-----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, UbGDl4/SOyafJXd3Ulboc20AbOB3VzO9XiGVU4WukPErLvXO2Am6uwGKb/RCstTh D4qhwIypmjX0Sjoiv8nSgg== 0000891804-03-000001.txt : 20030102 0000891804-03-000001.hdr.sgml : 20030101 20030102085601 ACCESSION NUMBER: 0000891804-03-000001 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021031 FILED AS OF DATE: 20030102 EFFECTIVENESS DATE: 20030102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN MUNICIPAL VALUE FUND INC CENTRAL INDEX KEY: 0000812801 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05120 FILM NUMBER: 03500022 BUSINESS ADDRESS: STREET 1: 333 W WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 MAIL ADDRESS: STREET 1: 333 W. WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: NUVEEN MUNICIPAL QUALITY FUND INC DATE OF NAME CHANGE: 19870504 N-30D 1 nv27930.txt EAN-A-1002D ANNUAL REPORT October 31, 2002 Nuveen Municipal Closed-End Exchange-Traded Funds MUNICIPAL VALUE FUND NUV MUNICIPAL INCOME FUND NMI PHOTO OF: 2 GIRLS READING A BOOK. PHOTO OF: WOMAN READING TO CHILDREN. Dependable, tax-free income because it's not what you earn, it's what you keep.(R) LOGO: NUVEEN Investments RECEIVE YOUR NUVEEN FUND UPDATES FASTER THAN EVER! By registering for online access, you can view and save on your computer the Fund information you currently receive in the mail. This information then can be retrieved any time, and you can select only the specific pages you want to view or print. Once you sign up, you'll receive an e-mail notice the moment Fund reports are ready. This notice will contain a link to the report - all you have to do is click on the internet address provided. You'll be saving time, as well as saving printing and distribution expenses for your Fund. Registering for electronic access is easy and only takes a few minutes. (see instructions at right) Your e-mail address is strictly confidential and will not be used for anything other than notifications of shareholder information. And if you decide you don't like receiving your reports electronically, it's a simple process to go back to regular mail delivery. Logo: NUVEEN Investments SIGN UP TODAY -- HERE'S ALL YOU NEED TO DO... IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT, FOLLOW THE STEPS OUTLINED BELOW: 1 G0 to WWW.INVESTORDELIVERY.COM 2 Look at the address sheet that accompanied this report. Enter the personal 13-CHARACTER ENROLLMENT NUMBER imprinted near your name on the address sheet. 3 You'll be taken to a page with several options. Select the NEW ENROLLMENT-CREATE screen. Once there, enter your e-mail address (e.g. yourID@providerID.com), and a personal, 4-digit PIN of your choice. (Pick a number that's easy to remember.) 4 Click Submit. Confirm the information you just entered is correct, then click Submit again. 5 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. 6 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 the Access Account tab. Select the E-REPORT ENROLLMENT section. Click on Enrollment Page. 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. PHOTO OF: Timothy R. Schwertfeger Chairman of the Board Sidebar text: "I URGE YOU TO CONSIDER RECEIVING FUTURE FUND REPORTS AND OTHER FUND INFORMATION THROUGH THE INTERNET AND BY E-MAIL... SEE THE INSIDE FRONT COVER OF THIS REPORT FOR STEP-BY-STEP INSTRUCTIONS." Dear SHAREHOLDER Once again, I am pleased to state that during the period covered by this report your Nuveen Fund continued to meet its objective of providing attractive tax-free monthly income. Detailed information on your Fund's performance can be found in the Portfolio Managers' Comments and on the Performance Overview pages within this report. Please take the time to read them. In addition to providing regular tax-free income, we believe that a municipal bond investment like your Nuveen Fund also may offer opportunities to reduce the risk of your overall investment portfolio. This is because the prices of municipal bonds may move differently than the prices of the common stocks, mutual funds or other investments you may own. Since one part of your portfolio may be going up when another is going down, portfolio diversification may reduce your overall risk. Your financial advisor can explain the advantages of portfolio diversification in more detail. I urge you to contact him or her soon for more information on this important investment strategy. I also urge you to consider receiving future Fund reports and other