at 100.00 BBB 5,723,043 5,150 Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco 6/22 at 100.00 BBB 3,776,186 Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-3, 0.000%, 6/01/37 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, Kettering Medical Center, Series 1999: 5,000 6.750%, 4/01/18 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 5,422,250 5,000 6.750%, 4/01/22 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 5,422,250 245 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 254,102 Securities Program Residential Mortgage Revenue Bonds, Series 2000C, 6.050%, 3/01/32 (Alternative Minimum Tax) 4,550 Ohio State Higher Educational Facilities Commission, Revenue 1/15/17 AAA 5,476,107 Bonds, University Hospitals Project, Residual Series 2007- 1033, 8.165%, 1/15/46 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 31,445 Total Ohio 31,543,945 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 2.4% (1.5% OF TOTAL INVESTMENTS) 2,235 Oklahoma Development Finance Authority, Revenue Bonds, 12/08 at 100.00 AA- 2,272,816 St. John Health System, Series 2004, 5.000%, 2/15/24 10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 9,968,900 Bonds, American Airlines Inc., Series 2001B, 5.650%, 12/01/35 (Mandatory put 12/01/08) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 12,235 Total Oklahoma 12,241,716 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 95 Delaware River Port Authority, New Jersey and Pennsylvania, 1/10 at 100.00 AAA 99,317 Revenue Bonds, Series 1999, 5.750%, 1/01/15 - FSA Insured 3,250 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/16 at 100.00 AA+ 3,055,520 Revenue Bonds, Series 96A, 4.650%, 10/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 3,345 Total Pennsylvania 3,154,837 - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS) 3,000 Puerto Rico Public Buildings Authority, Guaranteed Government 7/17 at 100.00 AAA 2,591,160 Facilities Revenue Refunding Bonds, Series 2002D, 0.000%, 7/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 0.3% (0.2% OF TOTAL INVESTMENTS) 665 Rhode Island Housing & Mortgage Finance Corporation, 4/17 at 100.00 AA+ 697,332 Homeownership Opportunity Bond Program, 2007 Series 57-B, Residual 1038, 8.134%, 10/01/32 (Alternative Minimum Tax) (IF) 1,000 Rhode Island Housing & Mortgage Finance Corporation, 4/17 at 100.00 AA+ 1,054,720 Homeownership Opportunity Bond Program, Residual Trust 1038, 8.175%, 10/01/27 (Alternative Minimum Tax) (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 1,665 Total Rhode Island 1,752,052 - ------------------------------------------------------------------------------------------------------------------------------------ 36 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 9.5% (6.1% OF TOTAL INVESTMENTS) Greenville County School District, South Carolina, Installment Purchase Revenue Bonds, Series 2002: $ 5,500 6.000%, 12/01/21 (Pre-refunded 12/01/12) 12/12 at 101.00 AA- (4) $ 6,168,855 4,500 6.000%, 12/01/21 (Pre-refunded 12/01/12) 12/12 at 101.00 AA- (4) 5,047,245 3,750 Greenwood County, South Carolina, Hospital Revenue Bonds, 10/11 at 100.00 A 3,815,775 Self Memorial Hospital, Series 2001, 5.500%, 10/01/31 2,500 Lexington County Health Service District, South Carolina, 11/13 at 100.00 A+ (4) 2,778,475 Hospital Revenue Refunding and Improvement Bonds, Series 2003, 5.750%, 11/01/28 (Pre-refunded 11/01/13) 2,825 Medical University Hospital Authority, South Carolina, 8/14 at 100.00 AAA 2,983,935 FHA-Insured Mortgage Revenue Bonds, Series 2004A, 5.250%, 2/15/22 - MBIA Insured 21,565 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 7,486,721 Revenue Bonds, Series 2004A-2, 0.000%, 1/01/30 - AMBAC Insured 1,250 South Carolina Housing Finance and Development Authority, 6/10 at 100.00 Aaa 1,254,475 Mortgage Revenue Bonds, Series 2000A-2, 6.000%, 7/01/20 - FSA Insured (Alternative Minimum Tax) Tobacco Settlement Revenue Management Authority, South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B: 11,530 6.000%, 5/15/22 5/11 at 101.00 BBB 11,852,033 4,000 6.375%, 5/15/28 5/11 at 101.00 BBB 4,113,760 3,000 6.375%, 5/15/30 No Opt. Call BBB 3,079,770 - ------------------------------------------------------------------------------------------------------------------------------------ 60,420 Total South Carolina 48,581,044 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH DAKOTA - 2.1% (1.3% OF TOTAL INVESTMENTS) 5,195 Sioux Falls, South Dakota, Industrial Revenue Refunding Bonds, 10/14 at 100.00 AAA 6,278,106 Great Plains Hotel Corporation, Series 1989, 8.500%, 11/01/16 (Pre-refunded 10/15/14) (Alternative Minimum Tax) 2,410 South Dakota Education Loans Inc., Revenue Bonds, Subordinate 6/08 at 102.00 A2 2,471,696 Series 1998-1K, 5.600%, 6/01/20 (Alternative Minimum Tax) 1,750 South Dakota Health and Educational Facilities Authority, 11/14 at 100.00 AA- 1,826,335 Revenue Bonds, Sioux Valley Hospitals, Series 2004A, 5.500%, 11/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 9,355 Total South Dakota 10,576,137 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 6.1% (4.0% OF TOTAL INVESTMENTS) 5,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 5,097,250 Tennessee, Hospital Revenue Bonds, Baptist Health System of East Tennessee Inc., Series 2002, 6.500%, 4/15/31 20,060 Knox County Health, Educational and Housing Facilities Board, 1/13 at 80.49 AAA 12,953,544 Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A, 0.000%, 1/01/17 - FSA Insured 12,500 Metropolitan Government of Nashville-Davidson County Health 11/09 at 101.00 AAA 13,196,875 and Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/28 (Pre-refunded 11/15/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 37,560 Total Tennessee 31,247,669 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 15.3% (9.9% OF TOTAL INVESTMENTS) 5,110 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Caa1 5,527,436 Refunding Bonds, TXU Electric Company, Series 1999C, 7.700%, 3/01/32 (Alternative Minimum Tax) 7,925 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Caa1 7,831,168 Refunding Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative Minimum Tax) 4,500 Brazos River Authority, Texas, Revenue Bonds, Reliant Energy Inc., 12/08 at 102.00 BBB- 4,654,170 Series 1999B, 7.750%, 12/01/18 4,080 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 4,169,678 Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/35 - FGIC Insured 5,500 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax Revenue 12/11 at 100.00 AAA 5,812,290 Bonds, Series 2001, 5.000%, 12/01/31 (Pre-refunded 12/01/11) - AMBAC Insured 37 NQS Nuveen Select Quality Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 2,000 Ennis Independent School District, Ellis County, Texas, General 8/16 at 54.64 Aaa $ 703,220 Obligation Bonds, Series 2006, 0.000%, 8/15/28 1,550 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal 4/11 at 101.00 BBB 1,620,820 Revenue Bonds, Valero Energy Corporation, Series 2001, 6.650%, 4/01/32 (Alternative Minimum Tax) 5,000 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 5,141,050 Bonds, Series 2003, 5.000%, 2/15/26 - AMBAC Insured 4,590 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 4,739,634 Series 2000A, 5.625%, 7/01/30 - FSA Insured (Alternative Minimum Tax) 9,000 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA 9,538,020 Revenue Refunding Bonds, Houston Light and Power Company, Series 1997, 5.125%, 11/01/28 - AMBAC Insured (Alternative Minimum Tax) 775 Panhandle Regional Housing Finance Corporation, Texas, 11/07 at 100.00 AAA 786,478 GNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Bonds, Series 1991A, 7.500%, 5/01/24 (Alternative Minimum Tax) 2,110 Richardson Hospital Authority, Texas, Revenue Bonds, Richardson 12/13 at 100.00 BBB 2,251,855 Regional Medical Center, Series 2004, 6.000%, 12/01/19 4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 Baa2 4,888,893 System Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21 5,500 Spring Independent School District, Harris County, Texas, 8/11 at 100.00 AAA 5,618,470 Unlimited Tax Schoolhouse Bonds, Series 2001, 5.000%, 8/15/26 2,920 Tarrant County Cultural and Education Facilities Financing 11/17 at 100.00 AA- 2,824,078 Corporation, Texas, Revenue Bonds, Tarrant County Health Resources, Series 2007B, Residuals 1830, 7.506%, 11/15/47 (IF) 4,520 Texas, General Obligation Bonds, Water Financial Assistance, 8/09 at 100.00 Aa1 4,636,254 State Participation Program, Series 1999C, 5.500%, 8/01/35 White Settlement Independent School District, Tarrant County, Texas, General Obligation Bonds, Series 2006: 9,110 0.000%, 8/15/36 8/15 at 33.75 AAA 2,064,326 9,110 0.000%, 8/15/41 8/15 at 25.73 AAA 1,571,384 7,110 0.000%, 8/15/45 8/15 at 20.76 AAA 988,574 2,305 Winter Garden Housing Finance Corporation, Texas, 4/08 at 100.00 AAA 2,334,965 GNMA/FNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Bonds, Series 1994, 6.950%, 10/01/27 (Alternative Minimum Tax) 2,000 Wylie Independent School District, Taylor County, Texas, General 8/15 at 57.10 AAA 775,540 Obligation Bonds, Series 2005, 0.000%, 8/15/26 - ------------------------------------------------------------------------------------------------------------------------------------ 99,415 Total Texas 78,478,303 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 3.9% (2.5% OF TOTAL INVESTMENTS) 3,565 Utah Associated Municipal Power Systems, Revenue Bonds, 4/13 at 100.00 AAA 3,714,730 Payson Power Project, Series 2003A, 5.000%, 4/01/24 - FSA Insured 16,050 Utah County, Utah, Hospital Revenue Bonds, IHC Health Services 12/07 at 101.00 AAA 16,232,649 Inc., Series 1997, 5.250%, 8/15/26 - MBIA Insured (ETM) - ------------------------------------------------------------------------------------------------------------------------------------ 19,615 Total Utah 19,947,379 - ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 2.0% (1.3% OF TOTAL INVESTMENTS) Vermont Educational and Health Buildings Financing Agency, Revenue Bonds, Fletcher Allen Health Care Inc., Series 2000A: 3,720 6.125%, 12/01/15 - AMBAC Insured 12/10 at 101.00 AAA 4,030,657 4,265 6.250%, 12/01/16 - AMBAC Insured 12/10 at 101.00 AAA 4,615,796 1,395 Vermont Housing Finance Agency, Single Family Housing Bonds, 11/09 at 100.00 AAA 1,408,071 Series 2000-13A, 5.950%, 11/01/25 - FSA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 9,380 Total Vermont 10,054,524 - ------------------------------------------------------------------------------------------------------------------------------------ 38 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 3.3% (2.1% OF TOTAL INVESTMENTS) $ 8,810 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA $ 9,281,159 Consolidated System Revenue Bonds, Series 2001A, 5.600%, 1/01/36 - MBIA Insured (Alternative Minimum Tax) 7,225 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 7,583,721 Terminal 18, Series 1999B, 6.000%, 9/01/20 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 16,035 Total Washington 16,864,880 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.0% (0.6% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,049,650 Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 3.0% (2.0% OF TOTAL INVESTMENTS) 7,965 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 8,237,005 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 5,000 Madison, Wisconsin, Industrial Development Revenue Refunding 4/12 at 100.00 AA- 5,224,150 Bonds, Madison Gas and Electric Company Projects, Series 2002A, 5.875%, 10/01/34 (Alternative Minimum Tax) 2,100 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A- 2,010,099 Revenue Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ 15,065 Total Wisconsin 15,471,254 - ------------------------------------------------------------------------------------------------------------------------------------ $ 925,265 Total Investments (cost $751,747,642) - 154.5% 790,328,477 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (1.3)% (6,665,000) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.3% 7,006,990 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (54.5)% (279,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 511,670,467 ====================================================================================================================
The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the Portfolio of Investments with a 0.000% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 39 NQU Nuveen Quality Income Municipal Fund, Inc. Portfolio of INVESTMENTS October 31, 2007
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.2% (2.0% OF TOTAL INVESTMENTS) $ 3,500 Bessemer Governmental Utility Services Corporation, Alabama, 6/08 at 102.00 AAA $ 3,596,495 Water Supply Revenue Bonds, Series 1998, 5.200%, 6/01/24 - MBIA Insured Jefferson County, Alabama, Sewer Revenue Capitol Improvement Warrants, Series 2001A: 7,475 5.500%, 2/01/31 (Pre-refunded 2/01/11) - FGIC Insured 2/11 at 101.00 AAA 7,998,026 6,340 5.500%, 2/01/31 (Pre-refunded 2/01/11) - FGIC Insured 2/11 at 101.00 AAA 6,775,558 6,970 5.500%, 2/01/31 (Pre-refunded 2/01/11) - FGIC Insured 2/11 at 101.00 AAA 7,457,691 - ------------------------------------------------------------------------------------------------------------------------------------ 24,285 Total Alabama 25,827,770 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.9% (0.6% OF TOTAL INVESTMENTS) 6,110 Alaska Housing Finance Corporation, General Housing Purpose 12/14 at 100.00 AAA 6,310,164 Bonds, Series 2005A, 5.000%, 12/01/27 - FGIC Insured 1,500 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/14 at 100.00 Baa3 1,276,455 Settlement Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46 - ------------------------------------------------------------------------------------------------------------------------------------ 7,610 Total Alaska 7,586,619 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.9% (1.2% OF TOTAL INVESTMENTS) 5,350 Arizona Tourism and Sports Authority, Tax Revenue Bonds, 7/13 at 100.00 Aaa 5,505,097 Multipurpose Stadium Facility Project, Series 2003A, 5.000%, 7/01/28 - MBIA Insured 1,000 Mesa, Arizona, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,104,410 Series 2002, 5.250%, 7/01/17 - FGIC Insured 8,010 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 Aa1 8,388,312 Arizona, Electric System Revenue Refunding Bonds, Series 2002A, 5.125%, 1/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ 14,360 Total Arizona 14,997,819 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.9% (0.6% OF TOTAL INVESTMENTS) Arkansas Development Finance Authority, Tobacco Settlement Revenue Bonds, Arkansas Cancer Research Center Project, Series 2006: 2,500 0.000%, 7/01/36 - AMBAC Insured No Opt. Call Aaa 600,125 19,800 0.000%, 7/01/46 - AMBAC Insured No Opt. Call Aaa 2,749,032 4,000 University of Arkansas, Fayetteville, Revenue Bonds, Medical 11/14 at 100.00 Aaa 4,125,000 Sciences Campus, Series 2004B, 5.000%, 11/01/34 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 26,300 Total Arkansas 7,474,157 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 12.2% (7.7% OF TOTAL INVESTMENTS) 1,000 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 1,104,340 Bonds, Series 2002A, 5.750%, 5/01/17 (Pre-refunded 5/01/12) 6,000 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 6,014,880 Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 3,450 California Infrastructure Economic Development Bank, Revenue 10/11 at 101.00 A- 3,500,543 Bonds, J. David Gladstone Institutes, Series 2001, 5.250%, 10/01/34 25,000 California, General Obligation Bonds, Series 2005, 3/16 at 100.00 AAA 25,075,500 4.750%, 3/01/35 - MBIA Insured (UB) 5,335 California State, Variable Purpose General Obligation Bonds, 6/17 at 100.00 A+ 5,559,550 Series 2007, Lehman Municipal Trust Receipts FC5, 7.690%, 6/01/37 (IF) 40 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 1,360 California Statewide Community Development Authority, Revenue 7/15 at 100.00 BBB+ $ 1,365,426 Bonds, Daughters of Charity Health System, Series 2005A, 5.250%, 7/01/30 14,600 California, General Obligation Bonds, Series 2003, 5.250%, 2/01/28 8/13 at 100.00 A+ 15,264,884 10,000 California, Various Purpose General Obligation Bonds, Series 1999, 4/09 at 101.00 AAA 10,041,500 4.750%, 4/01/29 - MBIA Insured 8,500 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 100.00 AAA 8,663,625 Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35 - MBIA Insured Golden State Tobacco Securitization Corporation, California, Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1: 10,000 5.000%, 6/01/33 6/17 at 100.00 BBB 8,909,200 1,500 5.125%, 6/01/47 6/17 at 100.00 BBB 1,319,520 30,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 8,102,400 California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured 1,500 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/10 at 101.00 AAA 1,577,790 Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/32 (Pre-refunded 8/01/10) - MBIA Insured 3,000 San Mateo County Community College District, California, No Opt. Call AAA 1,015,680 General Obligation Bonds, Series 2006C, 0.000%, 9/01/30 - MBIA Insured 1,500 Tobacco Securitization Authority of Northern California, Tobacco 6/15 at 100.00 BBB 1,406,445 Settlement Asset-Backed Bonds, Series 2005A-1, 5.500%, 6/01/45 - ------------------------------------------------------------------------------------------------------------------------------------ 122,745 Total California 98,921,283 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.7% (2.3% OF TOTAL INVESTMENTS) 10,000 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 10,386,500 Refunding Bonds, Series 2000A, 5.625%, 11/15/23 - AMBAC Insured (Alternative Minimum Tax) 5,385 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 2,228,528 Series 1997B, 0.000%, 9/01/26 - MBIA Insured 14,400 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 65.63 AAA 8,517,888 Series 2000B, 0.000%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 8,740 Larimer County School District R1, Poudre, Colorado, General 12/10 at 100.00 AAA 9,173,417 Obligation Bonds, Series 2000, 5.125%, 12/15/19 (Pre-refunded 12/15/10) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 38,525 Total Colorado 30,306,333 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.6% (0.4% OF TOTAL INVESTMENTS) 4,395 Bridgeport, Connecticut, General Obligation Bonds, Series 2001C, 8/11 at 100.00 AAA 4,695,266 5.375%, 8/15/17 (Pre-refunded 8/15/11) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 5,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 5,129,950 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.250%, 10/01/17 (Pre-refunded 10/01/08) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 0.7% (0.4% OF TOTAL INVESTMENTS) 5,000 Orange County Health Facilities Authority, Florida, Hospital 11/10 at 101.00 A+ (4) 5,473,000 Revenue Bonds, Adventist Health System/Sunbelt Obligated Group, Series 2000, 6.500%, 11/15/30 (Pre-refunded 11/15/10) - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 1.3% (0.8% OF TOTAL INVESTMENTS) 10,000 Hawaii Department of Transportation, Airport System Revenue 7/10 at 101.00 AAA 10,561,700 Refunding Bonds, Series 2000B, 5.750%, 7/01/21 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 41 NQU Nuveen Quality Income Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.4% (9.6% OF TOTAL INVESTMENTS) Chicago Board of Education, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Revenues, Series 2001C: $ 1,000 5.500%, 12/01/18 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA $ 1,075,650 3,690 5.000%, 12/01/19 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA 3,899,518 3,000 5.000%, 12/01/20 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA 3,170,340 2,000 5.000%, 12/01/21 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA 2,113,560 Chicago Board of Education, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1: 9,400 0.000%, 12/01/14 - FGIC Insured No Opt. Call AAA 7,145,034 4,400 0.000%, 12/01/15 - FGIC Insured No Opt. Call AAA 3,182,212 32,670 Chicago, Illinois, General Obligation Bonds, City Colleges, No Opt. Call AAA 10,358,350 Series 1999, 0.000%, 1/01/32 - FGIC Insured Chicago, Illinois, General Obligation Bonds, Neighborhoods Alive 21 Program, Series 2000A: 680 6.000%, 1/01/28 (Pre-refunded 7/01/10) - FGIC Insured 7/10 at 101.00 AAA 730,436 4,320 6.000%, 1/01/28 (Pre-refunded 7/01/10) - FGIC Insured 7/10 at 101.00 AAA 4,640,414 6,380 Chicago, Illinois, General Obligation Bonds, Series 2002A, 7/12 at 100.00 AAA 6,675,075 5.000%, 1/01/18 - AMBAC Insured 70 Chicago, Illinois, General Obligation Bonds, Series 2002A, 7/12 at 100.00 AAA 74,404 5.000%, 1/01/18 (Pre-refunded 7/01/12) - AMBAC Insured 5,045 Chicago, Illinois, General Obligation Refunding Bonds, 1/10 at 101.00 AAA 5,282,115 Series 2000D, 5.750%, 1/01/30 - FGIC Insured 13,190 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1998A, 1/09 at 101.00 AAA 13,255,950 5.125%, 1/01/35 - MBIA Insured (Alternative Minimum Tax) Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2000: 8,000 5.750%, 1/01/25 (Pre-refunded 1/01/10) - MBIA Insured 1/10 at 101.00 AAA 8,459,120 7,750 6.000%, 1/01/30 (Pre-refunded 1/01/10) - MBIA Insured 1/10 at 101.00 AAA 8,234,918 Illinois Educational Facilities Authority, Student Housing Revenue Bonds, Educational Advancement Foundation Fund, University Center Project, Series 2002: 3,000 6.625%, 5/01/17 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 3,406,830 1,800 6.000%, 5/01/22 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 1,997,694 1,050 Illinois Finance Authority, General Obligation Debt Certificates, 12/14 at 100.00 Aaa 1,098,027 Local Government Program - Kankakee County, Series 2005B, 5.000%, 12/01/20 - AMBAC Insured 15,000 Illinois Finance Authority, Illinois, Northwestern University, 12/15 at 100.00 Aaa 15,365,100 Revenue Bonds, Series 2006, 5.000%, 12/01/42 (UB) 5,000 Illinois Finance Authority, Revenue Bonds, Northwestern Memorial 8/14 at 100.00 AA+ 5,242,850 Hospital, Series 2004A, 5.500%, 8/15/43 10,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa Health 2/10 at 101.00 AAA 10,536,900 System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured (ETM) 5,000 Illinois, General Obligation Bonds, Illinois FIRST Program, 12/10 at 100.00 AAA 5,253,950 Series 2000, 5.450%, 12/01/21 - MBIA Insured 2,270 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, 6/12 at 101.00 AAA 2,334,218 McCormick Place Expansion Project, Series 2002A, 5.000%, 12/15/28 - MBIA Insured 1,000 Montgomery, Illinois, Lakewood Creek Project Special Assessment 3/16 at 100.00 AA 945,950 Bonds, Series 2007, 4.700%, 3/01/30 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ 145,715 Total Illinois 124,478,615 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.8% (1.1% OF TOTAL INVESTMENTS) 2,000 Indiana Health Facility Financing Authority, Hospital Revenue 3/14 at 100.00 AAA 2,088,100 Bonds, Deaconess Hospital Inc., Series 2004A, 5.375%, 3/01/34 - AMBAC Insured 3,240 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 3,437,122 Bonds, Marion General Hospital, Series 2002, 5.625%, 7/01/19 - AMBAC Insured 2,400 Indiana Health Facility Financing Authority, Revenue Bonds, 5/15 at 100.00 AAA 2,451,912 Community Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 - AMBAC Insured 42 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 6,540 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/08 at 101.00 AAA $ 6,513,644 Memorial Health System, Series 1998A, 4.625%, 8/15/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 14,180 Total Indiana 14,490,778 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.9% (1.2% OF TOTAL INVESTMENTS) 8,585 Iowa Finance Authority, Hospital Facilities Revenue Bonds, 7/08 at 102.00 AAA 8,847,873 Iowa Health System, Series 1998A, 5.125%, 1/01/28 (Pre-refunded 7/01/08) - MBIA Insured 7,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB 6,611,780 Revenue Bonds, Series 2005C, 5.625%, 6/01/46 - ------------------------------------------------------------------------------------------------------------------------------------ 15,585 Total Iowa 15,459,653 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS) 4,585 Johnson County Unified School District 232, Kansas, General 9/10 at 100.00 Aaa 4,746,621 Obligation Bonds, Series 2000, 4.750%, 9/01/19 (Pre-refunded 9/01/10) - FSA Insured 1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas Gas 6/14 at 100.00 AAA 1,833,703 and Electric Company, Series 2004, 5.300%, 6/01/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,335 Total Kansas 6,580,324 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.3% (0.2% OF TOTAL INVESTMENTS) 2,500 Kentucky State Property and Buildings Commission, Revenue 2/12 at 100.00 AAA 2,680,925 Refunding Bonds, Project 74, Series 2002, 5.375%, 2/01/18 (Pre-refunded 2/01/12) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.6% (2.2% OF TOTAL INVESTMENTS) 10,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds, No Opt. Call AAA 11,360,200 Franciscan Missionaries of Our Lady Health System, Series 1998A, 5.750%, 7/01/25 - FSA Insured 5,500 Louisiana Public Facilities Authority, Revenue Bonds, Tulane 7/12 at 100.00 AAA 5,841,165 University, Series 2002A, 5.000%, 7/01/32 (Pre-refunded 7/01/12) - AMBAC Insured 9,000 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner 5/17 at 100.00 A3 9,071,550 Clinic Foundation Project, Series 2007A, 5.500%, 5/15/47 2,600 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 2,600,936 Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ 27,100 Total Louisiana 28,873,851 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 8.1% (5.1% OF TOTAL INVESTMENTS) 7,405 Massachusetts Health and Educational Facilities Authority, No Opt. Call AAA 8,641,561 Revenue Bonds, Massachusetts Institute of Technology, Series 2002K, 5.500%, 7/01/32 6,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 6,134,580 Revenue Refunding Bonds, Ogden Haverhill Project, Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax) 13,500 Massachusetts Turnpike Authority, Metropolitan Highway 1/08 at 101.00 AAA 13,574,250 System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured 13,500 Massachusetts Turnpike Authority, Metropolitan Highway 1/09 at 101.00 AAA 13,605,165 System Revenue Bonds, Subordinate Series 1999A, 5.000%, 1/01/39 - AMBAC Insured 1,375 Massachusetts Water Pollution Abatement Trust, Revenue Bonds, 8/09 at 101.00 AAA 1,441,963 MWRA Loan Program, Subordinate Series 1999A, 5.750%, 8/01/29 (Pre-refunded 8/01/09) 5,570 Massachusetts Water Pollution Abatement Trust, Revenue Bonds, 8/09 at 101.00 AAA 5,796,309 MWRA Loan Program, Subordinate Series 1999A, 5.750%, 8/01/29 10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 10,692,200 Bonds, Series 2000A, 5.750%, 8/01/39 (Pre-refunded 8/01/10) - FGIC Insured 5,730 University of Massachusetts Building Authority, Senior Lien 11/10 at 100.00 AAA 6,025,725 Project Revenue Bonds, Series 2000-2, 5.250%, 11/01/20 (Pre-refunded 11/01/10) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 63,080 Total Massachusetts 65,911,753 - ------------------------------------------------------------------------------------------------------------------------------------ 43 NQU Nuveen Quality Income Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 2.1% (1.3% OF TOTAL INVESTMENTS) $ 5,000 Detroit, Michigan, Second Lien Sewerage Disposal System 7/15 at 100.00 AAA $ 5,135,800 Revenue Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured 3,790 Michigan Municipal Bond Authority, General Obligation Bonds, 6/15 at 100.00 AAA 3,971,238 Detroit City School District, Series 2005, 5.000%, 6/01/20 - FSA Insured 7,425 Michigan State Hospital Finance Authority, Hospital Revenue 11/09 at 101.00 A1 (4) 7,854,017 Bonds, Henry Ford Health System, Series 1999A, 6.000%, 11/15/24 (Pre-refunded 11/15/09) - ------------------------------------------------------------------------------------------------------------------------------------ 16,215 Total Michigan 16,961,055 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.6% (1.0% OF TOTAL INVESTMENTS) Chaska, Minnesota, Electric Revenue Bonds, Generating Facility Project, Series 2000A: 1,930 6.000%, 10/01/20 (Pre-refunded 10/01/10) 10/10 at 100.00 A3 (4) 2,066,219 2,685 6.000%, 10/01/25 (Pre-refunded 10/01/10) 10/10 at 100.00 A3 (4) 2,874,507 3,655 Dakota and Washington Counties Housing and Redevelopment No Opt. Call AAA 5,096,569 Authority, Minnesota, GNMA Mortgage-Backed Securities Program Single Family Residential Mortgage Revenue Bonds, Series 1988, 8.450%, 9/01/19 (Alternative Minimum Tax) (ETM) 3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/08 at 101.00 AAA 3,037,260 Minnesota, Airport Revenue Bonds, Series 1998A, 5.000%, 1/01/30 (Pre-refunded 1/01/08) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 11,270 Total Minnesota 13,074,555 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.6% (0.4% OF TOTAL INVESTMENTS) 1,875 Mississippi Hospital Equipment and Facilities Authority, Revenue 9/14 at 100.00 N/R 1,900,313 Bonds, Baptist Memorial Healthcare, Series 2004B-1, 5.000%, 9/01/24 2,500 Mississippi Hospital Equipment and Facilities Authority, Revenue 1/11 at 101.00 Aaa 2,669,750 Bonds, Forrest County General Hospital, Series 2000, 5.500%, 1/01/27 (Pre-refunded 