-----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, ASK7KugDftZeF6oMguQWDC61mXYVMk6DOb+dge0CCUL0l7hmYIU9+yWaU7vNHx4y QXMEb9BBbBmnpKK5JwG7cQ== 0000891804-04-000031.txt : 20040108 0000891804-04-000031.hdr.sgml : 20040108 20040108172742 ACCESSION NUMBER: 0000891804-04-000031 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031031 FILED AS OF DATE: 20040108 EFFECTIVENESS DATE: 20040108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN INSURED QUALITY MUNICIPAL FUND INC CENTRAL INDEX KEY: 0000869405 IRS NUMBER: 363734233 FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06206 FILM NUMBER: 04516168 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 INSURED 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 811-6206 --------------------- Nuveen Insured 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) Jessica R. Droeger Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: (312) 917-7700 ------------------- Date of fiscal year end: October 31, 2003 ------------------ Date of reporting period: October 31, 2003 ------------------ Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ANNUAL REPORT October 31, 2003 Nuveen Municipal Closed-End Exchange-Traded Funds NUVEEN INSURED QUALITY MUNICIPAL FUND NQI NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND NIO NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND NIF NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 NPX NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND NVG NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND NEA Photo of: Man holding up child in his arms. Photo of: 2 women and 2 girls looking at seashells. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments FASTER INFORMATION RECEIVE YOUR NUVEEN FUND REPORT ELECTRONICALLY By registering for electronic delivery, you will receive an e-mail as soon as your Nuveen Fund information is available. Click on the link and you will be taken directly to the report. Your Fund report can be viewed and saved on your computer. Your report will arrive faster via e-mail than by traditional mail. Registering is easy and only takes a few minutes (see instructions at right). - -------------------------------------------------------------------------------- SOME COMMON CONCERNS: WILL MY E-MAIL ADDRESS BE DISTRIBUTED TO OTHER COMPANIES? No, your e-mail address is strictly confidential and will not be used for anything other than notification of shareholder information. WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR MAIL DELIVERY AGAIN? If you decide you do not like receiving your reports electronically, it's a simple process to go back to regular mail delivery. - -------------------------------------------------------------------------------- IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT, FOLLOW THE STEPS OUTLINED BELOW: 1 Go to WWW.INVESTORDELIVERY.COM and follow the simple instructions, using the address sheet that accompanied this report as a guide. 2 You'll be taken to a page with several options. Select the NEW ENROLLMENT-CREATE screen and follow the simple instructions. 3 Click Submit. Confirm the information you just entered is correct, then click Submit again. 4 You should get a confirmation e-mail within 24 hours. If you do not, go back through these steps to make sure all the information is correct. 5 Use this same process if you need to change your registration information or cancel internet viewing. IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS COME DIRECTLY TO YOU FROM NUVEEN, FOLLOW THE STEPS OUTLINED BELOW: 1 Go to WWW.NUVEEN.COM 2 Select ACCESS YOUR ACCOUNT. Select the E-REPORT ENROLLMENT section. Click on Enrollment Today. 3 You'll be taken to a screen that asks for your Social Security number and e-mail address. Fill in this information, then click Enroll. 4 You should get a confirmation e-mail within 24 hours. If you do not, go back through these steps to make sure all the information is correct. 5 Use this same process if you need to change your registration information or cancel internet viewing. Logo: NUVEEN Investments Photo of: Timothy R. Schwertfeger Chairman of the Board Sidebar text: WE THINK YOUR NUVEEN FUND CAN BE AN IMPORTANT BUILDING BLOCK IN A PORTFOLIO DESIGNED TO PERFORM WELL THROUGH A VARIETY OF MARKET CONDITIONS. Dear SHAREHOLDER I am very pleased to report that for the year ended October 31, 2003, your Nuveen Fund continued to provide you with attractive monthly tax-free income. Your Nuveen Fund is managed with a value investing strategy that puts an emphasis on finding securities that we think are undervalued or underrated. We believe that there are always some municipal bonds that the market is not properly valuing, and that by using a consistent, research-oriented management approach we have the opportunity to find them for your Fund. In this low-rate environment, many have begun to wonder whether interest rates will soon start to rise, and whether that possibility should cause them to adjust their holdings of fixed-income investments. We believe that by constructing a carefully balanced portfolio with the help of a trusted investment professional you may be able to reduce your overall investment risk and give yourself a better chance to meet your financial goals. We think that municipal bond investments like your Nuveen Fund can be important building blocks in a portfolio designed to perform well through a variety of market conditions. Since 1898, Nuveen Investments has offered financial products and solutions that incorporate careful research, diversification, and the application of conservative risk-management principles. We are grateful that you have chosen us as a partner as you pursue your financial goals. We look forward to continuing to earn your trust in the months and years ahead. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board December 15, 2003 1 Nuveen National Insured Municipal Closed-End Exchange-Traded Funds (NQI, NIO, NIF, NPX, NVG, NEA) Portfolio Manager's COMMENTS Portfolio manager Tom O'Shaughnessy discusses U.S. economic and market conditions, key investment strategies, and the annual performance of the national insured Funds. With 20 years of investment experience at Nuveen, Tom assumed portfolio management responsibility for NEA at its inception in November 2002, adding NQI, NIO, NIF, NPX, and NVG in January 2003. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH PERIOD ENDED OCTOBER 31, 2003? Over the 12-month reporting period, the two greatest influences on the general economy continued to be historically low interest rates and the overall pace of economic improvement. In June 2003, the Federal Reserve reduced the fed funds rate to 1.0%, the lowest level since 1958. The Fed's accommodative monetary policy coupled with Washington's tax relief measures and increased spending for defense helped to fuel an 8.2% jump year-over-year in the third-quarter Gross Domestic Product (GDP), up from 3.3% in the second quarter. At the same time, inflation remained under control throughout the period. In the municipal market, the slower rate of economic recovery over the majority of this reporting period, low interest rates, and lack of inflationary pressures helped many municipal bonds perform well. During the summer of 2003, however, stronger-than-expected economic data precipitated a spike in bond yields and a corresponding drop in bond prices that impacted results across all fixed-income markets, including the municipal market, for the 12-month period ended October 31, 2003. During the first 10 months of 2003, municipal supply nationally remained robust, with $319.9 billion in new bonds, up 8% over the same period in 2002. HOW DID THESE NUVEEN FUNDS PERFORM OVER THIS REPORTING PERIOD? Individual results for these Funds, as well as for relevant benchmarks, are presented in the accompanying table. TOTAL RETURN LEHMAN LIPPER MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2 - -------------------------------------------------------------------------------- 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED ENDED ENDED 10/31/03 EQUIVALENT3 10/31/03 10/31/03 10/31/03 - -------------------------------------------------------------------------------- NQI 6.19% 8.60% 6.27% 5.52% 6.72% - -------------------------------------------------------------------------------- NIO 6.21% 8.63% 7.51% 5.52% 6.72% - -------------------------------------------------------------------------------- NIF 6.31% 8.76% 7.28% 5.52% 6.72% - -------------------------------------------------------------------------------- NPX 6.20% 8.61% 6.70% 5.52% 6.72% - -------------------------------------------------------------------------------- NVG 6.28% 8.72% 7.37% 5.52% 6.72% - -------------------------------------------------------------------------------- NEA 6.29% 8.74% NA -- -- - -------------------------------------------------------------------------------- Past performance is not predictive of future results. For additional information, see the individual Performance Overview for your Fund in this report. 1 The total annual returns on common share net asset value (NAV) for these Nuveen Funds are compared with the total annual return of the Lehman Brothers Insured Municipal Bond Index, an unleveraged, unmanaged index comprising a broad range of insured municipal bonds. Results for the Lehman index do not reflect any expenses. 2 The total returns of these Funds are compared with the average annualized return of the 24 funds in the Lipper Insured Leveraged Municipal Debt Funds category. Fund and Lipper returns assume reinvestment of dividends. 3 The taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 For the 12 months ended October 31, 2003, all of the Funds in this report with at least one year of performance history outperformed the unleveraged Lehman Brothers Insured Municipal Bond Index. NIO, NIF, and NVG also outperformed their Lipper peer group average, while NPX performed in line with the Lipper average while NQI trailed this measure. The use of leverage was one of the factors that influenced the performances of these Funds relative to the Lehman index over the past 12 months. While this is a strategy that carries some price risk and increased volatility, leveraging can provide opportunities for additional income for common shareholders, especially during periods of low short-term interest rates. In general, the Funds also benefited from their duration4 positioning during this period. As of October 31, 2003, the durations of the four older Funds ranged (NQI, NIO, NIF and NPX) from 7.59 to 9.94, while NVG and NEA had durations of 10.02 and 11.47, respectively, compared with 8.98 for the Lehman insured index. However, NPX's duration of 7.59 kept the Fund from fully benefiting from the decline in interest rates during much of the past year. In addition to leverage and duration, factors such as call exposure, portfolio trading activity, and the price movement of specific sectors and holdings also had an impact on the Funds' relative performances during this period. For example, as of October 31, 2003 NQI and NPX held 7% and 8%, respectively, of their portfolios in multifamily housing bonds. For the 12 months ended October 2003, the multifamily housing sector, as measured by the Lehman index, was among the poorer performers, lagging the insured municipal market by almost 80 basis points. HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES? With short-term interest rates remaining at historically low levels, the dividend-paying capabilities of these Funds benefited from their use of leverage. During the 12 months ended October 31, 2003, continued low short-term rates enabled us to implement two dividend increases in NQI and NPX and one each in NIO and NIF. Leverage also helped to support the dividends of the two newer Funds, as NVG and NEA continued to pay shareholders steady, attractive dividends since their first dividend declarations in May 2002 and January 2003, respectively. 4 Duration is a measure of a fund's NAV volatility in reaction to interest rate movements. Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for a fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the fund. References to duration in this commentary are intended to indicate fund duration unless otherwise noted. 3 Even at these dividend levels, each Fund's common share net investment income during the period exceeded the amount of dividends paid to common shareholders. This excess net investment income, along with any excess net investment income from prior fiscal periods, was held in reserve by the Funds as undistributed net investment income (UNII) and is part of the Funds' net asset value. The Funds, over time, will pay all their net investment income out to common shareholders. However, UNII reserves may help the Funds maintain more stable common share dividend levels over time should the short-term rates the Funds pay on their MuniPreferred shares rise or net common share earnings otherwise decline. Despite the increased volatility in the fixed-income markets during the summer of 2003, the share prices of all four of the older Funds (NQI, NIO, NIF and NPX) ended the period higher than they had been at the beginning. As of October 31, 2003, NQI had moved to trading at a premium to its common share NAV from a discount 12 months earlier, and the discounts on NIO, NIF, and NPX had narrowed. NVG and NEA both saw slight declines in share price during this period; NEA continued to trade at a premium, while the discount on NVG widened modestly . WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE FISCAL YEAR ENDED OCTOBER 31, 2003? Over this 12-month reporting period, we continued to place strong emphasis on keeping the Funds fully invested and well diversified, improving call protection, and enhancing dividend-paying capabilities. We also continued to focus on managing the Funds' durations as a way of enhancing our ability to mitigate interest rate risk and produce potentially more consistent returns over time. Interest rate risk is the risk that the value of a Fund's portfolio will decline when market interest rates rise. The longer the duration of a Fund's portfolio, the greater its interest rate risk. Over the past 12 months, we worked to make the Funds' durations more consistent with one another, although the duration of the newest Fund--NEA--was kept somewhat longer to provide additional support for its income stream in the current market environment. 4 In line with the steepness of the municipal yield curve, the majority of our purchase activity over the past year focused on value opportunities in the intermediate part of the yield curve (i.e., bonds that mature in 15 to 20 years). In many cases, bonds in this part of the curve offered yields similar to those of longer-term bonds but, in our opinion, had less inherent interest rate risk. We also took advantage of strategies that would enable us to reduce taxable distributions to shareholders. Over the past four months, as appropriate opportunities arose, we took losses on selected bonds in order to offset the substantial capital gains that had accumulated in some of the Funds. We also began to gradually cut our holdings of AMT (alternative minimum tax) bonds. In November 2002, we also introduced NEA, which cannot invest in any AMT bonds. HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF OCTOBER 31, 2003? We believe that, given the current geopolitical and economic climate, maintaining strong credit quality remains a vital requirement. The four older Funds continued to be 100% invested in insured and/or U.S. guaranteed bonds, while the two newer Funds (NVG and NEA), which are allowed to invest up to 20% in uninsured investment-grade quality securities, held 88% and 89% of their portfolios, respectively, in insured and/or U.S. guaranteed bonds as of October 31, 2003. Looking at bond calls, NVG and NEA should not face any significant call exposure for several years, while the four older Funds offer good levels of protection over the next two years, with potential call exposure ranging from 8% in NIF to 21% in NQI during 2004 and 2005. The number of bond calls will depend largely on market interest rates in coming months. In general, we believe that these Nuveen Funds can continue to serve as attractive sources of tax-free income, while simultaneously offering the potential for considerable portfolio diversification. In our opinion, the Funds represent a quality component of a well-balanced core investment portfolio that can continue to benefit shareholders over time. 5 Nuveen Insured Quality Municipal Fund, Inc. Performance OVERVIEW As of October 31, 2003 NQI Pie Chart: CREDIT QUALITY Insured 88% Insured and U.S. Guaranteed 11% U.S. Guaranteed 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $16.39 - -------------------------------------------------- Common Share Net Asset Value $15.72 - -------------------------------------------------- Market Yield 6.19% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.60% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $598,102 - -------------------------------------------------- Average Effective Maturity (Years) 21.05 - -------------------------------------------------- Leverage-Adjusted Duration 8.13 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/90) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 12.92% 6.27% - -------------------------------------------------- 5-Year 7.70% 6.17% - -------------------------------------------------- 10-Year 6.21% 6.16% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Transportation 21% - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- Utilities 13% - -------------------------------------------------- U.S. Guaranteed 12% - -------------------------------------------------- Tax Obligation/General 12% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.08 Dec 0.0815 Jan 0.0815 Feb 0.0815 Mar 0.0845 Apr 0.0845 May 0.0845 Jun 0.0845 Jul 0.0845 Aug 0.0845 Sep 0.0845 Oct 0.0845 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 15.55 15.41 15.48 15.5 15.65 15.64 15.55 15.48 15.61 15.95 15.6 15.67 15.87 15.94 15.9 16.08 16.01 16.25 16.21 16.17 15.92 16.38 16.4 16.42 16.6 16.53 16.75 16.85 16.83 16.94 16.97 16.61 17 17.1 16.81 16.04 15.72 15.73 15.51 15.6 15.63 15.86 15.73 15.88 15.97 15.95 16.16 16.18 10/31/03 16.39 1 Taxable equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 The Fund also paid shareholders a capital gains distribution in December 2002 of $0.1191 per share. 6 Nuveen Insured Municipal Opportunity Fund, Inc. Performance OVERVIEW As of October 31, 2003 NIO Pie Chart: CREDIT QUALITY Insured 80% Insured and U.S. Guaranteed 18% U.S. Guaranteed 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.64 - -------------------------------------------------- Common Share Net Asset Value $15.89 - -------------------------------------------------- Market Yield 6.21% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.63% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $1,288,087 - -------------------------------------------------- Average Effective Maturity (Years) 19.70 - -------------------------------------------------- Leverage-Adjusted Duration 8.40 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 9/19/91) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 10.22% 7.51% - -------------------------------------------------- 5-Year 5.38% 6.22% - -------------------------------------------------- 10-Year 6.43% 6.33% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Transportation 20% - -------------------------------------------------- U.S. Guaranteed 20% - -------------------------------------------------- Utilities 14% - -------------------------------------------------- Tax Obligation/Limited 12% - -------------------------------------------------- Healthcare 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 00.08 Dec 00.08 Jan 00.08 Feb 00.08 Mar 00.081 Apr 00.081 May 00.081 Jun 00.081 Jul 00.081 Aug 00.081 Sep 00.081 Oct 00.081 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 15.27 15.35 15.18 14.95 15.03 15.32 15.24 15.33 15.49 15.67 15.34 15.6 15.65 15.73 15.85 15.82 15.78 15.93 15.8 15.7 15.54 15.86 15.85 15.9 15.92 15.96 16.17 16.12 16.38 16.52 16.59 16.04 16.26 16.21 16.17 15.42 15.24 15.36 15.05 15.13 15.16 15.32 15.3 15.36 15.61 15.42 15.45 15.67 10/31/03 15.64 1 Taxable equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2002 of $0.1285 per share. 7 Nuveen Premier Insured Municipal Income Fund, Inc. Performance OVERVIEW As of October 31, 2003 NIF Pie Chart: CREDIT QUALITY Insured 82% Insured and U.S. Guaranteed 4% U.S. Guaranteed 14% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.51 - -------------------------------------------------- Common Share Net Asset Value $15.69 - -------------------------------------------------- Market Yield 6.31% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.76% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $303,912 - -------------------------------------------------- Average Effective Maturity (Years) 18.30 - -------------------------------------------------- Leverage-Adjusted Duration 9.94 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/91) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 7.84% 7.28% - -------------------------------------------------- 5-Year 4.66% 5.64% - -------------------------------------------------- 10-Year 6.39% 5.90% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 19% - -------------------------------------------------- U.S. Guaranteed 18% - -------------------------------------------------- Transportation 17% - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- Tax Obligation/Limited 11% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.0805 Dec 0.0805 Jan 0.0805 Feb 0.0805 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: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 15.7 15.29 15.19 15.22 15.38 15.46 15.34 15.2 15.55 15.9 15.39 15.53 15.65 15.78 15.87 15.78 15.94 15.9 16.06 16.04 15.77 15.95 16.13 15.99 16.03 16.14 16.31 16.34 16.62 16.95 16.96 16.47 16.67 16.7 16.51 16.01 14.99 15.24 14.93 15.16 15.16 15.24 15.35 15.37 15.37 15.35 15.26 15.53 10/31/03 15.51 1 Taxable equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2002 of $0.0360 per share. 8 Nuveen Insured Premium Income Municipal Fund 2 Performance OVERVIEW As of October 31, 2003 NPX Pie Chart: CREDIT QUALITY Insured 90% Insured and U.S. Guaranteed 10% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.12 - -------------------------------------------------- Common Share Net Asset Value $14.24 - -------------------------------------------------- Market Yield 6.20% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.61% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $530,975 - -------------------------------------------------- Average Effective Maturity (Years) 18.45 - -------------------------------------------------- Leverage-Adjusted Duration 7.59 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 7/22/93) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 8.84% 6.70% - -------------------------------------------------- 5-Year 6.79% 6.05% - -------------------------------------------------- 10-Year 6.44% 5.82% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Utilities 17% - -------------------------------------------------- Tax Obligation/Limited 15% - -------------------------------------------------- Transportation 13% - -------------------------------------------------- Tax Obligation/General 12% - -------------------------------------------------- Healthcare 11% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.0705 Dec 0.0705 Jan 0.0705 Feb 0.0705 Mar 0.072 Apr 0.072 May 0.072 Jun 0.072 Jul 0.072 Aug 0.072 Sep 0.073 Oct 0.073 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 13.87 13.92 13.82 13.32 13.74 13.85 13.85 13.73 13.88 13.98 13.99 13.87 13.88 14.14 14.21 14.13 14.23 14.31 14.25 14.15 13.91 14.29 14.26 14.31 14.33 14.42 14.64 14.72 14.7 14.9 15.15 14.74 14.93 14.98 14.99 14.2 13.99 13.85 13.69 13.75 13.89 13.8 13.9 13.89 13.96 14.12 13.96 14 10/31/03 14.12 1 Taxable equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 9 Nuveen Insured Dividend Advantage Municipal Fund Performance OVERVIEW As of October 31, 2003 NVG Pie Chart: CREDIT QUALITY Insured 86% Insured and U.S. Guaranteed 2% AAA (Uninsured) 5% AA (Uninsured) 5% A (Uninsured) 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.81 - -------------------------------------------------- Common Share Net Asset Value $15.41 - -------------------------------------------------- Market Yield 6.28% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.72% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $459,368 - -------------------------------------------------- Average Effective Maturity (Years) 21.65 - -------------------------------------------------- Leverage-Adjusted Duration 10.02 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 6.10% 7.37% - -------------------------------------------------- Since Inception 5.59% 11.18% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 23% - -------------------------------------------------- Transportation 21% - -------------------------------------------------- Tax Obligation/Limited 16% - -------------------------------------------------- Water and Sewer 12% - -------------------------------------------------- Education and Civic Organizations 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.0775 Dec 0.0775 Jan 0.0775 Feb 0.0775 Mar 0.0775 Apr 0.0775 May 0.0775 Jun 0.0775 Jul 0.0775 Aug 0.0775 Sep 0.0775 Oct 0.0775 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 14.99 14.96 14.86 14.6 14.59 14.72 14.46 14.19 14.5 15.01 14.45 14.8 14.84 14.92 15.01 14.91 15 15.04 14.94 14.95 14.84 14.93 14.95 15.05 15.04 15.02 15.2 15.35 15.62 15.88 15.95 15.41 15.4 15.73 15.67 15.19 14.1 14.49 14.31 14.26 14.44 14.59 14.55 14.48 14.56 14.89 14.67 14.81 10/31/03 14.81 1 Taxable equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 The Fund also paid shareholders a capital gains distribution in December 2002 of $0.1051 per share. 10 Nuveen Insured Tax-Free Advantage Municipal Fund Performance OVERVIEW As of October 31, 2003 NEA Pie Chart: CREDIT QUALITY Insured 87% Insured and U.S. Guaranteed 2% AAA (Uninsured) 4% AA (Uninsured) 1% A (Uninsured) 4% BBB (Uninsured) 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.79 - -------------------------------------------------- Common Share Net Asset Value $14.54 - -------------------------------------------------- Market Yield 6.29% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.74% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $269,112 - -------------------------------------------------- Average Effective Maturity (Years) 24.10 - -------------------------------------------------- Leverage-Adjusted Duration 11.47 - -------------------------------------------------- CUMULATIVE TOTAL RETURN (Inception 11/22/02) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- Since Inception 3.87% 6.98% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/Limited 31% - -------------------------------------------------- Tax Obligation/General 26% - -------------------------------------------------- Utilities 14% - -------------------------------------------------- Healthcare 13% - -------------------------------------------------- Transportation 8% - -------------------------------------------------- Bar Chart: 2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jan 0.0775 Feb 0.0775 Mar 0.0775 Apr 0.0775 May 0.0775 Jun 0.0775 Jul 0.0775 Aug 0.0775 Sep 0.0775 Oct 0.0775 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/22/02 15 15 15 15 15.01 15 14.66 14.8 14.94 14.94 14.94 14.8 15 14.99 14.93 14.97 14.66 14.83 14.96 15.17 15 15.08 14.97 15.05 15.18 15.57 15.63 15.56 15.36 15.45 15.33 15.52 15.1 14.24 14.74 14.07 14.09 14.07 14.08 14.13 14.06 14.41 14.56 14.42 14.67 10/31/03 14.79 1 Taxable equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 11 Shareholder MEETING REPORT The annual shareholder meeting was held on July 28, 2003, at the Northern Trust Bank, Chicago, Illinois.