Fund information through the Internet and by e-mail rather than in hard copy. Not only will you be able to receive the information faster, but this also may help lower your Fund expenses. Sign up is quick and easy -- see the inside front cover of this report for step-by-step instructions. For more than 100 years, Nuveen has specialized in offering quality investments such as your Nuveen Fund to those seeking to accumulate and preserve wealth. Our commitment to careful research, constant surveillance and judicious trading by our seasoned portfolio management team has never been stronger. Our mission continues to be to assist you and your financial advisor by offering the investment solutions and services that can help you meet your financial objectives. We thank you for choosing us as a partner as you work toward that goal. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board December 16, 2002 1 Nuveen National Municipal Closed-End Exchange-Traded Funds (NUV, NMI) Portfolio Managers' COMMENTS Portfolio managers Tom Spalding and John Miller discuss U.S. economic conditions, key investment strategies, and the recent performance of the Nuveen Municipal Value Fund, Inc. (NUV) and the Nuveen Municipal Income Fund, Inc. (NMI). With 26 years of investment management experience at Nuveen, Tom has managed NUV since its inception in 1987. John, who has nine years of investment experience, including six at Nuveen, assumed portfolio management responsibility for NMI in 2001. WHAT WERE THE MAJOR FACTORS AFFECTING THE U.S. ECONOMY AND THE MUNICIPAL MARKET DURING THIS REPORTING PERIOD? In a number of ways, market conditions have not changed significantly since our last shareholder report. We believe the most influential factors affecting the economy and the municipal market continue to be the slow pace of economic growth and the relatively low levels of interest rates. In addition, the ongoing threat of terrorism and the current uncertain geopolitical climate also have had an impact on the economy and the markets over this reporting period. Looking more closely at the municipal market, the sluggish economic recovery and lack of inflationary pressures helped many bonds perform well during most of the twelve-month period ended October 31, 2002. However, during the month of October 2002, the market environment for all fixed-income investments soured as a rally in the equity markets seemingly caused some investors to sell fixed-income products and purchase common stocks. In the first ten months of 2002 new municipal bond issuance nationwide reached $289.4 billion, an increase of 30% over January-October 2001. Demand for municipal bonds also remained strong over most of the reporting period, as many individual investors continued to seek investments offering diversification for their portfolios and tax-free income. Institutional investors, especially traditional municipal bond purchasers such as property/ casualty insurance companies, have also been active buyers in the municipal market. HOW DID NUV AND NMI PERFORM OVER THE TWELVE MONTHS ENDED OCTOBER 31, 2002? Individual results for NUV and NMI 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 10/31/02 EQUIVALENT3 10/31/02 10/31/02 10/31/02 - ------------------------------------------------------------------- NUV 5.47% 7.81% 3.32% 5.87% 3.48% - ------------------------------------------------------------------- NMI 6.06% 8.66% 2.87% 5.87% 3.48% - ------------------------------------------------------------------- Past performance is not predictive of future results. For additional information, see the individual Performance Overview for your Fund in this report. In a market characterized by rising bond values, as has been the case through most of this reporting period, the total returns for funds with relatively shorter durations4 typically would be expected to be less than those of funds and indexes with longer durations. As of October 31, 2002, NUV and NMI had average durations of 5.71 and 7.43, respectively, compared with 7.98 for the Lehman Brothers Municipal Bond Index. In addition to duration, the performance of both Funds was influenced by factors such as credit quality, portfolio trading activity, call exposure, and the price movement of individual Fund holdings. For example, both Funds hold airline-backed bonds issued to support the terminal or maintenance facilities of private companies. The value of these bonds fell over the