1/01/11) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 4,375 Total Mississippi 4,570,063 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.6% (1.0% OF TOTAL INVESTMENTS) 15,000 Kansas City Municipal Assistance Corporation, Missouri, No Opt. Call AAA 5,753,250 Leasehold Revenue Bonds, Series 2004B-1, 0.000%, 4/15/28 - AMBAC Insured 2,400 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,507,256 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/23 - FSA Insured 15,350 Springfield Public Building Corporation, Missouri, Lease Revenue No Opt. Call AAA 4,976,931 Bonds, Jordan Valley Park Projects, Series 2000A, 0.000%, 6/01/30 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 32,750 Total Missouri 13,237,437 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.3% (4.6% OF TOTAL INVESTMENTS) Clark County School District, Nevada, General Obligation Bonds, Series 2002C: 34,470 5.000%, 6/15/20 (Pre-refunded 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 36,619,891 10,380 5.000%, 6/15/22 (Pre-refunded 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 11,027,401 1,275 Nevada, General Obligation Refunding Bonds, Municipal Bond 5/08 at 100.00 AAA 1,282,523 Bank Projects 65 and R-6, Series 1998, 5.000%, 5/15/22 - MBIA Insured 10,000 Reno, Nevada, Health Facilities, Revenue Bonds, Catholic 7/17 at 100.00 A 10,196,800 Healthcare West, Series 2007A, 5.250%, 7/01/31 (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 56,125 Total Nevada 59,126,615 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 5.2% (3.2% OF TOTAL INVESTMENTS) 1,000 New Jersey Building Authority, State Building Revenue Bonds, 12/12 at 100.00 AAA 1,069,020 Series 2002A, 5.000%, 12/15/21 (Pre-refunded 12/15/12) - FSA Insured 2,150 New Jersey Health Care Facilities Financing Authority, Revenue 7/10 at 101.00 BBB- (4) 2,382,243 Bonds, Trinitas Hospital Obligated Group, Series 2000, 7.500%, 7/01/30 (Pre-refunded 7/01/10) 44 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY (continued) $ 2,025 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA $ 2,218,894 System Bonds, Series 2001B, 6.000%, 12/15/19 (Pre-refunded 12/15/11) - MBIA Insured 3,200 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 3,514,528 System Bonds, Series 2003C, 5.500%, 6/15/22 (Pre-refunded 6/15/13) New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2006C: 20,000 0.000%, 12/15/33 - FSA Insured No Opt. Call AAA 5,778,400 20,000 0.000%, 12/15/35 - AMBAC Insured No Opt. Call AAA 5,211,200 20,000 0.000%, 12/15/36 - AMBAC Insured No Opt. Call AAA 4,968,000 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 2,340 5.750%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 2,510,352 1,000 6.125%, 6/01/42 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,106,000 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 9,420 6.750%, 6/01/39 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 10,905,817 1,850 6.250%, 6/01/43 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 2,095,404 - ------------------------------------------------------------------------------------------------------------------------------------ 82,985 Total New Jersey 41,759,857 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.8% (0.5% OF TOTAL INVESTMENTS) 5,925 New Mexico Hospital Equipment Loan Council, Hospital Revenue 8/11 at 101.00 AA- (4) 6,377,848 Bonds, Presbyterian Healthcare Services, Series 2001A, 5.500%, 8/01/21 (Pre-refunded 8/01/11) - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 17.4% (10.9% OF TOTAL INVESTMENTS) 15 Dormitory Authority of the State of New York, Improvement 2/09 at 100.00 AA- 15,322 Revenue Bonds, Mental Health Services Facilities, Series 1997A, 5.750%, 2/15/27 65 Dormitory Authority of the State of New York, Improvement 2/10 at 100.00 AAA 67,998 Revenue Bonds, Mental Health Services Facilities, Series 2000B, 6.000%, 2/15/30 - MBIA Insured Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 2000B: 100 6.000%, 2/15/30 (Pre-refunded 2/15/10) - MBIA Insured 2/10 at 100.00 Aaa 105,707 1,005 6.000%, 2/15/30 (Pre-refunded 2/15/10) - MBIA Insured 2/10 at 100.00 AAA 1,062,355 8,830 6.000%, 2/15/30 (Pre-refunded 2/15/10) - MBIA Insured 2/10 at 100.00 AAA 9,333,928 275 Dormitory Authority of the State of New York, Insured Revenue 7/08 at 101.00 AAA 279,565 Bonds, Fordham University, Series 1998, 5.000%, 7/01/28 - MBIA Insured 2,250 Dormitory Authority of the State of New York, Insured Revenue No Opt. Call AAA 2,444,085 Bonds, Mount Sinai School of Medicine, Series 1994A, 5.150%, 7/01/24 - MBIA Insured 20,000 Erie County Tobacco Asset Securitization Corporation, New York, 7/10 at 101.00 AAA 21,547,999 Senior Tobacco Settlement Asset-Backed Bonds, Series 2000, 6.125%, 7/15/30 (Pre-refunded 7/15/10) 1,320 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 1,260,296 Bonds, Series 2006A, 4.500%, 2/15/47 - MBIA Insured 1,130 Long Island Power Authority, New York, Electric System General 9/11 at 100.00 AAA 1,208,049 Revenue Bonds, Series 2001A, 5.375%, 9/01/25 (Pre-refunded 9/01/11) 15,000 Metropolitan Transportation Authority, New York, Dedicated Tax 4/10 at 100.00 AAA 15,902,400 Fund Bonds, Series 2000A, 6.000%, 4/01/30 (Pre-refunded 4/01/10) - FGIC Insured 90 Metropolitan Transportation Authority, New York, Transportation 11/16 at 100.00 AAA 86,204 Revenue Bonds, Series 2006B, Drivers 1662, 6.055%, 11/15/32 - FSA Insured (IF) 13,335 Metropolitan Transportation Authority, New York, Transportation 11/16 at 100.00 AAA 13,147,510 Revenue Bonds, Series 2006B, 4.500%, 11/15/32 - FSA Insured (UB) 12,500 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 AAA 13,221,750 Tobacco Settlement Asset-Backed Bonds, Series 1999A, 6.400%, 7/15/33 (Pre-refunded 7/15/09) 45 NQU Nuveen Quality Income Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal Series 2000B: $ 8,035 5.750%, 11/15/19 (Pre-refunded 5/15/10) 5/10 at 101.00 AAA $ 8,571,336 2,065 5.750%, 11/15/19 (Pre-refunded 5/15/10) 5/10 at 101.00 AAA 2,202,839 New York City, New York, General Obligation Bonds, Fiscal Series 2002G: 950 5.000%, 8/01/17 8/12 at 100.00 AA 987,041 6,555 5.750%, 8/01/18 8/12 at 100.00 AA 7,072,779 3,990 New York City, New York, General Obligation Bonds, Fiscal 8/12 at 100.00 Aa3 (4) 4,384,092 Series 2002G, 5.750%, 8/01/18 (Pre-refunded 8/01/12) 5,000 New York City, New York, General Obligation Bonds, Fiscal 8/12 at 100.00 AA 5,444,700 Series 2003A, 5.750%, 8/01/16 New York State Environmental Facilities Corporation, State Clean Water and Drinking Water Revolving Funds Revenue Bonds, New York City Municipal Water Finance Authority Projects, Second Resolution Bonds, Series 2001C: 6,035 5.000%, 6/15/20 6/11 at 100.00 AAA 6,291,125 6,575 5.000%, 6/15/22 6/11 at 100.00 AAA 6,828,072 2,685 Penfield-Crown Oak Housing Development Corporation, New York, 2/08 at 100.00 AAA 2,705,997 FHA-Insured Section 8 Assisted Multifamily Mortgage Revenue Refunding Bonds, Crown Oak Estates, Series 1991A, 7.350%, 8/01/23 13,620 Port Authority of New York and New Jersey, Consolidated 11/12 at 101.00 AAA 14,448,368 Revenue Bonds, One Hundred Twenty-Eighth Series 2002, 5.000%, 11/01/20 - FSA Insured 2,250 United Nations Development Corporation, New York, Senior Lien 1/08 at 100.00 A3 2,254,545 Revenue Bonds, Series 2004A, 5.250%, 7/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ 133,675 Total New York 140,874,062 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.1% (1.9% OF TOTAL INVESTMENTS) 4,000 North Carolina Medical Care Commission, Health System Revenue 10/17 at 100.00 AA 3,796,440 Bonds, Mission St. Joseph's Health System, Series 2007, 4.500%, 10/01/31 665 North Carolina Medical Care Commission, Hospital Revenue 12/08 at 101.00 AAA 666,962 Bonds, Pitt County Memorial Hospital, Series 1998A, 4.750%, 12/01/28 - MBIA Insured 12,405 North Carolina Medical Care Commission, Hospital Revenue 12/08 at 101.00 AAA 12,700,239 Bonds, Pitt County Memorial Hospital, Series 1998A, 4.750%, 12/01/28 (Pre-refunded 12/01/08) - MBIA Insured 7,500 North Carolina Municipal Power Agency 1, Catawba Electric 1/13 at 100.00 AAA 7,963,875 Revenue Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 24,570 Total North Carolina 25,127,516 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.3% (2.7% OF TOTAL INVESTMENTS) Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2: 180 5.125%, 6/01/24 6/17 at 100.00 BBB 173,754 1,800 5.875%, 6/01/30 6/17 at 100.00 BBB 1,777,734 1,740 5.750%, 6/01/34 6/17 at 100.00 BBB 1,679,100 3,930 5.875%, 6/01/47 6/17 at 100.00 BBB 3,815,362 Cincinnati City School District, Hamilton County, Ohio, General Obligation Bonds, Series 2002: 2,165 5.250%, 6/01/19 - FSA Insured 12/12 at 100.00 AAA 2,307,262 2,600 5.250%, 6/01/21 - FSA Insured 12/12 at 100.00 AAA 2,770,846 2,000 5.000%, 12/01/22 - FSA Insured 12/12 at 100.00 AAA 2,091,100 10,000 Columbus City School District, Franklin County, Ohio, General 12/16 at 100.00 AAA 9,460,600 Obligation Bonds, Series 2006, 4.250%, 12/01/32 - FSA Insured (UB) 10,350 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102.00 N/R 10,437,458 Bonds, Bay Shore Power, Series 1998A, 5.875%, 9/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 34,765 Total Ohio 34,513,216 - ------------------------------------------------------------------------------------------------------------------------------------ 46 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 7.0% (4.4% OF TOTAL INVESTMENTS) $ 2,000 Oklahoma Municipal Power Authority, Power Supply System 1/17 at 100.00 AAA $ 1,905,220 Revenue Bonds, Series 2007, 4.500%, 1/01/47 - FGIC Insured 17,510 Pottawatomie County Home Finance Authority, Oklahoma, No Opt. Call AAA 19,764,413 Single Family Mortgage Revenue Bonds, Series 1991A, 8.625%, 7/01/10 (ETM) 11,750 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 11,755,993 Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Mandatory put 12/01/08) (Alternative Minimum Tax) 23,005 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 22,933,453 Bonds, American Airlines Inc., Series 2001B, 5.650%, 12/01/35 (Mandatory put 12/01/08) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 54,265 Total Oklahoma 56,359,079 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.4% (0.2% OF TOTAL INVESTMENTS) 3,000 Deschutes County School District 1, Bend-La Pine, Oregon, 6/11 at 100.00 Aaa 3,202,860 General Obligation Bonds, Series 2001A, 5.500%, 6/15/18 (Pre-refunded 6/15/11) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.8% (2.4% OF TOTAL INVESTMENTS) 3,985 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 4,137,347 Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 2,070 Falls Township Hospital Authority, Pennsylvania, FHA-Insured 2/08 at 100.00 AAA 2,082,524 Revenue Refunding Bonds, Delaware Valley Medical Center, Series 1992, 7.000%, 8/01/22 1,500 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/16 at 100.00 AA+ 1,410,240 Revenue Bonds, Series 96A, 4.650%, 10/01/31 (Alternative Minimum Tax) 2,600 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/14 at 100.00 AAA 2,826,200 Series 2004A, 5.500%, 12/01/31 - AMBAC Insured 7,800 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General 8/13 at 100.00 AAA 7,973,316 Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured Philadelphia School District, Pennsylvania, General Obligation Bonds, Series 2002B: 6,000 5.625%, 8/01/19 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 6,546,300 5,500 5.625%, 8/01/20 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 6,000,775 - ------------------------------------------------------------------------------------------------------------------------------------ 29,455 Total Pennsylvania 30,976,702 - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.3% (1.4% OF TOTAL INVESTMENTS) 5,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 918,500 Revenue Bonds, Series 2005A, 0.000%, 7/01/42 - FGIC Insured 5,000 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 5,211,850 5.000%, 8/01/27 - FSA Insured 1,500 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- 1,545,015 Facilities Revenue Refunding Bonds, Series 2002D, 5.125%, 7/01/20 5,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue 8/17 at 100.00 A1 5,513,600 Bonds, Series 2007A, Lehman Municipal Trust Receipts FC8, 8.252%, 8/01/57 (IF) 1,500 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call BBB- 1,639,305 Series 2001A, 5.500%, 7/01/29 3,840 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 3,839,885 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ 21,840 Total Puerto Rico 18,668,155 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 9.2% (5.8% OF TOTAL INVESTMENTS) 24,725 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- (4) 27,161,401 Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22 (Pre-refunded 12/01/12) Horry County School District, South Carolina, General Obligation Bonds, Series 2001A: 5,840 5.000%, 3/01/20 3/12 at 100.00 Aa1 6,101,807 5,140 5.000%, 3/01/21 3/12 at 100.00 Aa1 5,370,426 47 NQU Nuveen Quality Income Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA (continued) Medical University Hospital Authority, South Carolina, FHA-Insured Mortgage Revenue Bonds, Series 2004A: $ 5,240 5.250%, 8/15/20 - MBIA Insured 8/14 at 100.00 AAA $ 5,553,771 3,000 5.250%, 2/15/24 - MBIA Insured 8/14 at 100.00 AAA 3,159,750 13,615 South Carolina Transportation Infrastructure Bank, Junior Lien 10/11 at 100.00 Aaa 14,420,327 Revenue Bonds, Series 2001B, 5.125%, 10/01/21 (Pre-refunded 10/01/11) - AMBAC Insured 12,600 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 12,958,344 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ 70,160 Total South Carolina 74,725,826 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.3% (0.8% OF TOTAL INVESTMENTS) 3,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 3,062,040 Tennessee, Hospital Revenue Bonds, Baptist Health System of East Tennessee Inc., Series 2002, 6.375%, 4/15/22 7,415 Memphis, Tennessee, General Improvement Bonds, Series 2002, 11/10 at 101.00 A1 (4) 7,810,071 5.000%, 11/01/20 (Pre-refunded 11/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 10,415 Total Tennessee 10,872,111 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 18.1% (11.4% OF TOTAL INVESTMENTS) 535 Alamo Community College District, Bexar County, Texas, 11/11 at 100.00 AAA 570,085 Combined Fee Revenue Refunding Bonds, Series 2001, 5.375%, 11/01/16 - FSA Insured 465 Alamo Community College District, Bexar County, Texas, 11/11 at 100.00 Aaa 497,373 Combined Fee Revenue Refunding Bonds, Series 2001, 5.375%, 11/01/16 (Pre-refunded 11/01/11) - FSA Insured 6,500 Bell County Health Facilities Development Corporation, Texas, 11/08 at 101.00 AAA 6,679,985 Retirement Facility Revenue Bonds, Buckner Retirement Services Inc. Obligated Group, Series 1998, 5.250%, 11/15/19 (Pre-refunded 11/15/08) 11,255 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Caa1 11,121,741 Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative Minimum Tax) 5,500 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 5,580,685 Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC Insured 5,000 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 5,249,500 Refunding and Improvement Bonds, Series 2001A, 5.625%, 11/01/21 - FGIC Insured (Alternative Minimum Tax) 2,500 Harris County Health Facilities Development Corporation, Texas, 11/13 at 100.00 AAA 2,559,425 Thermal Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/30 - MBIA Insured 2,700 Harris County-Houston Sports Authority, Texas, Senior Lien 11/11 at 100.00 AAA 2,822,634 Revenue Bonds, Series 2001G, 5.250%, 11/15/30 - MBIA Insured 22,500 Houston, Texas, Junior Lien Water and Sewerage System 12/10 at 100.00 AAA 23,684,399 Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30 (Pre-refunded 12/01/10) - FGIC Insured 6,000 Leander Independent School District, Williamson and Travis 8/14 at 33.33 AAA 1,419,660 Counties, Texas, General Obligation Bonds, Series 2006, 0.000%, 8/15/34 Lubbock Health Facilities Development Corporation, Texas, Revenue Bonds, St. Joseph Health System, Series 1998: 4,900 5.250%, 7/01/15 7/08 at 101.00 AA- 4,996,481 8,495 5.250%, 7/01/16 7/08 at 101.00 AA- 8,646,126 17,655 Matagorda County Navigation District 1, Texas, Revenue 11/08 at 102.00 AAA 18,176,529 Refunding Bonds, Houston Industries Inc., Series 1998B, 5.150%, 11/01/29 - MBIA Insured 7,650 Port of Corpus Christi Authority, Nueces County, Texas, Revenue 11/07 at 100.00 BBB 7,665,071 Refunding Bonds, Union Pacific Corporation, Series 1992, 5.350%, 11/01/10 2,000 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 AA 2,124,020 System Revenue Refunding Bonds, Series 2002A, 5.750%, 10/01/21 - RAAI Insured 14,680 San Antonio Independent School District, Bexar County, Texas, 8/09 at 100.00 AAA 15,279,091 General Obligation Bonds, Series 1999, 5.800%, 8/15/29 (Pre-refunded 8/15/09) 48 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 11,300 San Antonio, Texas, Electric and Gas System Revenue Refunding No Opt. Call AAA $ 12,104,447 Bonds, New Series 1992, 5.000%, 2/01/17 (ETM) 3,750 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 3,936,038 Texas, Limited Tax Schoolhouse and Refunding Bonds, Series 2001, 5.125%, 2/01/23 (Pre-refunded 2/01/11) 2,920 Tarrant County Cultural and Education Facilities Financing 11/17 at 100.00 AA- 2,824,078 Corporation, Texas, Revenue Bonds, Tarrant County Health Resources, Series 2007B, Residuals 1831, 7.506%, 11/15/47 (IF) White Settlement Independent School District, Tarrant County, Texas, General Obligation Bonds, Series 2006: 9,110 0.000%, 8/15/38 8/15 at 30.30 AAA 1,851,699 9,110 0.000%, 8/15/39 8/15 at 28.63 AAA 1,751,124 6,610 0.000%, 8/15/42 8/15 at 24.42 AAA 1,082,189 7,110 0.000%, 8/15/43 8/15 at 23.11 AAA 1,100,984 5,000 Wichita Falls, Wichita County, Texas, Priority Lien Water and 8/11 at 100.00 AAA 5,262,050 Sewerage System Revenue Bonds, Series 2001, 5.000%, 8/01/22 (Pre-refunded 8/01/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 173,245 Total Texas 146,985,414 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.6% (1.0% OF TOTAL INVESTMENTS) 5,800 Carbon County, Utah, Solid Waste Disposal Revenue Refunding 2/08 at 100.00 BB- 5,841,296 Bonds, Laidlaw/ECDC Project, Guaranteed by Allied Waste Industries, Series 1995, 7.500%, 2/01/10 (Alternative Minimum Tax) 7,155 Utah Associated Municipal Power Systems, Revenue Bonds, 4/13 at 100.00 AAA 7,432,328 Payson Power Project, Series 2003A, 5.000%, 4/01/25 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 12,955 Total Utah 13,273,624 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 2.1% (1.3% OF TOTAL INVESTMENTS) 4,000 Norfolk Airport Authority, Virginia, Airport Revenue Refunding 7/11 at 100.00 AAA 4,038,960 Bonds, Series 2001B, 5.125%, 7/01/31 - FGIC Insured (Alternative Minimum Tax) 11,040 Suffolk Redevelopment and Housing Authority, Virginia, No Opt. Call Aaa 11,490,322 FNMA Multifamily Housing Revenue Refunding Bonds, Windsor at Potomac Vista L.P. Project, Series 2001, 4.850%, 7/01/31 (Mandatory put 7/01/11) 665 Virginia Housing Development Authority, Rental Housing Bonds, 5/09 at 101.00 AA+ 677,588 Series 1999F, 5.000%, 5/01/15 (Alternative Minimum Tax) Virginia Resources Authority, Water System Revenue Refunding Bonds, Series 2002: 500 5.000%, 4/01/18 4/12 at 102.00 AA 530,510 500 5.000%, 4/01/19 4/12 at 102.00 AA 529,045 - ------------------------------------------------------------------------------------------------------------------------------------ 16,705 Total Virginia 17,266,425 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 10.4% (6.5% OF TOTAL INVESTMENTS) 6,750 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 7,182,810 Bonds, Columbia Generating Station - Nuclear Project 2, Series 2002B, 5.350%, 7/01/18 - FSA Insured 2,500 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 2,709,875 Bonds, Columbia Generating Station - Nuclear Project 2, Series 2002C, 5.750%, 7/01/17 - MBIA Insured 6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,197,768 5.625%, 2/01/24 - MBIA Insured (Alternative Minimum Tax) 13,400 Seattle, Washington, Municipal Light and Power Revenue Bonds, 12/10 at 100.00 Aa3 13,934,660 Series 2000, 5.400%, 12/01/25 9,440 Tacoma, Washington, Electric System Revenue Refunding Bonds, 1/11 at 101.00 AAA 10,156,968 Series 2001A, 5.750%, 1/01/18 (Pre-refunded 1/01/11) - FSA Insured 5,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/16 at 100.00 AAA 4,894,250 Providence Health Care Services, Series 2006A, 4.625%, 10/01/34 - FGIC Insured 49 NQU Nuveen Quality Income Municipal Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 3,290 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB $ 3,453,381 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 18,145 Washington, General Obligation Bonds, Series 2001-02A, 7/11 at 100.00 AAA 18,769,732 5.000%, 7/01/23 - FSA Insured Washington, Motor Vehicle Fuel Tax General Obligation Bonds, Series 2002C: 7,000 5.000%, 1/01/21 - FSA Insured 1/12 at 100.00 AAA 7,302,680 7,960 5.000%, 1/01/22 - FSA Insured 1/12 at 100.00 AAA 8,259,216 - ------------------------------------------------------------------------------------------------------------------------------------ 80,435 Total Washington 83,861,340 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 1.4% (1.0% OF TOTAL INVESTMENTS) 180 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 186,147 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 7,545 La Crosse, Wisconsin, Pollution Control Revenue Refunding 12/08 at 102.00 AAA 7,835,483 Bonds, Dairyland Power Cooperative, Series 1997A, 5.450%, 9/01/14 - AMBAC Insured 3,000 Wisconsin Health and Educational Facilities Authority, Revenue 5/14 at 100.00 BBB+ 3,087,539 Bonds, Fort Healthcare Inc., Series 2004, 5.750%, 5/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ 10,725 Total Wisconsin 11,109,169 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,418,570 Total Investments (cost $1,225,967,368) - 159.5% 1,292,372,725 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (6.0)% (48,875,000) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.3% 18,588,283 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (55.8)% (452,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 810,086,008 ====================================================================================================================
The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the Portfolio of Investments with a 0.000% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 50 NPF Nuveen Premier Municipal Income Fund, Inc. Portfolio of INVESTMENTS October 31, 2007
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.3% (0.7% OF TOTAL INVESTMENTS) $ 1,000 Alabama Special Care Facilities Financing Authority, Revenue 11/16 at 100.00 AA $ 1,004,380 Bonds, Ascension Health, Series 2006C-2, 5.000%, 11/15/39 Birmingham Special Care Facilities Financing Authority, Alabama, Revenue Bonds, Baptist Health System Inc., Series 2005A: 1,200 5.250%, 11/15/20 11/15 at 100.00 Baa1 1,230,408 400 5.000%, 11/15/30 11/15 at 100.00 Baa1 389,584 1,000 Montgomery BMC Special Care Facilities Financing Authority, 11/14 at 100.00 A3 (4) 1,094,290 Alabama, Revenue Bonds, Baptist Medical Center, Series 2004C, 5.250%, 11/15/29 (Pre-refunded 11/15/14) - ------------------------------------------------------------------------------------------------------------------------------------ 3,600 Total Alabama 3,718,662 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 1.0% (0.6% OF TOTAL INVESTMENTS) 2,000 Alaska Housing Finance Corporation, General Mortgage Revenue 6/09 at 101.00 AAA 2,056,320 Bonds, Series 1999A, 6.000%, 6/01/49 - MBIA Insured 1,000 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/14 at 100.00 Baa3 850,970 Settlement Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46 - ------------------------------------------------------------------------------------------------------------------------------------ 3,000 Total Alaska 2,907,290 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 6.9% (4.1% OF TOTAL INVESTMENTS) Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health Network, Series 2005B: 100 5.250%, 12/01/24 12/15 at 100.00 BBB 101,475 135 5.250%, 12/01/25 12/15 at 100.00 BBB 136,723 7,000 Phoenix, Arizona, Civic Improvement Revenue Bonds, Civic Plaza, No Opt. Call AAA 5,945,380 Series 2005B, 0.000%, 7/01/39 - FGIC Insured 7,500 Salt River Project Agricultural Improvement and Power District, 1/13 at 100.00 Aa1 7,787,625 Arizona, Electric System Revenue Bonds, Series 2002B, 5.000%, 1/01/25 6,000 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 Aa1 6,419,280 Arizona, Electric System Revenue Refunding Bonds, Series 2002A, 5.250%, 1/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 20,735 Total Arizona 20,390,483 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.7% (1.0% OF TOTAL INVESTMENTS) 4,655 Arkansas Development Finance Authority, State Facility Revenue 11/15 at 100.00 AAA 4,840,036 Bonds, Department of Correction Special Needs Unit Project, Series 2005B, 5.000%, 11/01/25 - FSA Insured 17 Stuttgart Public Facilities Board, Arkansas, Single Family 3/08 at 100.00 Aaa 17,535 Mortgage Revenue Refunding Bonds, Series 1993A, 7.900%, 9/01/11 - ------------------------------------------------------------------------------------------------------------------------------------ 4,672 Total Arkansas 4,857,571 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 22.3% (13.2% OF TOTAL INVESTMENTS) 3,335 Anaheim Public Finance Authority, California, Public Improvement 9/17 at 100.00 AAA 2,736,368 Project Lease Revenue Bonds, UBS Residual Series 07 1011-1013, 5.869%, 3/01/37 - FGIC Insured (IF) 5,690 California Department of Veterans Affairs, Home Purchase 6/12 at 101.00 AAA 6,014,102 Revenue Bonds, Series 2002A, 5.300%, 12/01/21 - AMBAC Insured 1,800 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 AA+ 1,827,828 University of Southern California, Series 2005, 4.750%, 10/01/28 51 NPF Nuveen Premier Municipal Income Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 1,975 California Health Facilities Financing Authority, Revenue Bonds, No Opt. Call A $ 2,062,572 Catholic Healthcare West, Series 2004I, 4.950%, 7/01/26 (Mandatory put 7/01/14) 2,500 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 2,530,475 Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/27 8,000 California Infrastructure Economic Development Bank, First Lien No Opt. Call AAA 8,721,280 Revenue Bonds, San Francisco Bay Area Toll Bridge, Series 2003A, 5.000%, 7/01/33 (Pre-refunded 1/01/28) - AMBAC Insured (ETM) (UB) 500 California Statewide Community Development Authority, Revenue 7/15 at 100.00 BBB+ 475,960 Bonds, Daughters of Charity Health System, Series 2005A, 5.000%, 7/01/39 1,600 California Statewide Community Development Authority, 8/16 at 100.00 A+ 1,636,480 Revenue Bonds, Kaiser Permanente System, Series 2001C, 5.250%, 8/01/31 California, General Obligation Bonds, Series 2004: 4,000 5.000%, 2/01/23 2/14 at 100.00 A+ 4,170,680 4,900 5.000%, 6/01/23 - AMBAC Insured 12/14 at 100.00 AAA 5,127,164 1,000 Chula Vista, California, Industrial Development Revenue Bonds, 6/14 at 102.00 A2 1,036,510 San Diego Gas and Electric Company, Series 1996A, 5.300%, 7/01/21 28,000 Foothill/Eastern Transportation Corridor Agency, California, No Opt. Call AAA 19,318,595 Toll Road Revenue Bonds, Series 1995A, 0.000%, 1/01/17 (ETM) 3,500 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 3,078,880 Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.125%, 6/01/47 450 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 521,226 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 (Pre-refunded 6/01/13) 6,005 Los Angeles Unified School District, California, General Obligation 7/15 at 100.00 AAA 6,320,803 Bonds, Series 2005E, 5.000%, 7/01/22 - AMBAC Insured San Diego County, California, Certificates of Participation, Burnham Institute, Series 2006: 100 5.000%, 9/01/21 9/15 at 102.00 Baa3 100,363 110 5.000%, 9/01/23 9/15 at 102.00 Baa3 109,694 - ------------------------------------------------------------------------------------------------------------------------------------ 73,465 Total California 65,788,980 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.8% (4.1% OF TOTAL INVESTMENTS) 1,000 Colorado Health Facilities Authority, Revenue Bonds, 6/16 at 100.00 A- 990,190 Evangelical Lutheran Good Samaritan Society, Series 2005, 5.000%, 6/01/29 1,150 Colorado Health Facilities Authority, Revenue Bonds, Parkview 9/14 at 100.00 A3 1,157,441 Medical Center, Series 2004, 5.000%, 9/01/25 400 Colorado Health Facilities Authority, Revenue Bonds, Poudre 3/15 at 100.00 BBB+ 393,824 Valley Health Care, Series 2005F, 5.000%, 3/01/25 1,000 Colorado Health Facilities Authority, Revenue Bonds, Poudre 12/09 at 101.00 Aaa 1,054,820 Valley Healthcare Inc., Series 1999A, 5.750%, 12/01/23 (Pre-refunded 12/01/09) - FSA Insured 750 Colorado Health Facilities Authority, Revenue Bonds, Vail Valley 1/15 at 100.00 BBB+ 758,767 Medical Center, Series 2004, 5.000%, 1/15/17 Denver City and County, Colorado, Airport Revenue Bonds, Series 2006: 3,680 5.000%, 11/15/23 - FGIC Insured (IF) 11/16 at 100.00 AAA 4,184,712 2,270 5.000%, 11/15/24 - FGIC Insured (IF) 11/16 at 100.00 AAA 2,581,331 8,930 5.000%, 11/15/25 - FGIC Insured (UB) 11/16 at 100.00 AAA 9,329,260 - ------------------------------------------------------------------------------------------------------------------------------------ 19,180 Total Colorado 20,450,345 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.7% (0.4% OF TOTAL INVESTMENTS) 2,000 Connecticut Development Authority, Pollution Control Revenue 10/08 at 102.00 Baa1 2,055,460 Refunding Bonds, Connecticut Light and Power Company, Series 1993A, 5.850%, 9/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ 52 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 3.2% (1.9% OF TOTAL INVESTMENTS) $ 4,000 Dade County, Florida, Aviation Revenue Bonds, Series 1996A, 4/08 at 101.00 AAA $ 4,045,040 5.750%, 10/01/18 - MBIA Insured (Alternative Minimum Tax) 1,700 Hillsborough County Industrial Development Authority, Florida, 4/10 at 101.00 N/R 1,781,821 Exempt Facilities Remarketed Revenue Bonds, National Gypsum Company, Apollo Beach Project, Series 2000B, 7.125%, 4/01/30 (Alternative Minimum Tax) 2,500 Hillsborough County Industrial Development Authority, Florida, 10/12 at 100.00 Baa2 2,573,750 Pollution Control Revenue Bonds, Tampa Electric Company Project, Series 2002, 5.100%, 10/01/13 1,000 South Miami Health Facilities Authority, Florida, Hospital 8/17 at 100.00 AA- 994,210 Revenue, Baptist Health System Obligation Group, Series 2007, 5.000%, 8/15/42 - ------------------------------------------------------------------------------------------------------------------------------------ 9,200 Total Florida 9,394,821 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 4.3% (2.5% OF TOTAL INVESTMENTS) 8,000 George L. Smith II World Congress Center Authority, Atlanta, 7/10 at 101.00 AAA 8,331,920 Georgia, Revenue Refunding Bonds, Domed Stadium Project, Series 2000, 5.500%, 7/01/20 - MBIA Insured (Alternative Minimum Tax) 4,105 Municipal Electric Authority of Georgia, Combustion Turbine 11/13 at 100.00 AAA 4,394,361 Revenue Bonds, Series 2003A, 5.125%, 11/01/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 12,105 Total Georgia 12,726,281 - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,250 Hawaii Department of Budget and Finance, Special Purpose 1/09 at 101.00 AAA 2,325,960 Revenue Bonds, Hawaiian Electric Company Inc., Series 1999D, 6.150%, 1/01/20 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.2% (0.1% OF TOTAL INVESTMENTS) 95 Idaho Housing and Finance Association, Single Family Mortgage 1/08 at 101.00 Aa1 97,115 Bonds, Series 1996E, 6.350%, 7/01/14 (Alternative Minimum Tax) 500 Madison County, Idaho, Hospital Revenue Certificates of 9/16 at 100.00 BBB- 496,710 Participation, Madison Memorial Hospital, Series 2006, 5.250%, 9/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ 595 Total Idaho 593,825 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 13.4% (7.9% OF TOTAL INVESTMENTS) 8,300 Chicago Greater Metropolitan Area Sanitary District, Illinois, 12/16 at 100.00 AAA 9,082,109 General Obligation Bonds, Series 2006, 5.000%, 12/01/35 (UB) 725 Chicago Public Building Commission, Illinois, General Obligation No Opt. Call AAA 804,786 Lease Certificates, Chicago Board of Education, Series 1990B, 7.000%, 1/01/15 - MBIA Insured (ETM) 8,670 Chicago, Illinois, General Obligation Bonds, City Colleges, No Opt. Call AAA 4,136,630 Series 1999, 0.000%, 1/01/24 - FGIC Insured 8,500 Chicago, Illinois, Senior Lien Water Revenue Bonds, No Opt. Call AAA 10,019,459 Series 2001, 5.750%, 11/01/30 - AMBAC Insured (5) 200 Illinois Finance Authority, Revenue Bonds, Proctor Hospital, 1/16 at 100.00 BBB- 195,962 Series 2006, 5.125%, 1/01/25 1,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 1,007,750 Medical Center, Series 2002, 5.500%, 5/15/32 1,500 Illinois, General Obligation Bonds, Illinois FIRST Program, 2/12 at 100.00 AAA 1,600,935 Series 2002, 5.500%, 2/01/17 - FGIC Insured Lombard Public Facilities Corporation, Illinois, Second Tier Conference Center and Hotel Revenue Bonds, Series 2005B: 850 5.250%, 1/01/25 1/16 at 100.00 AA- 875,245 1,750 5.250%, 1/01/30 1/16 at 100.00 AA- 1,781,850 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1996A: 10,575 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 5,087,844 10,775 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 4,920,943 - ------------------------------------------------------------------------------------------------------------------------------------ 52,845 Total Illinois 39,513,513 - ------------------------------------------------------------------------------------------------------------------------------------ 53 NPF Nuveen Premier Municipal Income Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.3% (1.9% OF TOTAL INVESTMENTS) $ 2,275 Anderson School Building Corporation, Madison County, Indiana, 1/14 at 100.00 AAA $ 2,511,350 First Mortgage Bonds, Series 2003, 5.500%, 7/15/23 (Pre-refunded 1/15/14) - FSA Insured 6,180 Crown Point Multi-School Building Corporation, Indiana, No Opt. Call AAA 3,076,651 First Mortgage Bonds, Crown Point Community School Corporation, Series 2000, 0.000%, 1/15/23 - MBIA Insured 1,250 Portage, Indiana, Revenue Bonds, Series 2006, 5.000%, 7/15/23 7/16 at 100.00 BBB+ 1,243,850 1,000 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/15 at 100.00 BBB 1,001,420 Madison Center Inc., Series 2005, 5.250%, 2/15/28 1,760 St. Joseph County PHM Elementary/Middle School Building No Opt. Call A 1,791,715 Corporation, Indiana, First Mortgage Bonds, Series 1994, 6.300%, 1/15/09 - ------------------------------------------------------------------------------------------------------------------------------------ 12,465 Total Indiana 9,624,986 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.3% (0.7% OF TOTAL INVESTMENTS) 4,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB 3,712,320 Revenue Bonds, Series 2005C, 5.500%, 6/01/42 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.2% (0.1% OF TOTAL INVESTMENTS) 510 Louisville and Jefferson County Metropolitan Government, 10/16 at 100.00 N/R 498,347 Kentucky, Industrial Building Revenue Bonds, Sisters of Mercy of the Americas, Series 2006, 5.000%, 10/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 6.0% (3.6% OF TOTAL INVESTMENTS) 1,310 Louisiana Housing Finance Agency, GNMA Collateralized 3/08 at 101.00 AAA 1,325,641 Mortgage Revenue Bonds, St. Dominic Assisted Care Facility, Series 1995, 6.850%, 9/01/25 Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2006: 825 4.750%, 5/01/39 - FSA Insured (UB) 5/16 at 100.00 AAA 826,436 8,880 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 AAA 8,531,194 5 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 4,411 Residuals 660-3, 5.939%, 5/01/41 - FGIC Insured (IF) 1,500 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner 5/17 at 100.00 A3 1,511,925 Clinic Foundation Project, Series 2007A, 5.500%, 5/15/47 3,950 Morehouse Parish, Louisiana, Pollution Control Revenue Bonds, No Opt. Call BBB 4,198,139 International Paper Company, Series 2002A, 5.700%, 4/01/14 1,375 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 1,375,495 Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ 17,845 Total Louisiana 17,773,241 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.4% (0.8% OF TOTAL INVESTMENTS) 4,035 Maine State Housing Authority, Single Family Mortgage Purchase 5/13 at 100.00 AA+ 4,098,471 Bonds, Series 2004A-2, 5.000%, 11/15/21 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.2% (0.7% OF TOTAL INVESTMENTS) 2,000 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 2,058,800 Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24 1,550 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 1,553,736 Revenue Bonds, Western Maryland Health, Series 2006A, 4.750%, 7/01/36 - MBIA Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 3,550 Total Maryland 3,612,536 - ------------------------------------------------------------------------------------------------------------------------------------ 54 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.5% (0.9% OF TOTAL INVESTMENTS) $ 1,000 Massachusetts Development Finance Authority, Revenue Bonds, 10/14 at 100.00 BBB $ 1,035,830 Hampshire College, Series 2004, 5.625%, 10/01/24 3,000 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 AAA 3,260,160 Series 2004, 5.250%, 1/01/24 (Pre-refunded 1/01/14) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 4,000 Total Massachusetts 4,295,990 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 4.1% (2.4% OF TOTAL INVESTMENTS) 2,925 Detroit, Michigan, General Obligation Bonds, Series 2003A, 4/13 at 100.00 AAA 3,099,915 5.250%, 4/01/17 - XLCA Insured 4,600 Detroit, Michigan, Sewer Disposal System Revenue Bonds, 7/16 at 100.00 AAA 4,516,694 Second Lien, Series 2006B, 4.625%, 7/01/34 - FGIC Insured 1,000 Michigan State Hospital Finance Authority, Revenue Bonds, 12/16 at 100.00 Aa2 1,013,440 Trinity Health Care Group, Series 2006A, 5.000%, 12/01/31 170 Monroe County Hospital Finance Authority, Michigan, 6/16 at 100.00 BBB- 168,207 Mercy Memorial Hospital Corporation Revenue Bonds, Series 2006, 5.500%, 6/01/35 3,025 Wayne County, Michigan, Airport Revenue Refunding Bonds, 12/12 at 100.00 AAA 3,233,876 Detroit Metropolitan Airport, Series 2002C, 5.375%, 12/01/19 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 11,720 Total Michigan 12,032,132 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 5.1% (3.0% OF TOTAL INVESTMENTS) 4,350 Cohasset, Minnesota, Pollution Control Revenue Bonds, 7/14 at 100.00 A- 4,372,272 Allete Inc., Series 2004, 4.950%, 7/01/22 1,000 Duluth Economic Development Authority, Minnesota, Healthcare 2/14 at 100.00 A- 1,029,020 Facilities Revenue Bonds, Benedictine Health System - St. Mary's Duluth Clinic, Series 2004, 5.250%, 2/15/21 2,290 Minneapolis-St. Paul Housing and Redevelopment Authority, 12/13 at 100.00 Baa1 2,417,942 Minnesota, Revenue Bonds, HealthPartners Inc., Series 2003, 6.000%, 12/01/20 Minnesota Higher Education Facilities Authority, Revenue Bonds, University of St. Thomas, Series 2004-5Y: 530 5.250%, 10/01/19 10/14 at 100.00 A2 557,560 1,500 5.250%, 10/01/34 10/14 at 100.00 A2 1,534,830 665 Minnesota Higher Education Facilities Authority, Revenue Bonds, 4/16 at 100.00 A2 686,174 University of St. Thomas, Series 2006-6I, 5.000%, 4/01/23 1,000 Minnesota Municipal Power Agency, Electric Revenue Bonds, 10/14 at 100.00 A3 1,053,530 Series 2004A, 5.250%, 10/01/19 3,000 St. Paul Port Authority, Minnesota, Lease Revenue Bonds, 12/13 at 100.00 AA+ 3,221,550 Office Building at Cedar Street, Series 2003, 5.250%, 12/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ 14,335 Total Minnesota 14,872,878 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,325 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 N/R 2,356,388 Revenue Bonds, Baptist Memorial Healthcare, Series 2004B-1, 5.000%, 9/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.0% (0.6% OF TOTAL INVESTMENTS) 100 Hannibal Industrial Development Authority, Missouri, Health 3/16 at 100.00 BBB+ 99,336 Facilities Revenue Bonds, Hannibal Regional Hospital, Series 2006, 5.000%, 3/01/22 2,880 Joplin Industrial Development Authority, Missouri, Health 2/15 at 102.00 BBB+ 2,980,310 Facilities Revenue Bonds, Freeman Health System, Series 2004, 5.500%, 2/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ 2,980 Total Missouri 3,079,646 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 2.9% (1.7% OF TOTAL INVESTMENTS) 1,580 Douglas County Hospital Authority 2, Nebraska, Health Facilities No Opt. Call A1 1,655,445 Revenue Bonds, Nebraska Medical Center, Series 2003, 5.000%, 11/15/16 1,760 Grand Island, Nebraska, Electric System Revenue Bonds, 3/08 at 100.00 AAA 1,872,094 Series 1977, 6.100%, 9/01/12 (ETM) 55 NPF Nuveen Premier Municipal Income Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA (continued) $ 2,350 NebHelp Inc., Nebraska, Senior Subordinate Bonds, Student No Opt. Call Aaa $ 2,510,482 Loan Program, Series 1993A-5B, 6.250%, 6/01/18 - MBIA Insured (Alternative Minimum Tax) 2,300 Omaha Public Power District, Nebraska, Separate Electric 2/17 at 100.00 AAA 2,369,736 System Revenue Bonds, Nebraska City 2, Series 2006A, 5.000%, 2/01/49 - AMBAC Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 7,990 Total Nebraska 8,407,757 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 1.8% (1.1% OF TOTAL INVESTMENTS) 5,000 New Hampshire Housing Finance Authority, FHLMC Multifamily 7/10 at 101.00 Aaa 5,158,300 Housing Remarketed Revenue Bonds, Countryside LP, Series 1994, 6.100%, 7/01/24 (Alternative Minimum Tax) 190 New Hampshire Municipal Bond Bank, Revenue Bonds, No Opt. Call N/R 193,333 Coe-Brown Northwood Academy, Series 1994, 7.250%, 5/01/09 - ------------------------------------------------------------------------------------------------------------------------------------ 5,190 Total New Hampshire 5,351,633 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 6.0% (3.5% OF TOTAL INVESTMENTS) 1,000 New Jersey Economic Development Authority, School Facilities 9/15 at 100.00 AA- 1,064,261 Construction Bonds, Series 2005P, 5.250%, 9/01/24 New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2006C: 25,000 0.000%, 12/15/35 - AMBAC Insured (UB) No Opt. Call AAA 6,514,000 10,000 0.000%, 12/15/36 - AMBAC Insured (UB) No Opt. Call AAA 2,484,000 3,000 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 3,294,874 System Bonds, Series 2003C, 5.500%, 6/15/24 (Pre-refunded 6/15/13) 1,500 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 1,580,355 5.000%, 1/01/19 - FGIC Insured 2,500 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 1/15 at 100.00 AAA 2,610,725 5.000%, 1/01/25 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 43,000 Total New Jersey 17,548,215 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 22.3% (13.1% OF TOTAL INVESTMENTS) 10,000 Dormitory Authority of the State of New York, Revenue Bonds, 5/10 at 101.00 AAA 10,602,099 State University Educational Facilities Revenue Bonds, 1999 Resolution, Series 2000B, 5.500%, 5/15/30 (Pre-refunded 5/15/10) - FSA Insured 1,500 Dormitory Authority of the State of New York, State and Local 7/14 at 100.00 AA- 1,594,246 Appropriation Lease Bonds, Upstate Community Colleges, Series 2004B, 5.250%, 7/01/19 10 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 8,643 Bonds, Driver Trust 1649, 2006, 6.058%, 2/15/47 - MBIA Insured (IF) 2,180 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 2,081,399 Bonds, Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB) 7,500 Long Island Power Authority, New York, Electric System 6/16 at 100.00 AAA 7,870,500 Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - XLCA Insured (UB) 3,200 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 A 3,310,144 Revenue Bonds, Series 2005F, 5.000%, 11/15/30 5,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 5,299,950 Revenue Refunding Bonds, Series 2002A, 5.125%, 11/15/21 - FGIC Insured 4,000 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 4,191,280 Water and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%, 6/15/23 - AMBAC Insured 4,265 New York City, New York, General Obligation Bonds, 10/13 at 100.00 AA 4,486,098 Fiscal Series 2003D, 5.250%, 10/15/22 1,200 New York City, New York, General Obligation Bonds, 8/14 at 100.00 AA 1,296,876 Fiscal Series 2004B, 5.250%, 8/01/15 4,000 New York City, New York, General Obligation Bonds, 8/14 at 100.00 AA 4,246,800 Fiscal Series 2004C, 5.250%, 8/15/20 3,650 New York Convention Center Development Corporation, 11/15 at 100.00 AAA 3,734,571 Hotel Unit Fee Revenue Bonds, Series 2005, 5.000%, 11/15/44 - AMBAC Insured (UB) 3,250 New York State Municipal Bond Bank Agency, Special 6/13 at 100.00 A+ 3,439,703 School Purpose Revenue Bonds, Series 2003C, 5.250%, 6/01/22 56 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) New York State Thruway Authority, General Revenue Bonds, Series 2005G: $ 6,460 5.000%, 1/01/25 - FSA Insured (UB) 7/15 at 100.00 AAA $ 6,758,775 2,580 5.000%, 1/01/26 - FSA Insured (UB) 7/15 at 100.00 AAA 2,697,596 1,850 New York State Urban Development Corporation, Service 3/15 at 100.00 AAA 1,936,339 Contract Revenue Bonds, Series 2005B, 5.000%, 3/15/24 - FSA Insured 1,000 New York State Urban Development Corporation, Subordinate 7/14 at 100.00 A 1,047,620 Lien Corporate Purpose Bonds, Series 2004A, 5.125%, 1/01/22 1,000 Rensselaer County Industrial Development Agency, New York, 3/16 at 100.00 A 1,041,780 Civic Facility Revenue Bonds, Rensselaer Polytechnic Institute, Series 2006, 5.000%, 3/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ 62,645 Total New York 65,644,419 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 4.1% (2.4% OF TOTAL INVESTMENTS) 10,300 North Carolina Eastern Municipal Power Agency, Power System No Opt. Call AAA 12,112,593 Revenue Refunding Bonds, Series 1993B, 6.000%, 1/01/22 - CAPMAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.9% (1.7% OF TOTAL INVESTMENTS) Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2: 105 5.125%, 6/01/24 6/17 at 100.00 BBB 101,357 1,050 5.875%, 6/01/30 6/17 at 100.00 BBB 1,037,012 1,055 5.750%, 6/01/34 6/17 at 100.00 BBB 1,018,075 2,355 5.875%, 6/01/47 6/17 at 100.00 BBB 2,286,305 4,000 Ohio, Solid Waste Revenue Bonds, Republic Services Inc., No Opt. Call BBB+ 3,919,560 Series 2004, 4.250%, 4/01/33 (Mandatory put 4/01/14) (Alternative Minimum Tax) 250 Port of Greater Cincinnati Development Authority, Ohio, Economic 10/16 at 100.00 N/R 250,793 Development Revenue Bonds, Sisters of Mercy of the Americas, Series 2006, 5.000%, 10/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ 8,815 Total Ohio 8,613,102 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 2.5% (1.4% OF TOTAL INVESTMENTS) Norman Regional Hospital Authority, Oklahoma, Hospital Revenue Bonds, Series 2005: 500 5.375%, 9/01/29 9/16 at 100.00 BBB 502,055 450 5.375%, 9/01/36 9/16 at 100.00 BBB 448,002 Oklahoma Development Finance Authority, Revenue Bonds, Saint John Health System, Series 2007: 2,900 5.000%, 2/15/37 2/17 at 100.00 AA- 2,915,834 1,305 5.000%, 2/15/42 2/17 at 100.00 AA- 1,306,344 2,035 Tulsa County Industrial Authority, Oklahoma, Health Care 12/16 at 100.00 AA 2,045,989 Revenue Bonds, Saint Francis Health System, Series 2006, 5.000%, 12/15/36 - ------------------------------------------------------------------------------------------------------------------------------------ 7,190 Total Oklahoma 7,218,224 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 1.3% (0.8% OF TOTAL INVESTMENTS) Oregon, General Obligation Bonds, State Board of Higher Education, Series 2004A: 1,795 5.000%, 8/01/21 8/14 at 100.00 AA 1,893,958 1,990 5.000%, 8/01/23 8/14 at 100.00 AA 2,076,068 - ------------------------------------------------------------------------------------------------------------------------------------ 3,785 Total Oregon 3,970,026 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 1.2% (0.7% OF TOTAL INVESTMENTS) 2,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 2,100,940 Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured 1,385 Falls Township Hospital Authority, Pennsylvania, FHA-Insured 2/08 at 100.00 AAA 1,393,379 Revenue Refunding Bonds, Delaware Valley Medical Center, Series 1992, 7.000%, 8/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ 3,385 Total Pennsylvania 3,494,319 - ------------------------------------------------------------------------------------------------------------------------------------ 57 NPF Nuveen Premier Municipal Income Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 2.7% (1.6% OF TOTAL INVESTMENTS) $ 7,655 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB $ 7,864,824 Tobacco Settlement Asset-Backed Bonds, Series 2002A, 6.000%, 6/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 8.0% (4.7% OF TOTAL INVESTMENTS) 2,500 Berkeley County School District, South Carolina, Installment 12/13 at 100.00 A- 2,585,275 Purchase Revenue Bonds, Securing Assets for Education, Series 2003, 5.250%, 12/01/24 4,405 Dorchester County School District 2, South Carolina, Installment 12/14 at 100.00 A 4,565,474 Purchase Revenue Bonds, GROWTH, Series 2004, 5.250%, 12/01/23 3,340 Greenville County School District, South Carolina, Installment 12/13 at 100.00 AA- 3,516,352 Purchase Revenue Bonds, Series 2003, 5.250%, 12/01/19 3,620 Greenville, South Carolina, Hospital Facilities Revenue Refunding 5/13 at 100.00 AAA 3,791,371 Bonds, Series 2003A, 5.250%, 5/01/21 - AMBAC Insured 1,500 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A- 1,547,325 Development Revenue Bonds, Bon Secours Health System Inc., Series 2002A, 5.625%, 11/15/30 South Carolina JOBS Economic Development Authority, Hospital Refunding and Improvement Revenue Bonds, Palmetto Health Alliance, Series 2003C: 4,895 6.375%, 8/01/34 (Pre-refunded 8/01/13) 8/13 at 100.00 BBB+ (4) 5,576,825 605 6.375%, 8/01/34 (Pre-refunded 8/01/13) 8/13 at 100.00 BBB+ (4) 688,260 1,145 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 1,176,980 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%, 5/15/22 - ------------------------------------------------------------------------------------------------------------------------------------ 22,010 Total South Carolina 23,447,862 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH DAKOTA - 0.6% (0.4% OF TOTAL INVESTMENTS) 1,750 South Dakota Health and Educational Facilities Authority, 11/14 at 100.00 AA- 1,826,335 Revenue Bonds, Sioux Valley Hospitals, Series 2004A, 5.500%, 11/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.4% (0.8% OF TOTAL INVESTMENTS) 2,060 Johnson City Health and Educational Facilities Board, 7/23 at 100.00 AAA 2,108,080 Tennessee, Hospital Revenue Refunding and Improvement Bonds, Johnson City Medical Center, Series 1998C, 5.125%, 7/01/25 (Pre-refunded 7/01/23) - MBIA Insured 1,600 Johnson City Health and Educational Facilities Board, 7/16 at 100.00 BBB+ 1,622,432 Tennessee, Revenue Bonds, Mountain States Health Alliance, Series 2006A, 5.500%, 7/01/36 400 Sumner County Health, Educational, and Housing Facilities 11/17 at 100.00 N/R 404,756 Board, Tennessee, Revenue Refunding Bonds, Sumner Regional Health System Inc., Series 2007, 5.500%, 11/01/37 - ------------------------------------------------------------------------------------------------------------------------------------ 4,060 Total Tennessee 4,135,268 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 6.2% (3.7% OF TOTAL INVESTMENTS) 1,075 Brazos River Authority, Texas, Pollution Control Revenue Bonds, 10/13 at 101.00 Caa1 1,106,745 TXU Energy Company LLC Project, Series 2003C, 6.750%, 10/01/38 (Alternative Minimum Tax) 3,000 Houston, Texas, First Lien Combined Utility System Revenue 5/14 at 100.00 AAA 3,177,030 Bonds, Series 2004A, 5.250%, 5/15/25 - MBIA Insured Kerrville Health Facilities Development Corporation, Texas, Revenue Bonds, Sid Peterson Memorial Hospital Project, Series 2005: 400 5.250%, 8/15/21 No Opt. Call BBB- 404,116 500 5.125%, 8/15/26 No Opt. Call BBB- 491,085 2,265 Lower Colorado River Authority, Texas, Contract Revenue 5/13 at 100.00 AAA 2,403,233 Refunding Bonds, Transmission Services Corporation, Series 2003C, 5.250%, 5/15/25 - AMBAC Insured 290 Mansfield Independent School District, Tarrant County, Texas, 2/11 at 100.00 AAA 302,064 General Obligation Bonds, Series 2001, 5.375%, 2/15/26 1,710 Mansfield Independent School District, Tarrant County, Texas, 2/11 at 100.00 Aaa 1,808,975 General Obligation Bonds, Series 2001, 5.375%, 2/15/26 (Pre-refunded 2/15/11) 58 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 1,000 Sabine River Authority, Texas, Pollution Control Revenue Bonds, 11/15 at 100.00 Caa1 $ 902,860 TXU Electric Company, Series 2001C, 5.200%, 5/01/28 1,600 Tarrant County Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 1,606,368 Corporation, Texas, Revenue Bonds, Series 2007A, 5.000%, 2/15/36 Texas Tech University, Financing System Revenue Bonds, 9th Series 2003: 3,525 5.250%, 2/15/18 - AMBAC Insured 8/13 at 100.00 AAA 3,764,559 2,250 5.250%, 2/15/19 - AMBAC Insured 8/13 at 100.00 AAA 2,402,910 - ------------------------------------------------------------------------------------------------------------------------------------ 17,615 Total Texas 18,369,945 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.2% (0.1% OF TOTAL INVESTMENTS) 525 Utah Housing Corporation, Single Family Mortgage Bonds, 7/11 at 100.00 Aaa 531,815 Series 2001D, 5.500%, 1/01/21 (Alternative Minimum Tax) 25 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/08 at 101.00 AA 25,582 Series 1996C, 6.450%, 7/01/14 (Alternative Minimum Tax) 145 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/08 at 101.50 AA 147,290 Series 1997F, 5.750%, 7/01/15 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 695 Total Utah 704,687 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 8.9% (5.2% OF TOTAL INVESTMENTS) 2,500 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 2,709,875 Bonds, Columbia Generating Station - Nuclear Project 2, Series 2002C, 5.750%, 7/01/17 - MBIA Insured 7,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 7,551,180 Bonds, Nuclear Project 1, Series 2003A, 5.500%, 7/01/16 6,160 King County Public Hospital District 2, Washington, Limited 6/11 at 101.00 AAA 6,396,975 Tax General Obligation Bonds, Evergreen Hospital Medical Center, Series 2001A, 5.250%, 12/01/24 - AMBAC Insured 1,000 Skagit County Public Hospital District 1, Washington, Revenue No Opt. Call Baa2 1,047,310 Bonds, Skagit Valley Hospital, Series 2003, 6.000%, 12/01/23 8,045 Washington, General Obligation Refunding Bonds, Series 1992A No Opt. Call Aa1 8,398,095 and 1992AT-6, 6.250%, 2/01/11 - ------------------------------------------------------------------------------------------------------------------------------------ 24,705 Total Washington 26,103,435 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.9% (1.1% OF TOTAL INVESTMENTS) 2,000 West Virginia Water Development Authority, Infrastructure 10/13 at 101.00 AAA 2,220,960 Revenue Bonds, Series 2003A, 5.500%, 10/01/23 (Pre-refunded 10/01/13) - AMBAC Insured 3,150 West Virginia Water Development Authority, Loan Program II 11/13 at 101.00 AAA 3,379,887 Revenue Bonds, Series 2003B, 5.250%, 11/01/23 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,150 Total West Virginia 5,600,847 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 5.9% (3.5% OF TOTAL INVESTMENTS) 5,670 Wisconsin Health and Educational Facilities Authority, 7/11 at 100.00 A- 5,866,012 Revenue Bonds, Agnesian Healthcare Inc., Series 2001, 6.000%, 7/01/30 160 Wisconsin Health and Educational Facilities Authority, Revenue 5/16 at 100.00 BBB 148,392 Bonds, Divine Savior Healthcare, Series 2006, 5.000%, 5/01/32 1,000 Wisconsin Health and Educational Facilities Authority, Revenue 5/14 at 100.00 BBB+ 1,028,130 Bonds, Fort Healthcare Inc., Series 2004, 5.375%, 5/01/18 205 Wisconsin Health and Educational Facilities Authority, Revenue 10/11 at 101.00 AA- 216,117 Bonds, Froedtert and Community Health Obligated Group, Series 2001, 5.375%, 10/01/30 2,145 Wisconsin Health and Educational Facilities Authority, Revenue 10/11 at 101.00 N/R (4) 2,305,189 Bonds, Froedtert and Community Health Obligated Group, Series 2001, 5.375%, 10/01/30 (Pre-refunded 10/01/11) 59 NPF Nuveen Premier Municipal Income Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN (continued) $ 5,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/10 at 101.00 AA $ 5,245,300 Bonds, Marshfield Clinic, Series 1999, 6.250%, 2/15/18 - RAAI Insured 2,500 Wisconsin State, General Obligation Bonds, Series 2006A, 5/16 at 100.00 AAA 2,562,375 4.750%, 5/01/25 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 16,680 Total Wisconsin 17,371,515 - ------------------------------------------------------------------------------------------------------------------------------------ WYOMING - 0.5% (0.3% OF TOTAL INVESTMENTS) 1,350 Sweetwater County, Wyoming, Solid Waste Disposal Revenue 12/15 at 100.00 BBB 1,374,948 Bonds, FMC Corporation, Series 2005, 5.600%, 12/01/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ $ 535,382 Total Investments (cost $481,650,918) - 169.8% 499,840,080 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (16.1)% (47,354,500) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.4% 6,892,246 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (56.1)% (165,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 294,377,826 ====================================================================================================================
FORWARD SWAPS OUTSTANDING AT OCTOBER 31, 2007:
FUND FIXED RATE UNREALIZED NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION) - ------------------------------------------------------------------------------------------------------------------------------------ Morgan Stanley $28,000,000 Receive SIFM 3.690% Quarterly 11/06/07 11/06/17 $(34,042) Morgan Stanley 14,000,000 Receive 3-Month USD-LIBOR 5.262 Semi-Annually 11/15/07 11/15/34 163,801 - ------------------------------------------------------------------------------------------------------------------------------------ $129,759 ==================================================================================================================================== USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate) SIFM-The daily arithmetic average of the weekly SIFM (Securities Industry and Financial Markets) Municipal Swap Index.