NQI - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and MuniPreferred MuniPreferred shares voting shares voting together together MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred as a class as a class Series M Series T Series W Series TH Series F ==================================================================================================================================== William E. Bennett For 21,572,589 -- -- -- -- -- -- Withhold 1,036,844 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== Robert P. Bremner For 21,577,891 -- -- -- -- -- -- Withhold 1,031,542 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== Lawrence H. Brown For 21,613,444 -- -- -- -- -- -- Withhold 995,989 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== Jack B. Evans For 21,592,868 -- -- -- -- -- -- Withhold 1,016,565 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== Anne E. Impellizzeri For 21,570,511 -- -- -- -- -- -- Withhold 1,038,922 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== William L. Kissick For 21,555,672 -- -- -- -- -- -- Withhold 1,053,761 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== Thomas E. Leafstrand For 21,575,308 -- -- -- -- -- -- Withhold 1,034,125 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== Peter R. Sawers For 21,613,529 -- -- -- -- -- -- Withhold 995,904 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== William J. Schneider For -- 10,978 -- -- -- -- -- Withhold -- 76 -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,054 -- -- -- -- -- ==================================================================================================================================== 12 NQI - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and MuniPreferred MuniPreferred shares voting shares voting together together MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred as a class as a class Series M Series T Series W Series TH Series F ==================================================================================================================================== Timothy R. Schwertfeger For -- 10,981 -- -- -- -- -- Withhold -- 73 -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,054 -- -- -- -- -- ==================================================================================================================================== Judith M. Stockdale For 21,613,363 -- -- -- -- -- -- Withhold 996,070 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== Sheila W. Wellington For 21,567,533 -- -- -- -- -- -- Withhold 1,041,900 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 -- -- -- -- -- -- ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO LENDING For 16,610,597 2,224 -- -- -- -- -- Against 1,675,317 227 -- -- -- -- -- Abstain 856,753 90 -- -- -- -- -- Broker Non-Vote 3,466,766 8,513 -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 11,054 -- -- -- -- -- ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO BORROWING For 16,585,598 2,216 -- -- -- -- -- Against 1,718,177 235 -- -- -- -- -- Abstain 838,892 90 -- -- -- -- -- Broker Non-Vote 3,466,766 8,513 -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 11,054 -- -- -- -- -- ==================================================================================================================================== TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED THEREBY For 16,824,047 2,260 461 435 445 464 455 Against 1,445,925 188 19 7 46 74 42 Abstain 872,695 93 28 1 37 12 15 Broker Non-Vote 3,466,766 8,513 1,825 1,630 1,706 1,443 1,909 - ------------------------------------------------------------------------------------------------------------------------------------ Total 22,609,433 11,054 2,333 2,073 2,234 1,993 2,421 ==================================================================================================================================== 13 Shareholder MEETING REPORT (continued) NIO - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and MuniPreferred MuniPreferred shares voting shares voting Muni- Muni- Muni- Muni- Muni- Muni- Muni- together together Preferred Preferred Preferred Preferred Preferred Preferred Preferred as a class as a class Series M Series T Series W Series W2 Series TH Series TH2 Series F ==================================================================================================================================== William E. Bennett For 48,101,550 -- -- -- -- -- -- -- -- Withhold 1,244,787 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== Robert P. Bremner For 48,130,374 -- -- -- -- -- -- -- -- Withhold 1,215,963 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== Lawrence H. Brown For 48,176,808 -- -- -- -- -- -- -- -- Withhold 1,169,529 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== Jack B. Evans For 48,151,961 -- -- -- -- -- -- -- -- Withhold 1,194,376 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== Anne E. Impellizzeri For 48,114,883 -- -- -- -- -- -- -- -- Withhold 1,231,454 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== William L. Kissick For 48,091,932 -- -- -- -- -- -- -- -- Withhold 1,254,405 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== Thomas E. Leafstrand For 48,127,866 -- -- -- -- -- -- -- -- Withhold 1,218,471 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== Peter R. Sawers For 48,136,824 -- -- -- -- -- -- -- -- Withhold 1,209,513 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== William J. Schneider For -- 24,301 -- -- -- -- -- -- -- Withhold -- 142 -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 24,443 -- -- -- -- -- -- -- ==================================================================================================================================== 14 NIO - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and MuniPreferred MuniPreferred shares voting shares voting Muni- Muni- Muni- Muni- Muni- Muni- Muni- together together Preferred Preferred Preferred Preferred Preferred Preferred Preferred as a class as a class Series M Series T Series W Series W2 Series TH Series TH2 Series F ==================================================================================================================================== Timothy R. Schwertfeger For -- 24,307 -- -- -- -- -- -- -- Withhold -- 136 -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 24,443 -- -- -- -- -- -- -- ==================================================================================================================================== Judith M. Stockdale For 48,156,501 -- -- -- -- -- -- -- -- Withhold 1,189,836 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== Sheila W. Wellington For 48,092,502 -- -- -- -- -- -- -- -- Withhold 1,253,835 -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 -- -- -- -- -- -- -- -- ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO LENDING For 33,939,671 3,930 -- -- -- -- -- -- -- Against 2,593,875 317 -- -- -- -- -- -- -- Abstain 1,922,180 410 -- -- -- -- -- -- -- Broker Non-Vote 10,890,611 19,786 -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 24,443 -- -- -- -- -- -- -- ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO BORROWING For 33,854,073 3,939 -- -- -- -- -- -- -- Against 2,689,263 322 -- -- -- -- -- -- -- Abstain 1,912,390 396 -- -- -- -- -- -- -- Broker Non-Vote 10,890,611 19,786 -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 24,443 -- -- -- -- -- -- -- ==================================================================================================================================== TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED THEREBY For 34,290,901 4,019 987 508 403 369 461 481 810 Against 2,197,208 187 18 35 44 12 24 22 32 Abstain 1,967,617 451 70 107 95 58 38 12 71 Broker Non-Vote 10,890,611 19,786 2,343 3,031 3,023 2,677 3,089 2,857 2,766 - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,346,337 24,443 3,418 3,681 3,565 3,116 3,612 3,372 3,679 ==================================================================================================================================== 15 Shareholder MEETING REPORT (continued) NIF - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and MuniPreferred MuniPreferred shares voting shares voting together together MuniPreferred MuniPreferred MuniPreferred as a class as a class Series W Series TH Series F ==================================================================================================================================== William E. Bennett For 11,124,069 -- -- -- -- Withhold 274,673 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== Robert P. Bremner For 11,130,999 -- -- -- -- Withhold 267,743 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== Lawrence H. Brown For 11,124,870 -- -- -- -- Withhold 273,872 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== Jack B. Evans For 11,128,843 -- -- -- -- Withhold 269,899 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== Anne E. Impellizzeri For 11,122,494 -- -- -- -- Withhold 276,248 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== William L. Kissick For 11,114,736 -- -- -- -- Withhold 284,006 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== Thomas E. Leafstrand For 11,123,376 -- -- -- -- Withhold 275,366 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== Peter R. Sawers For 11,125,137 -- -- -- -- Withhold 273,605 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== William J. Schneider For -- 6,037 -- -- -- Withhold -- 63 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 6,100 -- -- -- ==================================================================================================================================== 16 NIF - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and MuniPreferred MuniPreferred shares voting shares voting together together MuniPreferred MuniPreferred MuniPreferred as a class as a class Series W Series TH Series F ==================================================================================================================================== Timothy R. Schwertfeger For -- 6,040 -- -- -- Withhold -- 60 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 6,100 -- -- -- ==================================================================================================================================== Judith M. Stockdale For 11,131,990 -- -- -- -- Withhold 266,752 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== Sheila W. Wellington For 11,121,848 -- -- -- -- Withhold 276,894 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 -- -- -- -- ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO LENDING For 7,960,506 1,034 -- -- -- Against 566,171 55 -- -- -- Abstain 366,221 16 -- -- -- Broker Non-Vote 2,505,844 4,995 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 6,100 -- -- -- ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO BORROWING For 7,958,571 1,020 -- -- -- Against 572,962 55 -- -- -- Abstain 361,365 30 -- -- -- Broker Non-Vote 2,505,844 4,995 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 6,100 -- -- -- ==================================================================================================================================== TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED THEREBY For 8,022,008 992 122 535 335 Against 486,969 85 3 52 30 Abstain 383,921 28 -- 20 8 Broker Non-Vote 2,505,844 4,995 657 1,977 2,361 - ------------------------------------------------------------------------------------------------------------------------------------ Total 11,398,742 6,100 782 2,584 2,734 ==================================================================================================================================== 17 Shareholder MEETING REPORT (continued) NPX NVG NEA - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting shares voting together together together together together together as a class as a class as a class as a class as a class as a class ==================================================================================================================================== William E. Bennett For 24,575,140 -- 17,811,562 -- 10,760,464 -- Withhold 566,512 -- 402,111 -- 263,055 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== Robert P. Bremner For 24,585,639 -- 17,810,865 -- 10,762,969 -- Withhold 556,013 -- 402,808 -- 260,550 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== Lawrence H. Brown For 24,575,923 -- 17,813,468 -- 10,759,630 -- Withhold 565,729 -- 400,205 -- 263,889 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== Jack B. Evans For 24,597,048 -- 17,806,462 -- 10,764,443 -- Withhold 544,604 -- 407,211 -- 259,076 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== Anne E. Impellizzeri For 24,538,313 -- 17,782,261 -- 10,757,033 -- Withhold 603,339 -- 431,412 -- 266,486 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== William L. Kissick For 24,553,417 -- 17,778,595 -- 10,758,256 -- Withhold 588,235 -- 435,078 -- 265,263 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== Thomas E. Leafstrand For 24,562,479 -- 17,809,999 -- 10,759,067 -- Withhold 579,173 -- 403,674 -- 264,452 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== Peter R. Sawers For 24,578,898 -- 17,801,778 -- 10,760,623 -- Withhold 562,754 -- 411,895 -- 262,896 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== William J. Schneider For -- 9,499 -- 9,233 -- 5,647 Withhold -- 44 -- 39 -- 73 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 9,543 -- 9,272 -- 5,720 ==================================================================================================================================== 18 NPX NVG NEA - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting shares voting together together together together together together as a class as a class as a class as a class as a class as a class ==================================================================================================================================== Timothy R. Schwertfeger For -- 9,503 -- 9,240 -- 5,647 Withhold -- 40 -- 32 -- 73 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 9,543 -- 9,272 -- 5,720 ==================================================================================================================================== Judith M. Stockdale For 24,588,470 -- 17,827,152 -- 10,763,809 -- Withhold 553,182 -- 386,521 -- 259,710 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== Sheila W. Wellington For 24,546,047 -- 17,774,871 -- 10,758,232 -- Withhold 595,605 -- 438,802 -- 265,287 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 -- 18,213,673 -- 11,023,519 -- ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO LENDING For 16,831,893 1,602 11,790,649 1,674 7,085,896 1,181 Against 1,138,769 148 776,827 68 730,586 242 Abstain 806,531 137 573,381 47 347,471 38 Broker Non-Vote 6,364,459 7,656 5,072,816 7,483 2,859,566 4,259 - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 9,543 18,213,673 9,272 11,023,519 5,720 ==================================================================================================================================== TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO BORROWING For 16,812,795 1,641 11,643,905 1,631 7,048,121 1,181 Against 1,112,977 159 844,600 111 743,124 242 Abstain 851,421 87 652,352 47 372,708 38 Broker Non-Vote 6,364,459 7,656 5,072,816 7,483 2,859,566 4,259 - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,141,652 9,543 18,213,673 9,272 11,023,519 5,720 ==================================================================================================================================== TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED THEREBY For -- -- -- -- -- -- Against -- -- -- -- -- -- Abstain -- -- -- -- -- -- Broker Non-Vote -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== 19
Report of INDEPENDENT AUDITORS THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS NUVEEN INSURED QUALITY MUNICIPAL FUND, INC. NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC. NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund as of October 31, 2003, and the related statements of operations, changes in net assets and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of investments owned as of October 31, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund at October 31, 2003, and the results of their operations, changes in their net assets and financial highlights for the periods indicated therein in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Chicago, Illinois December 12, 2003 20 Nuveen Insured Quality Municipal Fund, Inc. (NQI) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.2% $ 1,135 Birmingham, Waterworks and Sewer Board, Alabama, Water and 1/13 at 100.00 AAA $ 1,204,859 Sewer Revenue Bonds, Series 2002B, 5.250%, 1/01/20 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.6% 9,200 Phoenix, Civic Improvement Corporation, Arizona, Senior Lien 7/12 at 100.00 AAA 9,359,528 Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.0% 5,775 Arkansas Development Finance Authority, Single Family Mortgage 7/05 at 102.00 AAA 5,997,337 Revenue Bonds, Mortgage-Backed Securities Program, Series 1995B, 6.700%, 7/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 20.8% 8,135 Alameda County Public Facilities Corporation, Alameda County, 9/06 at 102.00 AAA 9,251,529 California, Certificates of Participation, Series 1991, 6.000%, 9/01/21 (Pre-refunded to 9/01/06) - MBIA Insured 13,175 California Pollution Control Financing Authority, Pollution 9/09 at 101.00 AAA 13,806,610 Control Revenue Refunding Bonds, Southern California Edison Company, Series 1999A, 5.450%, 9/01/29 - MBIA Insured 9,000 State of California, General Obligation Bonds, Series 2002, 10/12 at 100.00 AAA 9,025,290 5.000%, 10/01/32 - MBIA Insured 20,500 State of California, General Obligation Refunding Bonds, 4/12 at 100.00 AAA 20,632,020 Series 2002, 5.000%, 4/01/27 - AMBAC Insured 5,500 California Statewide Communities Development Authority, 7/04 at 102.00 AAA 5,785,340 San Diego, California, Certificates of Participation, The Salk Institute for Biological Studies, 6.200%, 7/01/24 - CONNIE LEE/AMBAC Insured Foothill-Eastern Transportation Corridor Agency, California, Toll Road Refunding Revenue Bonds, Series 1999: 22,985 0.000%, 1/15/24 - MBIA Insured 1/10 at 44.52 AAA 7,261,881 22,000 0.000%, 1/15/31 - MBIA Insured 1/10 at 29.11 AAA 4,502,960 50,000 0.000%, 1/15/37 - MBIA Insured 1/10 at 20.19 AAA 7,083,000 5,000 Garden Grove, California, Certificates of Participation, Financing 3/12 at 101.00 AAA 5,078,650 Project, Series 2002A, 5.125%, 3/01/32 - AMBAC Insured 5,000 Inland Empire Solid Waste Financing Authority, California, 8/06 at 102.00 AAA 5,663,000 Revenue Bonds, Landfill Improvement Financing Project, Series 1996B, 6.000%, 8/01/16 (Alternative Minimum Tax) (Pre-refunded to 8/01/06) - FSA Insured 5,513 Moreno Valley Public Finance Authority, California, GNMA 1/12 at 105.00 Aaa 6,475,845 Collateralized Assisted Living Housing Revenue Bonds, CDC Assisted Living Project, Series 2000A, 7.500%, 1/20/42 6,250 Ontario Redevelopment Financing Authority, San Bernardino 2/04 at 102.00 AAA 6,400,750 County, California, Revenue Bonds, Ontario Redevelopment Project No. 1, Series 1993, 5.850%, 8/01/22 - MBIA Insured 3,615 Pasadena Unified School District, Los Angeles County, 5/13 at 100.00 AAA 3,668,249 California, General Obligation Bonds, Series 2003D, 5.000%, 5/01/24 - MBIA Insured San Francisco City and County Airports Commission, California, Revenue Refunding Bonds, San Francisco International Airport, Series 2- Issue 27A: 7,200 5.125%, 5/01/21 (Alternative Minimum Tax) - MBIA Insured 5/11 at 100.00 AAA 7,284,888 12,690 5.250%, 5/01/31 (Alternative Minimum Tax) - MBIA Insured 5/11 at 100.00 AAA 12,858,650 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 1.7% 5,630 E-470 Public Highway Authority, Arapahoe County, Colorado, 8/05 at 103.00 AAA 6,296,198 Capital Improvement Trust Fund Highway Revenue Bonds, E-470 Project Vehicle Registration Fee Bonds, Series 1986A, 6.150%, 8/31/26 (Pre-refunded to 8/31/05) - MBIA Insured 3,750 City and County of Denver, Colorado, Airport System Revenue 11/06 at 101.00 AAA 3,913,725 Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured 21 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.4% $ 8,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA $ 8,187,440 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.000%, 10/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 6.9% 4,550 Florida Housing Finance Agency, Florida, Single Family Mortgage 7/04 at 102.00 AAA 4,672,395 Revenue Bonds, 1994 Series B, 6.650%, 7/01/26 (Alternative Minimum Tax) 20,000 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 10/10 at 101.00 AAA 21,164,000 5.750%, 10/01/25 (Alternative Minimum Tax) - FSA Insured 4,115 Housing Finance Authority of Miami-Dade County, Florida, 7/11 at 100.00 AAA 4,279,888 Multifamily Housing Revenue Bonds, Series 2001-2A, Monterey Pointe Apartments Project, 5.850%, 7/01/37 (Alternative Minimum Tax) - FSA Insured 7,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 7,195,790 Miami International Airport, Series 2002, 5.375%, 10/01/32 (Alternative Minimum Tax) - FGIC Insured 3,780 The School Board of Palm Beach County, Florida, Certificates 8/13 at 100.00 AAA 4,049,363 of Participation, Series 2003A, 5.000%, 8/01/16 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 6.3% 1,620 Hawaii County, Hawaii, General Obligation Bonds, 7/13 at 100.00 AAA 1,673,363 Series 2003A, 5.000%, 7/15/21 - FSA Insured Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 8,785 6.625%, 7/01/18 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 10,342,053 7,000 6.000%, 7/01/19 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 7,786,380 16,180 Hawaii Department of Budget and Finance, Special Purpose 5/06 at 101.00 AAA 17,809,811 Revenue Bonds, Hawaii Electric Company, Inc. and Subsidiaries Project, Series 1996A, 6.200%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 19.4% 10,000 City of Chicago, Illinois, General Obligation Bonds, Series 1995, 7/05 at 102.00 AAA 11,005,200 6.125%, 1/01/16 (Pre-refunded to 7/01/05) - AMBAC Insured 6,000 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/05 at 102.00 AAA 6,449,280 General Airport Second Lien Revenue Refunding Bonds, 1994 Series A, 6.375%, 1/01/12 - MBIA Insured 9,500 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/10 at 101.00 AAA 10,096,695 General Airport Second Lien Revenue Refunding Bonds, 1999 Series, 5.500%, 1/01/15 (Alternative Minimum Tax) - AMBAC Insured 6,825 Chicago Public Building Commission, Illinois, Building Revenue 12/03 at 102.00 AAA 6,988,595 Bonds, Chicago Board of Education, Series 1993A, 5.750%, 12/01/18 (Pre-refunded to 12/01/03) - MBIA Insured 7,165 Illinois Development Finance Authority, Revenue Bonds, 8/09 at 101.00 AAA 8,294,204 Bradley University Project, Series 1999, 5.500%, 8/01/29 (Pre-refunded to 8/01/09) - AMBAC Insured 25,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa 2/10 at 101.00 AAA 26,867,000 Health System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured 15,785 State of Illinois, General Obligation Bonds, Illinois FIRST, 4/12 at 100.00 AAA 16,296,750 Series of April 2002, 5.250%, 4/01/27 - FSA Insured 13,275 State of Illinois, General Obligation Bonds, Illinois FIRST, 5/11 at 100.00 AAA 13,668,604 Series of 2001, 5.250%, 5/01/26 - FSA Insured 18,000 Metropolitan Pier and Exposition Authority, Illinois, McCormick No Opt. Call AAA 5,698,620 Place Expansion Project Revenue Bonds, Series 2002A, 0.000%, 12/15/24 - MBIA Insured 10,000 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 10,424,100 Infrastructure Projects, Series 2001B, 5.250%, 8/15/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.0% 6,000 Jasper County, Indiana, Collateralized Pollution Control Revenue 1/04 at 100.00 AAA 6,210,900 Refunding Bonds, Northern Indiana Public Service Company Project, Series 1991, 7.100%, 7/01/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.5% 3,000 Wichita, Kansas, Water and Sewer and Utility Revenue Bonds, 10/13 at 100.00 AAA 3,105,450 Series 2003, 5.000%, 10/01/21 - FGIC Insured 22 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 4.0% Kentucky Economic Development Finance Authority, Health System Revenue Bonds, Norton Healthcare Inc., Series 2000C: $ 6,345 6.150%, 10/01/27 - MBIA Insured 10/13 at 101.00 AAA $ 6,131,554 18,185 6.150%, 10/01/28 - MBIA Insured 10/13 at 101.00 AAA 17,533,068 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.2% 13,170 City of New Orleans, Louisiana, General Obligation Refunding 10/05 at 101.00 AAA 14,365,573 Bonds, Series 1995, 6.200%, 10/01/21 - AMBAC Insured 4,285 Orleans Levee District, Louisiana, Levee District General 12/05 at 103.00 AAA 4,784,031 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.5% 8,000 Maine Health and Higher Educational Facilities Authority, 7/09 at 101.00 AAA 8,800,400 Revenue Bonds, Series 1999B, 6.000%, 7/01/29 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.3% 7,535 Maryland Transportation Authority, Baltimore-Washington 3/12 at 101.00 AAA 8,059,210 International Airport Parking Revenue Bonds, Series 2002B, 5.500%, 3/01/18 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 0.8% 5,000 Massachusetts Bay Transportation Authority, Senior Sales 7/12 at 100.00 AAA 5,048,700 Tax Revenue Bonds, Series 2002A Refunding, 5.000%, 7/01/27 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 0.8% 4,750 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 4,924,753 Revenue Refunding Pollution Control Bonds, Detroit Edison Company, Series 1999A, 5.550%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.0% 127 St. Louis Park, Minnesota, GNMA Mortgage-Backed Securities 4/04 at 100.00 Aaa 127,091 Program, Single Family Residential Mortgage Revenue Bonds, Series 1991A, 7.250%, 4/20/23 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 2.0% 2,545 Harrison County Wastewater Management District, No Opt. Call AAA 3,459,113 Mississippi, Wastewater Revenue Refunding Bonds, Series 1991A, 8.500%, 2/01/13 - FGIC Insured 2,715 Harrison County Wastewater Management District, No Opt. Call AAA 3,578,804 Mississippi, Wastewater Treatment Facilities Revenue Refunding Bonds, Series 1991B, 7.750%, 2/01/14 - FGIC Insured 4,495 Mississippi Home Corporation, Single Family Mortgage 6/06 at 105.00 Aaa 4,931,330 Revenue Bonds, GNMA Collateralized Home Mortgage Program, Series 1996C, 7.600%, 6/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.9% 5,000 St. Louis, Missouri, Municipal Finance Corporation, 2/06 at 102.00 AAA 5,593,650 Leasehold Revenue Bonds, Series 1996A, City Justice Center Project, 6.000%, 2/15/19 (Pre-refunded to 2/15/06) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 9.2% 33,700 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 35,257,277 Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000, 5.375%, 1/01/40 - AMBAC Insured 5,720 Reno, Nevada, Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 5,787,496 Transportation Rail Access Corridor Project, Senior Lien Series 2002, 5.125%, 6/01/32 - AMBAC Insured 13,185 Washoe County, Nevada, Hospital Revenue Bonds, Washoe 6/04 at 102.00 AAA 13,797,443 Medical Center Inc. Project, Refunding Series 1994A, 6.000%, 6/01/19 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.4% 3,750 New Jersey Health Care Facilities Financing Authority, Revenue 7/04 at 102.00 AAA 3,954,525 Bonds, Monmouth Medical Center Issue, Series C, 6.250%, 7/01/24 (Pre-refunded to 7/01/04) - CAP GTY/FSA Insured 10,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA 10,125,600 Series 2003A, 5.000%, 1/01/30 - AMBAC Insured 23 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 2.0% $ 6,000 City of Farmington, New Mexico, Pollution Control Refunding 4/04 at 100.00 BB $ 6,201,600 Revenue Bonds, Southern California Edison Company Four Corners Project, 1991 Series A, 7.200%, 4/01/21 5,750 