past year, in part due to the general decline in passenger volume that affected many airlines and in part due to the possibility of a 1 The total annual returns on common share net asset value for NUV and NMI are compared with that of the Lehman Brothers Municipal Bond Index, an unleveraged index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 2 The total returns of these Funds are compared with the average annualized return of the nine funds in the Lipper General and Insured Unleveraged 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 in order to equal the yield of the Nuveen Fund on an after-tax basis. The taxable-equivalent yield is based on the Fund's market yield on the indicated date and a federal income tax rate of 30%. 4 Duration is a measure of a Fund's NAV volatility in reaction to interest rate movements. 2 bankruptcy declaration by United Air Lines. (United filed for bankruptcy on December 9, 2002.) Since the United bonds we hold support ongoing operations, we believe the company has every intention of continuing to honor the obligations underlying these facilities. Over the longer-term, we believe air travel will remain a major component of transportation in this country, and we think airline-backed bonds, at their current depressed levels, are positioned to appreciate in value if and when the outlook for these companies improves. In addition to several specific airline issues, NMI also continued to hold bonds issued for CanFibre projects in California and New York, which were impacted by the bankruptcies of the projects' general contractor and the former parent company of CanFibre. While the CanFibre of Riverside bonds appreciated over the past year as the liquidation of CanFibre's California plant went better than expected, the CanFibre of Lackawanna issue depreciated following the failure of a restructuring plan. Nuveen continues to work to find an appropriate solution to these distressed credits that we believe will serve the best interests of our shareholders. Some of the negative impact of these holdings was offset by NMI's investment in issues that appreciated over the reporting period. These included bonds issued for the West Penn Allegheny Health System in Pittsburgh, Pennsylvania, and the Ogden Haverhill waste energy facility in Massachusetts. The West Penn Allegheny hospital, which went into default in 1998, was restructured and has been consistently meeting quarterly targets. Over the twelve months ended October 31, 2002, these bonds experienced market price appreciation, as their yield fell from 8.50% to 7.50%. The Ogden Haverhill facility, which has been profitable for years, was negatively affected when its parent company declared bankruptcy. After confirming with our outside counsel and the company that bondholders' positions would be recognized as a top priority, we purchased these bonds at attractive prices and have subsequently seen them appreciate by approximately 125 basis points. HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES? As of October 31, 2002, NUV had provided shareholders with 48 consecutive months of stable dividends. However, for NMI, the reinvestment of call proceeds in the relatively lower interest rate environment of the past twelve months, combined with the credit issues previously discussed, resulted in a reduced income stream and led to two dividend cuts over the year ended October 31, 2002. During this reporting period, the share prices and net asset values of both NUV and NMI declined. As of October 31, 2002, NUV's share price discount to common share net asset value had narrowed slightly versus its position a year earlier, while NMI moved from trading at a premium to a discount (see charts on individual Performance Overview pages). WHAT KEY STRATEGIES WERE USED TO MANAGE NUV AND NMI DURING THE FISCAL YEAR ENDED OCTOBER 31, 2002? Over the twelve month reporting period, our strategic focus was on positioning both Funds for potential changes in the interest rate environment, while continuing to look for bonds that we believed represented long-term values. Although the durations of both Funds lengthened over the past year, we continued to keep them shorter than the Lehman benchmark. We believe this will make the Funds less sensitive to future interest rate changes, while still providing attractive yields and returns. In particular, we believe bonds in the long-intermediate part of the yield curve currently