The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the Portfolio of Investments with a 0.000% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Portion of investment, with an aggregate market value of $188,602, has been pledged to collateralize the net payment obligations under forward swap contracts. (6) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each forward swap contract. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 60 NMZ Nuveen Municipal High Income Opportunity Fund Portfolio of INVESTMENTS October 31, 2007
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NATIONAL - 2.1% (1.4% OF TOTAL INVESTMENTS) Charter Mac Equity Issuer Trust, Preferred Shares, Series 2004A-4: $ 5,000 6.000%, 12/31/45 (Mandatory put 4/30/19) 10/19 at 100.00 A3 $ 5,434,350 (Alternative Minimum Tax) 1,000 5.750%, 12/31/45 (Mandatory put 4/30/15) 10/15 at 100.00 A3 1,069,970 (Alternative Minimum Tax) 1,000 GMAC Municipal Mortgage Trust, Series B-1, 5.600%, 10/31/39 No Opt. Call Baa1 1,023,640 (Mandatory put 10/31/19) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 7,000 Total National 7,527,960 - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 2.6% (1.7% OF TOTAL INVESTMENTS) 6,200 Baldwin County Eastern Shore Healthcare Authority, Alabama, 4/08 at 102.00 N/R (4) 6,375,026 Hospital Revenue Bonds, Thomas Hospital, Series 1998, 5.750%, 4/01/27 (Pre-refunded 4/01/08) 2,000 Bessemer, Alabama, General Obligation Warrants, Series 2007, 2/17 at 102.00 N/R 1,898,520 6.500%, 2/01/37 1,000 Birmingham Special Care Facilities Financing Authority, Alabama, 11/15 at 100.00 Baa1 973,960 Revenue Bonds, Baptist Health System Inc., Series 2005A, 5.000%, 11/15/30 - ------------------------------------------------------------------------------------------------------------------------------------ 9,200 Total Alabama 9,247,506 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 5.4% (3.6% OF TOTAL INVESTMENTS) 515 Estrella Mountain Ranch Community Facilities District, Goodyear, 7/10 at 102.00 N/R 551,683 Arizona, Special Assessment Lien Bonds, Series 2001A, 7.875%, 7/01/25 2,000 Maricopa County Industrial Development Authority, Arizona, 11/07 at 103.00 N/R 1,996,800 Multifamily Housing Revenue Bonds, Privado Park Apartments Project, Series 2006A, 5.250%, 11/01/41 (Mandatory put 11/01/11) (Alternative Minimum Tax) 6,720 Maricopa County Industrial Development Authority, Arizona, 1/11 at 103.00 BB 6,774,902 Senior Living Facility Revenue Bonds, Christian Care Mesa II Inc., Series 2004A, 6.625%, 1/01/34 (Alternative Minimum Tax) Phoenix Industrial Development Authority, Arizona, Educational Revenue Bonds, Keystone Montessori School, Series 2004A: 275 6.375%, 11/01/13 11/11 at 103.00 N/R 282,010 790 7.250%, 11/01/23 11/11 at 103.00 N/R 839,731 1,715 7.500%, 11/01/33 11/11 at 103.00 N/R 1,820,335 1,000 Pima County Industrial Development Authority, Arizona, 7/16 at 100.00 N/R 956,030 Charter School Revenue Bonds, Franklin Phonetic Charter School, Series 2006, 5.750%, 7/01/36 1,645 Pima County Industrial Development Authority, Arizona, Charter 7/14 at 100.00 N/R (4) 1,957,353 School Revenue Bonds, Heritage Elementary School, Series 2004, 7.500%, 7/01/34 (Pre-refunded 7/01/14) 550 Pima County Industrial Development Authority, Arizona, Charter 12/14 at 100.00 BBB- 568,194 School Revenue Bonds, Noah Webster Basic Schools Inc., Series 2004, 6.125%, 12/15/34 500 Pima County Industrial Development Authority, Arizona, Charter No Opt. Call AAA 577,405 School Revenue Bonds, Pointe Educational Services Charter School, Series 2004, 6.250%, 7/01/14 (ETM) 1,000 Pima County Industrial Development Authority, Arizona, Charter 7/14 at 100.00 N/R (4) 1,180,250 School Revenue Bonds, Pointe Educational Services Charter School, Series 2004, 7.125%, 7/01/24 (Pre-refunded 7/01/14) 61 NMZ Nuveen Municipal High Income Opportunity Fund (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA (continued) $ 1,150 Pinal County Industrial Development Authority, Arizona, 10/12 at 100.00 A $ 1,162,098 Correctional Facilities Contract Revenue Bonds, Florence West Prison LLC, Series 2002A, 5.250%, 10/01/22 - ACA Insured 1,000 Tucson Industrial Development Authority, Arizona, Charter School 9/14 at 100.00 BBB- 1,030,990 Revenue Bonds, Arizona Agribusiness and Equine Center Charter School, Series 2004A, 5.850%, 9/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ 18,860 Total Arizona 19,697,781 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 14.2% (9.2% OF TOTAL INVESTMENTS) 8,000 Alameda Public Finance Authority, California, Revenue Bond No Opt. Call N/R 7,995,998 Anticipation Notes, Alameda Power and Telecom, Series 2004, 7.000%, 6/01/09 940 California Health Facilities Financing Authority, Hospital Revenue 11/07 at 100.00 BB 937,133 Bonds, Downey Community Hospital, Series 1993, 5.750%, 5/15/15 4,000 California Statewide Communities Development Authority, Revenue No Opt. Call BB 3,640,480 Bonds, EnerTech Regional Biosolids Project, Series 2007A, 5.500%, 12/01/33 (Alternative Minimum Tax) 2,925 California Statewide Community Development Authority, Revenue 3/14 at 102.00 N/R 3,090,584 Bonds, Epidaurus Project, Series 2004A, 7.750%, 3/01/34 1,005 California Statewide Community Development Authority, 1/14 at 100.00 N/R 1,058,376 Subordinate Lien Multifamily Housing Revenue Bonds, Corona Park Apartments, Series 2004I-S, 7.750%, 1/01/34 (Alternative Minimum Tax) 1,000 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 960,100 Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.750%, 6/01/47 5,500 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 6,370,540 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 (Pre-refunded 6/01/13) 1,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 1,214,170 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2003A-2, 7.900%, 6/01/42 (Pre-refunded 6/01/13) Huntington Beach, California, Special Tax Bonds, Community Facilities District 2003-1, Huntington Center, Series 2004: 500 5.800%, 9/01/23 9/14 at 100.00 N/R 515,790 1,000 5.850%, 9/01/33 9/14 at 100.00 N/R 1,011,960 2,500 Independent Cities Lease Finance Authority, California, 5/14 at 100.00 N/R 2,611,475 Revenue Bonds, El Granada Mobile Home Park, Series 2004A, 6.450%, 5/15/44 1,015 Independent Cities Lease Finance Authority, California, 5/14 at 100.00 N/R 1,035,767 Subordinate Lien Revenue Bonds, El Granada Mobile Home Park, Series 2004B, 6.500%, 5/15/44 1,200 Lake Elsinore, California, Special Tax Bonds, Community 9/13 at 102.00 N/R 1,222,800 Facilities District 2003-2 Improvement Area A, Canyon Hills, Series 2004A, 5.950%, 9/01/34 3,400 Lee Lake Water District, Riverside County, California, Special 9/13 at 102.00 N/R 3,464,600 Tax Bonds, Community Facilities District 3, Series 2004, 5.950%, 9/01/34 300 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B 326,157 California, Sublease Revenue Bonds, Los Angeles International Airport, American Airlines Inc. Terminal 4 Project, Series 2002B, 7.500%, 12/01/24 (Alternative Minimum Tax) 2,950 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B 3,207,211 California, Sublease Revenue Bonds, Los Angeles International Airport, American Airlines Inc. Terminal 4 Project, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax) Moreno Valley Unified School District, Riverside County, California, Special Tax Bonds, Community Facilities District, Series 2004: 800 5.550%, 9/01/29 9/14 at 100.00 N/R 789,872 1,250 5.650%, 9/01/34 9/14 at 100.00 N/R 1,240,838 62 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 995 Oceanside, California, Special Tax Revenue Bonds, Community 3/14 at 100.00 N/R $ 1,004,094 Facilities District - Morro Hills, Series 2004, 5.750%, 9/01/28 Orange County, California, Special Tax Bonds, Community Facilities District 03-1 of Ladera Ranch, Series 2004A: 500 5.500%, 8/15/23 8/12 at 101.00 N/R 510,250 1,625 5.600%, 8/15/28 8/12 at 101.00 N/R 1,658,053 1,000 5.625%, 8/15/34 8/12 at 101.00 N/R 1,018,170 2,250 San Diego County, California, Certificates of Participation, 9/12 at 100.00 BBB- 2,281,703 San Diego-Imperial Counties Developmental Services Foundation Project, Series 2002, 5.500%, 9/01/27 3,895 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 4,063,186 Bonds, Community Facilities District 2001-1, Series 2004A, 6.125%, 9/01/39 - ------------------------------------------------------------------------------------------------------------------------------------ 49,550 Total California 51,229,307 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 8.8% (5.7% OF TOTAL INVESTMENTS) 925 Bradburn Metropolitan District 3, Colorado, General Obligation 12/13 at 101.00 N/R 981,120 Bonds, Series 2003, 7.500%, 12/01/33 5,594 Buffalo Ridge Metropolitan District, Colorado, Limited Obligation 12/13 at 101.00 N/R 5,933,388 Assessment Bonds, Series 2003, 7.500%, 12/01/33 400 Colorado Educational and Cultural Facilities Authority, Charter 12/10 at 101.00 BBB (4) 443,296 School Revenue Bonds, Academy Charter School - Douglas County School District Re. 1, Series 2000, 6.875%, 12/15/20 (Pre-refunded 12/15/10) 650 Colorado Educational and Cultural Facilities Authority, Charter 9/11 at 100.00 Ba1 (4) 735,631 School Revenue Bonds, Bromley East Charter School, Series 2000A, 7.250%, 9/15/30 (Pre-refunded 9/15/11) 900 Colorado Educational and Cultural Facilities Authority, Charter 7/08 at 100.00 N/R (4) 925,236 School Revenue Bonds, Compass Montessori Elementary Charter School, Series 2000, 7.750%, 7/15/31 (Pre-refunded 7/15/08) 3,500 Colorado Educational and Cultural Facilities Authority, Charter 5/14 at 101.00 N/R 3,671,430 School Revenue Bonds, Denver Arts and Technology Academy, Series 2003, 8.000%, 5/01/34 Colorado Educational and Cultural Facilities Authority, Charter School Revenue Bonds, Excel Academy Charter School, Series 2003: 470 7.300%, 12/01/23 (Pre-refunded 12/01/11) 12/11 at 100.00 AAA 536,717 875 7.500%, 12/01/33 (Pre-refunded 12/01/11) 12/11 at 100.00 AAA 1,005,804 1,784 Colorado Educational and Cultural Facilities Authority, Charter 2/10 at 100.00 AAA 1,945,916 School Revenue Bonds, Jefferson County School District R-1 - Compass Montessori Secondary School, Series 2002, 8.000%, 2/15/32 (Pre-refunded 2/15/10) 1,000 Colorado Educational and Cultural Facilities Authority, Charter 2/16 at 101.00 N/R 924,890 School Revenue Bonds, Jefferson County School District R-1 - Compass Montessori Secondary School, Series 2006, 5.625%, 2/15/36 1,240 Colorado Educational and Cultural Facilities Authority, Charter 6/11 at 100.00 Ba1 (4) 1,365,240 School Revenue Bonds, Weld County School District 6 - Frontier Academy, Series 2001, 7.250%, 6/01/20 (Pre-refunded 6/01/11) 1,500 Colorado Educational and Cultural Facilities Authority, Independent 6/14 at 100.00 N/R 1,302,600 School Improvement Revenue Bonds, Heritage Christian School of Northern Colorado, Series 2004A, 7.500%, 6/01/34 (5) 4,300 Denver Health and Hospitals Authority, Colorado, Revenue Bonds, 12/14 at 100.00 BBB (4) 4,958,803 Series 2004A, 6.250%, 12/01/33 (Pre-refunded 12/01/14) 1,000 Denver, Colorado, FHA-Insured Multifamily Housing Mortgage 7/08 at 102.00 AAA 1,013,660 Loan Revenue Bonds, Garden Court Community Project, Series 1998, 5.400%, 7/01/39 1,250 Mesa County, Colorado, Residential Care Facilities Mortgage 12/11 at 101.00 AA 1,274,488 Revenue Bonds, Hilltop Community Resources Inc. Obligated Group, Series 2001A, 5.250%, 12/01/21 - RAAI Insured 63 NMZ Nuveen Municipal High Income Opportunity Fund (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) $ 1,000 Mountain Shadows Metropolitan District, Colorado, General 12/13 at 100.00 N/R $ 839,930 Obligation Limited Tax Bonds, Series 2007, 5.500%, 12/01/27 1,995 Park Creek Metropolitan District, Colorado, Limited Tax Obligation 6/14 at 100.00 N/R 2,189,333 Revenue Bonds, Series 2003CR-2, 7.875%, 12/01/32 (Mandatory put 12/01/13) Tallyn's Reach Metropolitan District 2, Aurora, Colorado, Limited Tax General Obligation Bonds, Series 2004: 250 6.000%, 12/01/18 12/13 at 100.00 N/R 256,830 315 6.375%, 12/01/23 12/13 at 100.00 N/R 324,724 Tallyn's Reach Metropolitan District 3, Aurora, Colorado, Limited Tax General Obligation Bonds, Series 2004: 500 6.625%, 12/01/23 12/13 at 100.00 N/R 521,770 500 6.750%, 12/01/33 12/13 at 100.00 N/R 518,460 - ------------------------------------------------------------------------------------------------------------------------------------ 29,948 Total Colorado 31,669,266 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.6% (0.4% OF TOTAL INVESTMENTS) 1,025 Eastern Connecticut Resource Recovery Authority, Solid Waste 1/08 at 100.00 BBB 1,025,451 Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A, 5.500%, 1/01/20 (Alternative Minimum Tax) 1,000 Mashantucket Western Pequot Tribe, Connecticut, Subordinate 9/16 at 100.00 Baa3 999,200 Special Revenue Bonds, Series 2006A, 5.500%, 9/01/36 - ------------------------------------------------------------------------------------------------------------------------------------ 2,025 Total Connecticut 2,024,651 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 8.7% (5.7% OF TOTAL INVESTMENTS) 2,000 Aberdeen Community Development District, Florida, Special 5/14 at 100.00 N/R 1,697,660 Assessment Bonds, Series 2005, 5.500%, 5/01/36 4,320 Bartram Springs Community Development District, Duval County, 5/13 at 102.00 N/R (4) 4,894,603 Florida, Special Assessment Bonds, Series 2003A, 6.650%, 5/01/34 (Pre-refunded 5/01/13) 1,000 Bartram Springs Community Development District, Duval County, 5/16 at 100.00 N/R 796,640 Florida, Special Assessment Bonds, Series 2006, 4.750%, 5/01/34 700 Broward County, Florida, Airport Facility Revenue Bonds, Learjet 11/14 at 101.00 Ba2 776,321 Inc., Series 2000, 7.500%, 11/01/20 (Alternative Minimum Tax) 1,160 Century Gardens Community Development District, Miami-Dade 5/14 at 101.00 N/R 1,178,595 County, Florida, Special Assessment Revenue Bonds, Series 2004, 5.900%, 5/01/34 455 Islands at Doral Northeast Community Development District, 5/14 at 101.00 N/R 498,198 Miami-Dade County, Florida, Special Assessment Bonds, Series 2004, 6.125%, 5/01/24 3,000 Jacksonville, Florida, Economic Development Commission 9/17 at 100.00 N/R 3,099,810 Health Care Facilities Revenue Bonds, The Florida Proton Therapy Institute Project, Series 2007, 6.250%, 9/01/27 620 Lexington Community Development District, Florida, Special 5/14 at 101.00 N/R 631,551 Assessment Revenue Bonds, Series 2004, 6.125%, 5/01/34 3,816 MMA Financial CDD Junior Securitization Trust, Florida, 11/07 at 100.00 N/R 3,829,150 Pass-Through Certificates, Class A, Series 2003I, 8.000%, 11/01/13 3,820 Palm Beach County Housing Finance Authority, Florida, 7/09 at 103.00 N/R 3,891,090 Multifamily Housing Revenue Bonds, Lake Delray Apartments, Series 1999A, 6.400%, 1/01/31 (Alternative Minimum Tax) 1,000 Sarasota County Health Facility Authority, Florida, Revenue 7/17 at 100.00 N/R 980,290 Bonds, Sarasota-Manatee Jewish Housing Council, Inc., Series 2007, 5.750%, 7/01/45 64 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA (continued) $ 1,700 South-Dade Venture Community Development District, Florida, 5/14 at 101.00 N/R $ 1,716,252 Special Assessment Revenue Bonds, Series 2004, 6.125%, 5/01/34 Stonegate Community Development District, Florida, Special Assessment Revenue Bonds, Series 2004: 455 6.000%, 5/01/24 5/14 at 101.00 N/R 491,031 500 6.125%, 5/01/34 5/14 at 101.00 N/R 543,060 1,000 Tolomato Community Development District, Florida, Special 5/14 at 101.00 N/R 880,670 Assessment Bonds, Series 2006, 5.400%, 5/01/37 1,715 Tolomato Community Development District, Florida, Special 5/18 at 100.00 N/R 1,717,830 Assessment Bonds, Series 2007, 6.650%, 5/01/40 Westchester Community Development District 1, Florida, Special Assessment Bonds, Series 2003: 140 6.000%, 5/01/23 5/13 at 101.00 N/R 139,511 3,745 6.125%, 5/01/35 5/13 at 101.00 N/R 3,695,978 - ------------------------------------------------------------------------------------------------------------------------------------ 31,146 Total Florida 31,458,240 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.2% (0.8% OF TOTAL INVESTMENTS) 500 Effingham County Development Authority, Georgia, Solid Waste 7/08 at 102.00 B 485,145 Disposal Revenue Bonds, Ft. James Project, Series 1998, 5.625%, 7/01/18 (Alternative Minimum Tax) (6) 900 Fulton County Residential Care Facilities Authority, Georgia, 2/09 at 100.00 N/R 915,390 Revenue Bonds, Canterbury Court, Series 2004A, 6.125%, 2/15/34 1,000 Fulton County Residential Care Facilities Authority, Georgia, 7/17 at 100.00 N/R 881,830 Revenue Bonds, Elderly Care, Lenbrook Square Project, Series 2006A, 5.125%, 7/01/37 1,935 Fulton County Residential Care Facilities Authority, Georgia, 12/13 at 102.00 N/R 2,130,570 Revenue Bonds, St. Anne's Terrace, Series 2003, 7.625%, 12/01/33 - ------------------------------------------------------------------------------------------------------------------------------------ 4,335 Total Georgia 4,412,935 - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,000 Hawaii State Department of Budget and Finance, Private School No Opt. Call N/R 1,983,400 Revenue Bonds, Island Pacific Academy Project, Series 2007, 6.375%, 3/01/34 1,000 Hawaii State Department of Budget and Finance, Private School 2/17 at 100.00 N/R 943,890 Revenue Bonds, Montessori of Maui, Series 2007, 5.500%, 1/01/37 - ------------------------------------------------------------------------------------------------------------------------------------ 3,000 Total Hawaii 2,927,290 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 7.2% (4.7% OF TOTAL INVESTMENTS) 2,000 Chicago, Illinois, Certificates of Participation Tax Increment 12/08 at 100.00 N/R 2,036,220 Revenue Notes, Chicago/Kingsbury Redevelopment Project, Series 2004A, 6.570%, 2/15/13 1,000 Chicago, Illinois, Certificates of Participation, Tax Increment 7/11 at 100.00 N/R 1,042,260 Allocation Revenue Bonds, Diversey-Narragansett Project, Series 2006, 7.460%, 2/15/26 2,000 Illinois Finance Authority, Revenue Bonds, Midwest Regional 10/16 at 100.00 N/R 1,982,180 Medical Center Galena-Stauss Hospital, Series 2006, 6.750%, 10/01/46 1,350 Illinois Health Facilities Authority, FHA-Insured Mortgage 8/13 at 100.00 AAA 1,374,287 Revenue Refunding Bonds, Sinai Health System, Series 2003, 5.150%, 2/15/37 1,000 Illinois Health Facilities Authority, Revenue Bonds, Condell Medical 5/12 at 100.00 Baa2 1,007,750 Center, Series 2002, 5.500%, 5/15/32 8,800 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/12 at 100.00 A- 9,124,720 Hospital, Series 2016, 5.750%, 7/01/29 (UB) 65 NMZ Nuveen Municipal High Income Opportunity Fund (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 1,400 Illinois Health Facilities Authority, Revenue Bonds, Midwest 11/08 at 102.00 N/R $ 1,375,808 Physicians Group Ltd., Series 1998, 5.500%, 11/15/19 1,650 Lombard Public Facilities Corporation, Illinois, First Tier 1/16 at 100.00 N/R 1,762,250 Conference Center and Hotel Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36 1,154 Lombard Public Facilities Corporation, Illinois, Third Tier 1/08 at 100.00 N/R 1,132,131 Conference Center and Hotel Revenue Bonds, Series 2005C-3, 4.000%, 1/01/36 2,055 Plano Special Service Area 1, Illinois, Special Tax Bonds, 3/14 at 102.00 N/R 2,114,657 Lakewood Springs Project, Series 2004A, 6.200%, 3/01/34 998 Volo Village, Illinois, Special Service Area 3 Special Tax Bonds, 3/16 at 102.00 N/R 975,974 Symphony Meadows Project 1, Series 2006, 6.000%, 3/01/36 (Mandatory put 2/29/16) 1,000 Yorkville United City Business District, Illinois, Storm Water and 1/17 at 102.00 N/R 947,540 Water Improvement Project Revenue Bonds, Series 2007, 6.000%, 1/01/26 1,000 Yorkville, Illinois, Special Service Area 2005-108 Assessment 3/16 at 102.00 N/R 977,930 Bonds, Autumn Creek Project, Series 2006, 6.000%, 3/01/36 - ------------------------------------------------------------------------------------------------------------------------------------ 25,407 Total Illinois 25,853,707 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 9.7% (6.3% OF TOTAL INVESTMENTS) 6,360 Carmel Redevelopment District, Indiana, Tax Increment 7/12 at 103.00 N/R 6,632,780 Revenue Bonds, Series 2004A, 6.650%, 1/15/24 22,770 Indiana Finance Authority, Water Facilities Refunding Revenue 10/16 at 100.00 AAA 22,132,895 Bonds, Indian-American Water Company Inc. Project, Series 2006, 4.875%, 10/01/36 - AMBAC Insured (UB) Indiana Health Facility Financing Authority, Hospital Revenue Bonds, Community Foundation of Northwest Indiana, Series 2004A: 500 6.250%, 3/01/25 3/14 at 101.00 BBB- 533,960 2,500 6.000%, 3/01/34 3/14 at 101.00 BBB- 2,599,225 200 Jasper County, Indiana, Economic Development Revenue 4/10 at 101.00 B2 202,564 Refunding Bonds, Georgia Pacific Corporation Project, Series 2000, 6.700%, 4/01/29 (Alternative Minimum Tax) 1,000 St. Joseph County, Indiana, Economic Development Revenue 7/15 at 103.00 N/R 1,053,130 Bonds, Chicago Trail Village Apartments, Series 2005A, 7.500%, 7/01/35 1,735 Whitley County, Indiana, Solid Waste and Sewerage Disposal 11/10 at 102.00 N/R 1,840,783 Revenue Bonds, Steel Dynamics Inc., Series 1998, 7.250%, 11/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 35,065 Total Indiana 34,995,337 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.5% (0.4% OF TOTAL INVESTMENTS) 2,000 Fredonia, Kansas, Hospital Revenue Bonds, Series 2007, 8/17 at 100.00 N/R 1,984,880 6.125%, 8/15/37 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 6.3% (4.1% OF TOTAL INVESTMENTS) 1,000 Carter Marina Community Development District, Louisiana, 10/12 at 100.00 N/R 1,001,400 Special Assessment Bonds, Series 2007, 6.250%, 10/01/22 1,940 Carter Plantation Community Development District, Livingston 11/07 at 100.00 N/R 1,960,991 Parish, Louisiana, Special Assessment Bonds, Series 2004, 5.500%, 5/01/16 8,500 Hodge, Louisiana, Combined Utility System Revenue Bonds, No Opt. Call B- 9,950,861 Smurfit-Stone Container Corporation, Series 2003, 7.450%, 3/01/24 (Alternative Minimum Tax) 1,000 Louisiana Local Government Environmental Facilities and 9/16 at 100.00 N/R 981,620 Community Development Authority, Carter Plantation Hotel Project Revenue Bonds, Series 2006A, 6.000%, 9/01/36 1,000 Louisiana Local Government Environmental Facilities and 6/16 at 101.00 N/R 997,830 Community Development Authority, Revenue Bonds, CDF Healthcare of Louisiana LLC, Series 2006A, 7.000%, 6/01/36 66 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA (continued) Ouachita Parish Industrial Development Authority, Louisiana, Solid Waste Disposal Revenue Bonds, White Oaks Project, Series 2004A: $ 865 8.250%, 3/01/19 (Alternative Minimum Tax) 3/10 at 102.00 N/R $ 900,707 805 8.500%, 3/01/24 (Alternative Minimum Tax) 3/10 at 102.00 N/R 840,541 5,125 St. James Parish, Louisiana, Solid Waste Disposal Revenue Bonds, 4/08 at 100.00 N/R 5,208,589 Freeport McMoran Project, Series 1992, 7.700%, 10/01/22 (Alternative Minimum Tax) 1,000 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 1,000,360 Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ 21,235 Total Louisiana 22,842,899 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 0.9% (0.6% OF TOTAL INVESTMENTS) 3,155 Portland Housing Development Corporation, Maine, Section 8 2/14 at 102.00 Baa2 3,244,476 Assisted Senior Living Revenue Bonds, Avesta Housing Development Corporation, Series 2004A, 6.000%, 2/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 3.3% (2.2% OF TOTAL INVESTMENTS) 2,000 Maryland Energy Financing Administration, Revenue Bonds, 12/07 at 100.00 N/R 2,005,220 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) 3,850 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 N/R 3,938,242 Revenue Bonds, MedStar Health, Series 2004, 5.500%, 8/15/33 7,435 Prince George's County, Maryland, Revenue Bonds, Dimensions 1/08 at 100.00 B3 6,073,875 Health Corporation, Series 1994, 5.300%, 7/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ 13,285 Total Maryland 12,017,337 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.1% (0.7% OF TOTAL INVESTMENTS) 580 Massachusetts Development Finance Agency, Pioneer Valley No Opt. Call N/R 578,272 Resource Recovery Revenue Bonds, Eco/Springfield LLC, Series 2006, 5.875%, 7/01/14 (Alternative Minimum Tax) 2,000 Massachusetts Development Finance Agency, Revenue Bonds, 10/12 at 102.00 BBB- 1,898,760 Orchard Cove, Series 2007, 5.250%, 10/01/26 1,350 Massachusetts Health and Educational Facilities Authority, 7/14 at 100.00 BB- 1,406,660 Revenue Bonds, Northern Berkshire Community Services Inc., Series 2004B, 6.375%, 7/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 3,930 Total Massachusetts 3,883,692 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 5.4% (3.5% OF TOTAL INVESTMENTS) 1,265 Countryside Charter School, Berrien County, Michigan, Charter 4/09 at 100.00 N/R 1,283,988 School Revenue Bonds, Series 1999, 7.000%, 4/01/29 885 Countryside Charter School, Berrien County, Michigan, Charter 4/09 at 100.00 N/R 911,594 School Revenue Bonds, Series 2000, 8.000%, 4/01/29 Detroit Local Development Finance Authority, Michigan, Tax Increment Bonds, Series 1998A: 1,435 5.500%, 5/01/21 5/09 at 101.00 BB- 1,430,265 15 5.500%, 5/01/21 - ACA Insured 5/09 at 101.00 A 15,185 1,000 Garden City Hospital Finance Authority, Michigan, Revenue 8/17 at 100.00 N/R 880,520 Bonds, Garden City Hospital Obligated Group, Series 2007A, 5.000%, 8/15/38 3,580 Michigan State Hospital Finance Authority, Hospital Revenue 2/08 at 100.00 BB- 3,403,864 Refunding Bonds, Detroit Medical Center Obligated Group, Series 1993B, 5.500%, 8/15/23 500 Michigan State Hospital Finance Authority, Revenue Bonds, 5/15 at 100.00 BBB 470,065 Chelsea Community Hospital, Series 2005, 5.000%, 5/15/30 1,500 Michigan State Hospital Finance Authority, Revenue Bonds, 11/15 at 102.00 N/R 1,556,385 Hills and Dales General Hospital, Series 2005A, 6.750%, 11/15/38 67 NMZ Nuveen Municipal High Income Opportunity Fund (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 1,970 Midland County Economic Development Corporation, Michigan, 1/08 at 101.00 BB- $ 1,973,802 Subordinated Pollution Control Limited Obligation Revenue Refunding Bonds, Midland Cogeneration Project, Series 2000A, 6.875%, 7/23/09 (Alternative Minimum Tax) 2,665 Nataki Talibah Schoolhouse, Wayne County, Michigan, 6/10 at 102.00 N/R 2,745,723 Certificates of Participation, Series 2000, 8.250%, 6/01/30 Pontiac Hospital Finance Authority, Michigan, Hospital Revenue Refunding Bonds, NOMC Obligated Group, Series 1993: 985 6.000%, 8/01/13 2/08 at 100.00 B 940,911 1,500 6.000%, 8/01/18 2/08 at 100.00 B 1,354,710 1,800 6.000%, 8/01/23 2/08 at 100.00 B 1,543,302 1,000 Summit Academy North Charter School, Michigan, Charter 11/15 at 100.00 BB+ 951,810 School Revenue Bonds, Series 2005, 5.500%, 11/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ 20,100 Total Michigan 19,462,124 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 2.9% (1.9% OF TOTAL INVESTMENTS) Minneapolis, Minnesota, Student Housing Revenue Bonds, Riverton Community Housing Project, Series 2000: 100 7.200%, 7/01/14 (Pre-refunded 7/01/10) 7/10 at 100.00 N/R (4) 108,482 100 7.300%, 7/01/15 (Pre-refunded 7/01/10) 7/10 at 100.00 N/R (4) 108,723 1,325 Ramsey, Anoka County, Minnesota, Charter School Lease 6/14 at 102.00 N/R 1,401,280 Revenue Bonds, PACT Charter School, Series 2004A, 6.750%, 12/01/33 5,000 St. Louis Park, Minnesota, Revenue Bonds, Park Nicollet 7/14 at 100.00 A 5,099,600 Health Services, Series 2003B, 5.250%, 7/01/30 1,430 St. Paul Housing and Redevelopment Authority, Minnesota, 6/14 at 102.00 N/R 1,491,619 Charter School Revenue Bonds, Higher Ground Academy Charter School, Series 2004A, 6.625%, 12/01/23 1,100 St. Paul Housing and Redevelopment Authority, Minnesota, 6/14 at 102.00 N/R 1,148,268 Charter School Revenue Bonds, HOPE Community Academy Charter School, Series 2004A, 6.750%, 12/01/33 1,000 St. Paul Port Authority, Minnesota, Lease Revenue Bonds, 5/15 at 100.00 N/R 1,005,390 HealthEast Midway Campus, Series 2005B, 6.000%, 5/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ 10,055 Total Minnesota 10,363,362 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.3% (0.2% OF TOTAL INVESTMENTS) 976 Mississippi Home Corporation, Multifamily Housing Revenue 10/19 at 101.00 N/R 977,711 Bonds, Tupelo Personal Care Apartments, Series 2004-2, 6.125%, 9/01/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.7% (1.7% OF TOTAL INVESTMENTS) 2,000 Branson Regional Airport Transportation Development District, 7/17 at 100.00 N/R 1,967,680 Missouri, Project Revenue Bonds, Series 2007B, 6.000%, 7/01/37 (Alternative Minimum Tax) 5,935 Missouri Environmental Improvement and Energy Resources 12/16 at 100.00 AAA 5,547,088 Authority, Water Facility Revenue Bonds, Missouri-American Water Company, Series 2006, 4.600%, 12/01/36 - AMBAC Insured (Alternative Minimum Tax) (UB) 1,300 Saint Louis Industrial Development Authority, Missouri, 12/10 at 102.00 Caa2 1,303,640 Saint Louis Convention Center Headquarters Hotel Project, Series 2000A, 7.250%, 12/15/35 (Alternative Minimum Tax) 830 Saint Louis, Missouri, Tax Increment Financing Revenue Bonds, 12/07 at 100.00 N/R 786,193 Grace Lofts Redevelopment Projects, Series 2007A, 6.000%, 3/27/26 - ------------------------------------------------------------------------------------------------------------------------------------ 10,065 Total Missouri 9,604,601 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 2.0% (1.3% OF TOTAL INVESTMENTS) 5,200 Montana Board of Investments, Exempt Facility Revenue Bonds, 7/10 at 101.00 B2 5,269,420 Stillwater Mining Company, Series 2000, 8.000%, 7/01/20 (Alternative Minimum Tax) 68 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA (continued) $ 2,080 Montana Board of Investments, Resource Recovery Revenue No Opt. Call N/R $ 2,052,981 Bonds, Yellowstone Energy LP, Series 1993, 7.000%, 12/31/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 7,280 Total Montana 7,322,401 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 3.5% (2.3% OF TOTAL INVESTMENTS) 8,670 Omaha Public Power District, Nebraska, Separate Electric 2/17 at 100.00 AAA 9,458,621 System Revenue Bonds, Nebraska City 2, Series 2006A, Residuals 1508-2, 7.446%, 2/01/49 - AMBAC Insured (IF) 3,000 Omaha Public Power District, Nebraska, Separate Electric 2/17 at 100.00 AAA 3,090,960 System Revenue Bonds, Nebraska City 2, Series 2006A, 5.000%, 2/01/49 - AMBAC Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 11,670 Total Nebraska 12,549,581 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.3% (2.2% OF TOTAL INVESTMENTS) 3,670 Clark County, Nevada, Industrial Development Revenue Bonds, 1/08 at 100.00 B 3,546,505 Nevada Power Company Project, Series 1995C, 5.500%, 10/01/30 2,000 Clark County, Nevada, Industrial Development Revenue Bonds, 1/08 at 100.00 B 2,006,500 Nevada Power Company, Series 1995A, 5.600%, 10/01/30 (Alternative Minimum Tax) 500 Clark County, Nevada, Industrial Development Revenue Bonds, 11/07 at 100.00 B 500,075 Nevada Power Company, Series 1997A, 5.900%, 11/01/32 (Alternative Minimum Tax) 1,485 Clark County, Nevada, Local Improvement Bonds, Mountain's 8/16 at 100.00 N/R 1,532,015 Edge Special Improvement District 142, Series 2003, 6.375%, 8/01/23 4,500 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 4,345,740 Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40 - ------------------------------------------------------------------------------------------------------------------------------------ 12,155 Total Nevada 11,930,835 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 5.1% (3.3% OF TOTAL INVESTMENTS) 1,000 New Jersey Economic Development Authority, Revenue Bonds, 1/08 at 102.00 BB+ 930,100 United Methodist Homes of New Jersey Obligated Group, Series 1998, 5.125%, 7/01/25 3,510 New Jersey Economic Development Authority, Special Facilities 9/09 at 101.00 B 3,551,664 Revenue Bonds, Continental Airlines Inc., Series 1999, 6.250%, 9/15/29 (Alternative Minimum Tax) 500 New Jersey Economic Development Authority, Special Facilities 11/10 at 101.00 B 518,775 Revenue Bonds, Continental Airlines Inc., Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 500 New Jersey Health Care Facilities Financing Authority, 7/10 at 101.00 BBB- (4) 554,010 Revenue Bonds, Trinitas Hospital Obligated Group, Series 2000, 7.500%, 7/01/30 (Pre-refunded 7/01/10) Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 7,825 6.750%, 6/01/39 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 9,059,235 2,760 7.000%, 6/01/41 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 3,228,427 500 Tobacco Settlement Financing Corporation, New Jersey, 6/17 at 100.00 BBB 429,040 Tobacco Settlement Asset-Backed Bonds, Series 2007-1A, 5.000%, 6/01/41 - ------------------------------------------------------------------------------------------------------------------------------------ 16,595 Total New Jersey 18,271,251 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 2.3% (1.5% OF TOTAL INVESTMENTS) 4,000 Dormitory Authority of the State of New York, Revenue Bonds, 7/11 at 101.00 Ba2 4,020,880 Lenox Hill Hospital Obligated Group, Series 2001, 5.500%, 7/01/30 1,000 New York City Industrial Development Agency, New York, 8/16 at 101.00 B 1,135,690 American Airlines-JFK International Airport Special Facility Revenue Bonds, Series 2005, 7.750%, 8/01/31 (Alternative Minimum Tax) 500 New York City Industrial Development Agency, New York, Liberty 3/09 at 103.00 N/R 521,870 Revenue Bonds, 7 World Trade Center, Series 2005A, 6.250%, 3/01/15 69 NMZ Nuveen Municipal High Income Opportunity Fund (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 1,700 New York City Industrial Development Agency, New York, 2/08 at 100.00 CCC+ $ 1,703,434 Special Facilities Revenue Bonds, American Airlines Inc., Series 1994, 6.900%, 8/01/24 (Alternative Minimum Tax) 750 New York City Industrial Development Agency, New York, No Opt. Call B 822,593 Special Facilities Revenue Bonds, JFK Airport - American Airlines Inc., Series 2002A, 8.000%, 8/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 7,950 Total New York 8,204,467 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.5% (1.0% OF TOTAL INVESTMENTS) 5,500 North Carolina Capital Facilities Finance Agency, Solid Waste 7/12 at 106.00 N/R 5,554,560 Facilities Revenue Bonds, Liberty Tire Services of North Carolina LLC, Series 2004A, 6.750%, 7/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 8.9% (5.8% OF TOTAL INVESTMENTS) Belmont County, Ohio, Revenue Bonds, Ohio Valley Health Services and Education Corporation, Series 1998: 500 5.700%, 1/01/13 1/08 at 102.00 B 500,860 400 5.800%, 1/01/18 1/08 at 102.00 B 396,336 Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2: 355 5.125%, 6/01/24 6/17 at 100.00 BBB 342,682 3,570 5.875%, 6/01/30 6/17 at 100.00 BBB 3,525,839 3,375 5.750%, 6/01/34 6/17 at 100.00 BBB 3,256,875 7,855 5.875%, 6/01/47 6/17 at 100.00 BBB 7,625,870 3,375 Cleveland-Cuyahoga County Port Authority, Ohio, Development 5/14 at 102.00 N/R 3,376,080 Revenue Bonds, Bond Fund Program - Garfield Heights Project, Series 2004D, 5.250%, 5/15/23 7,000 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 7,059,150 Revenue Bonds, Bay Shore Power, Series 1998A, 5.875%, 9/01/20 (Alternative Minimum Tax) 1,000 Ohio, Environmental Facilities Revenue Bonds, Ford Motor 4/15 at 100.00 Ba1 957,450 Company, Series 2005, 5.750%, 4/01/35 (Alternative Minimum Tax) 1,275 Trumbull County, Ohio, Sewerage Disposal Revenue Bonds, No Opt. Call B- 1,309,884 General Motors Corporation, Series 1994, 6.750%, 7/01/14 (Alternative Minimum Tax) 4,000 Western Reserve Port Authority, Ohio, Solid