Santa Fe, New Mexico, Utility Revenue Bonds, Series 1994A, 6/04 at 100.00 AAA 5,927,503 6.300%, 6/01/24 (Pre-refunded to 6/01/04) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 16.8% 8,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AAA 8,097,680 Contract Refunding Bonds, Series 2002A, 5.000%, 7/01/25 - FGIC Insured 6,500 Metropolitan Transportation Authority, New York, Dedicated 11/12 at 100.00 AAA 6,558,695 Tax Fund Bonds, Series 2002A, 5.000%, 11/15/32 - FSA Insured City of New York, New York, General Obligation Bonds, Fiscal Series 1991A: 2,000 8.000%, 3/15/11 - FSA Insured 3/04 at 100.00 AAA 2,049,200 6,000 7.250%, 3/15/19 - FSA Insured 3/04 at 100.00 AAA 6,216,900 10,335 New York Municipal Water Finance Authority, New York, Water 6/05 at 101.00 AAA 11,237,866 and Sewer System Revenue Bonds, Fiscal Series 1996A, 6.000%, 6/15/25 (Pre-refunded to 6/15/05) - MBIA Insured 11,760 Dormitory Authority of the State of New York, Court Facilities 5/10 at 101.00 AAA 12,915,420 Lease Revenue Bonds, City of New York Issue, Series 1999, 5.750%, 5/15/30 - AMBAC Insured 7,000 New York State Energy Research and Development Authority, 7/05 at 102.00 A1 7,582,750 Facilities Refunding Revenue Bonds, Consolidated Edison Company of New York, Inc. Project, Series 1995A, 6.100%, 8/15/20 10,875 New York State Housing Finance Agency, Housing Project 5/06 at 102.00 AAA 11,549,576 Mortgage Revenue Refunding Bonds, Series 1996A, 6.125%, 11/01/20 - FSA Insured 4,200 New York Mortgage Agency, Homowner Mortgage Revenue 10/09 at 100.00 AAA 4,378,836 Bonds, Series 82, 5.550%, 10/01/19 (Alternative Minimum Tax) - MBIA Insured 12,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 13,114,800 New York, Hospital FHA-Insured Mortgage Revenue Bonds, Series 1994A, 6.900%, 8/15/34 (Pre-refunded to 2/15/05) - AMBAC Insured 15,000 Dormitory Authority of the State of New York, School Districts 10/12 at 100.00 AAA 16,643,400 Financing Program Revenue Bonds, Series 2002D, 5.500%, 10/01/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.3% 1,720 Union County, North Carolina, Certificates of Participation, 6/13 at 101.00 AAA 1,846,884 Series 2003, 5.000%, 6/01/16 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 3.6% 20,000 Mercer County, North Dakota, Pollution Control Revenue 1/05 at 102.00 AAA 21,336,600 Refunding Bonds, Basin Electric Power Cooperative - Antelope Valley Unit 1 and Common Facilities, Second Series 1995, 6.050%, 1/01/19 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.9% 5,000 Lorain County, Ohio, Health Facilities Revenue Bonds, 9/09 at 102.00 AAA 5,225,250 Catholic Healthcare Partners, Series 1999A, 5.500%, 9/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.6% 7,000 Allegheny County, Pennsylvania, Airport Revenue Refunding 1/08 at 101.00 AAA 7,358,680 Bonds, Pittsburgh International Airport, Series 1997A, 5.250%, 1/01/16 (Alternative Minimum Tax) - MBIA Insured 7,250 Lehigh County Industrial Development Authority, Pennsylvania, 8/05 at 102.00 AAA 7,898,585 Pollution Control Revenue Refunding Bonds, Pennsylvania Power & Light Company Project, Series 1995A, 6.150%, 8/01/29 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 1.0% 5,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 5,747,400 Revenue Bonds, Series 2003AA, 5.500%, 7/01/16 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 0.9% 5,050 Rhode Island Port Authority and Economic Development 7/04 at 102.00 AAA 5,327,952 Corporation, Airport Revenue Bonds, Series 1994A, 6.625%, 7/01/24 (Alternative Minimum Tax) - FSA Insured 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.8% Knox County Health, Educational and Housing Facility Board, Tennessee, Hospital Revenue Bonds, Covenant Health, Series 2002A Refunding: $ 7,500 0.000%, 1/01/24 - FSA Insured 1/13 at 52.75 AAA $ 2,376,450 5,000 0.000%, 1/01/25 - FSA Insured 1/13 at 49.71 AAA 1,490,300 2,750 0.000%, 1/01/26 - FSA Insured 1/13 at 46.78 AAA 772,365 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 20.5% 8,000 Abilene Health Facilities Development Corporation, Texas, 9/05 at 102.00 AAA 8,764,080 Hospital Revenue Refunding and Improvement Bonds, Hendrick Medical Center Project, Series 1995C, 6.150%, 9/01/25 - MBIA Insured 5,275 City of Austin, Texas, Combined Utility Systems Revenue 11/07 at 100.00 AAA 5,476,874 Refunding Bonds, Series 1997, 5.125%, 11/15/20 - FSA Insured 3,000 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/11 at 100.00 AAA 3,285,030 International Airport, Joint Revenue Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 (Alternative Minimum Tax) - FGIC Insured 3,735 Grand Prairie Independent School District, Dallas County, 2/13 at 100.00 AAA 3,796,814 Texas, General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA Insured Harris County Hospital District, Texas, Revenue Refunding Bonds, Series 1990: 2,100 7.400%, 2/15/10 - AMBAC Insured No Opt. Call AAA 2,364,894 2,900 7.400%, 2/15/10 - AMBAC Insured No Opt. Call AAA 3,388,592 4,500 City of Houston, Texas, General Obligation Public Improvement 3/11 at 100.00 AAA 4,589,640 Bonds, Series 2001A, 5.000%, 3/01/22 - FSA Insured 4,685 Houston, Texas, Airport System Subordinate Lien Revenue 7/10 at 100.00 AAA 4,873,946 Bonds, Series 2000A, 5.500%, 7/01/19 (Alternative Minimum Tax) - FSA Insured 17,000 Houston, Texas, Water and Sewer System Junior Lien Revenue No Opt. Call AAA 19,443,750 Refunding Bonds, Series 2002A, 5.750%, 12/01/32 - FSA Insured 19,200 Jefferson County Health Facilities Development Corporation, 8/11 at 100.00 AAA 19,564,800 Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.400%, 8/15/31 - AMBAC Insured 6,000 Laredo Community College District, Texas, Limited Tax General 8/10 at 100.00 AAA 6,231,840 Obligation Bonds, Series 2001, 5.375%, 8/01/31 - AMBAC Insured 22,045 North Central Texas Health Facility Development Corporation, 8/12 at 101.00 AAA 22,670,417 Revenue Bonds, Children's Medical Center of Dallas, Series 2002, 5.250%, 8/15/32 - AMBAC Insured 17,429 Tarrant County Housing Finance Corporation, Texas, GNMA 3/12 at 105.00 Aaa 18,456,265 Collateralized Mortgage Loan Multifamily Housing Revenue Bonds, Bardin Green Apartments Project, Series 2001, 6.600%, 9/20/42 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.1% 6,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds, 11/03 at 100.00 AAA 6,732,540 IHC Hospitals, Inc., Series 1988A, 8.000%, 5/15/07 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 10.7% 10,730 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 11,234,847 Chelan Hydro Consolidated System Revenue Bonds, Series 2001C Refunding, 5.650%, 7/01/32 (Alternative Minimum Tax) - MBIA Insured 4,700 Seattle Housing Authority, Washington, GNMA Collateralized 9/11 at 102.00 AAA 5,149,696 Mortgage Loan, Low Income Housing Assistance Revenue Bonds, RHF/Esperanza Apartments Project, Series 2000A, 6.125%, 3/20/42 (Alternative Minimum Tax) 15,025 Seattle Housing Authority, Washington, GNMA Collateralized 11/11 at 105.00 AAA 17,047,515 Mortgage Loan, Low Income Housing Assistance Revenue Bonds, Park Place Project, Series 2000A, 7.000%, 5/20/42 5,000 City of Seattle, Washington, Municipal Light and Power 12/10 at 100.00 AAA 5,244,900 Revenue Bonds, Series 2000, 5.250%, 12/01/21 - FSA Insured 10,000 Washington, General Obligation Refunding Bonds, 1/12 at 100.00 AAA 10,376,000 Series R-2003A, 5.000%, 1/01/19 - MBIA Insured 2,500 Washington Health Care Facilities Authority Revenue Bonds, 12/09 at 101.00 AAA 2,659,650 Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured 11,750 Washington Public Power Supply System, Nuclear Project No. 1, 7/08 at 102.00 AAA 12,408,470 Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/17 - MBIA Insured 25 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 2.3% $ 12,845 West Virginia Water Development Authority, Infrastructure 10/10 at 100.00 AAA $ 13,643,060 Revenue Bonds, West Virginia Infrastructure and Jobs Development Council Program, 2000 Series A, 5.500%, 10/01/39 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 948,249 Total Long-Term Investments (cost $841,952,939) - 150.4% 899,334,120 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.8% 16,767,798 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.2)% (318,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $598,101,918 ==================================================================================================================== All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. See accompanying notes to financial statements. 26
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 15.9% $ 3,850 Alabama Housing Finance Authority, Multifamily Housing 7/05 at 103.00 Aaa $ 4,040,267 Revenue Refunding Bonds, GNMA Collateralized Royal Hills Apartment Project, Series 1995F, 6.500%, 7/20/30 11,000 Special Care Facilities Financing Authority of the City of 5/05 at 102.00 AAA 11,830,060 Birmingham, Alabama, Baptist Medical Centers Revenue Bonds, Series 1995-B, Baptist Health System, Inc., 5.875%, 11/15/20 - MBIA Insured Special Care Facilities Financing Authority of the City of Birmingham, Alabama, Baptist Medical Centers Revenue Bonds, Series 1996-A, Baptist Health System, Inc.: 7,465 5.875%, 11/15/19 - MBIA Insured 11/06 at 102.00 AAA 8,297,945 1,750 5.875%, 11/15/26 - MBIA Insured 11/06 at 102.00 AAA 1,901,148 11,175 Hoover City Board of Education, Alabama, Capital Outlay 2/11 at 100.00 AAA 11,698,661 Tax Anticipation Warrants, Series 2001, 5.250%, 2/15/22 - MBIA Insured Jefferson County, Alabama, Sewer Revenue Warrants, Series 1997-A Refunding: 25,825 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 28,594,731 10,195 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 10,650,818 Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 1999A: 10,815 5.000%, 2/01/33 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 12,122,966 9,790 5.000%, 2/01/33 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 11,020,211 12,000 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 13,727,280 29,860 5.750%, 2/01/38 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 34,704,188 18,760 Jefferson County, Alabama, Sewer Revenue Capitol Improvement 2/11 at 101.00 AAA 20,861,308 Warrants, Series 2001A, 5.000%, 2/01/41 (Pre-refunded to 2/01/11) - FGIC Insured Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 2002B: 2,500 5.125%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,777,700 2,500 5.125%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,795,600 Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 2002D: 425 5.000%, 2/01/38 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 468,257 1,940 5.000%, 2/01/38 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,151,266 14,800 5.000%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 16,411,720 5,240 Jefferson County, Alabama, Sewer Revenue Bonds, 2/11 at 101.00 AAA 5,859,211 Series 2003B Refunding, 5.000%, 2/01/41 (Pre-refunded to 2/01/11) - FGIC Insured 4,250 Shelby County Board of Education, Alabama, General Obligation 2/05 at 102.00 AAA 4,550,518 Warrants, Series 1995 Refunding, 5.875%, 2/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 2.7% 11,245 Alaska Housing Finance Corporation, General Mortgage 6/09 at 100.00 AAA 11,693,113 Revenue Bonds, Series 1999A, 6.050%, 6/01/39 - MBIA Insured 11,460 Alaska Housing Finance Corporation, Governmental Purpose 12/05 at 102.00 AAA 11,981,201 Bonds, 1995 Series A, 5.875%, 12/01/30 - MBIA Insured 4,990 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 5,211,356 Mortgage Program Bonds, First Series 1999-A2, 6.250%, 6/01/39 (Alternative Minimum Tax) 3,190 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 3,357,507 Mortgage Program Bonds, Series 1999-A1, 6.150%, 6/01/39 3,000 Alaska Student Loan Corporation, Student Loan Revenue Bonds, 7/08 at 100.00 AAA 3,117,870 1998 Series A, 5.250%, 7/01/14 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.8% 7,560 Pima County Industrial Development Authority, Arizona, Lease 1/04 at 102.00 AAA 7,965,594 Obligation Revenue Refunding Bonds, Tucson Electric Power Company Irvington Project, Series 1988A, 7.250%, 7/15/10 - FSA Insured 2,000 Industrial Development Authority of the City of Yuma, Arizona, 8/11 at 101.00 AAA 2,155,220 Hospital Revenue Bonds, Series 2001, Yuma Regional Medical Centre, 5.500%, 8/01/20 - FSA Insured 27 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 31.3% $ 6,135 California Housing Finance Agency, Housing Revenue Bonds, 8/04 at 102.00 AAA $ 6,306,351 Series 1994C, 6.250%, 8/01/25 - MBIA Insured California Rural Home Mortgage Finance Authority, Single Family Mortgage Revenue Bonds, Mortgage-Backed Securities Program, 1996 Series A: 405 7.550%, 11/01/26 (Alternative Minimum Tax) No Opt. Call AAA 425,509 330 7.750%, 5/01/27 (Alternative Minimum Tax) No Opt. Call AAA 347,143 4,500 California, General Obligation Bonds, Series 1998, 10/08 at 101.00 AAA 4,613,940 5.000%, 10/01/19 - FGIC Insured 10,000 Department of Veterans Affairs of the State of California, 6/12 at 101.00 AAA 10,405,800 Home Purchase Revenue Bonds, Series 2002A, 5.300%, 12/01/21 - AMBAC Insured 14,585 California Housing Finance Agency, Home Mortgage Revenue 11/10 at 55.40 AAA 5,500,441 Bonds, 2000 Series Y, 0.000%, 8/01/20 (Alternative Minimum Tax) - FSA Insured California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 30,000 5.375%, 5/01/17 5/12 at 101.00 AAA 32,540,700 35,000 5.375%, 5/01/18 - AMBAC Insured 5/12 at 101.00 AAA 37,990,050 3,100 Campbell Union School District, Santa Clara County, 8/04 at 102.00 AAA 3,283,272 California, 1994 General Obligation Bonds, Series A, 6.250%, 8/01/19 (Pre-refunded to 8/01/04) - MBIA Insured 8,200 Castaic Lake Water Agency, California, Revenue Refunding 8/04 at 102.00 AAA 8,667,236 Certificates of Participation, Water System Improvement Projects, Series 1994A, 6.300%, 8/01/20 - MBIA Insured 20,000 Cucamonga County Water District, California, Certificates 9/11 at 101.00 AAA 20,253,800 of Participation, 2000 Water Shares Purchase, 5.125%, 9/01/35 - FGIC Insured 5,500 Fallbrook Union High School District, San Diego County, 9/04 at 102.00 AAA 5,848,755 California, 1994 General Obligation Bonds, Series A, 6.250%, 9/01/19 (Pre-refunded to 9/01/04) - MBIA Insured 5,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 101.00 AAA 5,142,650 Revenue Refunding Bonds, Long Beach Aquarium of the South Pacific, Series 2001, 5.250%, 11/01/30 - AMBAC Insured 20,000 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA 20,720,200 California, General Obligation Bonds, Series 2003A, 5.000%, 7/01/21 - FSA Insured 9,000 Orange County, California, Refunding Recovery Bonds, 6/05 at 102.00 AAA 9,777,870 Series 1995A, 5.750%, 6/01/15 - MBIA Insured 12,500 Orange County, California, Recovery Certificates of 7/06 at 102.00 AAA 13,971,250 Participation, Series 1996A, 6.000%, 7/01/26 - MBIA Insured 13,205 Port of Oakland, California, Revenue Bonds, Series 2002L, 11/12 at 100.00 AAA 13,266,799 5.000%, 11/01/22 (Alternative Minimum Tax) - FGIC Insured Poway Redevelopment Agency, California, Tax Allocation Bonds, Paguay Redevelopment Project, Series 2001: 15,000 5.200%, 6/15/30 - AMBAC Insured 12/11 at 101.00 AAA 15,383,550 5,000 5.125%, 6/15/33 - AMBAC Insured 12/11 at 101.00 AAA 5,065,150 6,000 Redlands Unified School District, San Bernardino County, 7/13 at 100.00 AAA 6,070,740 California, General Obligation Bonds, Series 2003, 5.000%, 7/01/26 - FSA Insured 11,000 Sacramento Municipal Utility District, California, Electric 8/13 at 100.00 AAA 11,054,120 Revenue Bonds, Series 2003R, 5.000%, 8/15/33 - MBIA Insured 19,300 Sacramento Power Authority, California, Revenue Bonds, 7/06 at 102.00 AAA 21,703,429 Power Authority Cogeneration Project, Series 1995, 5.875%, 7/01/15 - MBIA Insured 6,500 Salinas, California, GNMA Collateralized Housing Facility 7/04 at 102.00 AAA 6,692,660 Revenue Refunding Bonds, Villa Serra Project, Series 1994A, 6.600%, 7/20/30 10,000 San Francisco City and County Airports Commission, California, 5/06 at 101.00 AAA 10,280,800 Revenue Bonds, San Francisco International Airport, Series 2 - Issue 13B, 5.500%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured 18,710 San Francisco City and County Airports Commission, California, 5/11 at 100.00 AAA 18,993,644 Revenue Refunding Bonds, San Francisco International Airport, Series 2 - Issue 27A, 5.250%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured 11,500 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 11,644,555 Sales Tax Revenue Bonds, Series 2001, 5.125%, 7/01/36 - AMBAC Insured 28 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 66,685 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA $28,589,193 County, California, Senior Lien Toll Road Revenue Bonds, 0.000%, 1/01/21 San Joaquin Hills Transportation Corridor Agency Orange County, California,Toll Road Refunding Revenue Bonds, Series 1997A: 31,615 5.250%, 1/15/30 - MBIA Insured 1/07 at 102.00 AAA 32,601,704 21,500 0.000%, 1/15/32 - MBIA Insured No Opt. Call AAA 4,520,375 12,525 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 12,928,430 Bonds, Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/20 - MBIA Insured 11,000 Santa Ana Financing Authority, California, Police Administration No Opt. Call AAA 13,213,310 and Housing Facility Lease Revenue Bonds, Series 1994A, 6.250%, 7/01/24 - MBIA Insured 5,500 Santa Clara County Financing Authority, California, Lease 11/04 at 102.00 AAA 5,935,050 Revenue Bonds, VMC Facility Replacement Project, Series 1994A, 6.750%, 11/15/20 (Pre-refunded to 11/15/04) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.3% 10,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 10,713,400 Refunding Bonds, Series 2001A, 5.500%, 11/15/15 (Alternative Minimum Tax) - FGIC Insured 10,545 City and County of Denver, Colorado, Airport System Revenue 11/06 at 101.00 AAA 11,005,395 Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured 6,200 Denver Convention Center Hotel Authority, Colorado, 12/13 at 100.00 AAA 6,216,802 Convention Center Hotel Senior Revenue Bonds, Series 2003A, 5.000%, 12/01/33 - XLCA Insured 35,995 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 12,414,316 Bonds, Series 1997B, 0.000%, 9/01/23 - MBIA Insured 30,800 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 33,816,860 Bonds, Series 2000A, 5.750%, 9/01/35 - MBIA Insured 11,800 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 74.80 AAA 6,638,326 Bonds, 2000 Series B, 0.000%, 9/01/15 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.2% 2,500 Connecticut Health and Educational Facilities Authority, 7/04 at 101.00 AAA 2,624,300 Revenue Bonds, Choate Rosemary Hall Issue, Series A, 7.000%, 7/01/25 (Pre-refunded to 7/01/04) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.5% 3,770 District of Columbia Housing Finance Agency, GNMA 12/03 at 100.00 AAA 3,773,091 Collateralized Single Family Mortgage Revenue Bonds, Series 1990B, 7.100%, 12/01/24 (Alternative Minimum Tax) District of Columbia Water and Sewer Authority, Public Utility Revenue Bonds, Subordinate Lien Series 2003: 5,000 5.125%, 10/01/24 - FGIC Insured 10/13 at 100.00 AAA 5,095,200 5,000 5.125%, 10/01/25 - FGIC Insured 10/13 at 100.00 AAA 5,083,000 4,840 Metropolitan Washington DC Airports Authority, Airport 10/11 at 101.00 AAA 5,095,794 System Revenue Bonds, Series 2001A, 5.500%, 10/01/19 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.6% 4,425 Jacksonville Economic Development Commission, Florida, 11/12 at 100.00 AAA 4,667,844 Health Care Facilities Revenue Bonds, Mayo Clinic, Series 2001C, 5.500%, 11/15/36 - MBIA Insured 35,920 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 36,924,682 Miami International Airport, Series 2002, 5.375%, 10/01/32 (Alternative Minimum Tax) - FGIC Insured Miami-Dade County, Florida, Aviation Revenue Bonds, Miami International Airport, Series 2002A: 18,500 5.000%, 10/01/33 (Alternative Minimum Tax) - FSA Insured 10/12 at 100.00 AAA 18,371,425 2,150 5.125%, 10/01/35 (Alternative Minimum Tax) - FSA Insured 10/12 at 100.00 AAA 2,164,749 3,000 Orange County, Florida, Solid Waste Facility Revenue Bonds, 10/13 at 100.00 AAA 3,221,880 Series 2003 Refunding, 5.000%, 10/01/14 - MBIA Insured Plantation, Florida, Non-Ad Valorem Revenue Bonds, Refunding and Improvement Projects, Series 2003: 2,010 5.000%, 8/15/16 - FSA Insured 8/13 at 100.00 Aaa 2,153,695 2,110 5.000%, 8/15/17 - FSA Insured 8/13 at 100.00 Aaa 2,243,331 2,225 5.000%, 8/15/18 - FSA Insured 8/13 at 100.00 Aaa 2,347,331 29 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.4% $ 5,000 Glynn-Brunswick Memorial Hospital Authority, Georgia, 8/06 at 102.00 AAA $ 5,416,450 Revenue Bonds, Southeast Georgia Health Systems Project, Series 1996, 5.250%, 8/01/13 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 2.1% 24,250 Hawaii Department of Budget and Finance, Special Purpose 5/06 at 101.00 AAA 26,692,702 Revenue Bonds, Hawaii Electric Company, Inc. and Subsidiaries Project, Series 1996A, 6.200%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.4% 1,685 Idaho Housing Agency, Single Family Mortgage Bonds, No Opt. Call Aa1 1,796,513 Series 1994B-1, 6.750%, 7/01/22 1,560 Idaho Housing Agency, Single Family Mortgage Bonds, No Opt. Call Aa1 1,718,340 1994 Series B2, 6.900%, 7/01/26 (Alternative Minimum Tax) 1,845 Idaho Housing Agency, Single Family Mortgage Bonds, 1/05 at 102.00 Aaa 1,904,169 1995 Series B, Senior Lien, 6.600%, 7/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 10.1% 12,500 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/04 at 102.00 AAA 12,806,125 General Airport Second Lien, Revenue Refunding Bonds, 1993 Series C, 5.000%, 1/01/18 - MBIA Insured City of Chicago, Illinois, Chicago-O'Hare International Airport, Second Lien Passenger Facility Charge Revenue Bonds, Series 2001E Refunding: 4,615 5.500%, 1/01/17 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,877,086 4,870 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 5,129,668 12,000 Cook County, Illinois, General Obligation Bonds, Series 2003 No Opt. Call AAA 13,370,760 Refunding, 5.000%, 11/15/10 - MBIA Insured 5,000 Community Unit School District No. 204, Indian Prairie, 12/11 at 100.00 AAA 5,314,700 Counties of DuPage and Will, Illinois, General Obligation Bonds, Series 2001, 5.000%, 12/30/15 - FGIC Insured Eastern Illinois University, Auxiliary Facilities System Revenue Bonds, Series 1989: 12,355 0.000%, 10/01/09 - MBIA Insured 10/04 at 74.08 AAA 8,986,409 16,470 0.000%, 4/01/16 (Pre-refunded to 10/01/04) - MBIA Insured 10/04 at 47.07 AAA 7,674,691 10,000 Illinois Development Finance Authority, Revenue Bonds, 5/08 at 101.00 AAA 10,636,100 Provena Health, Series 1998A, 5.500%, 5/15/21 - MBIA Insured 2,095 Illinois Educational Facilities Authority, Revenue Bonds, 12/07 at 100.00 Aaa 2,270,163 Robert Morris College, Series 2000, 5.800%, 6/01/30 - MBIA Insured 2,180 Illinois Educational Facilities Authority, Revenue Bonds, DePaul 10/10 at 101.00 AAA 2,384,222 University, Series 2000, 5.500%, 10/01/19 - AMBAC Insured 7,000 Illinois Health Facilities Authority, Revenue Bonds, Hospital 6/08 at 101.00 Aaa 7,211,470 Sisters Services Inc. Obligated Group, Series 1998A, 5.000%, 6/01/18 - MBIA Insured Illinois Health Facilities Authority, Revenue Bonds, Alexian Brothers Health System, Series 1999: 4,500 5.000%, 1/01/19 - FSA Insured 1/09 at 101.00 AAA 4,619,610 12,000 5.125%, 1/01/28 - FSA Insured 1/09 at 101.00 AAA 12,168,000 22,410 State of Illinois, General Obligation Bonds, Illinois FIRST 2/12 at 100.00 AAA 22,774,387 Program, Series 2002, 5.125%, 2/01/27 - FGIC Insured 4,560 County of Macon, Illinois, Revenue Bonds, Millikin University, 10/05 at 100.00 AAA 4,990,874 Series 1995, 6.250%, 10/01/16 (Pre-refunded to 10/01/05) - AMBAC Insured 5,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/04 at 102.00 AAA 5,266,550 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1994D, 6.750%, 6/01/25 (Pre-refunded to 6/01/04) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.0% 2,030 Decatur Township Multi-School Building Corporation, Marion 7/13 at 100.00 AAA 2,098,472 County, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/20 - FGIC Insured 11,000 Indiana Health Facility Financing Authority, Hospital Revenue 11/03 at 102.00 Aaa 11,260,370 Bonds, Daughters of Charity, Series 1993, 5.750%, 11/15/22 3,250 Indianapolis, Indiana, Local Public Improvement Bond Bank, 7/12 at 100.00 AAA 3,348,995 Series 2002A, Waterworks Project, 5.250%, 7/01/33 - MBIA Insured 30 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 20,000 Indianapolis, Indiana, Local Public Improvement Bond Bank, No Opt. Call AAA $ 5,270,200 Series 1999E, 0.000%, 2/01/28 - AMBAC Insured 9,545 New Prairie School Building Corporation, LaPorte and 7/04 at 102.00 AAA 10,149,771 St. Joseph Counties, Indiana, First Mortgage Bonds, Series 1994, 7.200%, 7/15/21 (Pre-refunded to 7/15/04) - CAP GTY/FSA Insured 5,000 Noblesville Redevelopment Authority, Indiana, Economic 7/13 at 100.00 AAA 5,009,150 Development Lease Rental Bonds of 2003, Exit 10 Project, 5.000%, 1/15/28 - AMBAC Insured 10,000 Trustees of Purdue University, Indiana, Purdue University 1/12 at 100.00 AAA 10,389,900 Student Fee Bonds, Series O, 5.000%, 7/01/19 - MBIA Insured 3,705 Whitley County Middle School Building Corporation, Columbia 7/13 at 100.00 AAA 3,961,905 City, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/16 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.3% 3,045 Ames, Iowa, Hospital Revenue Bonds, Mary Greeley Medical 6/13 at 100.00 Aaa 3,239,758 Center, Series 2003 Refunding, 5.000%, 6/15/15 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.4% 5,000 University of Kansas Hospital Authority, Health Facilities 9/09 at 100.00 AAA 5,268,450 Revenue Bonds, KU Health System, Series 1999A, 5.650%, 9/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.1% 12,980 Louisville and Jefferson County Metropolitan Sewer District, 11/11 at 101.00 AAA 13,784,500 Kentucky, Sewer and Drainage System Revenue Bonds, 2001 Series A, 5.500%, 5/15/34 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.6% 5,000 De Soto Parish, Louisiana, Pollution Control Revenue Refunding 9/09 at 102.00 AAA 5,519,800 Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured 7,305 Orleans Levee District, Louisiana, Levee District General 12/05 at 103.00 AAA 8,155,740 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured 3,000 St. Charles Parish, Louisiana, Pollution Control Revenue Bonds, 12/03 at 100.00 AAA 3,126,450 Louisiana Power and Light Company Project, Series 1991, 7.500%, 6/01/21 (Alternative Minimum Tax) - FSA Insured 3,500 Tangipahoa Parish Hospital Service District 1, Louisiana, 2/04 at 102.00 AAA 3,615,675 Hospital Revenue Bonds, Series 1994, 6.250%, 2/01/24 (Pre-refunded to 2/01/04) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 0.2% 3,000 Maine Health and Higher Educational Facilities Authority, 7/13 at 100.00 AAA 3,015,780 Revenue Bonds, Series 2003B, 5.000%, 7/01/28 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 5.8% 22,500 Massachusetts Development Finance Authority, Revenue 1/12 at 101.00 AAA 23,410,125 Bonds, Series 2002A, WGBH Educational Foundation, 5.375%, 1/01/42 - AMBAC Insured 8,400 Massachusetts Health and Educational Facilities Authority, 10/05 at 102.00 AAA 9,220,512 Revenue Bonds, Berkshire Health Systems Issue, Series D, 6.000%, 10/01/13 - MBIA Insured 2,960 Massachusetts Health and Educational Facilities Authority, 1/04 at 101.00 AAA 3,039,476 Revenue Bonds, South Shore Hospital Issue, Series D, 6.500%, 7/01/22 - MBIA Insured 4,865 Massachusetts Housing Finance Agency, Housing Revenue 12/05 at 102.00 AAA 5,084,314 Bonds, 1995 Series A Refunding, 6.100%, 12/01/16 - MBIA Insured 33,315 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 33,380,297 System Revenue Bonds, 1997 Series A (Senior), 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 7.4% 6,000 City of Detroit, Michigan, General