offer excellent opportunities for attractive yields, and should be positioned to outperform if interest rates rise. In our opinion, NUV is well diversified by sector, effective maturity and credit quality. As of October 31, 2002, the Fund was most heavily weighted in the utilities and healthcare sectors. We believe 3 that the utilities exposure is adequately varied by issuer type (e.g., electrical plants, pollution control) and geographical region, while the healthcare sector was one of the top performing sectors over the reporting period. One of NUV's holdings - sewer bonds issued by Jefferson County, Alabama - - has been advance refunded, resulting in price appreciation. In NMI, we continued to diversify the Fund's holdings. One of our recent purchases involved bonds issued by the Illinois Development Finance Authority for the Chicago Charter School Foundation project, which have performed well to date for the Fund. These bonds, which we added to our portfolio in May 2002, provide the financing for a series of 15 charter schools that recently received a multi million dollar grant from the Gates Foundation. During the past year, we also found attractive yields in the healthcare sector and in tobacco settlement bonds. With the addition of Rhode Island tobacco bonds to our holdings of similar bonds issued by Iowa and South Carolina, NMI had 4.8% of its portfolio invested in the tobacco sector as of October 31, 2002. WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN GENERAL AND THESE NUVEEN FUNDS IN PARTICULAR? In general, our outlook for the fixed income markets over the coming months remains positive. We believe the U.S. economy is headed for an eventual recovery, but one that may be slower to arrive and less robust than some are now predicting. We expect inflation and interest rates to remain relatively low over the near term, while new municipal volume should continue to be strong as issuers take advantage of the low rate environment for both new issues and refinancings. Currently, national issuance totals are on pace to surpass $300 billion in 2002, eclipsing the record of $292 billion set in 1993. We also expect demand for tax-exempt municipal bonds to remain solid as investors continue to look for ways to rebalance their portfolios and reduce their overall investment risk. Over the next two years, we think NMI should have minimal call exposure, while NUV faces potential calls on 37% of its portfolio in 2003 and 5% in 2004. As in the past, we plan to continue to hold higher-yielding bonds in this Fund as long as possible to help support its dividend, and then reinvest in the most attractive bonds available at that time. While the number of actual calls experienced by NUV will depend largely on market interest rates over the next several years, we believe the Fund's call exposure is manageable and we foresee no problems in working through this period. Specific areas of concentration in the months ahead will include modestly shortening the durations of both Funds through the purchase of bonds in the intermediate range of the yield curve and premium bonds that we believe are likely to retain more of their value if interest rates rise. Resolving several of the individual credit issues noted earlier also will continue to be a priority for the Funds. In general, we will remain focused on actions that we believe add value for our shareholders and provide support for the Funds' dividends. The heavy calendar of new issuance anticipated by much of the market should enhance our ability to find attractive opportunities. Overall, we believe the attractive tax-free income, portfolio diversification, and risk reduction potential (for an equity-dominated portfolio) represented by both NUV and NMI continue to make these Funds potentially valuable components in your long-term financial plans. 