Waste Facility 7/17 at 102.00 N/R 3,943,520 Revenue Bonds, Central Waste Inc., Series 2007A, 6.350%, 7/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 32,705 Total Ohio 32,294,546 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 3.6% (2.4% OF TOTAL INVESTMENTS) 1,000 Okeene Municipal Hospital and Schallmo Authority, Oklahoma, 1/16 at 101.00 N/R 1,003,830 Revenue Bonds, Series 2006, 7.000%, 1/01/35 Oklahoma Development Finance Authority, Revenue Refunding Bonds, Hillcrest Healthcare System, Series 1999A: 1,200 5.750%, 8/15/15 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 1,258,380 6,680 5.625%, 8/15/29 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 6,990,620 850 Tulsa Industrial Authority, Oklahoma, Student Housing Revenue 10/16 at 100.00 A2 851,173 Bonds, University of Tulsa, Series 2006, 5.000%, 10/01/37 1,335 Tulsa Municipal Airport Trust, Oklahoma, Revenue Bonds, 12/07 at 100.00 B 1,335,160 American Airlines Inc., Series 1995, 6.250%, 6/01/20 1,500 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding No Opt. Call Caa1 1,659,120 Bonds, American Airlines Inc., Series 2004A, 7.750%, 6/01/35 (Mandatory put 12/01/14) - ------------------------------------------------------------------------------------------------------------------------------------ 12,565 Total Oklahoma 13,098,283 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 4.9% (3.2% OF TOTAL INVESTMENTS) Allegheny County Hospital Development Authority, Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B: 695 9.250%, 11/15/22 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA 820,865 6,455 9.250%, 11/15/30 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA 7,624,001 70 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 500 Allentown Area Hospital Authority, Pennsylvania, Revenue Bonds, No Opt. Call BB+ $ 502,755 Sacred Heart Hospital, Series 2005, 6.000%, 11/15/16 1,000 Berks County Industrial Development Authority, Pennsylvania, 11/17 at 101.00 N/R 983,160 First Mortgage Revenue Bonds, One Douglassville Properties Project, Series 2007A, 6.125%, 11/01/34 (Alternative Minimum Tax) 2,000 Chester County Health and Education Facilities Authority, 10/15 at 102.00 N/R 1,964,880 Pennsylvania, Revenue Bonds, Immaculata University, Series 2005, 5.750%, 10/15/37 500 New Morgan Industrial Development Authority, Pennsylvania, 4/08 at 100.00 BB- 500,620 Solid Waste Disposal Revenue Bonds, New Morgan Landfill Company Inc., Series 1994, 6.500%, 4/01/19 (Alternative Minimum Tax) 400 Pennsylvania Economic Development Financing Authority, 12/09 at 103.00 B2 428,832 Exempt Facilities Revenue Bonds, Reliant Energy Inc., Series 2002A, 6.750%, 12/01/36 (Alternative Minimum Tax) 600 Pennsylvania Economic Development Financing Authority, 12/09 at 103.00 B2 643,248 Exempt Facilities Revenue Bonds, Reliant Energy Inc., Series 2003A, 6.750%, 12/01/36 (Alternative Minimum Tax) 4,000 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 4,176,280 Revenue Bonds, Amtrak 30th Street Station Parking Garage, Series 2002, 5.800%, 6/01/23 - ACA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 16,150 Total Pennsylvania 17,644,641 - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.3% (0.8% OF TOTAL INVESTMENTS) 1,500 Central Falls Detention Facility Corporation, Rhode Island, 7/15 at 103.00 N/R 1,646,595 Detention Facility Revenue Bonds, Series 2005, 7.250%, 7/15/35 3,000 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 3,040,860 Tobacco Settlement Asset-Backed Bonds, Series 2002A, 6.250%, 6/01/42 - ------------------------------------------------------------------------------------------------------------------------------------ 4,500 Total Rhode Island 4,687,455 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.2% (0.8% OF TOTAL INVESTMENTS) 4,000 Lancaster County, South Carolina, Assessment Bonds, 11/17 at 100.00 N/R 4,000,000 Edgewater II Improvement District, Series 2007A, 7.750%, 11/01/39 (WI/DD, Settling 11/19/07) 490 Tobacco Settlement Revenue Management Authority, No Opt. Call BBB 503,029 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/30 - ------------------------------------------------------------------------------------------------------------------------------------ 4,490 Total South Carolina 4,503,029 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.5% (1.6% OF TOTAL INVESTMENTS) 3,500 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 3,568,075 Tennessee, Hospital Revenue Bonds, Baptist Health System of East Tennessee Inc., Series 2002, 6.500%, 4/15/31 1,500 Maury County Industrial Development Board, Tennessee, 3/08 at 100.00 B- 1,487,865 Multi-Modal Interchangeable Rate Pollution Control Revenue Refunding Bonds, Saturn Corporation, Series 1994, 6.500%, 9/01/24 Sumner County Health, Educational, and Housing Facilities Board, Tennessee, Revenue Refunding Bonds, Sumner Regional Health System Inc., Series 2007: 2,000 5.500%, 11/01/37 11/17 at 100.00 N/R 2,023,780 1,000 5.500%, 11/01/46 11/17 at 100.00 N/R 1,003,280 1,000 Wilson County Health and Educational Facilities Board, 7/17 at 100.00 N/R 976,300 Tennessee, Senior Living Revenue Bonds, Rutland Place, Series 2007A, 6.300%, 7/01/37 - ------------------------------------------------------------------------------------------------------------------------------------ 9,000 Total Tennessee 9,059,300 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 11.1% (7.2% OF TOTAL INVESTMENTS) 1,000 Austin Convention Enterprises Inc., Texas, Convention Center 1/17 at 100.00 BB 982,780 Hotel Revenue Bonds, First Tier Series 2006B, 5.750%, 1/01/34 2,000 Austin Convention Enterprises Inc., Texas, Convention Center 1/11 at 100.00 N/R 2,041,980 Hotel Revenue Bonds, First Tier Series 2001A, 9.750%, 1/01/26 71 NMZ Nuveen Municipal High Income Opportunity Fund (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 765 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Caa1 $ 755,942 Refunding Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative Minimum Tax) 2,705 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC+ 2,680,087 Corporation, Texas, Revenue Bonds, American Airlines Inc., Series 1995, 6.000%, 11/01/14 1,750 Dallas-Ft. Worth International Airport Facility Improvement 11/12 at 100.00 CCC+ 1,606,938 Corporation, Texas, Revenue Bonds, American Airlines Inc., Series 2007, 5.500%, 11/01/30 (Alternative Minimum Tax) Decatur Hospital Authority, Texas, Revenue Bonds, Wise Regional Health System, Series 2004A: 1,840 7.000%, 9/01/25 9/14 at 100.00 N/R 1,951,210 6,600 7.125%, 9/01/34 9/14 at 100.00 N/R 6,987,750 585 Gulf Coast Industrial Development Authority, Texas, Solid Waste 4/12 at 100.00 Baa3 648,256 Disposal Revenue Bonds, Citgo Petroleum Corporation Project, Series 1998, 8.000%, 4/01/28 (Alternative Minimum Tax) 1,000 Heart of Texas Education Finance Corporation, Texas, Gateway 8/16 at 100.00 N/R 956,060 Charter Academy, Series 2006A, 6.000%, 2/15/36 Houston Health Facilities Development Corporation, Texas, Revenue Bonds, Buckingham Senior Living Community Inc., Series 2004A: 250 7.000%, 2/15/23 (Pre-refunded 2/15/14) 2/14 at 101.00 N/R (4) 297,183 1,400 7.125%, 2/15/34 (Pre-refunded 2/15/14) 2/14 at 101.00 N/R (4) 1,673,070 2,020 Houston, Texas, Airport System Special Facilities Revenue Bonds, 7/09 at 101.00 B- 1,903,608 Continental Air Lines Inc., Series 1998B, 5.700%, 7/15/29 (Alternative Minimum Tax) 975 Houston, Texas, Airport System Special Facilities Revenue Bonds, 7/09 at 101.00 B- 918,821 Continental Air Lines Inc., Series 1998C, 5.700%, 7/15/29 (Alternative Minimum Tax) Houston, Texas, Airport System Special Facilities Revenue Bonds, Continental Air Lines Inc., Series 2001E: 600 7.375%, 7/01/22 (Alternative Minimum Tax) 7/11 at 101.00 B- 634,896 5,350 6.750%, 7/01/29 (Alternative Minimum Tax) 7/11 at 101.00 B- 5,546,934 1,000 La Vernia Education Financing Corporation, Texas, Charter 8/11 at 100.00 N/R 923,020 School Revenue Bonds, Riverwalk Education Foundation, Series 2007A, 5.450%, 8/15/36 500 Mission Economic Development Corporation, Texas, Solid Waste 4/12 at 100.00 B+ 492,830 Disposal Revenue Bonds, Allied Waste Industries, Inc., Series 2007A, 5.200%, 4/01/18 (Alternative Minimum Tax) 2,000 Sea Breeze Public Facility Corporation, Texas, Multifamily 1/21 at 100.00 N/R 1,954,300 Housing Revenue Bonds, Sea Breeze Senior Apartments, Series 2006, 6.500%, 1/01/46 (Alternative Minimum Tax) 5,785 Texas Department of Housing and Community Affairs, 7/21 at 100.00 N/R 5,812,768 Multifamily Housing Revenue Bonds, Humble Parkway Townhomes, Series 2004, 6.600%, 1/01/41 (Alternative Minimum Tax) 1,000 Texas Public Finance Authority, Charter School Finance 2/15 at 100.00 BB+ 931,730 Corporation Revenue Bonds, Cosmos Foundation Inc., Series 2007A, 5.375%, 2/15/37 340 Trinity River Authority of Texas, Pollution Control Revenue 5/13 at 101.00 Caa1 340,286 Refunding Bonds, TXU Electric Company, Series 2003, 6.250%, 5/01/28 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 39,465 Total Texas 40,040,449 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGIN ISLANDS - 2.4% (1.6% OF TOTAL INVESTMENTS) 5,000 Virgin Islands Public Finance Authority, Revenue Bonds, 1/14 at 100.00 BBB 5,170,350 Refinery Project - Hovensa LLC, Series 2003, 6.125%, 7/01/22 (Alternative Minimum Tax) 3,300 Virgin Islands Public Finance Authority, Senior Secured Lien 7/14 at 100.00 BBB 3,441,801 Revenue Bonds, Refinery Project - Hovensa LLC, Series 2004, 5.875%, 7/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ 8,300 Total Virgin Islands 8,612,151 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 4.9% (3.2% OF TOTAL INVESTMENTS) 1,940 Isle of Wight County Industrial Development Authority, Virginia, 3/17 at 100.00 BBB 1,720,702 Environmental Improvement Revenue Bonds, International Paper Company Project, Series 2007A, 4.700%, 3/01/31 (Alternative Minimum Tax) 72 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA (continued) Pocahontas Parkway Association, Virginia, Senior Lien Revenue Bonds, Route 895 Connector Toll Road, Series 1998A: $ 2,000 0.000%, 8/15/14 (Pre-refunded 8/15/08) 8/08 at 73.23 AAA $ 1,424,520 4,250 5.500%, 8/15/28 (Pre-refunded 8/15/08) 8/08 at 102.00 AAA 4,400,238 1,850 0.000%, 8/15/30 (Pre-refunded 8/15/08) 8/08 at 28.38 AAA 510,693 Pocahontas Parkway Association, Virginia, Senior Lien Revenue Bonds, Route 895 Connector Toll Road, Series 1998B: 2,000 0.000%, 8/15/12 (Pre-refunded 8/15/08) 8/08 at 82.10 AAA 1,597,100 3,000 0.000%, 8/15/15 (Pre-refunded 8/15/08) 8/08 at 68.82 AAA 2,008,260 9,000 0.000%, 8/15/19 (Pre-refunded 8/15/08) 8/08 at 54.38 AAA 4,760,550 605 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (4) 692,689 Horse Center Revenue Bonds, Series 2001A, 7.400%, 7/15/21 (Pre-refunded 7/15/11) 950 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (4) 1,074,564 Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%, 7/15/21 (Pre-refunded 7/15/11) - ------------------------------------------------------------------------------------------------------------------------------------ 25,595 Total Virginia 18,189,316 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 3.6% (2.3% OF TOTAL INVESTMENTS) 3,000 Skagit County Public Hospital District 1, Washington, Revenue 12/13 at 100.00 Baa2 3,164,400 Bonds, Skagit Valley Hospital, Series 2003, 6.000%, 12/01/18 Vancouver Downtown Redevelopment Authority, Washington, Revenue Bonds, Conference Center Project, Series 2003A: 1,750 6.000%, 1/01/28 - ACA Insured 1/14 at 100.00 A 1,824,305 4,725 6.000%, 1/01/34 - ACA Insured 1/14 at 100.00 A 4,892,879 2,500 5.250%, 1/01/34 - ACA Insured 1/14 at 100.00 A 2,459,625 1,000 Washington State Economic Development Finance Authority, 12/17 at 100.00 N/R 988,250 Revenue Bonds, Coeur D'Alene Fiber Project, Series 2007G, 7.000%, 12/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 12,975 Total Washington 13,329,459 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.3% (0.2% OF TOTAL INVESTMENTS) 500 Ohio County Commission, West Virginia, Special District Excise 3/16 at 100.00 N/R 486,500 Tax Revenue Bonds, Fort Henry Economic Development, Series 2006B, 5.625%, 3/01/36 500 Ohio County Commission, West Virginia, Tax Increment Revenue No Opt. Call N/R 496,970 Bonds, Fort Henry Centre Financing District, Series 2007A, 5.850%, 6/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 1,000 Total West Virginia 983,470 - ------------------------------------------------------------------------------------------------------------------------------------ 73 NMZ Nuveen Municipal High Income Opportunity Fund (continued) Portfolio of INVESTMENTS October 31, (2007) PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.2% (4.0% OF TOTAL INVESTMENTS) $ 550 Lac Courte Oreilles Band of Lake Superior Chippewa Indians, 12/14 at 101.00 N/R (4) $ 688,969 Wisconsin, Revenue Bonds, Series 2003A, 7.750%, 6/01/16 (Pre-refunded 12/01/14) Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Aurora Health Care Inc., Series 1999A: 9,485 5.600%, 2/15/29 2/09 at 101.00 BBB+ 9,557,558 2,300 5.600%, 2/15/29 - ACA Insured 2/09 at 101.00 A 2,315,617 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Southwest Health Center Inc., Series 2004A: 875 6.125%, 4/01/24 4/14 at 100.00 N/R 902,755 1,000 6.250%, 4/01/34 4/14 at 100.00 N/R 1,012,560 7,995 Wisconsin Health and Educational Facilities Authority, Revenue 8/16 at 100.00 A- 7,985,726 Bonds, Wheaton Fransciscan Health, 5.250%, 8/15/26 (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 22,205 Total Wisconsin 22,463,185 - ------------------------------------------------------------------------------------------------------------------------------------ $ 550,437 Total Investments (cost $529,773,951) - 153.3% 554,163,441 - ------------------------------------------------------------------------------------------------------------------------------------ Floating Rate Obligations - (9.1)% $ (32,995,000) - ------------------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - (1.3)% (4,684,858) - ------------------------------------------------------------------------------------------------------------------------------------ Preferred Shares, at Liquidation Value - (42.9)% (155,000,000) - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets Applicable to Common Shares - 100% $ 361,483,583 ====================================================================================================================
The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the Portfolio of Investments with a 0.000% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Non-income producing security, in the case of a bond, generally denotes that the issuer has defaulted on the payment of principal or interest or has filed for bankruptcy. (6) The issuer has received a formal adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. N/R Not rated. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 74 Statement of ASSETS & LIABILITIES October 31, 2007
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at value (cost $810,344,010, $751,747,642, $1,225,967,368, $481,650,918 and $529,773,951, respectively) $849,292,091 $790,328,477 $1,292,372,725 $499,840,080 $554,163,441 Cash 839,883 -- 2,454,281 59,050 -- Unrealized appreciation on forward swaps -- -- -- 129,759 -- Receivables: Fund shares sold -- -- -- -- 52,971 Interest 13,117,539 11,947,050 20,056,104 7,174,213 9,698,911 Investments sold 15,000 4,710,537 30,000 891,508 2,734,163 Deferred shelf offering cost -- -- -- -- 110,224 Other assets 83,077 96,657 118,432 56,617 27,550 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 863,347,590 807,082,721 1,315,031,542 508,151,227 566,787,260 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- 7,034,856 -- -- 8,965,318 Floating rate obligations 21,105,000 6,665,000 48,875,000 47,354,500 32,995,000 Payable for investments purchased 309,556 -- -- -- 6,093,476 Accrued expenses: Management fees 434,329 409,910 645,417 241,807 174,188 Shelf offering costs -- -- -- -- 65,000 Other 134,797 215,462 360,229 161,225 133,557 Common share dividends payable 1,992,227 1,988,680 2,885,060 970,441 1,834,736 Preferred share dividends payable 105,786 98,346 179,828 45,428 42,402 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 24,081,695 16,412,254 52,945,534 48,773,401 50,303,677 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 301,000,000 279,000,000 452,000,000 165,000,000 155,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $538,265,895 $511,670,467 $ 810,086,008 $294,377,826 $361,483,583 ==================================================================================================================================== Common shares outstanding 35,820,767 34,004,236 54,219,374 19,908,718 23,541,031 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.03 $ 15.05 $ 14.94 $ 14.79 $ 15.36 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 358,208 $ 340,042 $ 542,194 $ 199,087 $ 235,410 Paid-in surplus 499,419,993 473,671,931 755,310,592 276,648,209 333,684,307 Undistributed (Over-distribution of) net investment income (80,632) 124,715 (333,918) (632,067) 505,752 Accumulated net realized gain (loss) from investments and derivative transactions (379,755) (1,047,056) (11,838,217) (156,324) 2,668,624 Net unrealized appreciation (depreciation) of investments and derivative transactions 38,948,081 38,580,835 66,405,357 18,318,921 24,389,490 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $538,265,895 $511,670,467 $ 810,086,008 $294,377,826 $361,483,583 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 200,000,000 200,000,000 Unlimited Preferred 1,000,000 1,000,000 1,000,000 1,000,000 Unlimited ====================================================================================================================================
See accompanying notes to financial statements. 75 Statement of OPERATIONS Year Ended October 31, 2007
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $ 43,873,398 $ 42,419,337 $ 65,941,005 $ 24,583,332 $ 32,516,509 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 5,167,522 4,871,125 7,665,407 2,890,054 3,755,391 Preferred shares - auction fees 752,499 697,500 1,130,000 412,501 362,567 Preferred shares - dividend disbursing agent fees 50,000 50,000 60,000 30,000 28,830 Shareholders' servicing agent fees and expenses 54,500 48,810 81,749 30,436 2,384 Interest expense on floating rate obligations 839,868 133,900 1,706,466 1,922,377 807,475 Custodian's fees and expenses 199,152 179,055 264,035 87,201 239,887 Directors'/Trustees' fees and expenses 20,055 18,865 29,817 11,020 12,136 Professional fees 46,430 43,880 62,101 25,129 181,084 Shareholders' reports - printing and mailing expenses 86,804 83,772 134,690 49,829 60,120 Stock exchange listing fees 12,854 12,357 19,490 9,666 1,980 Investor relations expense 87,920 83,834 133,936 49,054 54,898 Other expenses 49,843 49,149 65,608 36,519 36,386 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement and legal fee refund 7,367,447 6,272,247 11,353,299 5,553,786 5,543,138 Custodian fee credit (100,592) (51,607) (120,042) (59,879) (19,348) Expense reimbursement -- -- -- -- (1,676,178) Legal fee refund -- -- -- (4,129) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 7,266,855 6,220,640 11,233,257 5,489,778 3,847,612 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 36,606,543 36,198,697 54,707,748 19,093,554 28,668,897 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments 1,949,305 1,994,624 1,756,386 53,881 2,665,874 Forward swaps -- -- -- 178,000 -- Change in net unrealized appreciation (depreciation) of: Investments (23,427,097) (19,571,728) (29,728,496) (12,901,205) (17,903,629) Forward swaps -- -- -- 636,942 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) (21,477,792) (17,577,104) (27,972,110) (12,032,382) (15,237,755) - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (10,668,647) (9,950,399) (16,132,468) (5,895,868) (5,501,664) From accumulated net realized gains -- -- -- -- (19,807) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (10,668,647) (9,950,399) (16,132,468) (5,895,868) (5,521,471) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations $ 4,460,104 $ 8,671,194 $ 10,603,170 $ 1,165,304 $ 7,909,671 ====================================================================================================================================
See accompanying notes to financial statements. 76 Statement of CHANGES in NET ASSETS
INVESTMENT QUALITY (NQM) SELECT QUALITY (NQS) ----------------------------- ------------------------------ YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/07 10/31/06 10/31/07 10/31/06 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 36,606,543 $ 37,550,921 $ 36,198,697 $ 36,194,734 Net realized gain (loss) from: Investments 1,949,305 (2,340,524) 1,994,624 (1,691,751) Forward swaps -- -- -- -- Change in net unrealized appreciation (depreciation) of: Investments (23,427,097) 17,200,976 (19,571,728) 9,521,291 Forward swaps -- -- -- -- Distributions to Preferred Shareholders: From net investment income (10,668,647) (8,562,468) (9,950,399) (8,877,061) From accumulated net realized gains -- (957,218) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 4,460,104 42,891,687 8,671,194 35,147,213 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (28,773,137) (30,152,759) (28,151,510) (29,818,961) From accumulated net realized gains -- (5,124,321) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (28,773,137) (35,277,080) (28,151,510) (29,818,961) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from shelf offering -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 1,107,500 -- 1,154,896 673,438 Cost of repurchases -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 1,107,500 -- 1,154,896 673,438 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (23,205,533) 7,614,607 (18,325,420) 6,001,690 Net assets applicable to Common shares at the beginning of year 561,471,428 553,856,821 529,995,887 523,994,197 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $538,265,895 $561,471,428 $511,670,467 $529,995,887 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (80,632) $ 2,769,331 $ 124,715 $ 2,057,255 ====================================================================================================================================
See accompanying notes to financial statements. 77 Statement of CHANGES in NET ASSETS (continued)
HIGH INCOME QUALITY INCOME (NQU) PREMIER INCOME (NPF) OPPORTUNITY (NMZ) ----------------------------- ----------------------------- ------------------------------ YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/07 10/31/06 10/31/07 10/31/06 10/31/07 10/31/06 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 54,707,748 $ 54,758,299 $ 19,093,554 $ 18,901,380 $ 28,668,897 $ 28,131,297 Net realized gain (loss) from: Investments 1,756,386 1,142,647 53,881 197,145 2,665,874 538,187 Forward swaps -- -- 178,000 -- -- -- Change in net unrealized appreciation (depreciation) of: Investments (29,728,496) 15,255,701 (12,901,205) 10,303,176 (17,903,629) 14,643,108 Forward swaps -- -- 636,942 (507,183) -- -- Distributions to Preferred Shareholders: From net investment income (16,132,468) (14,224,057) (5,895,868) (5,143,710) (5,501,664) (4,487,444) From accumulated net realized gains -- -- -- -- (19,807) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 10,603,170 56,932,590 1,165,304 23,750,808 7,909,671 38,825,148 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (40,496,209) (44,257,967) (13,479,410) (14,033,577) (22,823,070) (24,231,711) From accumulated net realized gains -- -- -- -- (105,253) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (40,496,209) (44,257,967) (13,479,410) (14,033,577) (22,928,323) (24,231,711) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from shelf offering -- -- -- -- 3,071,410 -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 227,748 -- -- -- 731,262 860,335 Cost of repurchases -- -- (2,448,254) -- -- 220,368 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 227,748 -- (2,448,254) -- 3,802,672 1,080,703 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (29,665,291) 12,674,623 (14,762,360) 9,717,231 (11,215,980) 15,674,140 Net assets applicable to Common shares at the beginning of year 839,751,299 827,076,676 309,140,186 299,422,955 372,699,563 357,025,423 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $810,086,008 $839,751,299 $294,377,826 $309,140,186 $361,483,583 $372,699,563 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (333,918) $ 1,631,998 $ (632,067) $ (342,548) $ 505,752 $ 166,221 ====================================================================================================================================
See accompanying notes to financial statements. 78 Statement of CASH FLOWS Year Ended October 31, 2007
PREMIER INCOME (NPF) - ------------------------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS $ 1,165,304 Adjustments to reconcile the net increase (decrease) in net assets applicable to Common shares from operations to net cash provided by (used in) operating activities: Purchases of investments (56,675,346) Proceeds from sales and maturities of investments 53,856,525 Proceeds from sales of forward swaps 178,000 Amortization/(Accretion) of premiums and discounts, net (956,411) (Increase) Decrease in receivable for interest 76,856 (Increase) Decrease in receivable for investments sold 13,098,669 (Increase) Decrease in other assets (7,947) Increase (Decrease) in payable for investments purchased (26,064,647) Increase (Decrease) in accrued management fees (6,251) Increase (Decrease) in accrued other liabilities 46,553 Increase (Decrease) in Preferred shares dividends payable (33,798) Net realized (gain) loss from investments (53,881) Net realized (gain) loss from forward swaps (178,000) Change in net unrealized (appreciation) depreciation of investments 12,901,205 Change in net unrealized (appreciation) depreciation of forward swaps (636,942) Taxes paid on undistributed capital gains (443) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) operating activities (3,290,554) - ------------------------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Increase in floating rate obligations 15,968,000 Cash distributions paid to Common shareholders (12,508,969) Cost of Common shares repurchases (2,448,254) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) financing activities 1,010,777 - ------------------------------------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN CASH (2,279,777) Cash at the beginning of year 2,338,827 - ------------------------------------------------------------------------------------------------------------------------------------ CASH AT THE END OF YEAR $ 59,050 ====================================================================================================================================
See accompanying notes to financial statements. 79 Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen Investment Quality Municipal Fund, Inc. (NQM), Nuveen Select Quality Municipal Fund, Inc. (NQS), Nuveen Quality Income Municipal Fund, Inc. (NQU), Nuveen Premier Municipal Income Fund, Inc. (NPF) and Nuveen Municipal High Income Opportunity Fund (NMZ). Common shares of Investment Quality (NQM), Select Quality (NQS), Quality Income (NQU) and Premier Income (NPF) are traded on the New York Stock Exchange while Common shares of High Income Opportunity (NMZ) are traded on the American Stock Exchange. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end, diversified management investment companies. Each Fund seeks to provide current income exempt from regular federal income tax by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities or certain U.S. territories. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. Investment Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When market price quotes are not readily available (which is usually the case for municipal securities), the pricing service may establish fair value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. Prices of forward swap contracts are also provided by an independent pricing service approved by each Fund's Board of Directors/Trustees. If the pricing service is unable to supply a price for a municipal bond or forward swap contract, each Fund may use a market price or fair market value quote provided by a major broker/dealer in such investments. If it is determined that the market price or fair market value for an investment or derivative transaction is unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish a fair value for the investment. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value. Investment Transactions Investment transactions are recorded on a trade date basis. Realized gains and losses from transactions are determined on the specific identification method. Investments purchased on a when-issued/delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At October 31, 2007, High Income Opportunity (NMZ) had outstanding when-issued/delayed delivery purchase commitments of $4,000,000. There were no such outstanding purchase commitments in any of the other Funds. Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any. Professional Fees Professional fees presented in the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment, or to pursue other claims or legal actions on behalf of Fund shareholders. Legal fee refunds presented on the Statement of Operations for Premier Income (NPF) reflect a refund of workout expenditures paid in a prior reporting period. 80 Federal Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, to retain such tax-exempt status when distributed to shareholders of the Funds. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation. Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Preferred Shares The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in more than one Series. The dividend rate paid by the Funds on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable at the end of each rate period. Prior to January 31, 2007, the dividend rate for High Income Opportunity's (NMZ) Series W was payable monthly at a rate which was negotiated at the time of the Preferred share offering. The number of Preferred shares outstanding, by Series and in total, for each Fund is as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------ Number of shares: Series M 2,500 2,000 3,000 1,000 3,000 Series T 2,500 2,000 3,000 2,800 1,600 Series W 2,500 2,800 3,000 -- 1,600 Series W2 -- -- 2,080 -- -- Series TH 2,040 1,560 4,000 2,800 -- Series F 2,500 2,800 3,000 -- -- - ------------------------------------------------------------------------------------------------------------------ Total 12,040 11,160 18,080 6,600 6,200 ==================================================================================================================
Common Shares Shelf Offering On September 24, 2007, a registration statement filed by High Income Opportunity (NMZ) became effective. This registration statement permits the Fund to issue up to 2,400,000 of additional shares of common stock through a shelf offering. Under this equity shelf program, the Fund, subject to market conditions, may raise additional equity capital from time to time in varying amounts and offering methods at a net price at or above the Fund's net asset value per common share. Shelf Offering Costs Costs incurred by High Income Opportunity (NMZ) in connection with the offering of its additional common shares are recorded as a deferred charge which are amortized over the period such additional Common shares are sold. Inverse Floating Rate Securities Each Fund may invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. In turn, this trust (a) issues floating rate certificates, in face amounts equal to some fraction of the deposited bond's par amount or market value, that typically pay short-term tax-exempt interest rates to third parties, and (b) issues to a long-term investor (such as one of the Funds) an inverse floating rate certificate (sometimes referred to as an "inverse floater") that represents all remaining or residual interest in the trust. The income received by the inverse floater holder varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the inverse floater holder bears substantially all of the underlying bond's downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond's value. The price of an inverse floating rate security will be more volatile than that of the underlying bond because the interest rate is dependent on not only the fixed coupon rate of the underlying bond but also on the short-term interest paid on the floating rate certificates, and because the inverse floating rate security essentially bears the risk of loss of the greater face value of the underlying bond. 81 Notes to FINANCIAL STATEMENTS (continued) A Fund may purchase an inverse floating rate security in a secondary market transaction without first owning the underlying bond (referred to as an "externally-deposited inverse floater"), or instead by first selling a fixed-rate bond to a broker-dealer for deposit into the special purpose trust and receiving in turn the residual interest in the trust (referred to as a "self-deposited inverse floater"). A Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a "recourse trust" or "credit recovery swap") with a broker-dealer by which a Fund agrees to reimburse the broker-dealer, in certain circumstances, for the difference between the liquidation value of the fixed-rate bond held by the trust and the liquidation value of the floating rate certificates, as well as any shortfalls in interest cash flows. The inverse floater held by a Fund gives the Fund the right (a) to cause the holders of the floating rate certificates to tender their notes at par, and (b) to have the broker transfer the fixed-rate bond held by the trust to the Fund, thereby collapsing the trust. An investment in an externally-deposited inverse floater is identified in the Portfolio of Investments as an "Inverse floating rate investment". An investment in a self-deposited inverse floater, recourse trust or credit recovery swap is accounted for as a financing transaction in accordance with Statement of Financial Accounting Standards (SFAS) No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities". In such instances, a fixed-rate bond deposited into a special purpose trust is identified in the Portfolio of Investments as an "Underlying bond of an inverse floating rate trust", with the Fund accounting for the short-term floating rate certificates issued by the trust as "Floating rate obligations" on the Statement of Assets and Liabilities. In addition, the Fund reflects in Investment Income the entire earnings of the underlying bond and accounts for the related interest paid to the holders of the short-term floating rate certificates as "Interest expense on floating rate obligations" in the Statement of Operations. During the fiscal year ended October 31, 2007, each Fund invested in externally deposited inverse floaters and/or self-deposited inverse floaters. The average floating rate obligations outstanding and average annual interest rate and fees related to self-deposited inverse floaters during the fiscal year ended October 31, 2007, were as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------ Average floating rate obligations $21,661,986 $3,451,192 $44,104,151 $49,557,774 $20,854,247 Average annual interest rate and fees 3.88% 3.88% 3.87% 3.88% 3.87% ==================================================================================================================