Obligation Bonds, 10/11 at 100.00 AAA 6,527,280 2001 Series A-1, 5.375%, 4/01/18 - MBIA Insured 5,490 Detroit School District, Wayne County, Michigan, Unlimited No Opt. Call AAA 6,484,678 Tax School Building and Site Improvement General Obligation Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured Detroit, Michigan, Sewage Disposal System Revenue Bonds, Series 1999A: 15,825 5.750%, 7/01/26 (Pre-refunded to 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 18,452,583 20,000 5.875%, 7/01/27 (Pre-refunded to 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 23,461,000 31 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 8,700 City of Detroit, Michigan, Water Supply System Revenue Senior 7/07 at 101.00 AAA $ 8,748,981 Lien Bonds, Series 1997-A, 5.000%, 7/01/27 - MBIA Insured 8,000 Gaylord Community Schools, Counties of Ostego and Antrim, 5/07 at 37.75 AAA 2,793,920 Michigan, 1992 School Building and Site and Refunding Bonds, 0.000%, 5/01/21 (Pre-refunded to 5/01/07) - MBIA Insured Grand Rapids Community College, Kent County, Michigan, General Obligation Bonds, Series 2003 Refunding: 1,050 5.250%, 5/01/17 - AMBAC Insured 5/13 at 100.00 AAA 1,141,214 1,085 5.250%, 5/01/20 - AMBAC Insured 5/13 at 100.00 AAA 1,156,415 27,000 Okemos Public School District, Ingham County, Michigan, 5/06 at 34.54 AAA 8,917,290 School Building and Site Bonds, Series 1991I, 0.000%, 5/01/21 (Pre-refunded to 5/01/06) - MBIA Insured 10,000 Wayne County, Michigan, Limited Tax General Obligation 12/11 at 101.00 AAA 10,391,200 Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.250%, 12/01/25 - MBIA Insured 6,850 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 7,317,855 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/15 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.2% 2,130 Minnesota Housing Finance Agency, Single Family Mortgage 1/04 at 102.00 AA+ 2,176,796 Bonds, Series 1994M, 6.700%, 7/01/26 (Alternative Minimum Tax) 13,020 St. Paul Housing and Redevelopment Authority, Minnesota, 12/11 at 102.00 Aaa 13,283,915 GNMA Collateralized Mortgage Loan, Multifamily Housing Revenue Bonds, Marian Center GEAC Project, Series 2001A, 3.870%, 6/20/43 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 6.5% Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000: 15,000 5.625%, 1/01/34 - AMBAC Insured 1/10 at 102.00 AAA 16,197,900 13,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 13,600,730 1,295 Nevada Housing Division, Single Family Mortgage Bonds, 4/04 at 102.00 Aa2 1,329,615 1994 Senior Series B-1, 6.700%, 10/01/17 1,000 Nevada Housing Division, Single Family Mortgage Bonds, 4/04 at 102.00 Aa2 1,017,190 1994 Senior Series B-2, 6.950%, 10/01/26 (Alternative Minimum Tax) 40,285 Reno, Nevada, Capital Improvement Revenue Bonds, 6/12 at 100.00 AAA 41,900,026 Series 2002, 5.375%, 6/01/32 - FGIC Insured 10,000 Reno, Nevada, Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 10,152,200 Transportation Rail Access Corridor Project, Senior Lien, Series 2002, 5.125%, 6/01/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 7.7% 8,685 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 9,417,406 General Revenue Bonds, Series 1998A, 5.300%, 12/01/19 - FSA Insured 5,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AAA 5,061,050 Service Contract Refunding Bonds, Series 2002A, 5.000%, 7/01/25 - FGIC Insured 10,000 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 10,990,900 Water and Sewer System Revenue Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 - MBIA Insured 15,000 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 15,678,600 Water and Sewer System Revenue Bonds, Fiscal 1997 Series A, 5.375%, 6/15/26 - FSA Insured Dormitory Authority of the State of New York, City University System Consolidated, Third General Resolution Revenue Bonds, 1994 Series 2: 3,000 6.250%, 7/01/19 (Pre-refunded to 7/01/04) - MBIA Insured 7/04 at 100.00 AAA 3,104,640 6,400 6.750%, 7/01/24 (Pre-refunded to 7/01/04) - MBIA Insured 7/04 at 102.00 AAA 6,771,584 5,000 New York State Urban Development Corporation, Correctional 1/07 at 102.00 AAA 5,692,800 Capital Facilities Revenue Bonds, Series 7, 5.700%, 1/01/27 (Pre-refunded to 1/01/07) - MBIA Insured 15,600 Port Authority of New York and New Jersey, Consolidated Bonds, 1/05 at 101.00 AAA 16,656,276 Ninety- Seventh Series, 6.650%, 1/15/23 (Alternative Minimum Tax) - FGIC Insured 25,000 Triborough Bridge and Tunnel Authority, New York, General 11/12 at 100.00 AAA 25,225,750 Revenue Refunding Subordinate Lien Bonds, Series 2002E, 5.000%, 11/15/32 - MBIA Insured 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.4% $ 5,000 North Carolina Municipal Power Agency Number 1, 1/13 at 100.00 AAA $ 5,433,400 Catawba Electric Revenue Bonds, Series 2003A, 5.250%, 1/01/16 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.6% 20,100 Lucas County, Ohio, Hospital Revenue Bonds, ProMedica 11/09 at 101.00 AAA 20,636,268 Healthcare Obligated Group, Series 1999, 5.375%, 11/15/39 - AMBAC Insured 2,865 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/05 at 102.00 Aaa 2,961,808 Securities Program, Residential Mortgage Revenue Bonds, Series 1995A-2, 6.625%, 3/01/26 (Alternative Minimum Tax) Ohio Air Quality Development Authority, Revenue Refunding Bonds, JMG Funding Limited Partnership Project, Series 1994: 13,750 6.375%, 1/01/29 (Alternative Minimum Tax) - AMBAC Insured 10/04 at 102.00 AAA 14,660,663 8,000 6.375%, 4/01/29 (Alternative Minimum Tax) - AMBAC Insured 10/04 at 102.00 AAA 8,529,840 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.2% 9,685 Oklahoma Housing Finance Agency, GNMA Collateralized No Opt. Call AAA 10,475,102 Single Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) 5,245 Oklahoma Industries Authority, Revenue Bonds, Oklahoma 2/11 at 100.00 Aaa 5,450,814 Medical Research Foundation Project, Series 2001, 5.250%, 2/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.2% 2,670 Oregon Housing and Community Services Department, 7/05 at 102.00 Aa2 2,765,933 Mortgage Revenue Bonds, Single-Family Mortgage Program, 1995 Series A, 6.450%, 7/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 0.6% 7,120 Lehigh County General Purpose Authority, Pennsylvania, 7/04 at 102.00 AAA 7,509,322 Hospital Revenue Bonds, Lehigh Valley Hospital, Series 1994A, 6.250%, 7/01/22 (Pre-refunded to 7/01/04) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.2% 2,000 Puerto Rico Highway and Transportation Authority, 7/13 at 100.00 AAA 2,169,460 Transportation Revenue Bonds, Series 2003G, 5.250%, 7/01/19 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 2.0% 2,195 Providence Housing Development Corporation, Rhode Island, 7/04 at 102.00 AAA 2,260,323 Mortgage Revenue Refunding Bonds, Series 1994A, FHA-Insured Mortgage Loan-Barbara Jordan Apartments Project, 6.750%, 7/01/25 - MBIA Insured 20,475 Rhode Island Depositors Economic Protection Corporation, 2/11 at 100.00 AAA 23,060,583 Special Obligation Refunding Bonds, 1992 Series B, 5.250%, 8/01/21 (Pre-refunded to 2/01/11) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 3.6% 10,000 Beaufort County, South Carolina, Tax Increment Bonds, 12/12 at 100.00 AAA 10,109,500 New River Redevelopment Project, Series 2002, 5.000%, 6/01/27 - MBIA Insured Piedmont Municipal Power Agency, South Carolina, Electric Revenue Bonds, 1988 Refunding Series: 9,190 0.000%, 1/01/13 (Pre-refunded to 1/01/10) - AMBAC Insured 1/10 at 79.60 AAA 5,931,502 12,810 0.000%, 1/01/13 - AMBAC Insured No Opt. Call AAA 8,412,071 South Carolina Jobs-Economic Development Authority, Hospital Revenue Bonds, Oconee Memorial Hospital Inc, Series 1995: 3,000 6.150%, 3/01/15 - CONNIE LEE/AMBAC Insured 3/05 at 102.00 AAA 3,230,490 600 6.150%, 3/01/25 - CONNIE LEE/AMBAC Insured 3/05 at 102.00 AAA 642,720 8,000 South Carolina Jobs-Economic Development Authority, 11/12 at 100.00 AAA 8,246,400 Industrial Revenue Bonds, South Carolina Electric and Gas Company Project, Series 2002A, 5.200%, 11/01/27 - AMBAC Insured 10,000 South Carolina Jobs-Economic Development Authority, Industrial 11/12 at 100.00 AAA 10,300,300 Revenue Bonds, South Carolina Electric and Gas Company Project, Series 2002B, 5.450%, 11/01/32 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.5% 6,455 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 6,835,393 Airport Revenue Bonds, Series 2001A, 5.500%, 3/01/18 (Alternative Minimum Tax) - FSA Insured 33 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 16.5% $ 22,650 Brazos River Authority, Texas, Revenue Refunding Bonds, 5/08 at 102.00 AAA $23,727,461 Houston Industries Inc. Project, Series 1998C, 5.125%, 5/01/19 (Optional put 5/01/08) - AMBAC Insured 1,773 Capital Area Housing Finance Corporation, Texas, FNMA 4/12 at 106.00 AAA 1,897,777 Backed Single Family Mortgage Revenue Refunding Bonds, Series 2002A-2, 6.300%, 4/01/35 (Alternative Minimum Tax) - AMBAC Insured 11,460 Dallas County Utility and Reclamation District, Texas, Unlimited 2/05 at 100.00 AAA 11,969,397 Tax Refunding Bonds, Series 1999B, 5.875%, 2/15/29 - AMBAC Insured 25,000 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 25,568,500 Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured Harris County, Texas, Senior Lien Toll Road Revenue Bonds, Series 1989: 9,000 0.000%, 8/15/18 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 53.84 AAA 4,056,030 39,000 0.000%, 8/15/19 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 50.26 AAA 16,407,300 7,280 0.000%, 8/15/20 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 46.91 AAA 2,859,074 5,085 0.000%, 8/15/21 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 43.80 AAA 1,864,212 2,130 Harris County Health Facilities Development Corporation, Texas, 11/13 at 100.00 AAA 2,265,681 Thermal Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/15 - MBIA Insured 6,570 City of Houston, Texas, General Obligation Public Improvement 3/11 at 100.00 AAA 7,073,985 Bonds, Series 2001A, 5.375%, 3/01/19 - FSA Insured 4,170 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/10 at 100.00 AAA 4,403,687 Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured 8,225 City of Houston, Texas, Airport System Subordinate Lien 7/07 at 100.00 AAA 8,434,491 Revenue Bonds, Series 1997 Refunding, 5.125%, 7/01/22 - FGIC Insured 17,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue 9/11 at 100.00 AAA 17,990,700 Bonds, Convention and Entertainment Project, Series 2001B, 5.250%, 9/01/33 - AMBAC Insured 12,826 Houston Housing Finance Corporation, Texas, GNMA 9/11 at 105.00 Aaa 13,455,500 Collateralized Mortgage Multifamily Housing Revenue Bonds, RRG Apartments Project, Series 2001, 6.350%, 3/20/42 23,865 Jefferson County, Health Facilities Development Corporation, 8/11 at 100.00 AAA 24,471,887 Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.500%, 8/15/41 - AMBAC Insured 8,205 Lower Colorado River Authority, Texas, Refunding and Improvement 5/11 at 100.00 AAA 8,404,053 Revenue Bonds, Series 2001A, 5.000%, 5/15/21 - MBIA Insured Port of Houston Authority of Harris County, Texas, General Obligation Port Improvement Bonds, Series 2001B: 3,205 5.500%, 10/01/18 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 3,384,672 3,375 5.500%, 10/01/19 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 3,545,944 7,205 City of San Antonio, Texas, Airport System Improvement Revenue 7/11 at 101.00 AAA 7,681,611 Bonds, Series 2001, 5.375%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured Tarrant County Health Facilities Development Corporation, Texas, Health Resources System Revenue Bonds, Series 1997A: 2,900 5.250%, 2/15/22 - MBIA Insured 2/08 at 102.00 AAA 2,989,262 6,500 5.000%, 2/15/26 - MBIA Insured 2/08 at 101.00 AAA 6,536,075 10,830 Texas Department of Housing and Community Affairs, Single 9/06 at 102.00 AAA 11,216,090 Family Mortgage Revenue Bonds, Series 1996D, 6.250%, 9/01/28 (Alternative Minimum Tax) - MBIA Insured 1,840 Ysleta Independent School District, Texas, Public Facility 11/09 at 100.00 AAA 1,921,310 Corporation, Lease Revenue Refunding Bonds, Series 2001, 5.375%, 11/15/24 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.3% 10,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/13 at 100.00 AAA 10,674,700 Bonds, Series 2003A Refunding, 5.000%, 7/01/16 - FSA Insured 5,630 Utah Housing Finance Agency, Multifamily Housing Refunding 1/04 at 100.00 AA 5,645,088 Bonds, 1992 Issue A, FHA-Insured Mortgage Loans, 7.400%, 7/01/24 450 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/04 at 102.00 Aaa 456,057 Series 1994D, 6.750%, 1/01/27 (Alternative Minimum Tax) 34 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.8% $ 10,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA $ 10,096,100 Bonds, 2001 Series H - Subseries H-1, 5.375%, 7/01/36 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 1.5% 3,195 Kitsap County, Washington, Limited Tax General Obligation 7/10 at 100.00 AAA 3,360,693 Bonds, Series 2000, 5.500%, 7/01/25 - AMBAC Insured 4,250 Snohomish County Public Utility District 1, Washington, 1/04 at 100.00 AAA 5,263,115 Generation System Revenue Bonds, Series 1989, 6.650%, 1/01/16 - FGIC Insured 6,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/13 at 102.00 AAA 6,056,580 Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 - AMBAC Insured 4,345 Washington Public Power Supply System, Nuclear Project No. 1 7/07 at 102.00 AAA 4,586,321 Refunding Revenue Bonds, Series 1997A, 5.125%, 7/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.8% 10,000 Harrison County Commission, West Virginia, Solid Waste 11/03 at 102.00 AAA 10,242,400 Disposal Revenue Bonds, West Penn Power Company - Harrison Station Project, Series 1993B, 6.300%, 5/01/23 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.8% 1,130 Wisconsin Housing and Economic Development Authority, 1/04 at 100.00 AAA 1,133,491 Housing Revenue Bonds, 1992 Series A, 6.850%, 11/01/12 - MBIA Insured 15,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 102.00 AAA 16,178,400 Bonds, Marshfield Clinic Project, Series 1997, 5.750%, 2/15/27 - MBIA Insured 18,000 Wisconsin Health and Educational Facilities Authority, Revenue 8/07 at 102.00 AAA 19,120,680 Bonds, Aurora Health Care, Inc., Series 1997, 5.250%, 8/15/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WYOMING - 0.4% 4,415 Wyoming Community Development Authority, Housing Revenue 12/07 at 101.50 AAA 4,539,900 Bonds, Series 1997-6, 5.600%, 6/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 2,016,549 Total Long-Term Investments (cost $1,789,468,672) - 149.9% 1,930,364,152 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.9% 37,722,581 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.8)% (680,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $1,288,086,733 ==================================================================================================================== All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. See accompanying notes to financial statements. 35
Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 1.0% $ 2,890 Alaska Housing Finance Corporation, Governmental Purpose 12/05 at 102.00 AAA $ 2,995,485 Bonds, 1995 Series A, 5.875%, 12/01/24 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 31.2% ABAG Finance Authority for Nonprofit Corporations, California, Insured Certificates of Participation, Children's Hospital Medical Center of Northern California, Series 1999: 6,750 5.875%, 12/01/19 - AMBAC Insured 12/09 at 101.00 AAA 7,596,585 10,000 6.000%, 12/01/29 - AMBAC Insured 12/09 at 101.00 AAA 11,146,400 4,755 Antioch Area Public Facilities Financing Agency, California, 8/09 at 101.00 AAA 5,229,074 Special Tax Bonds, Community Facilities District No. 1989-1, 5.700%, 8/01/22 - AMBAC Insured 3,250 California Pollution Control Financing Authority, Pollution 4/11 at 102.00 AAA 3,474,965 Control Revenue Refunding Bonds, Pacific Gas and Electric Company, Series 1996A Remarketed, 5.350%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured 380 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 399,407 Mortgage Obligation Bonds, Series 1994A-I, 7.150%, 12/30/24 (Alternative Minimum Tax) 350 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 366,975 Tax-Exempt Mortgage Obligation Bonds, Series 1994A-III, 7.450%, 6/30/25 (Alternative Minimum Tax) 5,365 La Verne-Grand Terrace Housing Finance Agency, California, No Opt. Call AAA 7,726,083 Single Family Residential Mortgage Revenue Bonds, Series 1984A, 10.250%, 7/01/17 11,080 City of Lodi, California, Electric System Revenue, Certificates 1/09 at 40.71 AAA 3,907,584 of Participation, 1999 Series B, 0.000%, 1/15/24 (Pre-refunded to 1/15/09) - MBIA Insured 5,000 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 6,741,650 County, California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured 8,880 Pomona, California, GNMA-FHLMC Mortgage-Backed Securities, No Opt. Call AAA 11,808,180 Single Family Mortgage Revenue Refunding Bonds, Series 1990B, 7.500%, 8/01/23 10,305 San Bernardino, California, GNMA Mortgage-Backed Securities, No Opt. Call AAA 13,487,493 Single Family Mortgage Revenue Refunding Bonds, Series 1990A, 7.500%, 5/01/23 14,755 San Bernardino County, California, GNMA Mortgage-Backed No Opt. Call AAA 18,973,455 Securities, Single Family Mortgage Revenue Bonds, Series 1988A, 8.300%, 9/01/14 (Alternative Minimum Tax) 4,300 San Francisco City and County Airports Commission, California, 5/11 at 100.00 AAA 4,380,367 Revenue Refunding Bonds, San Francisco International Airport, Series 2 - Issue 27A, 5.125%, 5/01/19 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.0% 1,500 Joint School District No. 28, Adams and Arapahoe Counties, 12/13 at 100.00 AAA 1,573,650 Colorado, General Obligation Bonds, Series 2003A, 5.125%, 12/01/21 - FSA Insured 2,500 City and County of Denver, Colorado, Airport System Revenue 11/12 at 100.00 AAA 2,648,700 Refunding Bonds, Series 2002E, 5.500%, 11/15/18 (Alternative Minimum Tax) - FGIC Insured 6,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 6,572,760 Bonds, Series 2000A, 5.750%, 9/01/29 - MBIA Insured 1,225 Summit County School District RE-1, Colorado, General 12/04 at 100.00 AAA 1,299,897 Obligation Bonds, Series 1994, 6.700%, 12/01/14 (Pre-refunded to 12/01/04) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.3% 4,145 City of Miami, Florida, General Obligation Bonds, Series 2002, 1/12 at 100.00 AAA 4,226,864 5.000%, 1/01/22 - MBIA Insured 6,985 Orange County, Florida, Sales Tax Revenue Bonds, Series 2002B, 1/13 at 100.00 AAA 7,143,490 5.125%, 1/01/32 - FGIC Insured 4,240 Reedy Creek Improvement District, Florida, Utilities Revenue 10/13 at 100.00 AAA 4,624,865 Bonds, Series 2003-1, 5.250%, 10/01/17 - MBIA Insured 36 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 2.2% $ 6,500 Medical Center Hospital Authority, Georgia, Revenue 8/09 at 102.00 AAA $ 6,751,420 Anticipation Certificates, Columbus Regional Healthcare System, Inc. Project, Series 1999, 5.500%, 8/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 3.9% 8,030 Hawaii Department of Transportation, Airport System Revenue 7/10 at 101.00 AAA 9,405,378 Refunding Bonds, Series 2000B, 6.500%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured 2,250 Hawaii Department of Budget and Finance, Special Purpose 1/09 at 101.00 AAA 2,523,308 Revenue Bonds, Hawaii Electric Company, Inc. and Subsidiaries Project, Series 1999D, 6.150%, 1/01/20 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 20.3% 4,000 Bridgeview, Illinois, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 4,080,320 5.000%, 12/01/22 - FGIC Insured 10,000 City of Chicago, Illinois, General Obligation Bonds, Refunding 1/10 at 101.00 AAA 10,552,200 Series 2000D, 5.500%, 1/01/35 - FGIC Insured 8,200 Board of Education of the City of Chicago, Illinois, General No Opt. Call AAA 9,737,992 Obligation Lease Certificates, 1992 Series A, 6.250%, 1/01/15 - MBIA Insured 23,110 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 12,343,744 Program Revenue Bonds, Elgin School District U46, Kane, Cook, and DuPage Counties, Series 2002, 0.000%, 1/01/17 - FSA Insured 10,010 Illinois Development Finance Authority, Revenue Bonds, 2/05 at 102.00 AAA 10,419,809 Catholic Health Partners Services, Series 1995A, 5.300%, 2/15/18 - CONNIE LEE/AMBAC Insured 10,150 Onterie Center Housing Finance Corporation, An Illinois 1/04 at 101.50 AAA 10,233,941 Not for Profit Corporation, Mortgage Revenue Refunding Bonds, Series 1992A, FHA-Insured Mortgage Loan, 7.050%, 7/01/27 - MBIA Insured 3,225 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 4,233,393 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1992A, 9.000%, 6/01/09 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.5% 4,725 Decatur Township Multi-School Building Corporation, Marion 7/13 at 100.00 AAA 4,994,514 County, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/17 - FGIC Insured 5,375 Indiana Health Facility Financing Authority, Hospital Revenue 11/03 at 101.00 AAA 5,537,863 Refunding and Improvement Bonds, Series 1992, Community Hospitals Projects, 6.400%, 5/01/12 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.2% 3,345 Ames, Iowa, Hospital Revenue Bonds, Mary Greeley Medical 6/13 at 100.00 Aaa 3,504,924 Center, Series 2003 Refunding, 5.000%, 6/15/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.7% 5,000 Maryland Transportation Authority, Baltimore-Washington 3/12 at 101.00 AAA 5,096,100 International Airport Parking Revenue Bonds, Series 2002B, 5.125%, 3/01/21 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 4.4% 2,250 Kalamazoo Hospital Finance Authority, Michigan, Hospital 5/06 at 102.00 AAA 2,482,223 Revenue Refunding and Improvement Bonds, Bronson Methodist Hospital, Series 1996, 5.750%, 5/15/16 - MBIA Insured 6,500 Michigan Higher Education Student Loan Authority, Revenue No Opt. Call AAA 7,056,725 Bonds, Series 2000 XII-T, 5.300%, 9/01/10 (Alternative Minimum Tax) - AMBAC Insured 3,810 Michigan Housing Development Authority, GNMA Collateralized 8/12 at 102.00 Aaa 3,922,319 Limited Obligation Multifamily Housing Revenue Bonds, Cranbrook Apartments, Series 2001A, 5.500%, 2/20/43 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 2.1% 4,860 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 5,248,363 Minnesota, Airport Revenue Bonds, Series 2001B, 5.750%, 1/01/15 (Alternative Minimum Tax) - FGIC Insured 1,195 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102.00 AAA 1,231,268 Series 1995D, 5.950%, 2/01/18 - MBIA Insured 37 Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 3.3% $ 7,495 Jefferson County Industrial Development Authority, Missouri, 8/07 at 100.00 AAA $ 9,892,725 Housing Revenue Bonds, Richardson Road Apartments Project, Series 1985, 11.000%, 12/15/15 (Pre-refunded to 8/15/07) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.8% 10,000 Clark County, Nevada, Airport System Subordinated Lien Revenue 7/11 at 100.00 AAA 10,314,500 Bonds, Series 2001B, 5.125%, 7/01/21 - FGIC Insured 7,990 Reno, Nevada, Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 8,180,881 Transportation Rail Access Corridor Project, Senior Lien Series 2002, 5.250%, 6/01/41 - AMBAC Insured 5,050 Washoe County, Nevada, Gas and Water Facilities Refunding 1/04 at 101.50 AAA 5,218,417 Revenue Bonds, Sierra Pacific Power Company Project, Series 1987 Remarketed, 6.300%, 12/01/14 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 2.8% 7,645 Metropolitan Transportation Authority, New York, Transit No Opt. Call AAA 8,634,722 Facilities Revenue Bonds, Series J, 9.100%, 7/01/05 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.0% 3,100 North Carolina Medical Care Commission, FHA-Insured Mortgage 10/13 at 100.00 AAA 3,147,554 Revenue Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.125%, 10/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 3.9% 2,050 Oklahoma Housing Finance Agency, GNMA Collateralized Single No Opt. Call AAA 2,217,239 Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) 5,440 Sapulpa Municipal Authority, Oklahoma, Capital Improvement 7/10 at 101.00 AAA 6,343,203 Revenue Bonds, Series 2000 Refunding, 5.625%, 7/01/20 (Pre-refunded to 7/01/10) - FSA Insured 3,000 Tulsa Industrial Authority, Oklahoma, GNMA Collateralized 11/05 at 103.00 Aaa 3,141,840 Multifamily Housing Revenue Bonds, Country Club of Woodland Hills Project, Series 1995, 6.250%, 11/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 9.7% Oregon Health Sciences University, Revenue Bonds, Series 2002A: 5,000 5.000%, 7/01/26 - MBIA Insured 1/13 at 100.00 AAA 5,071,300 19,000 5.000%, 7/01/32 - MBIA Insured 1/13 at 100.00 AAA 19,207,670 4,990 Oregon, Health, Housing, Educational, and Cultural Facilities 3/12 at 105.00 Aaa 5,342,544 Authority, Revenue Bonds, GNMA Mortgaged-Backed Securities Program, Necanicum Village Assisted Living Project, 2001 Series A, 6.850%, 6/20/42 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 4.9% 1,650 Pennsylvania Turnpike Commission, Oil Franchise Tax Senior 12/13 at 100.00 AAA 1,676,730 Lien Revenue Bonds, Series 2003A, 5.000%, 12/01/24 - MBIA Insured 13,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 13,092,950 Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/33 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.8% 2,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 2,296,280 Revenue Bonds, Series 2003AA, 5.500%, 7/01/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.0% 5,000 Health and Educational Facilities Board of the Metropolitan 11/09 at 101.00 AAA 5,945,450 Government of Nashville and Davidson County, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 6.000%, 11/15/30 (Pre-refunded to 11/15/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 10.4% 400 Corpus Christi Housing Finance Corporation, Texas, Single 1/04 at 101.00 AAA 404,888 Family Mortgage Senior Revenue Refunding Bonds, Series 1991A, 7.700%, 7/01/11 - MBIA Insured 12,500 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/09 at 100.00 AAA 12,788,750 International Airport, Joint Revenue Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 445 El Paso Property Finance Authority Inc., Texas, GNMA Mortgage- 12/03 at 102.00 Aaa $ 454,314 Backed Securities Program, Single Family Mortgage Revenue Bonds, Series 1992A, 8.700%, 12/01/18 (Alternative Minimum Tax) North Harris County Regional Water Authority, Texas, Senior Water Revenue Bonds, Series 2003: 4,565 5.250%, 12/15/20 - FGIC Insured 12/13 at 100.00 AAA 4,854,056 4,800 5.250%, 12/15/21 - FGIC Insured 12/13 at 100.00 AAA 5,075,856 7,600 City of San Antonio, Texas, Airport System Improvement Revenue 7/11 at 101.00 AAA 8,046,652 Bonds, Series 2001, 5.375%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.7% 2,000 Clearfield City, Utah, Sales Tax Revenue Bonds, Series 2003, 7/13 at 100.00 AAA 2,018,180 5.000%, 7/01/28 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.2% 3,635 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 3,732,273 Mortgage Bonds, 2001 Series C - Subseries C-2, 5.450%, 7/01/23 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 21.0% 5,000 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 5,199,600 Chelan Hydro Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured 1,570 Sedro-Wooley School District No. 101, Clark County, Washington, 12/12 at 100.00 Aaa 1,684,170 General Obligation Bonds, Series 2002, 5.250%, 12/01/18 - FSA Insured Bellevue School District No. 405, King County, Washington, General Obligation Bonds, Series 2002: 12,060 5.000%, 12/01/19 - FGIC Insured 12/12 at 100.00 AAA 12,555,304 12,785 5.000%, 12/01/20 - FGIC Insured 12/12 at 100.00 AAA 13,232,731 Pierce County School District No. 343, Dieringer, Washington, General Obligation Bonds, Series 2003 Refunding: 2,755 5.250%, 12/01/18 - FSA Insured 6/13 at 100.00 Aaa 2,964,297 2,990 5.250%, 12/01/19 - FSA Insured 6/13 at 100.00 Aaa 3,195,323 4,715 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 10/11 at 100.00 AAA 5,078,479 5.625%, 4/01/17 (Alternative Minimum Tax) - FGIC Insured Port of Seattle, Washington, Special Facilities Revenue Bonds, Terminal 18 Project, Series 1999C: 755 6.000%, 9/01/29 (Alternative Minimum Tax) 3/10 at 101.00 AAA 880,277 (Pre-refunded to 3/01/10) - MBIA Insured 895 6.000%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 957,847 1,265 City of Tacoma, Washington, General Obligation Bonds, 12/12 at 100.00 AAA 1,327,567 Series 2002, 5.000%, 12/01/18 - FGIC Insured 4,200 City of Tacoma, Washington, Solid Waste Utility Revenue 12/11 at 100.00 AAA 4,439,313 Bonds, Series 2001 Refunding, 5.250%, 12/01/20 - AMBAC Insured 5,000 State of Washington, General Obligation Bonds, 1/11 at 100.00 AAA 5,142,350 2001 Series C 5.250%, 1/01/26 - FSA Insured 6,990 Washington Public Power Supply System, Nuclear Project No. 1, 7/08 at 102.00 AAA 7,381,720 Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 436,525 Total Long-Term Investments (cost $425,205,273) - 150.3% 456,817,685 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.7% 8,094,007 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.0)% (161,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $303,911,692 ==================================================================================================================== All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. See accompanying notes to financial statements. 39