4 Nuveen Municipal Value Fund, Inc. Performance OVERVIEW As of October 31, 2002 NUV PIE CHART: CREDIT QUALITY AAA/U.S. GUARANTEED 45% AA 19% A 19% BBB 12% NR 2% BB OR LOWER 3% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $9.32 - -------------------------------------------------- Common Share Net Asset Value $9.98 - -------------------------------------------------- Market Yield 5.47% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.81% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $1,946,407 - -------------------------------------------------- Average Effective Maturity (Years) 18.86 - -------------------------------------------------- Average Duration 5.71 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 6/87) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 3.80% 3.32% - -------------------------------------------------- 5-Year 5.60% 5.16% - -------------------------------------------------- 10-Year 4.92% 5.84% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Utilities 31% - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- Tax Obligation/Limited 12% - -------------------------------------------------- U.S. Guaranteed 8% - -------------------------------------------------- Transportation 8% - -------------------------------------------------- BAR CHART: 2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 11/01 0.0425 12/01 0.0425 1/02 0.0425 2/02 0.0425 3/02 0.0425 4/02 0.0425 5/02 0.0425 6/02 0.0425 7/02 0.0425 8/02 0.0425 9/02 0.0425 10/02 0.0425 LINE CHART: SHARE PRICE PERFORMANCE WEEKLY CLOSING PRICE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 11/1/01 9.5 9.58 9.3 9.25 9.41 9.23 9.15 9.11 9.16 9.15 9.25 9.4 9.4 9.52 9.46 9.54 9.55 9.64 9.41 9.32 9.1 9.22 9.28 9.25 9.27 9.29 9.44 9.46 9.42 9.38 9.46 9.44 9.48 9.51 9.57 9.57 9.56 9.57 9.58 9.63 9.6 9.6 9.52 9.52 9.63 9.63 9.66 9.67 9.7 9.49 9.15 10/31/02 9.29 1 Taxable-equivalent yield represents the yield on a taxable investment necessary 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 30%. 2 The Fund also paid shareholders a capital gains distribution in December 2001 of $0.0074 per share. 5 Nuveen Municipal Income Fund, Inc. Performance OVERVIEW As of October 31, 2002 NMI PIE CHART: CREDIT QUALITY AAA/U.S. GUARANTEED 19% A 10% BBB 38% NR 25% BB OR LOWER 8% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $9.90 - -------------------------------------------------- Common Share Net Asset Value $10.61 - -------------------------------------------------- Market Yield 6.06% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.66% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $85,897 - -------------------------------------------------- Average Effective Maturity (Years) 18.31 - -------------------------------------------------- Average Duration 7.43 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 4/88) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year -11.93% 2.87% - -------------------------------------------------- 5-Year 1.41% 3.85% - -------------------------------------------------- 10-Year 3.68% 5.32% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Healthcare 18% - -------------------------------------------------- Utilities 18% - -------------------------------------------------- Tax Obligation/Limited 12% - -------------------------------------------------- Basic Materials 11% - -------------------------------------------------- Consumer Staples 7% - -------------------------------------------------- BAR CHART: 2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE 11/01 0.056 12/01 0.053 1/02 0.053 2/02 0.053 3/02 0.05 4/02 0.05 5/02 0.05 6/02 0.05 7/02 0.05 8/02 0.05 9/02 0.05 10/02 0.05 LINE CHART: SHARE PRICE PERFORMANCE WEEKLY CLOSING PRICE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 11/1/01 11.96 11.89 11.93 11.96 11.8 11.2 11.1 10.89 10.95 10.92 11.24 11.24 11.25 11.25 11.13 11.03 11 11.18 11.14 10.82 10.57 10.49 10.49 10.26 10.27 10.11 10.3 10.19 10.35 10.52 10.56 10.59 10.48 10.45 10.33 10.49 10.63 10.78 10.67 10.81 10.85 10.68 10.63 10.7 10.7 11.21 11.05 10.97 10.95 10.65 9.99 10/31/02 9.65 1 Taxable-equivalent yield represents the yield on a taxable investment necessary 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 30%. 6 Shareholder MEETING REPORT The Shareholder Meeting was held in Chicago, Illinois on July 31, 2002. NUV NMI - -------------------------------------------------------------------------------- APPROVAL OF THE TRUSTEES WAS REACHED AS FOLLOWS: Common Common Shares Shares ================================================================================ Anne E. Impellizzeri For 167,892,848 7,108,941 Withhold 2,509,050 100,657 - -------------------------------------------------------------------------------- Total 170,401,898 7,209,598 ================================================================================ 7 Report of INDEPENDENT AUDITORS THE BOARD OF DIRECTORS AND SHAREHOLDERS NUVEEN MUNICIPAL VALUE FUND, INC. NUVEEN MUNICIPAL INCOME FUND, INC. We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Municipal