Forward Swap Transactions The Funds are authorized to invest in forward interest rate swap transactions. Each Fund's use of forward interest rate swap transactions is intended to help the Fund manage its overall interest rate sensitivity, either shorter or longer, generally to more closely align the Fund's interest rate sensitivity with that of the broader municipal market. Forward interest rate swap transactions involve each Fund's agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed rate payment, the accruals for which would begin at a specified date in the future (the "effective date"). The amount of the payment obligation is based on the notional amount of the forward swap contract and the termination date of the swap (which is akin to a bond's maturity). The value of the Fund's swap commitment would increase or decrease based primarily on the extent to which long-term interest rates for bonds having a maturity of the swap's termination date increases or decreases. The Funds may terminate a swap contract prior to the effective date, at which point a realized gain or loss is recognized. When a forward swap is terminated, it ordinarily does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Each Fund intends, but is not obligated, to terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment to pay any realized gain to the Fund upon termination. To reduce such credit risk, all counterparties are required to pledge collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate, either up or down, by at least the predetermined threshold amount. Premier Income (NPF) was the only Fund to invest in forward interest rate swap transactions during the fiscal year ended October 31, 2007. 82 Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by net credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Credits for cash balances may be offset by charges for any days on which the Fund overdraws its account at the custodian bank. Indemnifications Under the Funds' organizational documents, their Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES On July 10, 2007, the Board of Directors of Premium Income (NPF), approved an open-market share repurchase program, as part of a broad, ongoing effort designed to support the market prices of the Fund's Common shares. Under the terms of the program, the Fund may repurchase up to 10% of its outstanding Common shares. Transactions in Common shares were as follows:
INVESTMENT QUALITY (NQM) SELECT QUALITY (NQS) QUALITY INCOME (NQU) ------------------------ ----------------------- ----------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/07 10/31/06 10/31/07 10/31/06 10/31/07 10/31/06 - ------------------------------------------------------------------------------------------------------------------ Common shares: Shares issued to shareholders due to reinvestment of distributions 71,808 -- 73,380 43,382 14,886 -- Shares repurchased -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------ Weighted average price per Common share repurchased -- -- -- -- -- -- Weighted average discount per Common share repurchased -- -- -- -- -- -- ================================================================================================================== HIGH PREMIER INCOME (NPF) INCOME OPPORTUNITY (NMZ) ----------------------- ------------------------ YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/07 10/31/06 10/31/07 10/31/06 - ------------------------------------------------------------------------------------------------------------------ Common shares: Shares sold through shelf offering -- -- 197,111 -- Shares issued to shareholders due to reinvestment of distributions -- -- 44,002 51,796 Shares repurchased (182,300) -- -- -- - ------------------------------------------------------------------------------------------------------------------ Weighted average price per Common share repurchased 13.41 -- -- -- Weighted average discount per Common share repurchased 8.71% -- -- -- Weighted average premium per Common share sold -- -- 4.32% -- ==================================================================================================================
3. INVESTMENT TRANSACTIONS Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the fiscal year ended October 31, 2007, were as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------ Purchases $112,902,262 $65,461,850 $76,284,562 $56,675,346 $112,573,190 Sales and maturities 90,225,327 61,173,985 67,090,964 53,856,525 64,618,492 ==================================================================================================================
83 Notes to FINANCIAL STATEMENTS (continued) 4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to the treatment of paydown gains and losses, timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate transactions subject to SFAS No.140. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds. At October 31, 2007, the cost of investments was as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------------ Cost of investments $789,017,765 $744,479,581 $1,176,625,155 $434,205,729 $495,195,725 ========================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2007, were as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------------ Gross unrealized: Appreciation $43,712,539 $40,445,063 $71,489,496 $20,970,478 $29,711,040 Depreciation (4,445,421) (1,261,069) (4,617,771) (2,721,766) (3,738,521) - ------------------------------------------------------------------------------------------------------------------------ Net unrealized appreciation (depreciation) of investments $39,267,118 $39,183,994 $66,871,725 $18,248,712 $25,972,519 ========================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at October 31, 2007, the Funds' tax year end, were as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ----------------------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income * $1,813,319 $1,897,389 $2,245,512 $458,294 $ 794,702 Undistributed net ordinary income ** 203,237 797 -- 10,401 82,621 Undistributed net long-term capital gains -- -- -- -- 2,667,895 =======================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on October 1, 2007, paid on November 1, 2007. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. The tax character of distributions paid during the Funds' tax years ended October 31, 2007 and October 31, 2006, was designated for purposes of the dividends paid deduction as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY 2007 (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------ Distributions from net tax-exempt income*** $39,550,444 $38,224,899 $56,796,248 $19,389,148 $28,368,237 Distributions from net ordinary income ** -- -- -- -- 4,938 Distributions from net long-term capital gains**** -- -- -- -- 125,060 ==================================================================================================================
84
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY 2006 (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------------------------ Distributions from net tax-exempt income $38,825,191 $38,884,337 $58,786,651 $19,384,184 $28,940,473 Distributions from net ordinary income ** 83,195 -- -- -- -- Distributions from net long-term capital gains 6,081,436 -- -- -- -- ==================================================================================================================
** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. *** The Funds hereby designate these amounts paid during the fiscal year ended October 31, 2007, as Exempt Interest Dividends. **** The Funds hereby designate these amounts paid during the fiscal year ended October 31, 2007, as long-term capital gain dividends pursuant to Internal Revenue Code Section 852(b)(3) At October 31, 2007, the Funds' tax year end, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - ------------------------------------------------------------------------------------------------------------------ Expiration year: 2011 $ -- $ -- $11,423,918 $ -- 2012 -- -- -- -- 2013 -- -- -- 156,324 2014 379,755 1,047,056 -- -- - ------------------------------------------------------------------------------------------------------------------ Total $379,755 $1,047,056 $11,423,918 $156,324 ==================================================================================================================
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Each Fund's management fee is separated into two components - a complex-level component, based on the aggregate amount of all fund assets managed by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. ("Nuveen"), and a specific fund-level component, based only on the amount of assets within each individual Fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser. The annual fund-level fee, payable monthly, for each Fund is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: INVESTMENT QUALITY (NQM) SELECT QUALITY (NQS) AVERAGE DAILY NET ASSETS QUALITY INCOME (NQU) (INCLUDING NET ASSETS PREMIER INCOME (NPF) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ================================================================================ AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS HIGH INCOME OPPORTUNITY (NMZ) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $125 million .5500% For the next $125 million .5375 For the next $250 million .5250 For the next $500 million .5125 For the next $1 billion .5000 For net assets over $2 billion .4750 ================================================================================ The annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as stated in the tables below. As of October 31, 2007, the complex-level fee rate was .1828%. 85 Notes to FINANCIAL STATEMENTS (continued) Effective August 20, 2007, the complex-level fee schedule is as follows: COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL - -------------------------------------------------------------------------------- $55 billion .2000% $56 billion .1996 $57 billion .1989 $60 billion .1961 $63 billion .1931 $66 billion .1900 $71 billion .1851 $76 billion .1806 $80 billion .1773 $91 billion .1691 $125 billion .1599 $200 billion .1505 $250 billion .1469 $300 billion .1445 ================================================================================ Prior to August 20, 2007, the complex-level fee schedule was as follows: COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL - -------------------------------------------------------------------------------- $55 billion .2000% $56 billion .1996 $57 billion .1989 $60 billion .1961 $63 billion .1931 $66 billion .1900 $71 billion .1851 $76 billion .1806 $80 billion .1773 $91 billion .1698 $125 billion .1617 $200 billion .1536 $250 billion .1509 $300 billion .1490 ================================================================================ (1) The complex-level fee component of the management fee for the funds is calculated based upon the aggregate Managed Assets ("Managed Assets" means the average daily net assets of each fund including assets attributable to preferred stock issued by or borrowings by the Nuveen funds) of Nuveen-sponsored funds in the U.S. The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to its Officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds. 86 For the first eight years of High Income Opportunity's (NMZ) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING NOVEMBER 30, NOVEMBER 30, - -------------------------------------------------------------------------------- 2003* .32% 2009 .24% 2004 .32 2010 .16 2005 .32 2011 .08 2006 .32 2007 .32 2008 .32 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse High Income Opportunity (NMZ) for any portion of its fees and expenses beyond November 30, 2011. As of October 31, 2007, Nuveen Investments, LLC received commissions of $17,981 related to the sale of common shares as a result of the High Income Opportunity (NMZ) shelf offering. Agreement and Plan of Merger On June 20, 2007, Nuveen Investments announced that it had entered into a definitive Agreement and Plan of Merger ("Merger Agreement") with Windy City Investments, Inc. ("Windy City"), a corporation formed by investors led by Madison Dearborn Partners, LLC ("Madison Dearborn"), pursuant to which Windy City would acquire Nuveen Investments. Madison Dearborn is a private equity investment firm based in Chicago, Illinois. The merger was consummated on November 13, 2007. The consummation of the merger was deemed to be an "assignment" (as that term is defined in the Investment Company Act of 1940) of the investment management agreement between each Fund and the Adviser, and resulted in the automatic termination of each Fund's agreement. The Board of Directors/Trustees of each Fund considered and approved a new investment management agreement with the Adviser at the same fee rate. The new ongoing agreement was approved by the shareholders of each Fund and took effect on November 13, 2007. The investors led by Madison Dearborn include an affiliate of Merrill Lynch. As a result, Merrill Lynch is an indirect "affiliated person" (as that term is defined in the Investment Company Act of 1940) of each Fund. Certain conflicts of interest may arise as a result of such indirect affiliation. For example, the Funds are generally prohibited from entering into principal transactions with Merrill Lynch and its affiliates. The Adviser does not believe that any such prohibitions or limitations as a result of Merrill Lynch's affiliation will significantly impact the ability of the Funds to pursue their investment objectives and policies. 6. NEW ACCOUNTING PRONOUNCEMENTS Financial Accounting Standards Board Interpretation No. 48 On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006, and is to be applied to all open tax years as of the effective date. SEC guidance allows funds to delay implementing FIN 48 into NAV calculations until the fund's last NAV calculation in the first required financial statement reporting period. As a result, the Funds must begin to incorporate FIN 48 into their NAV calculations by April 30, 2008. At this time, management is continuing to evaluate the implications of FIN 48 and does not expect the adoption of FIN 48 will have a significant impact on the net assets or results of operations of the Funds. Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157 In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this standard relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of October 31, 2007, management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements included within the Statement of Operations for the period. 87 Notes to FINANCIAL STATEMENTS (continued) 7. SUBSEQUENT EVENTS Distributions to Common Shareholders The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 3, 2007, to shareholders of record on November 15, 2007, as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME QUALITY QUALITY INCOME INCOME OPPORTUNITY (NQM) (NQS) (NQU) (NPF) (NMZ) - ------------------------------------------------------------------------------------------------ Dividend per share $.0645 $.0670 $.0605 $.0560 $.0815 ================================================================================================
88 Financial HIGHLIGHTS 89 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions ----------------------------------------------------------------- ------------------------------ Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total =============================================================================================================================== INVESTMENT QUALITY (NQM) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2007 $15.71 $1.02 $(.60) $(.30) $ -- $ .12 $ (.80) $ -- $ (.80) 2006 15.49 1.05 .42 (.24) (.03) 1.20 (.84) (.14) (.98) 2005 16.06 1.05 (.39) (.16) (.01) .49 (.96) (.10) (1.06) 2004 15.65 1.07 .43 (.08) -- 1.42 (1.01) -- (1.01) 2003 15.63 1.11 .02 (.08) -- 1.05 (1.01) (.02) (1.03) SELECT QUALITY (NQS) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2007 15.62 1.07 (.52) (.29) -- .26 (.83) -- (.83) 2006 15.46 1.07 .23 (.26) -- 1.04 (.88) -- (.88) 2005 15.69 1.06 (.16) (.16) -- .74 (.97) -- (.97) 2004 15.33 1.09 .42 (.07) (.01) 1.43 (1.00) (.07) (1.07) 2003 15.00 1.08 .30 (.07) -- 1.31 (.98) -- (.98) =============================================================================================================================== Total Returns --------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value* Value* ===================================================================================== INVESTMENT QUALITY (NQM) - ------------------------------------------------------------------------------------- Year Ended 10/31: 2007 $ -- $15.03 $13.88 (6.17)% .82% 2006 -- 15.71 15.60 15.33 8.09 2005 -- 15.49 14.45 1.17 3.10 2004 -- 16.06 15.33 8.54 9.37 2003 -- 15.65 15.10 7.78 6.88 SELECT QUALITY (NQS) - ------------------------------------------------------------------------------------- Year Ended 10/31: 2007 -- 15.05 15.00 2.31 1.70 2006 -- 15.62 15.47 10.47 6.94 2005 -- 15.46 14.83 4.14 4.77 2004 -- 15.69 15.19 10.19 9.64 2003 -- 15.33 14.81 9.91 8.96 ===================================================================================== Ratios/Supplemental Data -------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund** --------------------------------------------- --------------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++(a) Interest++(a) Interest++(a) Income++(a) Rate ==================================================================================================================================== INVESTMENT QUALITY (NQM) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2007 $538,266 1.35% 1.19% 6.67% 1.33% 1.17% 6.69% 11% 2006 561,471 1.20 1.20 6.79 1.17 1.17 6.82 10 2005 553,857 1.20 1.20 6.59 1.18 1.18 6.61 22 2004 574,164 1.20 1.20 6.78 1.20 1.20 6.79 16 2003 559,644 1.22 1.22 7.05 1.22 1.22 7.05 5 SELECT QUALITY (NQS) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2007 511,670 1.21 1.18 6.95 1.20 1.17 6.96 8 2006 529,996 1.18 1.18 6.91 1.17 1.17 6.93 5 2005 523,994 1.18 1.18 6.76 1.16 1.16 6.78 4 2004 531,694 1.21 1.21 6.96 1.15 1.15 7.02 4 2003 519,361 1.26 1.26 7.06 1.25 1.25 7.06 9 ====================================================================================================================================
Floating Rate Obligations Preferred Shares at End of Period at End of Period -------------------------------------- ------------------------- Aggregate Liquidation Aggregate Amount and Market Asset Amount Asset Outstanding Value Coverage Outstanding Coverage (000) Per Share Per Share (000) Per $1,000 =============================================================================== INVESTMENT QUALITY (NQM) - ------------------------------------------------------------------------------- Year Ended 10/31: 2007 $301,000 $25,000 $69,706 $21,105 $ 40,766 2006 301,000 25,000 71,634 -- -- 2005 301,000 25,000 71,001 -- -- 2004 301,000 25,000 72,688 -- -- 2003 301,000 25,000 71,482 -- -- SELECT QUALITY (NQS) - ------------------------------------------------------------------------------- Year Ended 10/31: 2007 279,000 25,000 70,849 6,665 119,630 2006 279,000 25,000 72,491 -- -- 2005 279,000 25,000 71,953 -- -- 2004 279,000 25,000 72,643 -- -- 2003 279,000 25,000 71,538 -- -- =============================================================================== * Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period takes place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. Total Return on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund's market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized. ** After custodian fee credit, expense reimbursement and legal fee refund, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. See accompanying notes to financial statements. 90-91 spread Financial HIGHLIGHTS (continued) Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions ----------------------------------------------------------------- ------------------------------ Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total =============================================================================================================================== QUALITY INCOME (NQU) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2007 $15.49 $1.01 $(.51) $(.30) $ -- $ .20 $(.75) $ -- $ (.75) 2006 15.26 1.01 .30 (.26) -- 1.05 (.82) -- (.82) 2005 15.54 1.02 (.22) (.16) -- .64 (.92) -- (.92) 2004 15.04 1.04 .51 (.08) -- 1.47 (.97) -- (.97) 2003 14.70 1.06 .34 (.07) -- 1.33 (.96) (.03) (.99) PREMIER INCOME (NPF) - ------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2007 15.39 .95 (.59) (.29) -- .07 (.67) -- (.67) 2006 14.90 .94 .51 (.26) -- 1.19 (.70) -- (.70) 2005 15.53 .94 (.39) (.16) (.01) .38 (.88) (.13) (1.01) 2004 15.13 1.00 .47 (.08) -- 1.39 (.99) -- (.99) 2003 15.23 1.06 (.01) (.07) (.01) .97 (.98) (.09) (1.07) =============================================================================================================================== Total Returns --------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value* Value* ================================================================================= QUALITY INCOME (NQU) - --------------------------------------------------------------------------------- Year Ended 10/31: 2007 $ -- $14.94 $13.64 (2.54)% 1.31% 2006 -- 15.49 14.73 8.55 7.07 2005 -- 15.26 14.34 4.78 4.15 2004 -- 15.54 14.58 8.76 10.07 2003 -- 15.04 14.33 9.31 9.37 PREMIER INCOME (NPF) - --------------------------------------------------------------------------------- Year Ended 10/31: 2007 -- 14.79 13.30 2.28 .48 2006 -- 15.39 13.65 5.93 8.20 2005 -- 14.90 13.57 1.05 2.49 2004 -- 15.53 14.43 4.75 9.48 2003 -- 15.13 14.74 9.13 6.57 ================================================================================= Ratios/Supplemental Data -------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund** --------------------------------------------- --------------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++(a) Interest++(a) Interest++(a) Income++(a) Rate ==================================================================================================================================== QUALITY INCOME (NQU) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2007 $810,086 1.38% 1.17% 6.65% 1.37% 1.16% 6.66% 5% 2006 839,751 1.18 1.18 6.62 1.17 1.17 6.63 11 2005 827,077 1.18 1.18 6.57 1.17 1.17 6.57 6 2004 842,093 1.20 1.20 6.83 1.20 1.20 6.83 6 2003 815,270 1.21 1.21 7.12 1.21 1.21 7.13 9 PREMIER INCOME (NPF) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2007 294,378 1.84 1.20 6.30 1.82 1.18 6.32 10 2006 309,140 1.24 1.24 6.27 1.23 1.23 6.28 35 2005 299,423 1.23 1.23 6.16 1.22 1.22 6.17 20 2004 311,991 1.28 1.28 6.57 1.27 1.27 6.58 22 2003 304,048 1.24 1.24 6.91 1.23 1.23 6.91 19 ====================================================================================================================================
Floating Rate Obligations Preferred Shares at End of Period at End of Period -------------------------------------- ------------------------- Aggregate Liquidation Aggregate Amount and Market Asset Amount Asset Outstanding Value Coverage Outstanding Coverage (000) Per Share Per Share (000) Per $1,000 =============================================================================== QUALITY INCOME (NQU) - ------------------------------------------------------------------------------- Year Ended 10/31: 2007 $ 452,000 $25,000 $69,806 $48,875 $26,823 2006 452,000 25,000 71,446 -- -- 2005 452,000 25,000 70,745 -- -- 2004 452,000 25,000 71,576 -- -- 2003 452,000 25,000 70,092 -- -- PREMIER INCOME (NPF) - ------------------------------------------------------------------------------- Year Ended 10/31: 2007 165,000 25,000 69,603 47,355 10,701 2006 165,000 25,000 71,839 -- -- 2005 165,000 25,000 70,367 -- -- 2004 165,000 25,000 72,271 -- -- 2003 165,000 25,000 71,068 -- -- =============================================================================== * Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period takes place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. Total Return on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund's market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized. ** After custodian fee credit, expense reimbursement and legal fee refund, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. See accompanying notes to financial statements. 92-93 spread Financial HIGHLIGHTS (continued) Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions ------------------------------------------------------------------ -------------------------------- Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ================================================================================================================================== HIGH INCOME OPPORTUNITY (NMZ) - ---------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2007 $16.00 $1.23 $(.65) $(.24) $ --**** $ .34 $ (.98) $ --**** $ (.98) 2006 15.36 1.21 .65 (.19) -- 1.67 (1.04) -- (1.04) 2005 14.87 1.22 .54 (.13) (.01) 1.62 (1.07) (.06) (1.13) 2004(b) 14.33 .98 .71 (.08) -- 1.61 (.89) -- (.89) ================================================================================================================================== Total Returns --------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value* Value* ================================================================================= HIGH INCOME OPPORTUNITY (NMZ) - --------------------------------------------------------------------------------- Year Ended 10/31: 2007 $ -- $15.36 $15.82 (2.68)% 2.14% 2006 .01 16.00 17.25 14.79 11.34 2005 -- 15.36 15.99 14.35 11.20 2004(b) (.18) 14.87 15.04 6.49 10.38 ================================================================================= Ratios/Supplemental Data ------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund** --------------------------------------------- --------------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++(a) Interest++(a) Interest++(a) Income++(a) Rate ==================================================================================================================================== HIGH INCOME OPPORTUNITY (NMZ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2007 $361,484 1.50% 1.28% 7.31% 1.04% .82% 7.77% 12% 2006 372,700 1.21 1.21 7.31 .75 .75 7.77 9 2005 357,025 1.20 1.20 7.54 .74 .74 8.00 6 2004(b) 345,023 1.15* 1.15* 6.75* .70* .70* 7.20* 52 ====================================================================================================================================
Floating Rate Obligations Preferred Shares at End of Period at End of Period -------------------------------------- ------------------------- Aggregate Liquidation Aggregate Amount and Market Asset Amount Asset Outstanding Value Coverage Outstanding Coverage (000) Per Share Per Share (000) Per $1,000 =============================================================================== HIGH INCOME OPPORTUNITY (NMZ) - ------------------------------------------------------------------------------- Year Ended 10/31: 2007 $ 155,000 $25,000 $83,304 $32,995 $16,653 2006 155,000 25,000 85,113 -- -- 2005 155,000 25,000 82,585 -- -- 2004(b) 155,000 25,000 80,649 -- -- =============================================================================== * Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period takes place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. Total Return on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund's market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized. ** After custodian fee credit, expense reimbursement and legal fee refund, where applicable. *** Annualized. **** Per share Distributions from Capital Gains to Preferred Shareholders and Capital Gains to Common Shareholders round to less than $.01 per share. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. (b) For the period November 19, 2003 (commencement of operations) through October 31, 2004. See accompanying notes to financial statements. 94-95 spread Board Members & Officers The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board Members of the Funds. The number of board members of the Fund is currently set at eight. None of the board members who are not "interested" persons of the Funds has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) & ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER AND TERM(2) OVERSEEN BY DIRECTORSHIPS BOARD MEMBER DURING PAST 5 YEARS BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS: [] TIMOTHY R. SCHWERTFEGER(1) Former director (1994-November 12, 3/28/49 Chairman of 1994 2007), Chairman (1996-June 30, 2007), 333 W. Wacker Drive the Board ANNUAL 182 Non-Executive Chairman (July 1, Chicago, IL 60606 and Board Member 2007-November 12, 2007) and Chief Executive Officer (1996-June 30, 2007) of Nuveen Investments, Inc. and Nuveen Asset Management and certain other subsidiaries of Nuveen Investments, Inc.; formerly, Director (1992-2006) of Institutional Capital Corporation. BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: [] ROBERT P. BREMNER Private Investor and Management 8/22/40 Lead 1997 Consultant. 333 W. Wacker Drive Independent ANNUAL OR CLASS III 182 Chicago, IL 60606 Board member [] JACK B. EVANS President, The Hall-Perrine Foundation, 10/22/48 1999 a private philanthropic corporation 333 W. Wacker Drive Board member ANNUAL OR CLASS III 182 (since 1996); Director and Vice Chicago, IL 60606 Chairman, United Fire Group, a publicly held company; Member of the Board of Regents for the State of Iowa University System; Director, Gazette Companies; Life Trustee of Coe College and Iowa College Foundation; Member of the Advisory Council of the Department of Finance in the Tippie College of Business, University of Iowa; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. [] WILLIAM C. HUNTER Dean, Tippie College of Business, 3/6/48 2004 University of Iowa (since July 2006); 333 W. Wacker Drive Board member ANNUAL OR CLASS II 182 formerly, Dean and Distinguished Chicago, IL 60606 Professor of Finance, School of Business at the University of Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); Director (since 1997), Credit Research Center at Georgetown University; Director (since 2004) of Xerox Corporation; Director, SS&C Technologies, Inc. (May 2005-October 2005). 96 NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) & ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER AND TERM(2) OVERSEEN BY DIRECTORSHIPS BOARD MEMBER DURING PAST 5 YEARS BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: [] DAVID J. KUNDERT Director, Northwestern Mutual Wealth 10/28/42 2005 Management Company; Retired (since 2004) 333 W. Wacker Drive Board member ANNUAL OR CLASS II 180 as Chairman, JPMorgan Fleming Asset Chicago, IL 60606 Management, President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Member, Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens; member of Board of Directors, Milwaukee Repertory Theater. [] WILLIAM J. SCHNEIDER Chairman of Miller-Valentine Partners 9/24/44 1997 Ltd., a real estate investment company, 333 W. Wacker Drive Board member ANNUAL 182 formerly, Senior Partner and Chief Chicago, IL 60606 Operating Officer (retired, 2004); Director, Dayton Development Coalition; formerly, Member, Business Advisory Council, Cleveland Federal Reserve Bank. [] JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy 12/29/47 1997 Donnelley Foundation (since 1994); prior 333 W. Wacker Drive Board member ANNUAL OR CLASS I 182 thereto, Executive Director, Great Lakes Chicago, IL 60606 Protection Fund (from 1990 to 1994). [] CAROLE E. STONE Director, Chicago Board Options Exchange 6/28/47 2007 (since 2006); Chair New York Racing 333 West Wacker Drive Board member ANNUAL OR CLASS I 182 Association Oversight Board (since Chicago, IL 60606 2005); Commissioner, New York State Commission on Public Authority Reform (since 2005); formerly Director, New York State Division of the Budget (2000-2004), Chair, Public Authorities Control Board (2000-2004) and Director, Local Government Assistance Corporation (2000-2004). 97 NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS OVERSEEN BY OFFICER OFFICERS OF THE FUND: [] GIFFORD R. ZIMMERMAN Managing Director (since 2002), 9/9/56 Chief Assistant Secretary and Associate 333 W. Wacker Drive Administrative 1988 182 General Counsel, formerly, Vice Chicago, IL 60606 Officer President and Assistant General Counsel, of Nuveen Investments, LLC; Managing Director (since 2002), Associate General Counsel and Assistant Secretary, of Nuveen Asset Management; Vice President and Assistant Secretary of NWQ Investment Management Company, LLC. (since 2002), Nuveen Investments Advisers Inc. (since 2002), Symphony Asset Management LLC, and NWQ Investment Management Company, LLC (since 2003), Tradewinds Global Investors, LLC, and Santa Barbara Asset Management, LLC (since 2006); Nuveen HydePark Group LLC and Richards & Tierney, Inc. (since 2007); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc. (since 2003); Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc., Assistant Secretary (since 2003) of Symphony Asset Management LLC. [] WILLIAMS ADAMS IV Executive Vice President, U.S. 6/9/55 Structured Products of Nuveen 333 West Wacker Drive Vice President 2007 120 Investments, LLC, (since 1999), prior Chicago, IL 60606 thereto, Managing Director of Structured Investments. [] JULIA L. ANTONATOS Managing Director (since 2005), formerly 9/22/63 Vice President (since 2002) of Nuveen 333 W. Wacker Drive Vice President 2004 182 Investments, LLC; Chartered Financial Chicago, IL 60606 Analyst. [] CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004) 1/11/62 previously, Vice President (1993-2004) 333 W. Wacker Drive Vice President 2007 120 of Nuveen Investments, LLC. Chicago, IL 60606 [] MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen 2/3/66 Vice President Investments, LLC. 333 W. Wacker Drive and Assistant 2000 182 Chicago, IL 60606 Secretary [] PETER H. D'ARRIGO Vice President and Treasurer of Nuveen 11/28/67 Investments, LLC and Nuveen Investments, 333 W. Wacker Drive Vice President 1999 182 Inc.; Vice President and Treasurer of Chicago, IL 60606 Nuveen Asset Management (since 2002), Nuveen Investments Advisers Inc. (since 2002); NWQ Investment Management Company, LLC. (since 2002); Rittenhouse Asset Management, Inc. (since 2003), Tradewinds NWQ Global Investors, LLC (since 2006), Santa Barbara Asset Management, LLC (since 2006) and Nuveen HydePark Group, LLC and Richards &Tierney, Inc. (since 2007); Treasurer of Symphony Asset Management LLC (since 2003); formerly, Vice President and Treasurer (1999-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3), Chartered Financial Analyst. [] LORNA C. FERGUSON Managing Director (since 2004), 10/24/45 formerly, Vice President of Nuveen 333 W. Wacker Drive Vice President 1998 182 Investments, LLC, Managing Director Chicago, IL 60606 (2004) formerly, Vice President (1998-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. [] WILLIAM M. FITZGERALD Managing Director (since 2002), 3/2/64 formerly, Vice President of Nuveen 333 W. Wacker Drive Vice President 1995 182 Investments, LLC; Managing Director Chicago, IL 60606 (1997-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2001) of Nuveen Asset Management; Vice President (since 2002) of Nuveen Investments Advisers Inc.; Chartered Financial Analyst. 98 NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS OVERSEEN BY OFFICER OFFICERS OF THE FUND: [] STEPHEN D. FOY Vice President (since 1993) and Funds 5/31/54 Vice President Controller (since 1998) of Nuveen 333 W. Wacker Drive and Controller 1998 182 Investments, LLC; formerly, Vice Chicago, IL 60606 President and Funds Controller (1998-2004) of Nuveen Investments, Inc.; Certified Public Accountant. [] WALTER M. KELLY Vice President (since 2006) formerly, 2/24/70 Chief Compliance Assistant Vice President and Assistant 333 West Wacker Drive Officer and 2003 182 General Counsel (2003-2006) of Nuveen Chicago, IL 60606 Vice President Investments, LLC; Assistant Vice President and Assistant Secretary of the Nuveen Funds (2003-2006); previously, Associate (2001-2003) at the law firm of Vedder, Price, Kaufman & Kammholz. [] DAVID J. LAMB Vice President (since 2000) of Nuveen 3/22/63 Investments, LLC; Certified Public 333 W. Wacker Drive Vice President 2000 182 Accountant. Chicago, IL 60606 [] TINA M. LAZAR Vice President of Nuveen Investments, LLC 8/27/61 (since 1999). 333 W. Wacker Drive Vice President 2002 182 Chicago, IL 60606 [] LARRY W. MARTIN Vice President, Assistant Secretary and 7/27/51 Vice President Assistant General Counsel of Nuveen 333 W. Wacker Drive and Assistant 1988 182 Investments, LLC; formerly, Vice Chicago, IL 60606 Secretary President and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President (since 2005) and Assistant Secretary of Nuveen Investments, Inc.; Vice President (since 2005) and Assistant Secretary (since 1997) of Nuveen Asset Management; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); NWQ Investment Management Company, LLC (since 2002), Symphony Asset Management LLC (since 2003), Tradewinds Global Investors, LLC, Santa Barbara Asset Management LLC (since 2006) and of Nuveen HydePark Group, LLC and Richards &Tierney, Inc. (since 2007). [] KEVIN J. MCCARTHY Vice President, Nuveen Investments, LLC 3/26/66 Vice President (since 2007); Vice President, and 333 W. Wacker Drive and Secretary 2007 182 Assistant Secretary, Nuveen Asset Chicago, IL 60606 Management, Rittenhouse Asset Management, Inc., Nuveen Investment Advisers Inc., Nuveen Investment Institutional Services Group LLC, NWQ Investment Management Company, LLC, Tradewinds Global Investors LLC, NWQHoldings, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management LLC, Nuveen HydePark Group, LLC and Richards &Tierney, Inc. (since 2007); Vice President and Assistant General Counsel, Nuveen Investments, Inc. (since 2007). prior thereto, Partner, Bell, Boyd & Lloyd LLP (1997-2007). [] JOHN V. MILLER Managing Director (since 2007), 4/10/67 formerly, Vice President (2002-2007) of 333 W. Wacker Drive Vice President 2007 182 Nuveen Investments, LLC; Chartered Chicago, IL 60606 Financial Analyst. [] JAMES F. RUANE Vice President, Nuveen Investments since 7/3/62 Vice President 2007; prior thereto, Partner, Deloitte & 333 W. Wacker Drive and Assistant 2007 182 Touche USA LLP (since 2005), formerly, Chicago, IL 60606 Secretary senior tax manager (since 2002); Certified Public Accountant.