Nuveen Insured Premium Income Municipal Fund 2 (NPX) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.9% Jefferson County, Alabama, Sewer Revenue Warrants, Series 1997D: $ 5,000 5.700%, 2/01/20 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA $ 5,634,150 3,970 5.750%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 4,479,708 4,830 5.750%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 5,464,855 2,500 City of Mobile, Alabama, General Obligation Refunding 2/06 at 102.00 AAA 2,785,850 Warrants, Series 1996, 5.750%, 2/15/16 (Pre-refunded to 2/15/06) - AMBAC Insured 2,000 City of Scottsboro, Alabama, General Obligation School 7/06 at 102.00 AAA 2,215,040 Warrants, Series 1996-B, 5.750%, 7/01/14 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 13.8% 31,200 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 24.23 AAA 5,303,376 Toll Road Refunding Revenue Bonds, Series 1999, 0.000%, 1/15/34 - MBIA Insured 6,850 Orange County, California, Recovery Certificates of Participation, 7/06 at 102.00 AAA 7,656,245 Series 1996A, 6.000%, 7/01/26 - MBIA Insured 15,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 15,490,050 of Participation, Series 2003, 5.250%, 2/01/30 - FGIC Insured 10,000 Orange County Water District, California, Revenue Certificates 8/13 at 100.00 AAA 10,033,800 of Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured 1,435 Pasadena Area Community College District, Los Angeles County, 6/13 at 100.00 AAA 1,476,228 California, General Obligation Bonds, Series 2003A, 5.000%, 6/01/22 - FGIC Insured 13,000 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 14,719,900 Improvement Revenue Bonds, Solid Waste and Redevelopment Projects, Series 1999, 5.800%, 12/01/19 - AMBAC Insured San Leandro Housing Finance Corporation, California, Mortgage Revenue Refunding Bonds, Series 1993A, FHA-Insured Mortgage Loan - Ashland Village Apartments, Section 8 Assisted Project: 1,140 6.550%, 1/01/12 - MBIA Insured 1/04 at 100.00 AAA 1,143,420 5,100 6.650%, 1/01/25 - MBIA Insured 1/04 at 100.00 AAA 5,111,730 12,500 University of California, Multiple Purpose Projects, Revenue 5/13 at 100.00 AAA 12,561,000 Bonds, Series 2003A, 5.000%, 5/15/33 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 10.0% Colorado Educational and Cultural Facilities Authority, Charter School Revenue Bonds, Adams School District 12 - Pinnacle School Project, Series 2003: 1,940 5.250%, 6/01/23 - XLCA Insured 6/13 at 100.00 AAA 2,019,210 1,000 5.000%, 6/01/33 - XLCA Insured 6/13 at 100.00 AAA 999,190 3,405 Colorado Educational and Cultural Facilities Authority, 12/13 at 100.00 AAA 3,549,713 Charter School Revenue Bonds, Classical Academy Project, Series 2003, 5.250%, 12/01/23 - XLCA Insured Colorado Health Facilities Authority, Hospital Revenue Bonds, Poudre Valley Health Care, Inc., Series 1999A: 2,480 5.625%, 12/01/19 - FSA Insured 12/09 at 101.00 Aaa 2,701,365 3,500 5.750%, 12/01/23 - FSA Insured 12/09 at 101.00 Aaa 3,796,765 12,955 City and County of Denver, Colorado, Airport System Revenue 11/05 at 102.00 AAA 13,955,903 Bonds, Series 1995A, 5.600%, 11/15/20 - MBIA Insured Denver Convention Center Hotel Authority, Colorado, Convention Center Hotel Senior Revenue Bonds, Series 2003A: 6,770 5.000%, 12/01/19 - XLCA Insured 12/13 at 100.00 AAA 7,061,245 17,495 5.000%, 12/01/33 - XLCA Insured 12/13 at 100.00 AAA 17,542,411 1,325 El Paso County, Colorado, Certificates of Participation, 12/12 at 100.00 AAA 1,337,084 Series 2002B, Detention Facility Project, 5.000%, 12/01/27 - AMBAC Insured 40 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.7% $ 3,540 District of Columbia Housing Finance Agency, GNMA 12/03 at 102.00 AAA $ 3,562,975 Collateralized Single Family Mortgage Revenue Bonds, Series 1990C-4, 6.350%, 12/01/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.4% Municipal Electric Authority of Georgia, Combustion Turbine Project Revenue Bonds, Series 2003A: 1,775 5.000%, 11/01/21 - MBIA Insured 11/13 at 100.00 AAA 1,829,244 2,580 5.000%, 11/01/22 - MBIA Insured 11/13 at 100.00 AAA 2,642,230 3,000 Valdosta and Lowndes County Hospital Authority, Georgia, 10/12 at 101.00 AAA 3,111,180 Series 2002, South Georgia Medical Center Project Revenue Certificates, 5.200%, 10/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 7.9% 2,375 Hawaii County, Hawaii, General Obligation Bonds, 7/13 at 100.00 AAA 2,485,461 Series 2003A, 5.000%, 7/15/19 - FSA Insured Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 6,105 6.100%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 6,908,662 9,500 6.625%, 7/01/17 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 11,183,780 20,000 Department of Budget and Finance of the State of Hawaii, 7/10 at 101.00 AAA 21,490,000 Special Purpose Revenue Bonds, Hawaiian Electric Company, Inc. and Subsidiary Projects, Refunding Series 2000, 5.700%, 7/01/20 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.3% 1,510 Idaho Housing and Finance Association, Single Family Mortgage 1/08 at 101.50 AAA 1,622,148 Bonds, 1998 Series E, 5.450%, 7/01/18 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.1% 2,500 Kane, DuPage, Kendall and Will Counties, Aurora, Illinois, 1/05 at 100.00 AAA 2,635,050 General Obligation Obligation Bonds, Series 1996, 5.800%, 1/01/14 (Pre-refunded to 1/01/05) - MBIA Insured 1,500 City of Chicago, Illinois, General Obligation Bonds, 7/05 at 102.00 AAA 1,650,780 Series 1995, 6.125%, 1/01/16 (Pre-refunded to 7/01/05) - AMBAC Insured 25,585 City of Chicago, Illinois, General Obligation Bonds, Project 1/06 at 102.00 AAA 25,796,844 and Refunding, Series 1996B, 5.125%, 1/01/25 - FGIC Insured 8,370 City of Chicago, Illinois, Chicago Midway Airport Revenue 1/07 at 101.00 AAA 9,128,741 Bonds, Series 1996A, 5.625%, 1/01/17 - MBIA Insured City of Chicago, Illinois, Chicago Midway Airport Revenue Bonds, 1994 Series A: 280 6.100%, 1/01/08 (Alternative Minimum Tax) - MBIA Insured 1/04 at 102.00 AAA 287,605 710 6.250%, 1/01/14 (Alternative Minimum Tax) - MBIA Insured 1/04 at 102.00 AAA 730,107 8,235 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/05 at 102.00 AAA 8,843,155 General Airport Second Lien Revenue Refunding Bonds, 1994 Series A, 6.375%, 1/01/15 - MBIA Insured 4,115 Chicago Park District, Illinois, General Obligation Limited 7/11 at 100.00 AAA 4,507,201 Tax Bonds, Series 2001C, 5.500%, 1/01/18 - FGIC Insured 9,680 Illinois Educational Facilities Authority, Revenue Bonds, 6/08 at 100.00 AAA 9,923,162 Columbia College Bonds, Series 1998, 5.000%, 12/01/20 - MBIA Insured 1,950 Illinois Health Facilities Authority, Health Facilities Refunding No Opt. Call AAA 2,359,598 Revenue Bonds, SSM Health Care, Series 1992AA, 6.550%, 6/01/14 - MBIA Insured Illinois Health Facilities Authority, Lutheran General Health System, Revenue Bonds, Series 1993A: 4,355 6.125%, 4/01/12 - FSA Insured No Opt. Call AAA 5,018,746 5,000 6.250%, 4/01/18 - FSA Insured No Opt. Call AAA 6,061,000 2,510 Illinois Housing Development Authority, Housing Development 1/04 at 102.00 A+ 2,564,442 Bonds, 1993 Series A, 6.000%, 7/01/18 745 Peoria, Moline and Freeport, Illinois, Collateralized Single 10/05 at 105.00 AAA 782,749 Family Mortgage Revenue Bonds, Series 1995A, 7.600%, 4/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.2% 1,000 Ft. Wayne South Side School Building Corporation, Indiana, 1/04 at 102.00 AAA 1,030,540 First Mortgage Bonds, Series 1994, 6.125%, 1/15/12 (Pre-refunded to 1/15/04) - MBIA Insured 5,285 Logansport School Building Corporation, Indiana, First Mortgage 7/11 at 100.00 AAA 5,441,859 Bonds, Series 2001, 5.125%, 1/15/22 - FGIC Insured 41 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.1% $ 245 Olathe-Labette Count, Kansas, GNMA Collateralized Single 2/05 at 105.00 Aaa $ 260,075 Family Mortgage Revenue Refunding Bonds, Series 1994A-I, 8.100%, 8/01/23 (Alternative Minimum Tax) 405 Sedgwick and Shawnee Counties, Kansas, GNMA Collateralized 11/04 at 105.00 Aaa 424,019 Single Family Mortgage Revenue Refunding Bonds, Series 1994A-II, 8.050%, 5/01/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.3% 7,000 Kentucky Economic Development Finance Authority, Health System No Opt. Call AAA 1,768,270 Revenue Bonds, Norton Healthcare Inc., Series 2000B, 0.000%, 10/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.1% 4,910 Commonwealth of Massachusetts, General Obligation Bonds, No Opt. Call AAA 5,609,037 Consolidated Loan, Series 2002C, 5.500%, 11/01/15 - MBIA Insured 3,000 Massachusetts Development Finance Authority, Revenue No Opt. Call AAA 3,399,990 Bonds, Series 2002A, WGBH Educational Foundation, 5.750%, 1/01/42 - AMBAC Insured 3,765 Massachusetts Housing Finance Agency, Single Family Housing 6/06 at 102.00 AAA 3,919,440 Revenue Bonds, Series 48, 6.350%, 6/01/26 (Alternative Minimum Tax) - MBIA Insured 3,340 Massachusetts Housing Finance Agency, Single Family Housing 6/07 at 102.00 AAA 3,474,836 Revenue Bonds, Series 53, 6.150%, 12/01/29 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 2.9% 4,705 Board of Control of Grand Valley State University, Michigan, 12/10 at 100.00 AAA 5,012,237 General Revenue Bonds, Series 2000, 5.250%, 12/01/20 - FGIC Insured 10,000 Michigan State Housing Development Authority, Rental Housing 4/07 at 102.00 AAA 10,501,500 Revenue Bonds, 1997 Series A, 6.000%, 4/01/16 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.4% 7,275 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102.00 AAA 7,495,796 Series 1995D, 5.950%, 2/01/18 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.5% 1,000 Hazelwood Industrial Development Authority, Missouri, 9/06 at 102.00 AAA 1,050,610 GNMA Collateralized Project Multifamily Housing Revenue Refunding Bonds, Lakes Apartments Project, Series 1996, 6.000%, 9/20/16 4,500 Land Clearance for Redevelopment Authority of Kansas City, 12/05 at 102.00 AAA 4,972,050 Missouri, Lease Revenue Bonds, Municipal Auditorium and Muehlebach Hotel Redevelopment Projects, Series 1995A, 5.900%, 12/01/18 - CAP GTY/FSA Insured 1,000 Kansas City Municipal Assistance Corporation, Missouri, 1/06 at 101.00 AAA 1,083,250 Leasehold Revenue Bonds, Capital Improvement, Series 1996B, 5.750%, 1/15/14 - AMBAC Insured 1,030 Missouri Housing Development Commission, Multifamily 12/06 at 102.00 AAA 1,086,125 Housing Revenue Bonds, Brookstone Village Apartments Project, 1996 Series A, 6.000%, 12/01/16 (Alternative Minimum Tax) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 8.0% 5,000 Clark County, Nevada, Industrial Development Revenue Bonds, 12/03 at 101.00 AAA 5,160,750 Nevada Power Company Project, Series 1992A, 6.700%, 6/01/22 (Alternative Minimum Tax) - FGIC Insured 5,000 Clark County, Nevada, Industrial Development Revenue 7/10 at 102.00 AAA 5,382,950 Bonds, Series 2000C, Southwest Gas Corporation, 5.950%, 12/01/38 (Alternative Minimum Tax) - AMBAC Insured 5,500 Director of Nevada State Department of Business and 1/10 at 102.00 AAA 5,926,195 Industry, Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000, 5.625%, 1/01/32 - AMBAC Insured Las Vegas Convention and Visitors Authority, Nevada, Revenue Bonds, Series 1999: 2,695 5.750%, 7/01/15 - AMBAC Insured 7/09 at 101.00 AAA 3,060,765 6,035 5.750%, 7/01/16 - AMBAC Insured 7/09 at 101.00 AAA 6,854,070 6,500 5.750%, 7/01/17 - AMBAC Insured 7/09 at 101.00 AAA 7,365,215 3,535 5.750%, 7/01/18 - AMBAC Insured 7/09 at 101.00 AAA 3,993,030 4,000 6.000%, 7/01/19 - AMBAC Insured 7/09 at 101.00 AAA 4,562,560 42 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 0.7% $ 3,075 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA $ 3,469,768 Series 2003 Refunding, 5.500%, 10/01/15 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 17.1% 4,090 Metropolitan Transportation Authority, New York, Commuter No Opt. Call AAA 4,975,158 Facilities Revenue Bonds, Series 1994A, 8.000%, 7/01/07 - MBIA Insured 4,985 Metropolitan Transportation Authority, New York, Transit No Opt. Call AAA 6,063,854 Facilities Revenue Bonds, Series O, 8.000%, 7/01/07 - MBIA Insured County of Nassau, New York, General Obligation Improvement Bonds, Series 2000E: 1,755 6.000%, 3/01/16 - FSA Insured 3/10 at 100.00 AAA 2,006,492 2,740 6.000%, 3/01/18 - FSA Insured 3/10 at 100.00 AAA 3,132,642 2,265 County of Nassau, New York, General Obligation Bonds, Serial 3/10 at 100.00 AAA 2,792,020 General Improvement Bonds, Series F, 7.000%, 3/01/14 (Pre-refunded to 3/01/10) - FSA Insured 7,500 Nassau Health Care Corporation, New York, County Guaranteed 8/09 at 102.00 AAA 8,224,950 Health System Revenue Bonds, Series 1999, 5.750%, 8/01/29 - FSA Insured 4,000 City of New York, New York, General Obligation Bonds, Fiscal No Opt. Call AAA 4,454,840 Series 1995E, 8.000%, 8/01/05 - MBIA Insured 7,900 City of New York, New York, General Obligation Bonds, Fiscal 3/06 at 101.50 AAA 8,644,022 Series 1996I, 5.875%, 3/15/18 - FSA Insured 7,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 7,708,610 Water and Sewer System Revenue Bonds, Fiscal 2000 Series A, 5.750%, 6/15/31 - FGIC Insured Dormitory Authority of the State of New York, Insured Revenue Bonds, New Island Hospital Issue, Series 1999B: 3,400 5.750%, 7/01/19 - MBIA Insured 7/09 at 101.00 AAA 3,694,440 5,750 6.000%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 6,489,853 9,095 New York State Housing Finance Agency, Housing Project 5/06 at 102.00 AAA 9,659,163 Mortgage Revenue Refunding Bonds, Series 1996A, 6.125%, 11/01/20 - FSA Insured 6,095 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 6,591,255 Mental Health Services Facilities Improvement Revenue Bonds, 1995 Series A, 6.000%, 8/15/15 (Pre-refunded to 2/15/05) - MBIA Insured New York State Medical Care Facilities Finance Agency, New York, Hospital FHA-Insured Mortgage Revenue Bonds, Series 1994A: 3,000 6.750%, 8/15/14 (Pre-refunded to 2/15/05) - AMBAC Insured 2/05 at 102.00 AAA 3,272,970 2,500 6.800%, 8/15/24 (Pre-refunded to 2/15/05) - AMBAC Insured 2/05 at 102.00 AAA 2,729,075 New York State Urban Development Corporation, Correctional Capital Facilities Revenue Bonds, Series 7: 3,505 5.700%, 1/01/27 (Pre-refunded to 1/01/07) - MBIA Insured 1/07 at 102.00 AAA 3,990,653 5,000 5.700%, 1/01/27 (Pre-refunded to 1/01/07) - FSA Insured 1/07 at 102.00 AAA 5,692,800 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 3.7% 10,715 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 11,473,515 Obligated Group, Series 2000A, 5.600%, 6/01/21 - FSA Insured 8,000 North Dakota, Student Loan Trust Revenue Bonds, 12/10 at 100.00 AAA 8,314,000 Series 2000B, 5.850%, 12/01/25 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.3% 12,200 Board of Education, City School District of Columbus, Franklin 6/13 at 100.00 AAA 12,315,168 County, Ohio, General Obligation Bonds, Series 2003, 5.000%, 12/01/31 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.0% Oklahoma City, Oklahoma, Airport Trust Junior Lien Tax Exempt Bonds, Twenty Seventh Series 2000A: 1,320 5.125%, 7/01/20 - FSA Insured 7/10 at 100.00 AAA 1,360,696 4,040 5.250%, 7/01/21 - FSA Insured 7/10 at 100.00 AAA 4,200,550 43 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.7% Portland, Oregon, Airport Way Urban Renewal and Redevelopment Bonds, Series 2000A: $ 4,405 5.700%, 6/15/17 - AMBAC Insured 6/10 at 101.00 Aaa $ 4,901,267 3,665 5.750%, 6/15/18 - AMBAC Insured 6/10 at 101.00 Aaa 4,081,234 4,265 5.750%, 6/15/19 - AMBAC Insured 6/10 at 101.00 Aaa 4,726,729 1,375 5.750%, 6/15/20 - AMBAC Insured 6/10 at 101.00 Aaa 1,515,003 Housing Authority of Portland, Oregon, Multifamily Housing Revenue Bonds, Series 2000, Lovejoy Station Apartments Project: 1,500 5.900%, 7/01/23 (Alternative Minimum Tax) - MBIA Insured 7/10 at 100.00 Aaa 1,565,265 2,520 6.000%, 7/01/33 (Alternative Minimum Tax) - MBIA Insured 7/10 at 100.00 Aaa 2,619,212 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 8.6% 12,620 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 14,558,558 Health System Insured Revenue Bonds, Series 2000A, West Penn Allegheny Health System, 6.500%, 11/15/30 - MBIA Insured 2,165 Allegheny County Residential Finance Authority, Pennsylvania, 11/06 at 102.00 Aaa 2,266,798 Single Family Mortgage Revenue Bonds, GNMA Mortgage Backed Securities Program, Series 1996AA, 6.450%, 5/01/28 (Alternative Minimum Tax) 9,485 Berks County Municipal Authority, Pennsylvania, Hospital 11/09 at 102.00 AAA 11,372,515 Revenue Bonds, Reading Hospital and Medical Center Project, Series 1999, 6.000%, 11/01/19 (Pre-refunded to 11/01/09) - FSA Insured 1,000 Luzerne County Industrial Development Authority, Pennsylvania, 12/04 at 102.00 Aaa 1,081,280 Exempt Facilities Revenue Refunding Bonds, Pennsylvania Gas and Water Company Project, Series 1994A, 7.000%, 12/01/17 (Alternative Minimum Tax) - AMBAC Insured 12,730 City of Philadelphia, Pennsylvania, Water and Wastewater 8/07 at 102.00 AAA 12,904,783 Revenue Bonds, Series 1997A, 5.125%, 8/01/27 - AMBAC Insured 3,650 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 3,684,456 Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/29 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.8% 4,000 Puerto Rico Municipal Finance Agency, 2002 Series A, 8/12 at 100.00 AAA 4,361,200 5.250%, 8/01/17 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 19.1% Brazos River Authority, Texas, Revenue Refunding Bonds, Houston Industries Inc. Project, Series 1998C: 10,000 5.125%, 5/01/19 - AMBAC Insured 5/08 at 102.00 AAA 10,475,700 9,000 5.125%, 11/01/20 (Optional put 11/01/08) - AMBAC Insured 11/08 at 102.00 AAA 9,348,300 12,500 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/09 at 100.00 AAA 12,788,750 International Airport, Joint Revenue Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured 3,895 Denton, Texas, Utility System Revenue Bonds, Series 2000A, 12/10 at 100.00 AAA 4,312,544 5.625%, 12/01/19 - FSA Insured 7,210 Houston, Texas, Water and Sewer System Junior Lien Revenue 12/07 at 101.00 AAA 7,489,171 Refunding Bonds, Series 1997A, 5.250%, 12/01/22 - FGIC Insured 4,485 Lower Colorado River Authority, Texas, Transmission Contract 5/12 at 100.00 AAA 4,605,647 Refunding Revenue Bonds, Transmission Services Corporation Project, Series 2003B, 5.000%, 5/15/21 - FSA Insured 10,000 Lower Colorado River Authority, Texas, Contract Revenue 5/13 at 100.00 AAA 10,048,800 Refunding Bonds, Transmission Services Corporation Project, Series 2003C, 5.000%, 5/15/33 - AMBAC Insured 4,151 Panhandle Regional Housing Finance Corporation, Texas, 7/12 at 105.00 Aaa 4,400,766 Multifamily Housing Revenue Bonds, GNMA Collateralized Mortgage - Renaissance of Amarillo Apartments, Series 2001A, 6.650%, 7/20/42 Tarrant County Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Cook Children's Medical Center Project, Series 2000A: 6,725 5.750%, 12/01/17 - FSA Insured 12/10 at 101.00 AAA 7,491,717 7,500 5.750%, 12/01/24 - FSA Insured 12/10 at 101.00 AAA 7,984,800 10,627 Tarrant County Housing Finance Corporation, Texas, GNMA 10/11 at 105.00 Aaa 11,239,115 Collateralized Mortgage Loan, Multifamily Housing Revenue Bonds, Legacy Senior Residence Apartments Project, Series 2001, 6.625%, 4/20/42 44 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) Texas General Obligation Bonds, Veterans Housing Assistance Program Fund, Series 1993: $ 1,315 6.800%, 12/01/23 (Alternative Minimum Tax) 12/03 at 102.00 Aa1 $ 1,343,378 (Pre-refunded to 12/01/03) 6,585 6.800%, 12/01/23 (Alternative Minimum Tax) 12/03 at 102.00 AAA 6,729,277 (Pre-refunded to 12/01/03) - MBIA Insured 2,300 Texas State University System, Financing Revenue Refunding 3/12 at 100.00 AAA 2,406,329 Bonds, Series 2002, 5.000%, 3/15/18 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 3.3% 2,695 Intermountain Power Agency, Utah, Power Supply Revenue 1/04 at 102.00 AAA 2,758,602 Refunding Bonds, Series 1993A, 5.500%, 7/01/20 - AMBAC Insured 8,600 Intermountain Power Agency, Utah, Power Supply Revenue 7/13 at 100.00 AAA 9,040,234 Bonds, Series 2003A Refunding, 5.000%, 7/01/18 - FSA Insured 5,525 Utah Transit Authority, Sales Tax Revenue Bonds, 12/12 at 100.00 AAA 5,591,300 Series 2002A, 5.000%, 6/15/24 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 0.3% 1,320 Vermont Educational and Health Buildings Financing Agency, 12/10 at 101.00 AAA 1,438,391 Revenue Bonds, Fletcher Allen Health Care Project, Series 2000A, 6.000%, 12/01/23 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.4% 2,250 Virginia Housing Development Authority, Multifamily Housing 1/08 at 102.00 AAA 2,381,130 Bonds, Series 1997B, 6.050%, 5/01/17 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 6.5% 10,000 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 10,399,200 Chelan Hydro Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured 1,370 Sedro-Wooley School District No. 101, Clark County, Washington, 12/12 at 100.00 Aaa 1,401,579 General Obligation Bonds, Series 2002, 5.000%, 12/01/22 - FSA Insured 5,230 Douglas County Public Utility District 1, Washington, Wells 9/09 at 102.00 AAA 5,799,076 Hydroelectric Revenue Bonds, Series 1999A, 6.125%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured 3,485 Public Utility District No. 2 of Grant County, Washington, Priest 1/06 at 102.00 AAA 3,777,601 Rapids Hydroelectric Development Revenue Bonds, Second Series B of 1996, 5.900%, 1/01/21 (Alternative Minimum Tax) - MBIA Insured 2,500 City of Tacoma, Washington, Sewer Revenue Bonds, 12/05 at 100.00 AAA 2,760,725 1995 Series B, 6.375%, 12/01/15 (Pre-refunded to 12/01/05) - FGIC Insured 6,200 State of Washington, General Obligation Bonds, Series 2003A 7/12 at 100.00 AAA 6,408,816 Various Purpose, 5.000%, 7/01/20 - FGIC Insured 3,950 Washington Health Care Facilities Authority, Revenue Bonds, 11/08 at 101.00 Aaa 4,031,722 Swedish Health Services, Series 1998, 5.125%, 11/15/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.6% 8,000 Pleasants County, West Virginia, Pollution Control Revenue 5/05 at 102.00 AAA 8,691,120 Bonds, Monongahela Power Company - Pleasants Station Project, Series 1995C, 6.150%, 5/01/15 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.4% 7,000 La Crosse, Wisconsin, Resource Recovery Revenue Refunding No Opt. Call AAA 8,055,460 Bonds, Northern States Power Company Project, Series 1996, 6.000%, 11/01/21 (Alternative Minimum Tax) - MBIA Insured 12,750 Milwaukee County, Wisconsin, Airport Revenue Bonds, 12/10 at 100.00 Aaa 13,379,720 Series 2000A, 5.750%, 12/01/25 (Alternative Minimum Tax) - FGIC Insured 6,250 Wisconsin Health and Educational Facilities Authority, Revenue 8/06 at 102.00 AAA 6,944,500 Bonds, Series 1996, Sinai Samaritan Medical Center, Inc. Project, 5.750%, 8/15/16 - MBIA Insured 45 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN (continued) $ 5,000 Wisconsin Health and Educational Facilities Authority, 8/05 at 102.00 AAA $ 5,474,750 Revenue Bonds, Mercy Health System Corporation, Series 1995, 6.125%, 8/15/13 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 759,768 Total Long-Term Investments (cost $730,247,731) - 147.1% 780,891,281 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.5% 18,983,263 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.6)% (268,900,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $530,974,544 ==================================================================================================================== All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. See accompanying notes to financial statements. 46