Value Fund, Inc. and Nuveen Municipal Income Fund, Inc. as of October 31, 2002, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with 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, 2002, 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 Municipal Value Fund, Inc. and Nuveen Municipal Income Fund, Inc. at October 31, 2002, and the results of their operations for the year then ended, the changes in their net assets for the two years in the period then ended and financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Ernst & Young LLP Chicago, Illinois December 11, 2002 8 Nuveen Municipal Value Fund, Inc. (NUV) Portfolio of INVESTMENTS October 31, 2002
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.4% $ 2,055 Alabama Housing Finance Authority, Single Family Mortgage 4/08 at 102.00 Aaa $ 2,084,160 Revenue Bonds (Collateralized Home Mortgage Revenue Bond Program), 1998 Series A-2, 5.450%, 10/01/28 (Alternative Minimum Tax) 5,000 Industrial Development Board of the Town of Courtland, Alabama, 11/09 at 101.00 Baa2 5,268,800 Solid Waste Disposal Revenue Bonds, Champion International Paper Corporation, Series 1999A, 6.700%, 11/01/29 (Alternative Minimum Tax) 1,750 Health Care Authority of the City of Huntsville, Alabama, 6/11 at 101.00 A2 1,773,695 Series 2001A, Revenue Bonds, 5.750%, 6/01/31 4,000 Medical Clinic Board of the City of Jasper, Alabama, Hospital 1/03 at 102.00 Baa1 4,058,760 Revenue Bonds, Series 1993 (Walker Regional Medical Center, Inc. Project), 6.375%, 7/01/18 12,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA 13,532,880 Warrants, Series 1999-A, 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.1% 4,900 Arizona Health Facilities Authority, Hospital Revenue Bonds 11/09 at 100.00 Baa2 4,928,861 (Phoenix Children's Hospital), Series 1999A, 6.250%, 11/15/29 16,000 Arizona Health Facilities Authority, Revenue Bonds (Catholic 7/10 at 101.00 BBB 16,943,520 Healthcare West), 1999 Series A, 6.625%, 7/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.2% 1,200 City of Conway, Arkansas, Sales and Use Tax Capital Improvement 12/06 at 101.00 AAA 1,277,412 Bonds, Series 1997A, 5.350%, 12/01/17 2,750 Jefferson County, Arkansas, Pollution Control Revenue Refunding 12/02 at 102.00 BBB- 2,634,583 Bonds (Entergy Arkansas, Inc. Project), Series 1997, 5.600%, 10/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 7.4% 7,310 California Educational Facilities Authority, Revenue Bonds, 10/09 at 39.19 Aaa 2,232,840 Series 2000, Loyola Marymount University, 0.000%, 10/01/24 (Pre-refunded to 10/01/09) 3,975 California Infrastructure and Economic Development Bank, Revenue 10/11 at 101.00 A- 3,977,544 Bonds, Series 2001, The J. David Gladstone Institutes Project, 5.250%, 10/01/34 9,000 State of California Department of Water Resources, Central 6/03 at 101.50 AA 9,292,860 Valley Project, Water System Revenue Bonds, Series L, 5.750%, 12/01/19 14,500 State of California Department of Water Resources, Central Valley 12/03 at 101.00 AA 14,160,120 Project, Water System Revenue Bonds, Series M, 4.750%, 12/01/24 17,155 State Public Works Board of the State of California, Lease Revenue 6/03 at 102.00 Aa2 17,428,108 Refunding Bonds (The Regents of the University of California), 1993 Series A (Various University of California Projects), 5.500%, 6/01/21 15,500 California Statewide Communities Development Authority, 4/09 at 101.00 BBB 15,582,615 Certificates of Participation, The Internext Group, 5.375%, 4/01/17 6,530 California Statewide Communities Development Authority, 7/03 at 102.00 AA- 6,707,681 Certificates of Participation, St. Joseph Health System Obligated Group, 5.500%, 7/01/14 3,000 Community Facilities District No. 98-2 of the Capistrano Unified 9/09 at 102.00 N/R 2,977,410 School District, Ladera, California, Series 1999, Special Tax Bonds, 5.750%, 9/01/29 5,960 Central Joint Powers Health Financing Authority, Certificates of 2/03 at 100.00 Baa1 5,512,583 Participation, Series 1993 (Community Hospital of Central California), 5.000%, 2/01/23 Foothill/Eastern Transportation Corridor Agency, California, Toll Road Revenue Bonds, Series 1995A: 30,000 0.000%, 1/01/22 No Opt. Call AAA 11,267,700 2,500 6.000%, 1/01/34 (Pre-refunded to 1/01/07) 1/07 at 100.00 AAA 2,848,875 9 Nuveen Municipal Value Fund, Inc. (NUV) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 7,500 Department of Water and Power of the City of Los Angeles, 11/03 at 