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, by reason of being the former Chairman and Chief Executive Officer of Nuveen Investments, Inc. and having previously served in various other capacities with Nuveen Investments, Inc. and its subsidiaries. It is expected that Mr. Schwertfeger will resign from the Board of Trustees by the end of the second quarter of 2008. (2) For High Income Opportunity (NMZ), Board Members serve three year terms, except for two board members who are elected by the holders of Preferred Shares. The Board of Trustees for NMZ is divided into three classes, Class I, Class II, and Class III, with each being elected to serve until the third succeeding annual shareholders' meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed, except two board members are elected by the holders of Preferred Shares to serve until the next annual shareholders' meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed. For Investment Quality (NQM), Select Quality (NQS), Quality Income (NQU) and Premier Income (NPF), the Board Members serve a one year term to serve until the next annual meeting or until their successors shall have been duly elected and qualified. The first year elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were reorganized into Nuveen Asset Management, effective January 1, 2005. (4) Officers serve one year terms through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 99 Annual Investment Management Agreement APPROVAL PROCESS The Board Members are responsible for overseeing the performance of the investment adviser to the Funds and determining whether to continue the advisory arrangements. At the annual review meeting held on May 21, 2007 (the "May Meeting"), the Board Members of the Funds, including the Independent Board Members, unanimously approved the continuance of the Investment Management Agreement between each Fund (each, a "Fund") and Nuveen Asset Management ("NAM"). The foregoing Investment Management Agreements with NAM are hereafter referred to as the "Original Investment Management Agreements." Subsequent to the May Meeting, Nuveen Investments, Inc. ("Nuveen"), the parent company of NAM, entered into a merger agreement providing for the acquisition of Nuveen by Windy City Investments, Inc., a corporation formed by investors led by Madison Dearborn Partners, LLC ("MDP"), a private equity investment firm (the "Transaction"). Each Original Investment Management Agreement, as required by Section 15 of the Investment Company Act of 1940 (the "1940 Act"), provides for its automatic termination in the event of its "assignment" (as defined in the 1940 Act). Any change in control of the adviser is deemed to be an assignment. The consummation of the Transaction will result in a change of control of NAM as well as its affiliated sub-advisers and therefore cause the automatic termination of each Original Investment Management Agreement, as required by the 1940 Act. Accordingly, in anticipation of the Transaction, at a meeting held on July 31, 2007 (the "July Meeting"), the Board Members, including the Independent Board Members, unanimously approved new Investment Management Agreements (the "New Investment Management Agreements") with NAM on behalf of each Fund to take effect immediately after the Transaction or shareholder approval of the new advisory contracts, whichever is later. The 1940 Act also requires that each New Investment Management Agreement be approved by the respective Fund's shareholders in order for it to become effective. Accordingly, to ensure continuity of advisory services, the Board Members, including the Independent Board Members, unanimously approved Interim Investment Management Agreements to take effect upon the closing of the Transaction if shareholders have not yet approved the New Investment Management Agreements. Because the information provided and considerations made at the annual review continue to be relevant with respect to the evaluation of the New Investment Management Agreements, the Board considered the foregoing as part of its deliberations of the New Investment Management Agreements. Accordingly, as indicated, the discussions immediately below outline the materials and information presented to the Board in connection with the Board's prior annual review and the analysis undertaken and the conclusions reached by Board Members when determining to continue the Original Investment Management Agreements. I. APPROVAL OF THE ORIGINAL INVESTMENT MANAGEMENT AGREEMENTS During the course of the year, the Board received a wide variety of materials relating to the services provided by NAM and the performance of the Funds. At each of its quarterly meetings, the Board reviewed investment performance and various matters relating to the operations of the Funds and other Nuveen funds, including the compliance program, shareholder services, valuation, custody, distribution and other information relating to the nature, extent and quality of services provided by NAM. Between the regularly scheduled quarterly meetings, the Board Members received information on particular matters as the need arose. In preparation for their considerations at the May Meeting, the Independent Board Members received extensive materials, well in advance of the meeting, which outlined or are related to, among other things: [] the nature, extent and quality of services provided by NAM; [] the organization and business operations of NAM, including the responsibilities of various departments and key personnel; 100 [] each Fund's past performance as well as the Fund's performance compared to funds with similar investment objectives based on data and information provided by an independent third party and to customized benchmarks; [] the profitability of Nuveen and certain industry profitability analyses for unaffiliated advisers; [] the expenses of Nuveen in providing the various services; [] the advisory fees and total expense ratios of each Fund, including comparisons of such fees and expenses with those of comparable, unaffiliated funds based on information and data provided by an independent third party (the "Peer Universe") as well as compared to a subset of funds within the Peer Universe (the "Peer Group") of the respective Fund (as applicable); [] the advisory fees NAM assesses to other types of investment products or clients; [] the soft dollar practices of NAM, if any; and [] from independent legal counsel, a legal memorandum describing among other things, applicable laws, regulations and duties in reviewing and approving advisory contracts. At the May Meeting, NAM made a presentation to, and responded to questions from, the Board. Prior to and after the presentations and reviewing the written materials, the Independent Board Members met privately with their legal counsel to review the Boardduties in reviewing advisory contracts and considering the renewal of the advisory contracts. The Independent Board Members, in consultation with independent counsel, reviewed the factors set out in judicial decisions and Securities and Exchange Commission ("SEC") directives relating to the renewal of advisory contracts. As outlined in more detail below, the Board Members considered all factors they believed relevant with respect to each Fund, including, but not limited to, the following: (a) the nature, extent and quality of the services to be provided by NAM; (b) the investment performance of the Fund and NAM; (c) the costs of the services to be provided and profits to be realized by Nuveen and its affiliates; (d) the extent to which economies of scale would be realized; and (e) whether fee levels reflect those economies of scale for the benefit of the Fund's investors. In addition, as noted, the Board Members met regularly throughout the year to oversee the Funds. In evaluating the Original Investment Management Agreements, the Board Members also relied upon their knowledge of NAM, its services and the Funds resulting from their meetings and other interactions throughout the year. It is with this background that the Board Members considered each Original Investment Management Agreement. A. NATURE, EXTENT AND QUALITY OF SERVICES In considering the renewal of the Original Investment Management Agreements, the Board Members considered the nature, extent and quality of NAM's services. The Board Members reviewed materials outlining, among other things, Nuveen's organization and business; the types of services that NAM or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and, any initiatives Nuveen had taken for the municipal fund product line. As noted, at the annual review, the Board Members were already familiar with the organization, operations and personnel of NAM due to the Board Members' experience in governing the respective Funds and working with NAM on matters relating to the Funds. With respect to personnel, the Board Members recognized NAM's investment in additional qualified personnel throughout the various groups in the organization and recommended to NAM that it continue to review staffing needs as necessary. In addition, the Board Members reviewed materials describing the current status and, in particular, the developments in 2006 with respect to NAM's investment process, investment strategies (including additional tools used in executing such strategies), personnel (including portfolio management and research teams), trading process, hedging activities, risk management operations (e.g., reviewing credit quality, duration limits, and derivatives use, as applicable), and investment operations (such as enhancements to trading procedures, pricing procedures, and client services). The Board Members recognized NAM's investment of resources and efforts to continue to enhance and refine its investment process. 101 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) In addition to advisory services, the Independent Board Members considered the quality of administrative and non-advisory services provided by NAM and noted that NAM and its affiliates provide the Funds with a wide variety of services and officers and other personnel as are necessary for the operations of the Funds, including: [] product management; [] fund administration; [] oversight by shareholder services and other fund service providers; [] administration of Board relations; [] regulatory and portfolio compliance; and [] legal support. As the Funds operate in a highly regulated industry and given the importance of compliance, the Board Members considered, in particular, Nuveen's compliance activities for the Funds and enhancements thereto. In this regard, the Board Members recognized the quality of Nuveen's compliance team. The Board Members further noted Nuveen's negotiations with other service providers and the corresponding reduction in certain service providers' fees at the May Meeting. In addition to the foregoing services, the Board Members also noted the additional services that NAM or its affiliates provide to Nuveen's closed-end funds, including, in particular, its secondary market support activities. The Board Members recognized Nuveen's continued commitment to supporting the secondary market for the common shares of its closed-end funds through a variety of programs designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include: [] maintaining shareholder communications; [] providing advertising for the Nuveen closed-end funds; [] maintaining its closed-end fund website; [] maintaining continual contact with financial advisers; [] providing educational symposia; [] conducting research with investors and financial analysis regarding closed-end funds; and [] evaluating secondary market performance. With respect to the Nuveen closed-end funds that utilize leverage through the issuance of preferred shares ("Preferred Shares"), the Board Members noted Nuveen's continued support for the holders of Preferred Shares by, among other things: [] maintaining an in-house trading desk; [] maintaining a product manager for the Preferred Shares; [] developing distribution for Preferred Shares with new market participants; [] maintaining an orderly auction process; [] managing leverage and risk management of leverage; and [] maintaining systems necessary to test compliance with rating agency criteria. Based on their review, the Board Members found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Original Investment Management Agreements were satisfactory. 102 B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM At the May Meeting, the Board considered the investment performance for each Fund, including the Fund's historic performance as well as its performance compared to funds with similar investment objectives (the "Performance Peer Group") based on data provided by an independent third party (as described below). The Board Members also reviewed the respective Fund's portfolio level performance (which does not reflect fund level fees and expenses, and leverage) against customized benchmarks, described in further detail below. In evaluating the performance information during the annual review at the May Meeting, in certain instances, the Board Members noted that the closest Performance Peer Group for a fund may not adequately reflect such fund's investment objectives and strategies, thereby limiting the usefulness of the comparisons of such fund's performance with that of the Performance Peer Group. With respect to state-specific municipal funds, the Board Members also recognized that certain funds do not have a corresponding state-specific Performance Peer Group in which case their performance is measured against a more general municipal category for various states. With respect to municipal closed-end funds, funds that do not have corresponding state-specific Performance Peer Groups are from states other than New York, California, Florida, New Jersey, Michigan and Pennsylvania. However, with respect to funds based in Florida, New Jersey, Michigan and Pennsylvania, the peer group may be so small or the Nuveen funds may dominate the category to such an extent that performance information for such funds was also compared to the more general category for all states (other than New York and California). The Board Members reviewed performance information including, among other things, total return information compared with the Fund's Performance Peer Group for the one-, three- and five-year periods (as applicable) ending December 31, 2006. The Board Members also reviewed the Fund's portfolio level performance (which does not reflect fund level fees and expenses, and leverage) compared to customized portfolio level benchmarks for the one- and three-year periods ending December 31, 2006 (as applicable). The analysis was used to assess the efficacy of investment decisions against appropriate measures of risk and total return, within specific market segments. This information supplemented the Fund performance information provided to the Board at each of its quarterly meetings. Based on their review, the Board Members determined that each Fund's investment performance over time had been satisfactory, subject to the following. With respect to various municipal closed-end funds, the Board Members noted relative total return underperformance in recent years compared to peers. The Board Members reviewed materials and discussed with NAM the factors contributing to the shift in performance including, among other things, the degree of risk undertaken by peers compared to the municipal closed-end funds (such as through the increased use of leverage or taking concentrated positions in high risk credits). In addition, the Board Members also considered a fund's dividend performance and the extent of any secondary market discounts. The Board Members noted NAM's efforts to evaluate the factors affecting performance and determine whether modification to a fund's investment strategy is necessary or appropriate, and concluded that they were satisfied with the steps being taken. C. FEES, EXPENSES AND PROFITABILITY 1. FEES AND EXPENSES During the annual review, in evaluating the management fees and expenses of a Fund, the Board reviewed, among other things, the Fund's advisory fees (net and gross management fees) and total expense ratios (before and after expense reimbursements and/or waivers) in absolute terms as well as comparisons to the gross management fees (before waivers), net management fees (after waivers) and total expense ratios (before and after waivers) of comparable funds in the Peer Universe and the Peer Group. In reviewing the fee schedule for a Fund, the Board Members considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain funds launched since 1999). The Board Members further reviewed data regarding the construction of Peer Groups as well as the methods of measurement for the fee and expense analysis and the performance analysis. In certain cases, due to the small number of peers in the Peer Universe, the Peer Universe and Peer Group had significant overlap or even consisted entirely of the same unaffiliated funds. In reviewing the comparisons of fee and expense information, the Board Members recognized that in certain cases, the fund size relative to peers, the small size and odd composition of the Peer Group (including differences 103 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) in objectives and strategies), expense anomalies, timing of information used or other factors impacting the comparisons thereby limited some of the usefulness of the comparative data. The Board Members also considered the differences in the use of leverage. Based on their review of the fee and expense information provided, the Board Members determined that each Fund's net total expense ratio was within an acceptable range compared to peers. 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS At the annual review, the Board Members further reviewed data comparing the advisory fees of NAM with fees NAM charges to other clients. With respect to municipal funds, such clients include NAM's municipal separately managed accounts. In general, the advisory fees charged for separate accounts are somewhat lower than the advisory fees assessed to the Funds. The Board Members considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Board Members noted, in particular, that the range of services provided to the Funds (as discussed above) is much more extensive than that provided to separately managed accounts. As described in further detail above, such additional services include, but are not limited to: product management, fund administration, oversight of third party service providers, administration of Board relations, and legal support. The Board Members noted that the Funds operate in a highly regulated industry requiring extensive compliance functions compared to other investment products. Given the inherent differences in the products, particularly the extensive services provided to the Funds, the Board Members believe such facts justify the different levels of fees. 3. PROFITABILITY OF NUVEEN In conjunction with its review of fees, the Board Members also considered the profitability of Nuveen for its advisory activities (which incorporated Nuveen's wholly-owned affiliated sub-advisers) and its financial condition. At the annual review, the Board Members reviewed the revenues and expenses of Nuveen's advisory activities for the last three years, the allocation methodology used in preparing the profitability data as well as the 2006 Annual Report for Nuveen. The Board Members noted this information supplemented the profitability information requested and received during the year to help keep them apprised of developments affecting profitability (such as changes in fee waivers and expense reimbursement commitments). In this regard, the Board Members noted the enhanced dialogue and information regarding profitability with NAM during the year, including more frequent meetings and updates from Nuveen's corporate finance group. The Board Members also reviewed data comparing Nuveen's profitability with other fund sponsors prepared by three independent third party service providers as well as comparisons of the revenues, expenses and profit margins of various unaffiliated management firms with similar amounts of assets under management prepared by Nuveen. In reviewing profitability, the Board Members recognized the subjective nature of determining profitability which may be affected by numerous factors, including the allocation of expenses. Further, the Board Members recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by, among other things, the adviser's particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Board Members reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. Last year, the Board Members also designated an Independent Board Member as a point person for the Board to review the methodology determinations during the year and any refinements thereto, which relevant information produced from such process was reported to the full Board. In reviewing profitability, the Board Members recognized Nuveen's increased investment in its fund business. Based on its review, the Board Members concluded that Nuveen's level of profitability for its advisory activities was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Board Members also considered other amounts paid to NAM by the Funds as well as any indirect benefits (such as soft dollar arrangements, if any) NAM and its affiliates receive, or are expected to receive, that are directly attributable to the management of the 104 Funds, if any. See Section E below for additional information on indirect benefits NAM may receive as a result of its relationship with the Funds. Based on their review of the overall fee arrangements of each Fund, the Board Members determined that the advisory fees and expenses of the Funds were reasonable. D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE With respect to economies of scale, the Board Members recognized the potential benefits resulting from the costs of a Fund being spread over a larger asset base. To help ensure the shareholders share in these benefits, the Board Members reviewed and considered the breakpoints in the advisory fee schedules that reduce advisory fees. In addition to advisory fee breakpoints, the Board also approved a complex-wide fee arrangement in 2004. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. In evaluating the complex-wide fee arrangement, the Board Members noted that the last complex-wide asset level breakpoint for the complex-wide fee schedule was at $91 billion and that the Board Members anticipated further review and/or negotiations prior to the assets of the Nuveen complex reaching such threshold. Based on their review, the Board Members concluded that the breakpoint schedule and complex-wide fee arrangement were acceptable and desirable in providing benefits from economies of scale to shareholders, subject to further evaluation of the complex-wide fee schedule as assets in the complex increase. See Section II, Paragraph D - "Approval of the New Investment Management Agreements - Economies of Scale and Whether Fee Levels Reflect These Economies of Scale" for information regarding subsequent modifications to the complex-wide fee. E. INDIRECT BENEFITS In evaluating fees, the Board Members also considered any indirect benefits or profits NAM or its affiliates may receive as a result of its relationship with each Fund. With respect to closed-end funds, the Board Members considered the revenues received by affiliates of NAM for serving as agent at Nuveen's preferred trading desk and for serving as a co-manager in the initial public offering of new closed-end exchange traded funds. In addition to the above, the Board Members considered whether NAM received any benefits from soft dollar arrangements whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to NAM in managing the assets of the Funds and other clients. With respect to NAM, the Board Members noted that NAM does not currently have any soft dollar arrangements; however, to the extent certain bona fide agency transactions that occur on markets that traditionally trade on a principal basis and riskless principal transactions are considered as generating "commissions," NAM intends to comply with the applicable safe harbor provisions. Based on their review, the Board Members concluded that any indirect benefits received by NAM as a result of its relationship with the Funds were reasonable and within acceptable parameters. F. OTHER CONSIDERATIONS The Board Members did not identify any single factor discussed previously as all-important or controlling in their considerations to continue an advisory contract. The Board Members, including the Independent Board Members, unanimously concluded that the terms of the Original Investment Management Agreements are fair and reasonable, that NAM's fees are reasonable in light of the services provided to each Fund and that the renewal of the Original Investment Management Agreements be approved. II. APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENTS Following the May Meeting, the Board Members were advised of the potential Transaction. As noted above, the completion of the Transaction would terminate each of the Original Investment Management Agreements. Accordingly, at the July Meeting, the Board of each Fund, including the Independent Board Members, unanimously approved the New Investment Management Agreements on behalf of the respective Funds. Leading up to the July Meeting, the Board Members had several meetings and deliberations with and without Nuveen management present, and with the advice of legal counsel, regarding the proposed Transaction as outlined below. On June 8, 2007, the Board Members held a special telephonic meeting to discuss the proposed Transaction. At that meeting, the Board Members established a special ad hoc committee comprised solely of Independent Board Members to focus on the Transaction and to keep the Independent Board Members 105 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) updated with developments regarding the Transaction. On June 15, 2007, the ad hoc committee discussed with representatives of NAM the Transaction and modifications to the complex-wide fee schedule that would generate additional fee savings at specified levels of complex-wide asset growth. Following the foregoing meetings and several subsequent telephonic conferences among Independent Board Members and independent counsel, and between Independent Board Members and representatives of Nuveen, the Board met on June 18, 2007 to further discuss the proposed Transaction. Immediately prior to and then again during the June 18, 2007 meeting, the Independent Board Members met privately with their independent legal counsel. At that meeting, the Board met with representatives of MDP, of Goldman Sachs, Nuveen's financial adviser in the Transaction, and of the Nuveen Board to discuss, among other things, the history and structure of MDP, the terms of the proposed Transaction (including the financing terms), and MDP's general plans and intentions with respect to Nuveen (including with respect to management, employees, and future growth prospects). On July 9, 2007, the Board also met to be updated on the Transaction as part of a special telephonic Board meeting. The Board Members were further updated at a special in-person Board meeting held on July 19, 2007 (one Independent Board Member participated telephonically). Subsequently, on July 27, 2007, the ad hoc committee held a telephonic conference with representatives of Nuveen and MDP to further discuss, among other things, the Transaction, the financing of the Transaction, retention and incentive plans for key employees, the effect of regulatory restrictions on transactions with affiliates after the Transaction, and current volatile market conditions and their impact on the Transaction. In connection with their review of the New Investment Management Agreements, the Independent Board Members, through their independent legal counsel, also requested in writing and received additional information regarding the proposed Transaction and its impact on the provision of services by NAM and its affiliates. The Independent Board Members received, well in advance of the July Meeting, materials which outlined, among other things: [] the structure and terms of the Transaction, including MDP's co-investor entities and their expected ownership interests, and the financing arrangements that will exist for Nuveen following the closing of the Transaction; [] the strategic plan for Nuveen following the Transaction; [] the governance structure for Nuveen following the Transaction; [] any anticipated changes in the operations of the Nuveen funds following the Transaction, including changes to NAM's and Nuveen's day-to-day management, infrastructure and ability to provide advisory, distribution or other applicable services to the Funds; [] any changes to senior management or key personnel who work on Fund related matters (including portfolio management, investment oversight, and legal/compliance) and any retention or incentive arrangements for such persons; [] any anticipated effect on each Fund's expense ratio (including advisory fees) following the Transaction; [] any benefits or undue burdens imposed on the Funds as a result of the Transaction; [] any legal issues for the Funds as a result of the Transaction; [] the nature, quality and extent of services expected to be provided to the Funds following the Transaction, changes to any existing services and policies affecting the Funds, and cost-cutting efforts, if any, that may impact such services or policies; [] any conflicts of interest that may arise for Nuveen or MDP with respect to the Funds; [] the costs associated with obtaining necessary shareholder approvals and who would bear those costs; and [] from legal counsel, a memorandum describing the applicable laws, regulations and duties in approving advisory contracts, including, in particular, with respect to a change of control. 