Nuveen Insured Dividend Advantage Municipal Fund (NVG) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 4.4% $ 5,310 Athens, Alabama, Water and Sewer Revenue Warrants, 5/12 at 101.00 AAA $ 5,522,135 Series 2002, 5.300%, 5/01/32 - MBIA Insured 3,045 Hoover, Alabama, General Obligation Warrants, Series 2003, 3/12 at 101.00 AAA 3,160,984 5.000%, 3/01/20 - MBIA Insured 10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA 11,439,400 Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 3.4% 15,000 State of Alaska, International Airport System Revenue Bonds, 10/12 at 100.00 AAA 15,397,800 Series 2002B, 5.250%, 10/01/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.1% 5,000 Phoenix Civic Improvement Corporation, Arizona, Senior Lien 7/12 at 100.00 AAA 5,086,700 Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 11.4% 10,000 State of California, General Obligation Veterans Welfare 12/08 at 101.00 A 10,395,700 Bonds, Series 1997BH, 5.400%, 12/01/14 (Alternative Minimum Tax) 3,200 State of California, General Obligation Various Purpose Bonds, 9/10 at 100.00 AAA 3,398,592 5.250%, 9/01/17 - MBIA Insured 10,000 State of California, General Obligation Refunding Bonds, No Opt. Call AAA 10,144,400 Series 2002, 5.000%, 2/01/23 - MBIA Insured 3,000 State of California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 3,032,580 Series 2001BZ, 5.375%, 12/01/24 (Alternative Minimum Tax) - MBIA Insured 7,935 Los Angeles, California, Certificates of Participation, Real 4/12 at 100.00 AAA 8,206,694 Property Acquisition Program, Series 2002, 5.300%, 4/01/32 - AMBAC Insured 1,000 Los Angeles Convention and Exhibition Center Authority, 12/05 at 100.00 AAA 1,158,080 California, Certificates of Participation, Series 1985, 9.000%, 12/01/20 (Pre-refunded to 12/01/05) 7,500 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 7,647,900 Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 - MBIA Insured 2,320 Sacramento Municipal Utility District, California, Electric Revenue 8/11 at 100.00 AAA 2,499,104 Bonds, Series 2001P, 5.250%, 8/15/18 - FSA Insured 6,000 University of California, Multiple Purpose Projects, Revenue Bonds, 5/13 at 100.00 AAA 6,065,640 Series 2003A, 5.000%, 5/15/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 16.9% 11,600 Greater Orlando Aviation Authority, Florida, Airport Facilities 10/12 at 100.00 AAA 11,740,244 Revenue Bonds, Series 2002B, 5.125%, 10/01/21 (Alternative Minimum Tax) - FSA Insured 6,000 JEA, Florida, Water and Sewer System Revenue Bonds, 4/07 at 100.00 AAA 6,331,440 Series 2002A, 5.500%, 10/01/41 - MBIA Insured 8,155 Lee County, Florida, Solid Waste System Revenue Refunding 10/11 at 100.00 Aaa 8,867,502 Bonds, Series 2001, 5.625%, 10/01/13 (Alternative Minimum Tax) - MBIA Insured 15,000 Miami-Dade County School Board, Florida, Certificates of No Opt. Call AAA 16,568,550 Participation, Series 2003A, 5.000%, 8/01/08 (Mandatory put 8/01/08) - MBIA Insured Miami-Dade County, Florida, Aviation Revenue Bonds, Miami International Airport, Series 2002: 7,165 5.625%, 10/01/15 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 7,831,202 5,600 5.750%, 10/01/16 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 6,132,952 10,000 5.125%, 10/01/21 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 10,149,700 2,000 5.250%, 10/01/22 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 2,044,920 8,400 Village Center Community Development District, Florida, 11/13 at 101.00 AAA 8,461,572 Recreational Revenue Bonds, Series 2003A, 5.000%, 11/01/32 - MBIA Insured 47 Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.4% $ 1,695 Georgia Housing and Finance Agency, Single Family Mortgage 12/11 at 100.00 AAA $ 1,737,121 Bonds, 2002 Series B-2, 5.500%, 6/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.9% 19,185 Village of Bolingbrook, Illinois, General Obligation Bonds, 1/12 at 100.00 AAA 19,888,898 Series 2002A, 5.375%, 1/01/38 - FGIC Insured 5,000 City of Chicago, Illinois, General Obligation Bonds, Project 1/11 at 101.00 AAA 5,245,850 and Refunding Bonds, Series 2001A, 5.500%, 1/01/38 - MBIA Insured City of Chicago, Illinois, Chicago O'Hare International Airport, Second Lien Passenger Facility Charge Revenue Bonds, Series 2001C: 4,250 5.500%, 1/01/16 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,518,090 4,485 5.500%, 1/01/17 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,739,703 4,730 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,982,204 2,930 5.500%, 1/01/19 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 3,070,054 3,000 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/12 at 100.00 AAA 3,229,290 General Airport Third Lien Revenue Refunding Bonds, Series 2002A, 5.750%, 1/01/17 (Alternative Minimum Tax) - MBIA Insured 12,765 City of Chicago, Illinois, Skyway Toll Bridge Revenue Bonds, 1/07 at 102.00 AAA 13,569,450 Series 1996, 5.500%, 1/01/23 - MBIA Insured 4,000 Town of Cicero, Cook County, Illinois, General Obligation 12/12 at 101.00 AAA 4,113,120 Corporate Purpose Bonds, Series 2002, 5.000%, 12/01/21 - MBIA Insured 1,500 DuPage County Community School District 200, Wheaton, 10/13 at 100.00 Aaa 1,575,045 Illinois, General Obligation Bonds, Series 2003C, 5.250%, 10/01/22 - FSA Insured 5,000 State of Illinois, General Obligation Bonds, Illinois FIRST, 4/12 at 100.00 AAA 5,205,000 Series of April 2002, 5.250%, 4/01/23 2,700 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 2,770,740 Infrastructure Projects, Series 2001A, 5.000%, 8/15/20 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 16.5% 3,380 Evansville, Indiana, Sewage Works Revenue Bonds, Series 2003A 7/13 at 100.00 AAA 3,507,054 Refunding, 5.000%, 7/01/20 - AMBAC Insured Indiana Bond Bank, Special Program Bonds, 2002 Series D, Hendricks County Redevelopment District: 2,500 5.375%, 4/01/23 - AMBAC Insured 4/12 at 100.00 AAA 2,618,750 7,075 5.250%, 4/01/26 - AMBAC Insured 4/12 at 100.00 AAA 7,275,718 7,000 5.250%, 4/01/30 - AMBAC Insured 4/12 at 100.00 AAA 7,184,030 10,000 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 10,258,300 Bonds, Marion General Hospital Project, Series 2002, 5.250%, 7/01/32 - AMBAC Insured 25,000 Indianapolis, Indiana, Local Public Improvement Bond Bank, 7/12 at 100.00 AAA 25,761,500 Series 2002A, Waterworks Project, 5.250%, 7/01/33 - MBIA Insured New Albany-Floyd County School Building Corporation, Indiana, First Mortgage Bonds, Series 2002: 2,500 5.750%, 7/15/17 - FGIC Insured 7/12 at 100.00 AAA 2,806,100 3,810 5.750%, 7/15/20 - FGIC Insured 7/12 at 100.00 AAA 4,232,224 Northern Wells Community School Building Corporation, Wells County, Indiana, First Mortgage Bonds, Series 2001: 420 5.250%, 1/15/19 - FGIC Insured 7/12 at 100.00 AAA 445,091 430 5.250%, 7/15/19 - FGIC Insured 7/12 at 100.00 AAA 455,688 1,675 5.400%, 7/15/23 - FGIC Insured 7/12 at 100.00 AAA 1,761,882 6,960 Valparaiso Middle Schools Building Corporation, Indiana, First 1/13 at 100.00 AAA 7,018,255 Mortgage Bonds, Series 2002 Refunding, 5.000%, 7/15/24 - MBIA Insured 2,490 Whitley County Middle School Building Corporation, Columbia 7/13 at 100.00 AAA 2,623,937 City, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 1/15/18 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 0.7% 3,085 City of New Orleans, Louisiana, General Obligation Bonds, 9/12 at 100.00 AAA 3,214,477 Series 2002 Refunding, 5.125%, 9/01/21 - MBIA Insured 48 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.4% $ 10,000 Commonwealth of Massachusetts, Special Obligation Refunding No Opt. Call Aaa $10,952,600 Notes, Federal Highway Grant Anticipation Note Program, Series 2003A, 5.000%, 12/15/13 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.0% 8,735 City of St. Louis, Missouri, Airport Revenue Bonds, 7/11 at 100.00 AAA 8,964,905 Series 2001A, Airport Development Program, 5.250%, 7/01/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.5% Municipal Energy Agency of Nebraska, Power Supply System Revenue Bonds, Series 2003A: 1,000 5.250%, 4/01/20 (WI, settling 11/05/03) - FSA Insured 4/13 at 100.00 AAA 1,066,110 1,000 5.250%, 4/01/21 (WI, settling 11/05/03) - FSA Insured 4/13 at 100.00 AAA 1,060,560 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.2% 9,810 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 10,068,592 Series 2002C, 5.000%, 6/15/21 - MBIA Insured 8,750 Truckee Meadows Water Authority, Nevada, Water Revenue 7/11 at 100.00 AAA 9,004,538 Bonds, Series 2001A, 5.250%, 7/01/34 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 6.6% 20,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 20,195,200 Revenue Bonds, Series 2002A Refunding, 5.000%, 11/15/30 - FSA Insured 10,000 Triborough Bridge and Tunnel Authority, New York, General 1/12 at 100.00 AAA 10,082,700 Purpose Revenue Bonds, Series 2001A, 5.000%, 1/01/32 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.6% 2,435 North Carolina Medical Care Commission, FHA-Insured 10/13 at 100.00 AAA 2,566,953 Mortgage Revenue Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.375%, 10/01/24 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.3% State of Oregon, General Obligation Veterans Welfare Bonds, 2002 Series 82: 9,570 5.375%, 12/01/31 12/11 at 100.00 AA 9,773,937 5,465 5.500%, 12/01/42 12/11 at 100.00 AA 5,588,454 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.7% 4,500 Allegheny County, Pennsylvania, Airport Revenue Refunding No Opt. Call AAA 4,948,560 Bonds, Pittsburgh International Airport, Series 1997A, 5.750%, 1/01/13 (Alternative Minimum Tax) - MBIA Insured 5,000 Pennsylvania Higher Educational Facilities Authority, University 7/08 at 100.00 AAA 5,258,900 of Pennsylvania Revenue Bonds, Series 1998, 5.500%, 7/15/38 - MBIA Insured 1,000 Pennsylvania Higher Educational Facilities Authority, 11/13 at 100.00 AA 1,076,140 Lycoming College Revenue Bonds, Series 2003-AA2, 5.250%, 11/01/16 - RAAI Insured 1,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 1,016,330 Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.8% Greenville, South Carolina, Tax Increment Revenue Improvement Bonds, Series 2003: 1,000 5.500%, 4/01/17 - MBIA Insured 4/13 at 100.00 AAA 1,108,830 2,300 5.000%, 4/01/21 - MBIA Insured 4/13 at 100.00 AAA 2,374,014 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 8.1% 10,000 Memphis and Shelby County Sports Authority, Inc., Tennessee, 11/12 at 100.00 AAA 10,162,900 Revenue Bonds, 2002 Series A, Memphis Arena Project, 5.125%, 11/01/28 - AMBAC Insured 11,000 Memphis and Shelby County Sports Authority, Inc., Tennessee, 11/12 at 100.00 AAA 11,177,540 Revenue Bonds, 2002 Series B, Memphis Arena Project, 5.125%, 11/01/29 - AMBAC Insured 15,195 Tennessee State School Bond Authority, Higher Educational 5/12 at 100.00 AAA 15,712,694 Facilities Bonds, Second Program, Series 2002A, 5.250%, 5/01/32 - FSA Insured 49 Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 29.7% $ 7,165 Arlington Independent School District, Tarrant County, Texas, 2/08 at 100.00 Aaa $ 7,187,928 General Obligation Bonds, Series 1998 Refunding, 4.750%, 2/15/21 3,500 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/11 at 100.00 AAA 3,832,535 International Airport, Joint Revenue Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 (Alternative Minimum Tax) - FGIC Insured 10,000 Gainesville Hospital District, Texas, General Obligation 8/11 at 100.00 AAA 10,388,300 Limited Tax Bonds, Series 2002, 5.375%, 8/15/32 - MBIA Insured 3,645 Galveston, Texas, General Obligation Bonds, Series 2001A No Opt. Call AAA 3,824,735 Refunding, 5.250%, 5/01/21 - AMBAC Insured Harris County Health Facilities Development Corporation, Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003: 2,240 5.000%, 11/15/16 - MBIA Insured 11/13 at 100.00 AAA 2,363,894 2,355 5.000%, 11/15/17 - MBIA Insured 11/13 at 100.00 AAA 2,465,709 13,000 Houston Area Water Corporation, Texas, City of Houston Contract 3/12 at 100.00 AAA 13,177,710 Revenue Bonds, Northeast Water Purification Plant Project, Series 2002, 5.125%, 3/01/32 - FGIC Insured 2,500 Houston Higher Education Finance Corporation, Texas, Revenue 11/09 at 101.00 AAA 2,605,100 Bonds, Rice University Project, Series 1999A, 5.375%, 11/15/29 4,345 San Antonio, Texas, Water System Senior Lien Revenue 5/12 at 100.00 AAA 4,767,942 Refunding Bonds, Series 2002, 5.500%, 5/15/17 - FSA Insured 9,145 State of Texas, General Obligation Bonds, Veterans Housing 6/12 at 100.00 Aa1 9,318,572 Assistance Program Fund II, 2002 Series A-1, 5.250%, 12/01/22 (Alternative Minimum Tax) 7,255 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 7,330,742 Residential Mortgage Revenue Bonds, 2001 Series A, 5.350%, 7/01/33 (Alternative Minimum Tax) 6,000 Texas Department of Housing and Community Affairs, 7/12 at 100.00 AAA 6,056,700 Residential Mortgage Revenue Bonds, 2002 Series A, 5.350%, 7/01/33 (Alternative Minimum Tax) Texas Public Finance Authority, Revenue Financing System Bonds, Series 2002, Texas Southern University: 3,520 5.125%, 11/01/20 - MBIA Insured 5/12 at 100.00 Aaa 3,670,938 3,520 5.125%, 11/01/21 - MBIA Insured 5/12 at 100.00 Aaa 3,650,803 8,905 Texas Department of Housing and Community Affairs, Single 3/12 at 100.00 AAA 9,098,417 Family Mortgage Bonds, Series 2002B, 5.550%, 9/01/33 (Alternative Minimum Tax) - MBIA Insured Texas Student Housing Authority, Student Housing Revenue Bonds, Austin Project, Senior Series 2001A: 9,400 5.375%, 1/01/23 - MBIA Insured 1/12 at 102.00 Aaa 9,958,266 11,665 5.500%, 1/01/33 - MBIA Insured 1/12 at 102.00 Aaa 12,416,459 5,000 Texas Water Development Board, State Revolving Fund, Senior 1/10 at 100.00 AAA 5,391,150 Lien Revenue Bonds, Series 1999B, 5.250%, 7/15/17 Williamson County, Texas, General Obligation Road Bonds, Series 2002: 3,500 5.200%, 2/15/21 - FSA Insured 2/12 at 100.00 AAA 3,657,850 3,000 5.250%, 2/15/22 - FSA Insured 2/12 at 100.00 AAA 3,136,080 7,340 5.250%, 2/15/23 - FSA Insured 2/12 at 100.00 AAA 7,631,838 5,000 5.250%, 2/15/25 - FSA Insured 2/12 at 100.00 AAA 5,164,100 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 12.9% 7,675 Energy Northwest, Washington, Nuclear Project No. 1 Electric 7/12 at 100.00 AAA 8,484,099 Revenue Bonds, Series 2002A Refunding, 5.500%, 7/01/15 - MBIA Insured 6,600 Energy Northwest, Washington, Columbia Generation Station 7/12 at 100.00 AAA 7,092,096 Electric Revenue Refunding Bonds, Series 2002B, 5.350%, 7/01/18 - FSA Insured 2,500 Port of Seattle, Washington, Revenue Bonds, Series 2002D 11/12 at 100.00 AAA 2,739,850 Refunding, 5.750%, 11/01/15 (Alternative Minimum Tax) - FGIC Insured 3,255 Yelm Community Schools, Thurston and Pierce Counties, 6/13 at 100.00 Aaa 3,550,424 Washington, General Obligation Bonds, Series 2003, 5.250%, 12/01/16 - FSA Insured 50 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) Washington State Economic Development Finance Authority, Wastewater Revenue Bonds, LOTT Project, Series 2002: $ 2,000 5.500%, 6/01/17 - AMBAC Insured 6/12 at 100.00 Aaa $ 2,187,940 4,325 5.125%, 6/01/22 - AMBAC Insured 6/12 at 100.00 Aaa 4,446,965 15,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/13 at 102.00 AAA 15,141,450 Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 - AMBAC Insured 10,000 Washington State Health Care Facilities Authority, Revenue 10/11 at 100.00 Aaa 10,135,900 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.125%, 10/01/31 - AMBAC Insured 5,170 Whitman County School District No. 267, Pullman, Washington, 6/12 at 100.00 Aaa 5,342,885 General Obligation Bonds, Series 2002, 5.000%, 12/01/20 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 4.5% 8,080 Wisconsin Housing and Economic Development Authority, Home 3/12 at 100.00 AA 8,210,250 Ownership Revenue Bonds, 2002 Series E, 5.250%, 9/01/22 (Alternative Minimum Tax) 11,950 State of Wisconsin, Transportation Revenue Bonds, 7/12 at 100.00 AAA 12,662,458 Series 2002-1 Refunding, 5.125%, 7/01/18 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 657,110 Total Long-Term Investments (cost $653,305,321) - 149.0% 684,341,904 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.7% 8,026,142 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.7)% (233,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $459,368,046 ==================================================================================================================== At least 80% of the Fund's net assets (including net assets applicable to Preferred shares) are invested in municipal securities that are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance which ensures the timely payment of principal and interest. Up to 20% of the Fund's net assets (including net assets applicable to Preferred shares) may be invested in municipal securities that are (i) either backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities (also ensuring the timely payment of principal and interest), or (ii) municipal bonds that are rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 51
Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 9.0% $ 5,655 Colbert County-Northwest Health Care Facilities Authority, 6/13 at 101.00 Baa3 $ 5,331,477 Alabama, Helen Keller Hospital Revenue Bonds, Series 2003, 5.750%, 6/01/27 3,100 Huntsville Health Care Authority, Alabama, Revenue Bonds, 5/12 at 102.00 AAA 3,294,277 Series 1998A, 5.400%, 6/01/22 - MBIA Insured 2,000 Huntsville Public Building Authority, Alabama, Lease Revenue 10/12 at 101.00 AAA 2,017,820 Bonds, Municipal Justice and Public Safety Center, Series 2002, 5.000%, 10/01/29 - MBIA Insured 6,280 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 6,963,892 Warrants, Series 2002D, 5.000%, 2/01/32 (Pre-refunded to 8/01/12) - FGIC Insured 1,750 Montgomery, Alabama, General Obligation Warrants, 5/12 at 101.00 AAA 1,806,788 Series 2003, 5.000%, 5/01/21 - AMBAC Insured 4,500 Sheffield, Alabama, Electric Revenue Warrants, Series 2003, 7/13 at 100.00 Aaa 4,767,030 5.500%, 7/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 3.8% 10,000 Maricopa County, Arizona, Pollution Control Corporation Revenue 11/12 at 100.00 AAA 10,092,900 Bonds, Arizona Public Service Company - Palo Verde Project, Series 2002A, 5.050%, 5/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 29.8% 13,500 State of California, General Obligation Refunding Bonds, 4/12 at 100.00 AAA 13,892,445 Series 2002, 5.250%, 4/01/30 - XLCA Insured 26,300 California State Public Works Board, Department of General 12/12 at 100.00 AAA 26,576,413 Services, Lease Revenue Bonds, Capital East End Project, Series 2002A, 5.000%, 12/01/27 - AMBAC Insured 2,910 Cathedral City Public Financing Authority, California, Tax 8/12 at 102.00 AAA 2,942,359 Allocation Bonds, Housing Set-Aside, Series 2002D, 5.000%, 8/01/26 - MBIA Insured 3,500 Cerritos Public Financing Authority, California, Tax Allocation 11/17 at 102.00 AAA 3,575,600 Revenue Bonds, Los Cerritos Redevelopment Projects, Series 2002A, 5.000%, 11/01/24 - AMBAC Insured 2,500 Irvine Public Facilities and Infrastructure Authority, California, 3/04 at 103.00 AAA 2,508,500 Assessment Revenue Bonds, Series 2003C, 5.000%, 9/02/23 - AMBAC Insured 4,000 Montara Sanitary District, California, General Obligation 8/11 at 101.00 AAA 4,038,120 Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured 2,000 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 2,011,680 Hydroelectric Project 1, Series 1998A, 5.000%, 7/01/28 - MBIA Insured Plumas County, California, Certificates of Participation, Series 2003A, Capital Improvement Program: 1,130 5.250%, 6/01/19 - AMBAC Insured 6/13 at 101.00 AAA 1,220,965 1,255 5.250%, 6/01/21 - AMBAC Insured 6/13 at 101.00 AAA 1,338,420 1,210 Redding Joint Power Financing Authority, California, Lease 3/13 at 100.00 AAA 1,233,462 Revenue Bonds, Series 2003A, Capital Projects, 5.000%, 3/01/23 - AMBAC Insured Sacramento Municipal Utility District, California, Electric Revenue Bonds, Series 2003R: 3,750 5.000%, 8/15/28 - MBIA Insured 8/13 at 100.00 AAA 3,785,887 5,000 5.000%, 8/15/33 - MBIA Insured 8/13 at 100.00 AAA 5,024,600 1,500 San Diego Community College District, California, General 5/13 at 100.00 AAA 1,514,115 Obligation Bonds, Series 2003A, 5.000%, 5/01/28 - FSA Insured 3,000 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 3,009,900 Bonds, Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/32 - MBIA Insured 1,055 Turlock Irrigation District, California, Certificates of 1/13 at 100.00 AAA 1,063,029 Participation, Series 2003A, 5.000%, 1/01/28 - MBIA Insured 6,300 University of California, Multiple Purpose Projects, Revenue 5/13 at 100.00 AAA 6,330,744 Bonds, Series 2003A, 5.000%, 5/15/33 - AMBAC Insured 52 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 5.2% Bowles Metropolitan District, Colorado, General Obligation Bonds, Series 2003: $ 4,300 5.500%, 12/01/23 - FSA Insured 12/13 at 100.00 AAA $ 4,654,363 3,750 5.500%, 12/01/28 - FSA Insured 12/13 at 100.00 AAA 4,009,088 5,250 Sand Creek Metropolitan District, Colorado, General Obligation 12/13 at 100.00 AAA 5,276,618 Bonds, Series 2003 Refunding, 5.000%, 12/01/31 - XLCA Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.1% 3,000 Pinellas County Health Facilities Authority, Florida, Revenue 5/13 at 100.00 A1 3,014,280 Bonds, Baycare Health System, Series 2003, 5.500%, 11/15/27 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.4% 3,825 Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales 1/13 at 100.00 AAA 3,858,354 Tax Revenue Bonds, Second Indenture Series 2002, 5.000%, 7/01/32 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 1.4% 1,310 Cook County School District No. 100, Berwyn, Illinois, General 12/13 at 100.00 Aaa 1,390,526 Obligation Bonds, Series 2003B Refunding, 5.250%, 12/01/21 - FSA Insured 2,500 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 2,483,150 Hospital, Series 2003, 5.250%, 7/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 8.7% 2,500 Evansville, Indiana, Sewage Works Revenue Bonds, Series 2003A 7/13 at 100.00 AAA 2,546,875 Refunding, 5.000%, 7/01/23 - AMBAC Insured 2,190 Indiana Bond Bank, Common School Fund Advance Purchase 8/13 at 100.00 AAA 2,276,374 Funding Bonds, Series 2003B, 5.000%,8/01/19 - MBIA Insured 1,000 Trustees of Indiana University, Indiana University Student Fee 8/13 at 100.00 AAA 1,021,210 Revenue Bonds, 2003 Series O, 5.000%, 8/01/22 - FGIC Insured IPS Multi-School Building Corporation, Indiana, First Mortgage Bonds, Series 2003: 11,020 5.000%, 7/15/19 - MBIA Insured 7/13 at 100.00 AAA 11,488,350 6,000 5.000%, 7/15/20 - MBIA Insured 7/13 at 100.00 AAA 6,211,920 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 2.4% 6,250 Kansas Development Finance Authority, Revenue Bonds, 4/13 at 102.00 AAA 6,463,125 Kansas Board of Regents, Scientific Research and Development Facilities Projects, Series 2003C, 5.000%, 10/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.5% 1,325 Commonwealth of Kentucky, State Property and Buildings 8/13 at 100.00 AAA 1,354,150 Commission, Project No. 77 Revenue and Refunding Bonds, Series 2003, 5.000%, 8/01/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 2.2% 5,785 City of New Orleans, Louisiana, General Obligation Bonds, 12/12 at 100.00 AAA 6,026,813 Series 2002 Refunding, 5.300%, 12/01/27 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 5.3% 10,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 10,097,400 Revenue Bonds, Series 2002A Refunding, 5.000%, 7/01/27 - FGIC Insured 1,125 Massachusetts Development Finance Agency, Revenue Bonds, 9/13 at 100.00 A1 1,145,812 Middlesex School Project, Series 2003, 5.125%, 9/01/23 3,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 3,005,880 System Revenue Bonds, 1997 Series A - Senior, 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 11.8% 6,130 Detroit, Michigan, Water Supply System Senior Lien Revenue 7/13 at 100.00 AAA 6,254,439 Bonds, Series 2003A, 5.000%, 7/01/23 - MBIA Insured 4,465 City of Detroit, Michigan, Water Supply System Senior Lien 7/13 at 100.00 AAA 4,583,546 Revenue Bonds, Series 2003C Refunding, 5.000%, 7/01/22 - MBIA Insured 53 Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 955 Grand Rapids Community College, Kent County, Michigan, 5/13 at 100.00 AAA $ 1,030,168 General Obligation Bonds, Series 2003 Refunding, 5.250%, 5/01/18 - AMBAC Insured 10,800 Michigan Strategic Fund, Resource Recovery Limited 12/12 at 100.00 AAA 11,142,900 Obligation Revenue Bonds, Detroit Edison Company, Series 2002D Refunding, 5.250%, 12/15/32 - XLCA Insured 2,250 Romulus Community Schools, County of Wayne, State of 5/11 at 100.00 AAA 2,325,307 Michigan, General Obligation Bonds, Series 2001 Refunding, 5.250%, 5/01/25 6,500 Wayne County, Michigan, Limited Tax General Obligation, 12/11 at 101.00 AAA 6,549,270 Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.000%, 12/01/30 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 2.3% 6,105 Forsyth, Rosebud County, Montana, Pollution Control Revenue 3/13 at 101.00 AAA 6,141,325 Refunding Bonds, Puget Sound Energy, Series 2003A, 5.000%, 3/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 3.3% 5,000 Lincoln, Nebraska, Sanitary Sewer System Revenue Bonds, 6/13 at 100.00 AAA 5,059,150 Series 2003 Refunding, 5.000%, 6/15/28 - MBIA Insured 3,855 Nebraska Public Power District, General Revenue Bonds, 1/13 at 100.00 AAA 3,887,189 Series 2002B, 5.000%, 1/01/33 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 0.9% 2,315 Clark County, Nevada, Airport System Subordinated Lien Revenue 7/11 at 100.00 AAA 2,351,971 Bonds, Series 2001B, 5.200%, 7/01/31 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 9.4% 25,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 25,225,750 Revenue Bonds, Series 2002F Refunding, 5.000%, 11/15/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.3% 8,700 North Carolina Medical Care Commission, Revenue Bonds, 10/13 at 100.00 AA 8,928,288 Maria Pelham Medical Center, Series 2003, 5.375%, 10/01/33 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.5% 9,350 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 9,452,196 Series 2002A, 5.000%, 7/01/32 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 8.6% 3,000 Lehigh County General Purpose Authority, Pennsylvania, Hospital 8/13 at 100.00 BBB 2,900,340 Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 2,000 Philadelphia, Pennsylvania, Gas Works Revenue Bonds, General 8/13 at 100.00 AAA 2,010,420 Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured 5,000 City of Philadelphia, Pennsylvania, Water and Wastewater 8/07 at 102.00 AAA 5,068,650 Revenue Bonds, Series 1997A, 5.125%, 8/01/27 - AMBAC Insured 13,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 13,092,950 Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/33 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 7.9% Greenville County School District, South Carolina, Installment Purchase Revenue Bonds, Series 2003: 3,000 5.000%, 12/01/22 12/13 at 100.00 AA- 3,005,760 1,785 5.000%, 12/01/23 12/13 at 100.00 AA- 1,785,625 1,365 Myrtle Beach, South Carolina, Water and Sewer System Revenue 3/13 at 100.00 AAA 1,476,207 Bonds, Series 2003 Refunding, 5.375%, 3/01/19 - FGIC Insured 15,000 South Carolina Transportation Infrastructure Bank, Revenue 10/12 at 100.00 Aaa 15,112,050 Bonds, Series 2002A, 5.000%, 10/01/33 - AMBAC Insured 54 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 12.2% $ 7,975 Fort Bend Independent School District, Fort Bend County, 8/10 at 100.00 AAA $ 8,013,120 Texas, General Obligation Bonds, Series 2000, 5.000%, 8/15/25 12,500 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 12,706,875 General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA Insured 5,515 Houston, Texas, General Obligation Bonds, Series 2002 3/12 at 100.00 AAA 5,832,829 Refunding, 5.250%, 3/01/20 - MBIA Insured 5,850 Katy Independent School District, Harris Fort Bend, and 2/12 at 100.00 AAA 6,173,564 Waller Counties, Texas, General Obligation Bonds, Series 2002A, 5.125%, 2/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.6% 1,500 Hampton, Virginia, Convention Center Revenue Bonds, 1/13 at 100.00 AAA 1,531,230 Series 2002, 5.125%, 1/15/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 9.1% 4,945 Broadway Office Properties, King County, Washington, Lease 12/12 at 100.00 AAA 4,950,143 Revenue Bonds, Washington Project, Series 2002, 5.000%, 12/01/31 - MBIA Insured 5,250 Public Utility District No. 1 of Chelan County, Washington, 7/12 at 100.00 AAA 5,295,308 Chelan Hydro Consolidated System Revenue Bonds, Series 2002C, 5.125%, 7/01/33 - AMBAC Insured 2,135 Kitsap County Consolidated Housing Authority, Washington, 7/13 at 100.00 Aaa 2,160,172 Revenue Bonds, Bremerton Government Center Project, Series 2003, 5.000%, 7/01/23 - MBIA Insured 1,935 Pierce County School District No. 343, Dieringer, Washington, 6/13 at 100.00 Aaa 2,097,850 General Obligation Bonds, Series 2003 Refunding, 5.250%, 12/01/17 - FSA Insured 9,670 State of Washington, General Obligation Bonds, Series 2003D, 6/13 at 100.00 AAA 9,962,904 5.000%, 12/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.2% 3,000 West Virginia State Building Commission, Lease Revenue Bonds, No Opt. Call AAA 3,280,830 Series 1998A Refunding, Regional Jail Project, 5.375%, 7/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.1% 4,750 Wisconsin Health and Educational Facilities Authority, Revenue 8/08 at 102.00 AAA 4,887,513 Bonds, Wausau Hospital Inc., Series 1998A Refunding, 5.125%, 8/15/20 - AMBAC Insured 3,000 Wisconsin Health and Educational Facilities Authority, Revenue No Opt. Call AAA 3,433,440 Bonds, Series 1992A, Meriter Hospital, Inc., 6.000%, 12/01/22 - FGIC Insured 3,600 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A 3,380,472 Bonds, Wheaton Franciscan Services, Series 2003A, 5.125%, 8/15/33 4,605 Wisconsin Health and Educational Facilities Authority, Revenue 9/13 at 100.00 A- 4,628,482 Bonds, Franciscan Sisters of Christian Health Care Ministry, Series 2003A, 5.875%, 9/01/33 - ------------------------------------------------------------------------------------------------------------------------------------ $ 398,130 Total Long-Term Investments (cost $398,679,247) - 151.0% 406,382,944 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.5% 6,729,443 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.5)% (144,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $269,112,387 ==================================================================================================================== At least 80% of the Fund's net assets (including net assets applicable to Preferred shares) are invested in municipal securities that are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance which ensures the timely payment of principal and interest. Up to 20% of the Fund's net assets (including net assets applicable to Preferred shares) may be invested in municipal securities that are (i) either backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities (also ensuring the timely payment of principal and interest), or (ii) municipal bonds that are rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. See accompanying notes to financial statements. 55
Statement of ASSETS AND LIABILITIES October 31, 2003