102.00 AAA $ 7,732,875 California, Electric Plant Refunding Revenue Bonds, Second Issue of 1993, 5.400%, 11/15/31 4,000 Regional Airports Improvement Corporation, California, American 12/12 at 102.00 BB- 2,600,000 Airlines, Inc. Terminal 4 Project, Los Angeles International Airport Facilities Sublease Revenue Bonds, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax) 30,470 Los Angeles County Public Works Financing Authority, California, 12/03 at 102.00 AAA 31,228,094 Lease Revenue Bonds (Multiple Capital Facilities Project IV), 4.750%, 12/01/13 7,300 County of San Diego, California, Certificates of Participation, 9/09 at 101.00 Baa3 7,596,745 The Burnham Institute, 6.250%, 9/01/29 2,665 Yuba County Water Agency, California, Yuba River Development 3/03 at 100.00 Ba3 2,471,841 Revenue Bonds, Series A, 4.000%, 3/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.3% 1,300 Colorado Educational and Cultural Facilities Authority, Charter 8/11 at 100.00 Ba2 1,311,349 School Revenue Bonds, Peak to Peak Charter School Project, Created by Boulder Valley School District No. RE-2, Boulder County, Colorado, 7.625%, 8/15/31 Colorado Health Facilities Authority, Revenue Refunding Bonds, Series 1994 (Sisters of Charity Health Care Systems, Inc.): 9,590 5.250%, 5/15/14 (Pre-refunded to 5/15/04) 5/04 at 102.00 AA*** 10,277,219 2,580 5.250%, 5/15/14 5/04 at 102.00 AA 2,636,760 345 Colorado Health Facilities Authority, Revenue Bonds, 5/04 at 102.00 AA*** 369,723 Series 1994 (Sisters of Charity Health Care Systems, Inc.), 5.250%, 5/15/14 (Pre-refunded to 5/15/04) 500 Colorado Health Facilities Authority, Revenue Bonds, Vail Valley 1/12 at 100.00 BBB 497,935 Medical Center Project, Series 2001, 5.750%, 1/15/22 8,290 City and County of Denver, Colorado, Airport System Revenue 11/02 at 102.00 A 8,472,877 Bonds, Series 1992B, 7.250%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1992C: 5,045 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102.00 A 5,155,334 (Pre-refunded to 11/15/02) 29,870 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102.00 A 30,523,257 (Pre-refunded to 11/15/02) 5,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 5,410,900 Series 2000A, 5.750%, 9/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.4% 27,725 Washington Convention Center Authority, Washington, D.C., 10/08 at 100.00 AAA 26,436,619 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 4.750%, 10/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 2.9% 10,690 City of Jacksonville, Florida, Better Jacksonville Sales Tax Revenue 10/11 at 100.00 AAA 10,746,871 Bonds, Series 2001, 5.000%, 10/01/30 5,000 Orange County Health Facilities Authority, Florida, Hospital Revenue 10/09 at 101.00 A2 5,158,050 Bonds (Orlando Regional Healthcare System), Series 1999E, 6.000%, 10/01/26 8,250 School Board of Orange County, Florida, Certificates of 8/12 at 100.00 AAA 8,314,598 Participation, Series 2002A, 5.000%, 8/01/27 Orlando Utilities Commission, Florida, Water and Electric Subordinated Revenue Bonds, Series 1993B: 7,400 5.600%, 10/06/17 10/03 at 102.00 Aa2 7,625,922 9,600 5.250%, 10/01/23 10/03 at 101.00 Aa2 9,664,704 1,750 Orlando Utilities Commission, Florida, Water and Electric Revenue 4/03 at 101.00 Aa1 1,759,573 Bonds, Series 1993, 5.125%, 10/01/19 5,570 Orlando Utilities Commission, Florida, Water and Electric 12/02 at 100.00 Aa2 5,572,674 Subordinated Revenue Bonds, Series 1992A, 5.500%, 10/01/27 (Pre-refunded to 12/16/02) 8,000 Orlando Utilities Commission, Florida, Water and Electric 10/03 at 102.00 Aa2 8,095,440 Subordinated Revenue Refunding Bonds, Series 1993A, 5.250%, 10/01/23 10 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.9% $ 2,500 City of Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5/12 at 100.00 AAA $ 2,498,050 Series 2001A, 5.000%, 11/01/33 9,790 City of Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5/09 at 101.00 AAA 9,765,623 Series 1999A, 5.000%, 11/01/38 Coffee County Hospital Authority, Georgia, Revenue Anticipation Certificates (Coffee Regional Medical Center, Inc. Project), Series 1997A: 1,700 6.250%, 12/01/06 No Opt. Call N/R 1,744,217 21,100 6.750%, 12/01/26 12/06 at 102.00 N/R 20,826,755 2,250 Hospital Authority of the City of Royston, Georgia, Revenue 7/09 at 102.00 N/R 2,163,308 Anticipation Certificates (Ty Cobb Healthcare System, Inc. Project), Series 1999, 6.500%, 7/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 11.8% 2,060 Aurora, Illinois, Golf