106 Immediately preceding the July Meeting, representatives of MDP met with the Board to further respond to questions regarding the Transaction. After the meeting with MDP, the Independent Board Members met with independent legal counsel in executive session. At the July Meeting, Nuveen also made a presentation and responded to questions. Following the presentations and discussions of the materials presented to the Board, the Independent Board Members met again in executive session with their counsel. As outlined in more detail below, the Independent Board Members considered all factors they believed relevant with respect to each Fund, including the impact that the Transaction could be expected to have on the following: (a) the nature, extent and quality of services to be provided; (b) the investment performance of the Funds; (c) the costs of the services and profits to be realized by Nuveen and its affiliates; (d) the extent to which economies of scale would be realized; and (e) whether fee levels reflect those economies of scale for the benefit of investors. As noted above, the Board Members had completed their annual review of the respective Original Investment Management Agreements at the May Meeting and many of the factors considered at the annual review were applicable to their evaluation of the New Investment Management Agreements. Accordingly, in evaluating the New Investment Management Agreements, the Board Members relied upon their knowledge and experience with NAM and considered the information received and their evaluations and conclusions drawn at the annual review. While the Board reviewed many Nuveen funds at the July Meeting, the Independent Board Members evaluated all information available to them on a fund-by-fund basis, and their determinations were made separately in respect of each Fund. A. NATURE, EXTENT AND QUALITY OF SERVICES In evaluating the nature, quality and extent of the services expected to be provided by NAM under the New Investment Management Agreements, the Independent Board Members considered, among other things, the expected impact, if any, of the Transaction on the operations, facilities, organization and personnel of NAM; the potential implications of regulatory restrictions on the Funds following the Transaction; the ability of NAM and its affiliates to perform their duties after the Transaction; and any anticipated changes to the current investment and other practices of the Funds. The Board noted that the terms of each New Investment Management Agreement, including the fees payable thereunder, are substantially identical to those of the Original Investment Management Agreement relating to the same Fund (with both reflecting reductions to fee levels in the complex-wide fee schedule for complex-wide assets in excess of $80 billion that have an effective date of August 20, 2007). The Board considered that the services to be provided and the standard of care under the New Investment Management Agreements are the same as the Original Investment Management Agreements. The Board Members further noted that key personnel who have responsibility for the Funds in each area, including portfolio management, investment oversight, fund management, fund operations, product management, legal/compliance and board support functions, are expected to be the same following the Transaction. The Board Members considered and are familiar with the qualifications, skills and experience of such personnel. The Board also considered certain information regarding anticipated retention or incentive plans designed to retain key personnel. Further, the Board Members noted that no changes to Nuveen's infrastructure or operations as a result of the Transaction were anticipated other than potential enhancements as a result of an expected increase in the level of investment in such infrastructure and personnel. The Board noted MDP's representations that it does not plan to have a direct role in the management of Nuveen, appointing new management personnel, or directly impacting individual staffing decisions. The Board Members also noted that there were not any planned "cost cutting" measures that could be expected to reduce the nature, extent or quality of services. After consideration of the foregoing, the Board Members concluded that no diminution in the nature, quality and extent of services provided to the Funds and their shareholders is expected. In addition to the above, the Board Members considered potential changes in the operations of each Fund. In this regard, the Board Members considered the potential effect of regulatory restrictions on the Funds' transactions with future affiliated persons. During their deliberations, it was noted that, after the Transaction, a subsidiary of Merrill Lynch is expected to have an ownership interest in Nuveen at a level that will make Merrill Lynch an affiliated person of Nuveen. The Board Members recognized that applicable law would generally prohibit the Funds from engaging in securities transactions with Merrill Lynch as principal, and would also impose restrictions on using Merrill Lynch for agency transactions. They recognized that having MDP and Merrill Lynch as affiliates may restrict the Nuveen funds' ability to invest in securities of issuers controlled by MDP or issued by Merrill Lynch and its affiliates even if not bought directly from MDP or Merrill 107 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) Lynch as principal. They also recognized that various regulations may require the Nuveen funds to apply investment limitations on a combined basis with affiliates of Merrill Lynch. The Board Members considered information provided by NAM regarding the potential impact on the Nuveen funds' operations as a result of these regulatory restrictions. The Board Members considered, in particular, the Nuveen funds that may be impacted most by the restricted access to Merrill Lynch, including: municipal funds (particularly certain state-specific funds), senior loan funds, taxable fixed income funds, preferred security funds and funds that heavily use derivatives. The Board Members considered such funds' historic use of Merrill Lynch as principal in their transactions and information provided by NAM regarding the expected impact resulting from Merrill Lynch's affiliation with Nuveen and available measures that could be taken to minimize such impact. NAM informed the Board Members that, although difficult to determine with certainty, its management did not believe that MDP's or Merrill Lynch's status as an affiliate of Nuveen would have a material adverse effect on any Nuveen fund's ability to pursue its investment objectives and policies. In addition to the regulatory restrictions considered by the Board, the Board Members also considered potential conflicts of interest that could arise between the Nuveen funds and various parties to the Transaction and discussed possible ways of addressing such conflicts. Based on its review along with its considerations regarding services at the annual review, the Board concluded that the Transaction was not expected to adversely affect the nature, quality or extent of services provided by NAM and that the expected nature, quality and extent of such services supported approval of the New Investment Management Agreements. B. PERFORMANCE OF THE FUNDS With respect to the performance of the Funds, the Board considered that the portfolio management personnel responsible for the management of the Funds' portfolios were expected to continue to manage the portfolios following the completion of the Transaction. In addition, the Board Members recently reviewed Fund performance at the May Meeting, as described above, and determined that Fund performance was satisfactory or better, subject to the following. With respect to certain municipal closed-end funds with relative short-term underperformance, the Board Members concluded NAM was taking steps to evaluate the factors affecting performance and those steps would continue following the Transaction. Further, the investment policies and strategies were not expected to change as a result of the Transaction. In light of the foregoing factors, along with the prior findings regarding performance at the annual review, the Board concluded that its findings with respect to performance supported approval of the New Investment Management Agreements. C. FEES, EXPENSES AND PROFITABILITY As described in more detail above, during the annual review, the Board Members considered, among other things, the management fees and expenses of the Funds, the breakpoint schedules, and comparisons of such fees and expenses with peers. At the annual review, the Board Members determined that the respective Fund's advisory fees and expenses were reasonable. In evaluating the costs of services to be provided by NAM under the New Investment Management Agreements and the profitability of Nuveen for its advisory activities, the Board Members considered their prior conclusions at the annual review and whether the management fees or other expenses would change as a result of the Transaction. As described above, the investment management fee is composed of two components--a fund-level component and complex-wide level component. The fee schedule under the New Investment Management Agreements to be paid to NAM is identical to that under the Original Investment Management Agreements, including the modified complex-wide fee schedule. As noted above, the Board recently approved a modified complex-wide fee schedule that would generate additional fee savings on complex-wide assets above $80 billion. The modifications have an effective date of August 20, 2007 and are part of the Original Investment Management Agreements. Accordingly, the terms of the complex-wide component under the New Investment Management Agreements are the same as under the Original Investment Management Agreements. The Board Members also noted that Nuveen has committed for a period of two years from the 108 date of closing of the Transaction that it will not increase gross management fees for any Nuveen fund and will not reduce voluntary expense reimbursement levels for any Nuveen fund from their currently scheduled prospective levels. Based on the information provided, the Board Members did not expect that overall Fund expenses would increase as a result of the Transaction. In addition, the Board Members considered that additional fund launches were anticipated after the Transaction which would result in an increase in total assets under management in the complex and a corresponding decrease in overall management fees under the complex-wide fee schedule. Taking into consideration the Board's prior evaluation of fees and expenses at the annual renewal, and the modification to the complex-wide fee schedule, the Board determined that the management fees and expenses were reasonable. While it is difficult to predict with any degree of certainty the impact of the Transaction on Nuveen's profitability, at the recent annual review, the Board Members were satisfied that Nuveen's level of profitability for its advisory activities was reasonable. During the year, the Board Members had noted the enhanced dialogue regarding profitability and the appointment of an Independent Board Member as a point person to review methodology determinations and refinements in calculating profitability. Given their considerations at the annual review and the modifications to the complex-wide fee schedule, the Board Members were satisfied that Nuveen's level of profitability for its advisory activities continues to be reasonable. D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE The Board Members have been cognizant of economies of scale and the potential benefits resulting from the costs of a Fund being spread over a larger asset base. To help ensure that shareholders share in the benefits derived from economies of scale, the Board adopted the complex-wide fee arrangement in 2004. At the May Meeting, the Board Members reviewed the complex-wide fee arrangements and noted that additional negotiations may be necessary or appropriate as the assets in the complex approached the $91 billion threshold. In light of this assessment coupled with the upcoming Transaction, at the June 15, 2007 meeting, the ad hoc committee met with representatives of Nuveen to further discuss modifications to the complex-wide fee schedule that would generate additional savings for shareholders as the assets of the complex grow. The proposed terms for the complex-wide fee schedule are expressed in terms of targeted cumulative savings at specified levels of complex-wide assets, rather than in terms of targeted marginal complex-wide fee rates. Under the modified schedule, the schedule would generate additional fee savings beginning at complex-wide assets of $80 billion in order to achieve targeted cumulative annual savings at $91 billion of $28 million on a complex-wide level (approximately $0.6 million higher than those generated under the then current schedule) and generate additional fee savings for asset growth above complex-wide assets of $91 billion in order to achieve targeted annual savings at $125 billion of assets of approximately $50 million on a complex-wide level (approximately $2.2 million higher annually than that generated under the then current schedule). At the July Meeting, the Board approved the modified complex-wide fee schedule for the Original Investment Management Agreements and these same terms will apply to the New Investment Management Agreements. Accordingly, the Board Members believe that the breakpoint schedules and revised complex-wide fee schedule are appropriate and desirable in ensuring that shareholders participate in the benefits derived from economies of scale. E. INDIRECT BENEFITS During their recent annual review, the Board Members considered any indirect benefits that NAM may receive as a result of its relationship with the Funds, as described above. As the policies and operations of Nuveen are not anticipated to change significantly after the Transaction, such indirect benefits should remain after the Transaction. The Board Members further considered any additional indirect benefits to be received by NAM or its affiliates after the Transaction. The Board Members noted that other than benefits from its ownership interest in Nuveen and indirect benefits from fee revenues paid by the Funds under the management agreements and other Board-approved relationships, it was currently not expected that MDP or its affiliates would derive any benefit from the Funds as a result of the Transaction or transact any business with or on behalf of the Funds (other than perhaps potential Fund acquisitions, in secondary market transactions, of securities issued by MDP portfolio companies); or that Merrill Lynch or its affiliates would derive any benefits from the Funds as a result of the Transaction (noting that, indeed, Merrill Lynch would stand to experience the discontinuation of principal transaction activity with the Nuveen funds and likely would experience a noticeable reduction in the volume of agency transactions with the Nuveen funds). 109 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) F. OTHER CONSIDERATIONS In addition to the factors above, the Board Members also considered the following with respect to the Funds: [] Nuveen would rely on the provisions of Section 15(f) of the 1940 Act. Section 15(f) provides, in substance, that when a sale of a controlling interest in an investment adviser occurs, the investment adviser or any of its affiliated persons may receive any amount or benefit in connection with the sale so long as (i) during the three-year period following the consummation of a transaction, at least 75% of the investment company's board of directors must not be "interested persons" (as defined in the 1940 Act) of the investment adviser or predecessor adviser and (ii) an "unfair burden" (as defined in the 1940 Act, including any interpretations or no-action letters of the SEC) must not be imposed on the investment company as a result of the transaction relating to the sale of such interest, or any express or implied terms, conditions or understanding applicable thereto. In this regard, to help ensure that an unfair burden is not imposed on the Nuveen funds, Nuveen has committed for a period of two years from the date of the closing of the Transaction (i) not to increase gross management fees for any Nuveen fund; (ii) not to reduce voluntary expense reimbursement levels for any Nuveen fund from their currently scheduled prospective levels during that period; (iii) that no Nuveen fund whose portfolio is managed by a Nuveen affiliate shall use Merrill Lynch as a broker with respect to portfolio transactions done on an agency basis, except as may be approved in the future by the Compliance Committee of the Board; and (iv) that NAM shall not cause the Funds and other municipal funds that NAM manages, as a whole, to enter into portfolio transactions with or through the other minority owners of Nuveen, on either a principal or an agency basis, to a significantly greater extent than both what one would expect an investment team to use such firm in the normal course of business, and what NAM has historically done, without prior Board or Compliance Committee approval (excluding the impact of proportionally increasing the use of such other "minority owners" to fill the void necessitated by not being able to use Merrill Lynch). [] The Funds would not incur any costs in seeking the necessary shareholder approvals for the New Investment Management Agreements (except for any costs attributed to seeking shareholder approvals of Fund specific matters unrelated to the Transaction, such as approval of Board Members, in which case a portion of such costs will be borne by the applicable Funds). [] The reputation, financial strength and resources of MDP. [] The long-term investment philosophy of MDP and anticipated plans to grow Nuveen's business to the benefit of the Nuveen funds. [] The benefits to the Nuveen funds as a result of the Transaction including: (i) as a private company, Nuveen may have more flexibility in making additional investments in its business; (ii) as a private company, Nuveen may be better able to structure compensation packages to attract and retain talented personnel; (iii) as certain of Nuveen's distribution partners are expected to be equity or debt investors in Nuveen, Nuveen may be able to take advantage of new or enhanced distribution arrangements with such partners; and (iv) MDP's experience, capabilities and resources that may help Nuveen identify and acquire investment teams or firms and finance such acquisitions. [] The historic premium and discount levels at which the shares of the Nuveen funds have traded at specified dates with particular focus on the premiums and discounts after the announcement of the Transaction, taking into consideration recent volatile market conditions and steps or initiatives considered or undertaken by NAM to address discount levels. 110 G. CONCLUSION The Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, unanimously concluded that the terms of the New Investment Management Agreements are fair and reasonable, that the fees therein are reasonable in light of the services to be provided to each Fund and that the New Investment Management Agreements should be approved and recommended to shareholders. III. APPROVAL OF INTERIM CONTRACTS As noted above, at the July Meeting, the Board Members, including the Independent Board Members, unanimously approved the Interim Investment Management Agreements. If necessary to assure continuity of advisory services, the Interim Investment Management Agreements will take effect upon the closing of the Transaction if shareholders have not yet approved the New Investment Management Agreements. The terms of each Interim Investment Management Agreement are substantially identical to those of the corresponding Original Investment Management Agreement and New Investment Management Agreement, respectively, except for certain term and escrow provisions. In light of the foregoing, the Board Members, including the Independent Board Members, unanimously determined that the scope and quality of services to be provided to the Funds under the respective Interim Investment Management Agreement are at least equivalent to the scope and quality of services provided under the applicable Original Investment Management Agreement. 111 Reinvest Automatically EASILY and CONVENIENTLY NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional Fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the greater of the net asset value or 95% of the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund's shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares' net asset value or 95% of the shares' market value on the last business day immediately prior to the purchase date. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. 112 FLEXIBLE You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 113 NOTES 114 NOTES 115 NOTES 116 NOTES 117 Glossary of TERMS USED in this REPORT [] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment's actual cumulative performance (including change in NAV or market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. [] AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity of the bonds in a Fund's portfolio, computed by weighting each bond's time to maturity (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions unless an escrow account has been established to redeem the bond before maturity. The market value weighting for an investment in an inverse floating rate security is the value of the portfolio's residual interest in the inverse floating rate trust, and does not include the value of the floating rate securities issued by the trust. [] INVERSE FLOATERS: Inverse floating rate securities are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. This trust, in turn, (a) issues floating rate certificates typically paying short-term tax-exempt interest rates to third parties in amounts equal to some fraction of the deposited bond's par amount or market value, and (b) issues an inverse floating rate certificate (sometimes referred to as an "inverse floater") to an investor (such as a Fund) interested in gaining investment exposure to a long-term municipal bond. The income received by the holder of the inverse floater varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the holder of the inverse floater bears substantially all of the underlying bond's downside investment risk. The holder of the inverse floater typically also benefits disproportionately from any potential appreciation of the underlying bond's value. Hence, an inverse floater essentially represents an investment in the underlying bond on a leveraged basis. [] LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period over which a bond's principal and interest will be paid, and consequently is a measure of the sensitivity of a bond's or bond Fund's value to changes when market interest rates change. Generally, the longer a bond's or Fund's duration, the more the price of the bond or Fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is longer than the duration of the Fund's portfolio of bonds. [] MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. [] NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by subtracting the liabilities of the Fund (including any MuniPreferred shares issued in order to leverage the Fund) from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. [] TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. [] ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon to its holders during the life of the bond. Tax-exempt income to the holder of the bond comes from accretion of the difference between the original purchase price of the bond at issuance and the par value of the bond at maturity and is effectively paid at maturity. The market prices of zero coupon bonds generally are more volatile than the market prices of bonds that pay interest periodically. 118 Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION Each Fund's (i) quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the twelve-month period ended June 30, 2007, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 450 Fifth Street NW, Washington, D.C. 20549. CEO CERTIFICATION DISCLOSURE Each Fund's Chief Executive Officer has submitted to the Exchange the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. Each Fund has filed with the Securities and Exchange Commission the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act. INVESTMENT POLICY CHANGES In May 2007, the Funds' Board of Directors/Trustees voted to permit the Funds' to make loans from Fund assets to certain bond issuers. The amounts of these loans are subject to strict limits. This policy is designed to enhance the Funds' ability to meet their Funds' investment objectives by providing for increased portfolio management flexibility, greater diversification potential, and opportunities for increased capital appreciation over time. BOARD OF DIRECTORS/TRUSTEES Robert P. Bremner Jack B. Evans William C. Hunter David J. Kundert William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Carole E. Stone FUND MANAGER Nuveen Asset Management 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Company Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Company Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Chicago, IL Each Fund intends to repurchase shares of its own common stock in the future at such times and in such amounts as is deemed advisable. During the period covered by this report, NPF repurchased 182,300 Common shares. Any future repurchases will be reported to shareholders in the next annual or semi-annual report. 119 Nuveen Investments: - ------------------- SERVING INVESTORS FOR GENERATIONS Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. We offer many different investing solutions for our clients' different needs. Managing $170 billion in assets, as of September 30, 2007, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; Symphony, a leading institutional manager of market-neutral alternative investment portfolios; Santa Barbara, a leader in growth equities; and Tradewinds, a leader in global equities. Find out how we can help you reach your financial goals. To learn more about the products and services Nuveen Investments offers, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Be sure to obtain a prospectus, where applicable. Investors should consider the investment objective and policies, risk considerations, charges and expenses of the Fund carefully before investing. The prospectus contains this and other information relevant to an investment in the Fund. For a prospectus, please contact your securities representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money. Learn more about Nuveen Funds at: www.nuveen.com/etf Share prices Fund details Daily financial news Investor education Interactive planning tools EAN-C-1007D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There were no amendments to or waivers from the Code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/etf. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then click on Code of Conduct.) ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors or Trustees determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit committee financial expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Nuveen Investment Quality Municipal Fund, Inc. The following tables show the amount of fees that Ernst & Young LLP, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with Ernst & Young LLP the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4) - ---------------------------------------------------------------------------------------------------------------------------- October 31, 2007 $ 28,799 $ 0 $ 500 $ 3,150 - ---------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------------- October 31, 2006 $ 27,370 $ 0 $ 400 $ 2,950 - ---------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ----------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for the audit of the Fund's annual financial statements and services provided in connection with statutory and regulatory filings or engagements. (2) "Audit Related Fees" are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements and are not reported under "Audit Fees". (3) "Tax Fees" are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. (4) "All Other Fees" are the aggregate fees billed for products and services for agreed upon procedures engagements performed for leveraged funds. SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling, controlled by or under common control with NAM ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS - --------------------------------------------------------------------------------------------------------- October 31, 2007 $ 0 $ 0 $ 0 - --------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - --------------------------------------------------------------------------------------------------------- October 31, 2006 $ 0 $ 0 $ 0 - --------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES TOTAL NON-AUDIT BILLED TO ADVISER AND FEES BILLED TO AFFILIATED FUND SERVICE ADVISER AND PROVIDERS (ENGAGEMENTS AFFILIATED FUND TOTAL RELATED DIRECTLY TO THE SERVICE PROVIDERS NON-AUDIT FEES OPERATIONS AND FINANCIAL (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL - ------------------------------------------------------------------------------------------------------------------------- October 31, 2007 $ 3,650 $ 0 $ 0 $ 3,650 October 31, 2006 $ 3,350 $ 0 $ 0 $ 3,350
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax Fees" billed to Adviser in their respective amounts from the previous table. Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Jack B. Evans, William J. Schneider and David J. Kundert. Mr. Eugene S. Sunshine, who also served as a member of the Committee during this reporting period, resigned from the Board of Directors or Trustees effective July 31, 2007. ITEM 6. SCHEDULE OF INVESTMENTS. See Portfolio of Investments in Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The registrant invests its assets primarily in municipal bonds and cash management securities. On rare occasions the registrant may acquire, directly or through a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the registrant already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer's credit problem. In the course of exercising control of a distressed municipal issuer, NAM may pursue the registrant's interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the issuer. NAM does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the registrant's Board of Trustees on its control activities on a quarterly basis. In the rare event that a municipal issuer were to issue a proxy or that the registrant were to receive a proxy issued by a cash management security, NAM would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the registrant's Board of Trustees or its representative. A member of NAM's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and the results provided to the registrant's Board of Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. THE PORTFOLIO MANAGER The following individual has primary responsibility for the day-to-day implementation of the registrant's investment strategies: NAME FUND PAUL BRENNAN Nuveen Investment Quality Municipal Fund, Inc. Other Accounts Managed. In addition to managing the registrant, the portfolio manager is also primarily responsible for the day-to-day portfolio management of the following accounts: TYPE OF ACCOUNT NUMBER OF PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS - -------------------------------------------------------------------------------- Paul Brennan Registered Investment Company 14 $11.469 billion Other Pooled Investment Vehicles 0 $0 Other Accounts 1 $.7 million * Assets are as of October 31, 2007. None of the assets in these accounts are subject to an advisory fee based on performance. Compensation. Each portfolio manager's compensation consists of three basic elements--base salary, cash bonus and long-term incentive compensation. The compensation strategy is to annually compare overall compensation, including these three elements, to the market in order to create a compensation structure that is competitive and consistent with similar financial services companies. As discussed below, several factors are considered in determining each portfolio manager's total compensation. In any year these factors may include, among others, the effectiveness of the investment strategies recommended by the portfolio manager's investment team, the investment performance of the accounts managed by the portfolio manager, and the overall performance of Nuveen Investments, Inc. (the parent company of NAM). Although investment performance is a factor in determining the portfolio manager's compensation, it is not necessarily a decisive factor. The portfolio manager's performance is evaluated in part by comparing manager's performance against a specified investment benchmark. This fund-specific benchmark is a customized subset (limited to bonds in each Fund's specific state and with certain maturity parameters) of the S&P/Investortools Municipal Bond index, an index comprised of bonds held by managed municipal bond fund customers of Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund holdings aggregate at least $2 million. As of November 30, 2007, the S&P/Investortools Municipal Bond Index was comprised of 52,116 securities with an aggregate current market value of $1,034 billion. Base salary. Each portfolio manager is paid a base salary that is set at a level determined by NAM in accordance with its overall compensation strategy discussed above. NAM is not under any current contractual obligation to increase a portfolio manager's base salary. Cash bonus. Each portfolio manager is also eligible to receive an annual cash bonus. The level of this bonus is based upon evaluations and determinations made by each portfolio manager's supervisors, along with reviews submitted by his peers. These reviews and evaluations often take into account a number of factors, including the effectiveness of the investment strategies recommended to the NAM's investment team, the performance of the accounts for which he serves as portfolio manager relative to any benchmarks established for those accounts, his effectiveness in communicating investment performance to stockholders and their representatives, and his contribution to the NAM's investment process and to the execution of investment strategies. The cash bonus component is also impacted by the overall performance of Nuveen Investments, Inc. in achieving its business objectives. Long-term incentive compensation. Each portfolio manager is eligible to receive bonus compensation in the form of equity-based awards issued in securities issued by Nuveen Investments, Inc. The amount of such compensation is dependent upon the same factors articulated for cash bonus awards but also factors in his long-term potential with the firm. Material Conflicts of Interest. Each portfolio manager's simultaneous management of the registrant and the other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of the Registrant and the other account. NAM, however, believes that such potential conflicts are mitigated by the fact that the NAM has adopted several policies that address potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager, although the allocation procedures may provide allocation preferences to funds with special characteristics (such as favoring state funds versus national funds for allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct that sets forth policies regarding conflicts of interest. Beneficial Ownership of Securities. As of October 31, 2007, the portfolio manager beneficially owned the following dollar range of equity securities issued by the Registrant and other Nuveen Funds managed by NAM's municipal investment team.
DOLLAR RANGE OF EQUITY SECURITIES DOLLAR RANGE OF BENEFICIALLY OWNED EQUITY IN THE REMAINDER OF SECURITIES NUVEEN FUNDS MANAGED BENEFICIALLY BY NAM'S MUNICIPAL NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM - ------------------------------------------------------------------------------------------------------------------ Paul Brennan Nuveen Investment Quality Municipal Fund, Inc. $0 $10,001-$50,000
PORTFOLIO MANAGER BIO: Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in 1994, and subsequently became an Assistant Vice President of NAM upon the acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice President of NAM in 2002. He currently manages investments for 15 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 Investment Quality Municipal Fund, Inc. ----------------------------------------------------------- By (Signature and Title)* /s/ Kevin J. McCarthy ---------------------------------------------- Kevin J. McCarthy Vice President and Secretary Date: January 7, 2008 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) Date: January 7, 2008 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: January 7, 2008 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. 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 Investment Quality Municipal 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 7, 2008 /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 Investment Quality Municipal 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 7, 2008 /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 Investment Quality Municipal 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, 2007 (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 7, 2008 ----------------------- /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-----