INSURED INSURED INSURED INSURED INSURED PREMIER PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INSURED INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $841,952,939, $1,789,468,672, $425,205,273, $730,247,731, $653,305,321 and $398,679,247, respectively) $899,334,120 $1,930,364,152 $456,817,685 $780,891,281 $684,341,904 $406,382,944 Cash -- 287,186 621,390 1,765,136 289,399 676,120 Receivables: Interest 12,825,106 30,783,815 7,709,805 13,694,058 10,117,516 6,348,311 Investments sold 4,798,116 14,117,073 115,180 4,258,848 -- -- Other assets 47,095 80,231 17,289 42,786 24,435 6,907 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 917,004,437 1,975,632,457 465,281,349 800,652,109 694,773,254 413,414,282 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 181,468 -- -- -- -- -- Payable for investments purchased -- 6,100,993 -- -- 2,085,070 -- Accrued expenses: Management fees 484,135 1,018,982 250,022 424,083 196,504 111,443 Organization and offering costs -- -- -- -- -- 5,000 Other 217,555 387,777 112,049 337,682 108,337 179,330 Preferred share dividends payable 19,361 37,972 7,586 15,800 15,297 6,122 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 902,519 7,545,724 369,657 777,565 2,405,208 301,895 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 318,000,000 680,000,000 161,000,000 268,900,000 233,000,000 144,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $598,101,918 $1,288,086,733 $303,911,692 $530,974,544 $459,368,046 $269,112,387 ==================================================================================================================================== Common shares outstanding 38,051,042 81,060,946 19,371,141 37,292,863 29,807,822 18,507,847 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.72 $ 15.89 $ 15.69 $ 14.24 $ 15.41 $ 14.54 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 380,510 $ 810,609 $ 193,711 $ 372,929 $ 298,078 $ 185,078 Paid-in surplus 530,579,588 1,127,616,209 268,677,643 490,981,637 423,486,894 261,300,467 Undistributed (Overdistribution of) net investment income 7,882,002 16,782,480 3,050,407 5,784,342 2,280,637 (180,848) Accumulated net realized gain (loss) from investments 1,878,637 1,981,955 377,519 (16,807,915) 2,265,854 103,993 Net unrealized appreciation of investments 57,381,181 140,895,480 31,612,412 50,643,551 31,036,583 7,703,697 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $598,101,918 $1,288,086,733 $303,911,692 $530,974,544 $459,368,046 $269,112,387 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 56
Statement of OPERATIONS Year Ended October 31, 2003
INSURED INSURED INSURED INSURED INSURED PREMIER PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INSURED INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA)* - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $49,005,308 $101,120,686 $24,064,314 $41,860,523 $34,133,654 $16,796,072 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 5,746,494 12,056,807 2,960,010 5,023,477 4,365,615 2,319,452 Preferred shares - auction fees 802,763 1,716,149 405,689 661,155 574,916 278,916 Preferred shares - dividend disbursing agent fees 50,000 70,000 30,000 50,000 30,000 15,780 Shareholders' servicing agent fees and expenses 132,841 213,403 52,429 80,241 10,174 5,542 Custodian's fees and expenses 199,461 427,011 114,216 184,146 164,105 82,595 Directors'/Trustees' fees and expenses 12,513 24,426 5,753 11,844 11,187 5,962 Professional fees 32,157 61,225 18,750 24,978 29,184 19,050 Shareholders' reports - printing and mailing expenses 60,970 116,978 37,998 48,620 109,994 65,510 Stock exchange listing fees 15,892 31,000 15,602 15,742 2,270 1,371 Investor relations expense 96,115 202,491 57,503 97,455 90,221 32,699 Portfolio insurance expense 37,227 42,511 -- 13,097 -- -- Other expenses 46,827 81,932 31,227 36,766 18,891 6,255 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 7,233,260 15,043,933 3,729,177 6,247,521 5,406,557 2,833,132 Custodian fee credit (30,261) (87,236) (33,888) (58,338) (15,279) (34,962) Expense reimbursement -- -- -- -- (2,080,476) (1,165,162) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 7,202,999 14,956,697 3,695,289 6,189,183 3,310,802 1,633,008 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 41,802,309 86,163,989 20,369,025 35,671,340 30,822,852 15,163,064 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN FROM INVESTMENTS Net realized gain from investments 1,876,817 2,436,868 398,323 4,868,689 2,261,496 103,646 Change in net unrealized appreciation (depreciation) of investments (4,019,790) 11,623,684 2,116,009 (3,467,246) 2,080,176 7,703,697 - ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments (2,142,973) 14,060,552 2,514,332 1,401,443 4,341,672 7,807,343 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (2,683,386) (5,618,357) (1,427,461) (2,405,892) (1,986,953) (1,000,298) From accumulated net realized gains from investments (433,291) (990,259) (66,215) -- (389,279) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (3,116,677) (6,608,616) (1,493,676) (2,405,892) (2,376,232) (1,000,298) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $36,542,659 $ 93,615,925 $21,389,681 $34,666,891 $32,788,292 $21,970,109 ==================================================================================================================================== * For the period November 22, 2002 (commencement of operations) through October 31, 2003. See accompanying notes to financial statements. 57
Statement of CHANGES IN NET ASSETS
INSURED QUALITY (NQI) INSURED OPPORTUNITY (NIO) --------------------------------- -------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/03 10/31/02 10/31/03 10/31/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 41,802,309 $ 42,568,954 $ 86,163,989 $ 93,065,833 Net realized gain from investments 1,876,817 4,974,138 2,436,868 11,512,148 Change in net unrealized appreciation (depreciation) of investments (4,019,790) (3,800,192) 11,623,684 (10,056,251) Distributions to Preferred Shareholders: From net investment income (2,683,386) (4,177,031) (5,618,357) (8,962,116) From accumulated net realized gains from investments (433,291) (252,858) (990,259) (425,567) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 36,542,659 39,313,011 93,615,925 85,134,047 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (37,979,535) (34,809,135) (78,840,403) (74,985,371) From accumulated net realized gains from investments (4,511,581) (824,876) (10,041,988) (1,454,843) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (42,491,116) (35,634,011) (88,882,391) (76,440,214) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 2,555,277 817,396 -- -- Preferred shares offering costs -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 2,555,277 817,396 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares (3,393,180) 4,496,396 4,733,534 8,693,833 Net assets applicable to Common shares at the beginning of year 601,495,098 596,998,702 1,283,353,199 1,274,659,366 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $598,101,918 $601,495,098 $1,288,086,733 $1,283,353,199 ==================================================================================================================================== Undistributed (Overdistribution of) net investment income at the end of year $ 7,882,002 $ 6,743,927 $ 16,782,480 $ 15,148,385 ==================================================================================================================================== See accompanying notes to financial statements. 58
PREMIER INSURED INSURED PREMIUM INCOME (NIF) INCOME 2 (NPX) --------------------------------- -------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/03 10/31/02 10/31/03 10/31/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 20,369,025 $ 21,949,356 $ 35,671,340 $ 36,821,783 Net realized gain from investments 398,323 1,473,037 4,868,689 5,701,469 Change in net unrealized appreciation (depreciation) of investments 2,116,009 (2,260,720) (3,467,246) 159,715 Distributions to Preferred Shareholders: From net investment income (1,427,461) (2,181,015) (2,405,892) (3,630,320) From accumulated net realized gains from investments (66,215) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 21,389,681 18,980,658 34,666,891 39,052,647 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (18,862,625) (18,123,654) (32,051,466) (30,549,239) From accumulated net realized gains from investments (674,649) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (19,537,274) (18,123,654) (32,051,466) (30,549,239) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 937,964 610,174 559,464 -- Preferred shares offering costs -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 937,964 610,174 559,464 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares 2,790,371 1,467,178 3,174,889 8,503,408 Net assets applicable to Common shares at the beginning of period 301,121,321 299,654,143 527,799,655 519,296,247 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $303,911,692 $301,121,321 $530,974,544 $527,799,655 ==================================================================================================================================== Undistributed (Overdistribution of) net investment income at the end of period $ 3,050,407 $ 2,973,772 $ 5,784,342 $ 4,646,374 ==================================================================================================================================== See accompanying notes to financial statements. 59
Statement of CHANGES IN NET ASSETS (continued)
INSURED DIVIDEND INSURED TAX-FREE ADVANTAGE (NVG) ADVANTAGE (NEA) ---------------------------- ----------------- FOR THE FOR THE PERIOD PERIOD 3/25/02 11/22/02 (COMMENCEMENT (COMMENCEMENT YEAR OF OPERATIONS) OF OPERATIONS) ENDED THROUGH THROUGH 10/31/03 10/31/02 10/31/03 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 30,822,852 $ 16,506,478 $ 15,163,064 Net realized gain from investments 2,261,496 3,519,698 103,646 Change in net unrealized appreciation (depreciation) of investments 2,080,176 28,956,407 7,703,697 Distributions to Preferred Shareholders: From net investment income (1,986,953) (1,473,247) (1,000,298) From accumulated net realized gains from investments (389,279) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 32,788,292 47,509,336 21,970,109 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (27,721,277) (13,860,480) (14,343,267) From accumulated net realized gains from investments (3,132,797) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (30,854,074) (13,860,480) (14,343,267) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares (1,575) 426,270,921 264,457,500 Net proceeds from shares issued to shareholders due to reinvestment of distributions -- 12,436 12,612 Preferred shares offering costs 3,032 (2,600,117) (3,084,842) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 1,457 423,683,240 261,385,270 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares 1,935,675 457,332,096 269,012,112 Net assets applicable to Common shares at the beginning of period 457,432,371 100,275 100,275 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $459,368,046 $457,432,371 $269,112,387 ==================================================================================================================================== Undistributed (Overdistribution of) net investment income at the end of period $ 2,280,637 $ 1,172,751 $ (180,848) ==================================================================================================================================== See accompanying notes to financial statements. 60
Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The National Funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen Insured Quality Municipal Fund, Inc. (NQI), Nuveen Insured Municipal Opportunity Fund, Inc. (NIO), Nuveen Premier Insured Municipal Income Fund, Inc. (NIF), Nuveen Insured Premium Income Municipal Fund 2 (NPX), Nuveen Insured Dividend Advantage Municipal Fund (NVG) and Nuveen Insured Tax-Free Advantage Municipal Fund (NEA). Common shares of Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF) and Insured Premium Income 2 (NPX) are traded on the New York Stock Exchange while Common shares of Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) 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. Prior to the commencement of operations of Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA), each Fund had no operations other than those related to organizational matters, the initial capital contribution of $100,275 per Fund by Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. (formerly, The John Nuveen Company), and the recording of the organization expenses ($11,500 per Fund) and their reimbursement by Nuveen Investments, LLC (formerly, Nuveen Investments), also a wholly owned subsidiary of Nuveen Investments, Inc. Each Fund seeks to provide current income exempt from regular federal income tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with accounting principles generally accepted in the United States. Securities Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair market value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluation of anticipated cash flows or collateral and general market conditions. If it is determined that market prices for a security are unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish a fair value for the security. Temporary investments in securities that have variable rate and demand features qualifying them as short-term securities are valued at amortized cost, which approximates market value. Securities Transactions Securities transactions are recorded on a trade date basis. Realized gains and losses from such transactions are determined on the specific identification method. Securities purchased or sold on a when-issued or delayed delivery basis may have extended settlement periods. The securities so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued and delayed delivery purchase commitments. At October 31, 2003, Insured Dividend Advantage (NVG) had outstanding when-issued purchase commitments of $2,085,070. 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. Federal Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net investment income to its shareholders. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended October 31, 2003, have been designated Exempt Interest Dividends 61 Notes to FINANCIAL STATEMENTS (continued) Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. Preferred Shares The Funds have issued and outstanding $25,000 stated value Preferred shares. Each Fund's Preferred shares are issued in more than one Series. The dividend rate on each Series may change every seven days, as set pursuant to a dutch auction process by the auction agent, and is payable at or near the end of each rate period. The number of Preferred shares outstanding, by Series and in total, for each Fund is as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M 2,600 4,000 -- 2,080 3,160 -- Series T 2,600 4,000 -- 2,200 3,080 2,880 Series W 2,600 4,000 840 2,080 -- 2,880 Series W2 -- 3,200 -- -- -- -- Series TH 2,320 4,000 2,800 2,200 3,080 -- Series TH2 -- 4,000 -- -- -- -- Series F 2,600 4,000 2,800 2,196 -- -- - --------------------------------------------------------------------------------------------------------- Total 12,720 27,200 6,440 10,756 9,320 5,760 =========================================================================================================
Effective January 17, 2003, Insured Tax-Free Advantage (NEA) issued 2,880 Series T and 2,880 Series W, $25,000 stated value Preferred shares. Insurance Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF) and Insured Premium Income 2 (NPX) invest in municipal securities which are either covered by insurance or are backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities, both of which ensure the timely payment of principal and interest. Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) invest at least 80% of their net assets (including net assets applicable to Preferred shares) in municipal securities that are covered by insurance. Each Fund may also invest up to 20% of its net assets (including net assets applicable to Preferred shares) in municipal securities which are either (i) backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, or (ii) municipal bonds that are rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. 62 Each insured municipal security is covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such insurance does not guarantee the market value of the municipal securities or the value of the Funds' Common shares. Original Issue Insurance and Secondary Market Insurance remain in effect as long as the municipal securities covered thereby remain outstanding and the insurer remains in business, regardless of whether the Funds ultimately dispose of such municipal securities. Consequently, the market value of the municipal securities covered by Original Issue Insurance or Secondary Market Insurance may reflect value attributable to the insurance. Portfolio Insurance is effective only while the municipal securities are held by the Funds. Accordingly, neither the prices used in determining the market value of the underlying municipal securities nor the Common share net asset value of the Funds include value, if any, attributable to the Portfolio Insurance. Each policy of the Portfolio Insurance does, however, give the Funds the right to obtain permanent insurance with respect to the municipal security covered by the Portfolio Insurance policy at the time of its sale. Derivative Financial Instruments The Funds may invest in certain derivative financial instruments including futures, forward, swap and option contracts, and other financial instruments with similar characteristics. Although the Funds are authorized to invest in such financial instruments, and may do so in the future, they did not make any such investments during the fiscal year ended October 31, 2003. Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Offering Costs Nuveen Investments, LLC has agreed to pay all Common share offering costs (other than the sales load) that exceed $.03 per Common share for Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA). Insured Dividend Advantage's (NVG) and Insured Tax-Free Advantage's (NEA) share of Common share offering costs ($615,654 and $555,000, respectively) were recorded as a reduction of the proceeds from the sale of Common shares. Costs incurred by Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) in connection with their offering of Preferred shares ($2,597,085 and $3,084,842, respectively) were recorded as a reduction to paid-in surplus. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common and Preferred shares were as follows:
INSURED INSURED PREMIER INSURED QUALITY (NQI) OPPORTUNITY (NIO) INCOME (NIF) --------------------- ---------------------- --------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02 - --------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- -- -- -- -- -- Shares issued to shareholders due to reinvestment of distributions 156,328 51,548 -- -- 57,779 39,202 - --------------------------------------------------------------------------------------------------------- 156,328 51,548 -- -- 57,779 39,202 ========================================================================================================= Preferred shares sold -- -- -- -- -- -- =========================================================================================================
63 Notes to FINANCIAL STATEMENTS (continued)
INSURED INSURED INSURED PREMIUM INCOME 2 (NPX) DIVIDEND ADVANTAGE (NVG) TAX-FREE ADVANTAGE (NEA) ---------------------- ------------------------ ------------------------ FOR THE FOR THE PERIOD PERIOD 3/25/02 11/22/02 (COMMENCEMENT (COMMENCEMENT YEAR YEAR YEAR OF OPERATIONS) OF OPERATIONS) ENDED ENDED ENDED THROUGH THROUGH 10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 - ----------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- -- -- 29,800,000 18,500,000 Shares issued to shareholders due to reinvestment of distributions 38,904 -- -- 822 847 - ----------------------------------------------------------------------------------------------------------- 38,904 -- -- 29,800,822 18,500,847 =========================================================================================================== Preferred shares sold -- -- -- 9,320 5,760 ===========================================================================================================
3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities during the fiscal year ended October 31, 2003, were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA)* - ------------------------------------------------------------------------------------------------------------- Purchases $119,890,993 $374,582,677 $117,785,020 $229,788,119 $159,490,051 $655,485,705 Sales and maturities 147,254,224 387,201,969 106,157,405 220,200,166 158,334,979 256,591,743 =============================================================================================================
* For the period November 22, 2002 (commencement of operations) through October 31, 2003. 4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing income on taxable market discount securities and timing differences in recognizing certain gains and losses on security transactions. At October 31, 2003, the cost of investments were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - --------------------------------------------------------------------------------------------------------------- Cost of investments $841,542,409 $1,789,063,044 $425,192,858 $730,237,702 $653,243,130 $398,672,025 ===============================================================================================================
64 Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2003, were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ------------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $58,181,730 $142,812,042 $31,682,018 $51,219,451 $31,265,766 $7,998,469 Depreciation (390,019) (1,510,934) (57,191) (565,872) (166,992) (287,550) - ------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments $57,791,711 $141,301,108 $31,624,827 $50,653,579 $31,098,774 $7,710,919 =============================================================================================================
The tax components of undistributed net investment income and net realized gains at October 31, 2003, were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ----------------------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income $10,441,828 $22,381,199 $4,603,021 $8,407,682 $4,542,562 $1,252,401 Undistributed net ordinary income * 264,316 78,388 -- 66,600 2,266,382 104,003 Undistributed net long-term capital gains 1,878,637 2,503,130 398,819 -- 758 -- =======================================================================================================================
* Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. The tax character of distributions paid during the fiscal years ended October 31, 2003 and October 31, 2002, was designated for purposes of the dividends paid deduction as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE 2003 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ------------------------------------------------------------------------------------------------------------------------ Distributions from net tax-exempt income $40,502,631 $84,020,174 $20,270,539 $34,382,914 $29,729,306 $13,903,084 Distributions from net ordinary income * 538,152 410,238 22,665 -- 3,522,076 -- Distributions from net long-term capital gains 4,406,720 11,032,247 740,863 -- -- -- ========================================================================================================================
PREMIER INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE 2002 (NQI) (NIO) (NIF) (NPX) (NVG) - ----------------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $38,550,143 $83,471,540 $20,196,415 $34,005,278 $12,987,249 Distributions from net ordinary income * 123,801 5,439 -- -- -- Distributions from net long-term capital gains 1,077,734 1,880,410 -- -- -- =======================================================================================================================
* Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. At October 31, 2003, Insured Premium Income 2 (NPX) had an unused capital loss carryforward of $16,777,857 available for federal income tax purposes to be applied against future capital gains, if any. If not applied $1,449,876 and $15,327,981 of the carryforward will expire in 2004 and 2008, respectively. 65 Notes to FINANCIAL STATEMENTS (continued) 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Under the Funds' (excluding Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA)) investment management agreements with the Adviser, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE - -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For the next $3 billion .5875 For net assets over $5 billion .5750 ================================================================================ Under Insured Dividend Advantage's (NVG) and Insured Tax-Free Advantage's (NEA) investment management agreements with the Adviser, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE - -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For net assets over $2 billion .5750 ================================================================================ The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. For the first ten years of Insured Dividend Advantage's (NVG) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING MARCH 31, MARCH 31, - -------------------------------------------------------------------------------- 2002* .30% 2008 .25% 2003 .30 2009 .20 2004 .30 2010 .15 2005 .30 2011 .10 2006 .30 2012 .05 2007 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Insured Dividend Advantage (NVG) for any portion of its fees and expenses beyond March 31, 2012. 66 For the first eight years of Insured Tax-Free Advantage's (NEA) 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, - -------------------------------------------------------------------------------- 2002* .32% 2007 .32% 2003 .32 2008 .24 2004 .32 2009 .16 2005 .32 2010 .08 2006 .32 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Insured Tax-Free Advantage (NEA) for any portion of its fees and expenses beyond November 30, 2010. 6. INVESTMENT COMPOSITION At October 31, 2003, the revenue sources by municipal purpose, expressed as a percent of total investments, were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - --------------------------------------------------------------------------------------------------------- Education and Civic Organizations 2% 3% 2% 5% 10% 2% Healthcare 16 10 16 11 5 13 Housing/Multifamily 7 3 4 8 -- -- Housing/Single Family 2 6 2 2 5 -- Tax Obligation/General 12 7 19 12 23 26 Tax Obligation/Limited 10 12 11 15 16 31 Transportation 21 20 17 13 21 8 U.S. Guaranteed 12 20 18 10 2 1 Utilities 13 14 7 17 6 14 Water and Sewer 5 5 2 7 12 5 Other -- -- 2 -- -- -- - --------------------------------------------------------------------------------------------------------- 100% 100% 100% 100% 100% 100% =========================================================================================================
Certain investments owned by the Funds are either covered by insurance issued by several private insurers or are backed by an escrow or trust containing U.S. Government or U.S. Government agency securities, both of which ensure the timely payment of principal and interest in the event of default (100% for Insured Quality (NQI), 100% for Insured Opportunity (NIO), 100% for Premier Insured Income (NIF), 100% for Insured Premium Income 2 (NPX), 88% for Insured Dividend Advantage (NVG) and 89% for Insured Tax-Free Advantage (NEA)). Such insurance or escrow, however, does not guarantee the market value of the municipal securities or the value of any of the Funds' shares. For additional information regarding each investment security, refer to the Portfolio of Investments of each Fund. 67 Notes to FINANCIAL STATEMENTS (continued) 7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 1, 2003, to shareholders of record on November 15, 2003, as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - --------------------------------------------------------------------------------------------------------- Dividend per share $.0845 $.0810 $.0815 $.0730 $.0775 $.0775 =========================================================================================================
68 Financial HIGHLIGHTS 69 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each year:
Investment Operations Less Distributions ------------------------------------------------------------------- ------------------------------- Distributions Distributions from Net from Net Beginning Net Investment Capital Investment Capital Common Realized/ Income to Gains to Income to Gains to Share Net Unrealized Preferred Preferred Common Common Net Asset Investment Investment Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== INSURED QUALITY (NQI) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 $15.87 $1.10 $ (.05) $(.07) $(.01) $ .97 $(1.00) $(.12) $(1.12) 2002 15.78 1.12 .03 (.11) (.01) 1.03 (.92) (.02) (.94) 2001 14.51 1.18 1.20 (.26) -- 2.12 (.85) -- (.85) 2000 13.95 1.20 .60 (.34) -- 1.46 (.90) -- (.90) 1999 16.02 1.17 (1.91) (.22) (.04) (1.00) (.92) (.13) (1.05) INSURED OPPORTUNITY (NIO) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 15.83 1.06 .17 (.07) (.01) 1.15 (.97) (.12) (1.09) 2002 15.72 1.15 .03 (.11) (.01) 1.06 (.93) (.02) (.95) 2001 14.64 1.17 1.04 (.26) -- 1.95 (.87) -- (.87) 2000 14.25 1.21 .39 (.33) -- 1.27 (.88) -- (.88) 1999 16.04 1.18 (1.73) (.24) (.01) (.80) (.94) (.04) (.98) PREMIER INSURED INCOME (NIF) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 15.59 1.05 .13 (.07) -- 1.11 (.98) (.03) (1.01) 2002 15.55 1.14 (.05) (.11) -- .98 (.94) -- (.94) 2001 14.66 1.18 .85 (.26) -- 1.77 (.88) -- (.88) 2000 14.25 1.20 .43 (.33) -- 1.30 (.89) -- (.89) 1999 16.18 1.16 (1.89) (.23) (.01) (.97) (.90) (.04) (.94) INSURED PREMIUM INCOME 2 (NPX) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 14.17 .96 .03 (.06) -- .93 (.86) -- (.86) 2002 13.94 .99 .16 (.10) -- 1.05 (.82) -- (.82) 2001 13.05 1.01 .86 (.23) -- 1.64 (.75) -- (.75) 2000 12.40 .99 .66 (.29) -- 1.36 (.71) -- (.71) 1999 14.10 .97 (1.71) (.23) -- (.97) (.73) -- (.73) INSURED DIVIDEND ADVANTAGE (NVG) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 15.35 1.03 .15 (.07) (.01) 1.10 (.93) (.11) (1.04) 2002(a) 14.33 .55 1.10 (.05) -- 1.60 (.47) -- (.47) INSURED TAX-FREE ADVANTAGE (NEA) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003(b) 14.33 .82 .42 (.05) -- 1.19 (.78) -- (.78) ==================================================================================================================================== 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** ==================================================================================== INSURED QUALITY (NQI) - ------------------------------------------------------------------------------------ Year Ended 10/31: 2003 $ -- $15.72 $16.3900 12.92% 6.27% 2002 -- 15.87 15.5500 10.82 6.83 2001 -- 15.78 14.9200 15.53 14.94 2000 -- 14.51 13.6875 10.94 10.86 1999 (.02) 13.95 13.1875 (9.65) (6.77) INSURED OPPORTUNITY (NIO) - ------------------------------------------------------------------------------------ Year Ended 10/31: 2003 -- 15.89 15.6400 10.22 7.51 2002 -- 15.83 15.2100 9.80 7.01 2001 -- 15.72 14.7400 19.84 13.61 2000 -- 14.64 13.0625 5.06 9.25 1999 (.01) 14.25 13.3125 (14.71) (5.33) PREMIER INSURED INCOME (NIF) - ------------------------------------------------------------------------------------ Year Ended 10/31: 2003 -- 15.69 15.5100 7.84 7.28 2002 -- 15.59 15.3300 6.84 6.57 2001 -- 15.55 15.2500 19.97 12.40 2000 -- 14.66 13.5000 9.92 9.41 1999 (.02) 14.25 13.1250 (17.33) (6.42) INSURED PREMIUM INCOME 2 (NPX) - ------------------------------------------------------------------------------------ Year Ended 10/31: 2003 -- 14.24 14.1200 8.84 6.70 2002 -- 14.17 13.7700 6.32 7.83 2001 -- 13.94 13.7500 29.46 12.85 2000 -- 13.05 11.2500 4.35 11.35 1999 -- 12.40 11.5000 (11.16) (7.21) INSURED DIVIDEND ADVANTAGE (NVG) - ------------------------------------------------------------------------------------ Year Ended 10/31: 2003 -- 15.41 14.8100 6.10 7.37 2002(a) (.11) 15.35 14.9600 2.84 10.44 INSURED TAX-FREE ADVANTAGE (NEA) - ------------------------------------------------------------------------------------ Year Ended 10/31: 2003(b) (.20) 14.54 14.7900 3.87 6.98 ==================================================================================== Ratios/Supplemental Data ----------------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement*** ----------------------------- ---------------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate ======================================================================================================================== INSURED QUALITY (NQI) - ------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 $ 598,102 1.20% 6.93% 1.20% 6.94% 14% 2002 601,495 1.23 7.22 1.21 7.24 44 2001 596,999 1.24 7.72 1.23 7.74 34 2000 549,120 1.24 8.48 1.23 8.49 24 1999 527,789 1.19 7.67 1.18 7.67 27 INSURED OPPORTUNITY (NIO) - ------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 1,288,087 1.17 6.67 1.16 6.68 21 2002 1,283,353 1.20 7.42 1.19 7.42 37 2001 1,274,659 1.21 7.69 1.20 7.70 39 2000 1,186,701 1.20 8.47 1.20 8.48 16 1999 1,155,516 1.16 7.67 1.16 7.67 26 PREMIER INSURED INCOME (NIF) - ------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 303,912 1.22 6.66 1.21 6.68 25 2002 301,121 1.25 7.40 1.23 7.42 43 2001 299,654 1.26 7.79 1.24 7.81 34 2000 282,544 1.26 8.37 1.24 8.39 21 1999 274,668 1.19 7.49 1.18 7.50 32 INSURED PREMIUM INCOME 2 (NPX) - ------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 530,975 1.17 6.68 1.16 6.69 31 2002 527,800 1.20 7.13 1.19 7.14 26 2001 519,296 1.22 7.39 1.20 7.41 27 2000 486,009 1.22 7.87 1.20 7.88 55 1999 461,955 1.21 7.11 1.21 7.11 35 INSURED DIVIDEND ADVANTAGE (NVG) - ------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 459,368 1.17 6.22 .72 6.67 25 2002(a) 457,432 1.10* 5.71* .61* 6.20* 22 INSURED TAX-FREE ADVANTAGE (NEA) - ------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003(b) 269,112 1.12* 5.52* .65* 6.00* 72 ======================================================================================================================== Preferred Shares at End of Period ---------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ================================================================= INSURED QUALITY (NQI) - ----------------------------------------------------------------- Year Ended 10/31: 2003 $318,000 $25,000 $72,021 2002 318,000 25,000 72,287 2001 318,000 25,000 71,934 2000 318,000 25,000 68,170 1999 318,000 25,000 66,493 INSURED OPPORTUNITY (NIO) - ----------------------------------------------------------------- Year Ended 10/31: 2003 680,000 25,000 72,356 2002 680,000 25,000 72,182 2001 680,000 25,000 71,862 2000 680,000 25,000 68,629 1999 680,000 25,000 67,482 PREMIER INSURED INCOME (NIF) - ----------------------------------------------------------------- Year Ended 10/31: 2003 161,000 25,000 72,191 2002 161,000 25,000 71,758 2001 161,000 25,000 71,530 2000 161,000 25,000 68,873 1999 161,000 25,000 67,650 INSURED PREMIUM INCOME 2 (NPX) - ----------------------------------------------------------------- Year Ended 10/31: 2003 268,900 25,000 74,365 2002 268,900 25,000 74,070 2001 268,900 25,000 73,280 2000 268,900 25,000 70,185 1999 268,900 25,000 67,949 INSURED DIVIDEND ADVANTAGE (NVG) - ----------------------------------------------------------------- Year Ended 10/31: 2003 233,000 25,000 74,288 2002(a) 233,000 25,000 74,081 INSURED TAX-FREE ADVANTAGE (NEA) - ----------------------------------------------------------------- Year Ended 10/31: 2003(b) 144,000 25,000 71,721 ================================================================= * Annualized. ** Total Investment Return on Market Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in stock price per share. Total Return on Common Share Net Asset Value is the combination of reinvested dividend income at net asset value, reinvested capital gains distributions at net asset value, if any, and changes in Common share net asset value per share. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) For the period March 25, 2002 (commencement of operations) through October 31, 2002. (b) For the period November 22, 2002 (commencement of operations) through October 31, 2003. See accompanying notes to financial statements. 70-71 SPREAD
Directors AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board of Directors of the Funds. The number of directors of the Funds is currently set at twelve. None of the directors 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 directors and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTOR WHO IS AN INTERESTED PERSON OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Timothy R. Schwertfeger (1) Chairman of the 1994 Chairman and Director (since 1996) of Nuveen 142 3/28/49 Board and Investments, Inc. and Nuveen Investments, LLC; 333 W. Wacker Drive Director Director (since 1992) and Chairman (since 1996) of Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Chairman and Director (since 1997) of Nuveen Asset Management, Inc.; Director (since 1996) of Institutional Capital Corporation; Chairman and Director (since 1999) of Rittenhouse Asset Management, Inc.; Chairman of Nuveen Investments Advisers Inc. (since 2002). DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ William E. Bennett Director 2001 Private Investor; previously, President and Chief Executive 142 10/16/46 Officer, Draper & Kramer, Inc., a private company that 333 W. Wacker Drive handles mortgage banking, real estate development, pension Chicago, IL 60606 advisory and real estate management (1995-1998). Prior thereto, Executive Vice President and Chief Credit Officer of First Chicago Corporation and its principal subsidiary, The First National Bank of Chicago. - ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Director 1997 Private Investor and Management Consultant. 141 8/22/40 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Director 1993 Retired (since 1989) as Senior Vice President of The 141 7/29/34 Northern Trust Company; Director of the United Way of 333 W. Wacker Drive Highland Park-Highwood (since 2002). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Director 1999 President, The Hall-Perrine Foundation, a private philanthropic 131 10/22/48 corporation (since 1996); Director, Alliant Energy; Director and 333 W. Wacker Drive Vice Chairman, United Fire & Casualty Company; Director, Chicago, IL 60606 Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. - ------------------------------------------------------------------------------------------------------------------------------------ Anne E. Impellizzeri Director 1994 Retired, formerly, Executive Director (since 1998) of Manitoga/ 141 1/26/33 The Russel Wright Design Center; prior thereto, President and 333 W. Wacker Drive Chief Executive Officer of Blanton-Peale Institute (since 1990); Chicago, IL 60606 prior thereto, Vice President, Metropolitan Life Insurance Co. - ------------------------------------------------------------------------------------------------------------------------------------ William L. Kissick Director 1992 Professor Emeritus, School of Medicine and the Wharton 131 7/29/32 School of Management and former Chairman, Leonard Davis 333 W. Wacker Drive Institute of Health Economics, University of Pennsylvania; Chicago, IL 60606 Adjunct Professor, Health Policy and Management, Yale University. - ------------------------------------------------------------------------------------------------------------------------------------ Thomas E. Leafstrand Director 1992 Retired; previously, Vice President in charge of Municipal 131 11/11/31 Underwriting and Dealer Sales at The Northern Trust 333 W. Wacker Drive Company. Chicago, IL 60606 72 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Peter R. Sawers Director 1991 Adjunct Professor of Business and Economics, University of 141 4/3/33 Dubuque, Iowa; formerly (1991-2000) Adjunct Professor, Lake 333 W. Wacker Drive Forest Graduate School of Management, Lake Forest, Illinois; Chicago, IL 60606 prior thereto, Executive Director, Towers Perrin Australia, a management consulting firm; Chartered Financial Analyst; Certified Management Consultant; Director, Executive Service Corps of Chicago, a not-for-profit organization. - ------------------------------------------------------------------------------------------------------------------------------------ William J. Schneider Director 1997 Senior Partner and Chief Operating Officer, Miller-Valentine 141 9/24/44 Group, Vice President, Miller-Valentine Realty, a construction 333 W. Wacker Drive company; Chair, MiamiValley Hospital; Chair, Dayton Chicago, IL 60606 Development Coalition; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. - ------------------------------------------------------------------------------------------------------------------------------------ Judith M. Stockdale Director 1997 Executive Director, Gaylord and Dorothy Donnelley Foundation 141 12/29/47 (since 1994); prior thereto, Executive Director, Great Lakes 333 W. Wacker Drive Protection Fund (from 1990 to 1994). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Sheila W. Wellington Director 1994 President (since 1993) of Catalyst (a not-for-profit organization 131 2/24/32 focusing on women's leadership development in business 333 W. Wacker Drive and the professions). Chicago, IL 60606 POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary 142 9/9/56 Administrative and Associate General Counsel, formerly, Vice President 333 W. Wacker Drive Officer and Assistant General Counsel of Nuveen Investments, LLC; Chicago, IL 60606 Managing Director (since 2002), General Counsel and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Managing Director (since 2002), Assistant Secretary and Associate General Counsel, formerly, Vice President (since 2000), of Nuveen Asset Management, Inc.; Assistant Secretary of Nuveen Investments, Inc. (since 1994); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc. (since May 2003); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant 142 2/3/66 and Assistant Vice President (since 2000), previously, Associate of 333 W. Wacker Drive Secretary Nuveen Investments, LLC. Chicago, IL 60606 73 Directors AND OFFICERS (CONTINUED) POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Paul L. Brennan Vice President 1999 Vice President (since 2002), formerly, Assistant 128 11/10/66 Vice President (since 1997), of Nuveen Advisory Corp.; 333 W. Wacker Drive prior thereto, portfolio manager of Flagship Financial Inc.; Chicago, IL 60606 Chartered Financial Analyst and Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 142 11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice 333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. (since 1999); Vice President and Treasurer of Nuveen Asset Management, Inc. (since 2002) and of Nuveen Investments Advisers Inc. (since 2002); Assistant Treasurer of NWQ Investment Management Company, LLC (since 2002); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Susan M. DeSanto Vice President 2001 Vice President of Nuveen Advisory Corp. (since 2001); 142 9/8/54 previously, Vice President of Van Kampen Investment 333 W. Wacker Drive Advisory Corp. (since 1998); Vice President of Nuveen Chicago, IL 60606 Institutional Advisory Corp. (since 2002); prior thereto, Assistant Vice President of Van Kampen Investment Advisory Corp. (since 1994). - ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 142 9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998) 333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002) Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. - ------------------------------------------------------------------------------------------------------------------------------------ Lorna C. Ferguson Vice President 1998 Vice President of Nuveen Investments, LLC; Vice 142 10/24/45 President (since 1998) of Nuveen Advisory Corp. and 333 W. Wacker Drive Nuveen Institutional Advisory Corp. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 142 3/2/64 LLC; Managing Director (since 2001), formerly Vice 333 W. Wacker Drive President of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp. (since 1995); Managing Director of Nuveen Asset Management, Inc. (since 2001); Vice President of Nuveen Investment Advisers Inc. (since 2002); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 142 5/31/54 and Controller 1998) of Nuveen Investments, LLC and Vice President and 333 W. Wacker Drive Funds Controller (since 1998) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ J. Thomas Futrell Vice President 1988 Vice President of Nuveen Advisory Corp.; 128 7/5/55 Chartered Financial Analyst. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Steven J. Krupa Vice President 1990 Vice President of Nuveen Advisory Corp. 128 8/21/57 333 W. Wacker Drive Chicago, IL 60606 74 POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, LLC, 142 3/22/63 previously Assistant Vice President (since 1999); prior 333 W. Wacker Drive thereto, Associate of Nuveen Investments, LLC; Certified Chicago, IL 60606 Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 142 8/27/61 President (since 1993) of Nuveen Investments, LLC. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 142 7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and 333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen Investments, Inc. and (since 1997) Nuveen Asset Management, Inc.; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002). - ------------------------------------------------------------------------------------------------------------------------------------ John V. Miller Vice President 2003 Vice President (since 2003), previously, Assistant 128 4/10/67 Vice President (since 1999), prior thereto, credit 333 W. Wacker Drive analyst (since 1996) of Nuveen Advisory Corp.; Chicago, IL 60606 Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, 142 7/7/65 LLC; Managing Director (since 1997), formerly Vice 333 W. Wacker Drive President (since 1996) of Nuveen Advisory Corp. and Chicago, IL 60606 Nuveen Institutional Advisory Corp.; Managing Director of Nuveen Asset Management, Inc. (since 1999). Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Thomas J. O'Shaughnessy Vice President 1999 Vice President (since 2002), formerly, Assistant 128 9/4/60 Vice President (since 1998), of Nuveen Advisory Corp.; 333 W. Wacker Drive prior thereto, portfolio manager. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Daniel S. Solender Vice President 2003 Vice President of Nuveen Advisory Corp. (since 2003); 128 10/27/65 previously, Principal and portfolio manager with The Vanguard 333 W. Wacker Drive Group (1999-2003); prior thereto, Assistant Vice President Chicago, IL 60606 of the Nuveen Advisory Corp.; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Thomas C. Spalding Vice President 1982 Vice President of Nuveen Advisory Corp. and Nuveen 128 7/31/51 Institutional Advisory Corp.; Chartered Financial Analyst. 333 W. Wacker Drive Chicago, IL 60606
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, because he is an officer and trustee of the Adviser. (2) Directors serve a one-year term until his/her successor is elected. The year first elected or appointed represents the year in which the Director was first elected or appointed to any fund in the Nuveen Complex. (3) Officers serve a one-year term through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 75 Build Your Wealth AUTOMATICALLY Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. FLEXIBILITY You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 76 Fund INFORMATION BOARD OF DIRECTORS/TRUSTEES William E. Bennett Robert P. Bremner Lawrence H. Brown Jack B. Evans Anne E. Impellizzeri William L. Kissick Thomas E. Leafstrand Peter R. Sawers William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Sheila W. Wellington FUND MANAGER Nuveen Advisory Corp. 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT AUDITORS Ernst & Young LLP Chicago, IL PROXY VOTING POLICIES AND PROCEDURES A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling Nuveen Investments at (800) 257-8787; and (ii) on the Commission's website at http://www.sec.gov. POLICY CHANGE On November 14, 2002, the Board adopted a policy that allows these Funds, in addition to investments in municipal bonds, to invest up to 5% of its net assets (including assets attributable to preferred shares, if any) in tax-exempt or taxable fixed-income securities or equity securities for the purpose of acquiring control of an issuer whose municipal bonds (a) the Fund already owns and (b) have deteriorated or are expected shortly to deteriorate significantly in credit quality, provided Nuveen Advisory determines that such investment should enable the Fund to better maximize the value of its existing investment in such issuer. This policy is a non-fundamental policy of each Fund which means that it can be changed at any time by the Board of Trustees without vote of the shareholders. GLOSSARY OF TERMS USED IN THIS REPORT Average Annual Total Return: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return (including change in NAV and reinvested dividends) that would have been necessary on an annual basis to equal the investment's actual performance over the time period being considered. Average Effective Maturity: The average of all the maturities of the bonds in a fund's portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions. Leverage-Adjusted Duration: Duration is a measure of a bond or bond fund's sensitivity to changes in interest rates. Generally, the longer a bond or fund's duration, the more the price of the bond or fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the Fund. Market Yield (also known as Dividend Yield or Current Yield): An investment's current annualized dividend divided by its current market price. Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities of the fund from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. - --------- Each Fund intends to repurchase shares of its own common or preferred stock in the future at such times and in such amounts as is deemed advisable. No shares were repurchased during the fiscal year ended October 31, 2003. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 77 Serving Investors FOR GENERATIONS Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. Managing $80 billion in assets, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under four distinct brands: Nuveen, a leader in tax-free investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; and Symphony, a leading institutional manager of market-neutral alternative investment portfolios. To learn more about the products and services Nuveen Investments offers and for a prospectus, where applicable, talk to your financial advisor, or call us at (800) 257-8787. Please read the information carefully before you invest. Distributed by NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive | Chicago, Illinois 60606 | www.nuveen.com EAN-D-1003D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The registrant has posted such code of ethics on its website at www.nuveen.com/etf. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's board of directors has determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its audit committee. The registrant's audit committee financial expert is William E. Bennett, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of First Chicago Corporation and its principal subsidary, The First National Bank of Chicago. As part of his role as Chief Credit Officer, Mr. Bennett set policy as to accrual of assets/loans; designated performing/non-performing assets; set the level of reserves against the credit portfolio; and determined the carrying value of credit related assets and exposure. Among other things, Mr. Bennett was also responsible for the oversight of the internal analysis function including setting ground rules for the review and preparation of financial analysis and financial statements for use in making credit and risk decisions for clients. Mr. Bennett has significant experience reviewing, analyzing and evaluating financial statements of domestic and international companies in a variety of industries with complex accounting issues. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable at this time. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES In the rare event that a municipal issuer held by the Fund were to issue a proxy or that the Fund were to receive a proxy issued by a cash management security, Nuveen Advisory Corp. (the "Adviser") would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the Fund's Board of Directors or Trustees or its representative. In the case of a conflict of interest, the proxy would be submitted to the applicable Fund's Board to determine how the proxy should be voted. A member of the Adviser's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17 CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the results were provided to the Board of Directors or Trustees and made available to shareholders as required by applicable rules. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")(17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because posted on registrant's website at www.nuveen.com/etf. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Nuveen Insured Quality Municipal Fund, Inc. ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: January 8, 2004 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (Principal Executive Officer) Date: January 8, 2004 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (Principal Financial Officer) Date: January 8, 2004 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 3 file002.txt CERTIFICATIONS CERTIFICATION I, Gifford R. Zimmerman, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Insured 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) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 8, 2004 /s/ Gifford R. Zimmerman ------------------------- -------------------------------- Chief Administrative Officer (Principal Executive Officer) CERTIFICATION I, Stephen D. Foy, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Insured 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) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 8, 2004 /s/ Stephen D. Foy ------------------------- -------------------------------- Vice President and Controller (Principal Financial Officer) EX-99.906CERT 4 file003.txt CERTIFICATIONS Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002; provided by the Chief Executive Officer and Chief Financial Officer, based on each such officer's knowledge and belief. The undersigned officers of Nuveen Insured 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, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Date: January 8, 2004 ----------------------- /s/ Gifford R. Zimmerman --------------------- Chief Administrative Officer (Chief Executive Officer) /s/ Stephen D. Foy --------------------- Vice President, Controller (Chief Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----