Course Revenue Bonds, Series 2000, 1/10 at 100.00 A+ 2,250,056 6.375%, 1/01/20 10,000 City of Chicago, Illinois, General Obligation Bonds, Series 2002A 7/12 at 100.00 AAA 10,579,800 Project and Refunding, 5.625%, 1/01/39 2,000 School Reform Board of Trustees of the Board of Education of 12/07 at 102.00 AAA 2,038,380 the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1997A, 5.250%, 12/01/22 School Reform Board of Trustees of the Board of Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1998A: 15,000 0.000%, 12/01/24 No Opt. Call AAA 4,482,600 47,500 0.000%, 12/01/28 No Opt. Call AAA 11,322,100 5,000 City of Chicago, Illinois, Adjustable-Rate Gas Supply Revenue Bonds, 3/03 at 101.50 Aa3 5,122,950 1985 Series A (Peoples Gas Project), 6.875%, 3/01/15 5,000 Chicago Housing Authority, Illinois, Capital Program Revenue 7/12 at 100.00 AA*** 5,198,350 Bonds, Series 2001, 5.375%, 7/01/18 1,125 Metropolitan Water Reclamation District of Greater Chicago, No Opt. Call Aaa 1,393,943 Illinois, General Obligation Capital Improvement Bonds, Series 1991, 7.000%, 1/01/11 3,575 City of Chicago, Illinois, Chicago O'Hare International Airport, 1/11 at 101.00 AAA 3,562,702 Second Lien Passenger Facility Charge Revenue Bonds, Series 2001C, 5.100%, 1/01/26 (Alternative Minimum Tax) 4,650 Illinois Development Finance Authority, Industrial Development 12/02 at 102.00 N/R 4,679,760 Revenue Bonds, Series 1992 (Plano Molding Company Project), 7.750%, 6/01/12 (Alternative Minimum Tax) 3,000 Illinois Development Finance Authority, Pollution Control Revenue No Opt. Call A- 3,009,480 Refunding Bonds, Series 1994 (Commonwealth Edison Company Project), 5.850%, 1/15/14 28,030 Illinois Development Finance Authority, Local Government Program No Opt. Call Aaa 12,242,663 Bonds, Elgin School District No. U46, Kane, Cook and DuPage Counties, Series 2002, 0.000%, 1/01/19 Illinois Development Finance Authority, Revenue Bonds (Presbyterian Home Lake Forest Place Project), Series 1996B: 6,495 6.400%, 9/01/31 (Pre-refunded to 9/01/06) 9/06 at 102.00 AAA 7,565,831 990 6.400%, 9/01/31 9/06 at 102.00 AAA 1,092,663 1,800 Illinois Development Finance Authority, Local Government Program No Opt. Call Aaa 782,838 Revenue Bonds, Series 2000 (Rockford School District Number 205 Project), 0.000%, 2/01/19 3,180 Illinois Development Finance Authority, Revenue Bonds, Chicago 12/21 at 100.00 BBB 3,118,531 Charter School Foundation Project, Series 2002A, 6.250%, 12/01/32 8,000 Illinois Development Finance Authority, Revenue Refunding Bonds, 9/11 at 100.00 AAA 8,036,640 Illinois Wesleyan University, Series 2001, 5.125%, 9/01/35 14,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 10/03 at 102.00 A-*** 14,755,720 Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19 (Pre-refunded to 10/01/03) 7,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 11/03 at 102.00 AAA 7,064,190 Series 1993 (Swedish American Hospital), 5.375%, 11/15/23 18,015 Illinois Health Facilities Authority, Revenue Refunding Bonds, 11/03 at 102.00 AAA 18,142,546 Series 1993 (Rush-Presbyterian-St. Luke's Medical Center Obligated Group), 5.250%, 11/15/20 4,350 Illinois Health Facilities Authority, Revenue Bond, Series 1992 No Opt. Call A*** 5,408,660 (South Suburban Hospital), 7.000%, 2/15/18 8,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1997 8/07 at 101.00 AAA 8,028,640 (Sherman Health Systems), 5.250%, 8/01/22 11 Nuveen Municipal Value Fund, Inc. (NUV) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 15,000 Illinois Health Facilities Authority, Revenue Bonds, Series 2000 5/10 at 101.00 A3 $ 15,932,100 (Condell Medical Center), 6.500%, 5/15/30 15,000 Illinois Health Facilities Authority, Revenue Bonds, Series 2001B 2/11 at 101.00 AAA 15,145,950 (Edward Hospital ObligationGroup), 5.250%, 2/15/34 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Bonds, Series 1992A: 18,955 0.000%, 6/15/17 No Opt. Call AAA 9,246,249 12,300 0.000%, 6/15/18 No Opt. Call AAA 5,617,533 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Bonds, Series 1994B: 7,250 0.000%, 6/15/18 No Opt. Call AAA 3,311,148 3,385 0.000%, 6/15/21 No Opt. Call AAA 1,259,491 9,900 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place No Opt. Call AAA 2,305,116 Expansion Project Bonds, Series 1994B, 0.000%, 6/15/29 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Bonds, Series 2002A: 21,000 0.000%, 12/15/35 No Opt. Call AAA 3,370,920 20,000 0.000%, 6/15/36 No Opt. Call AAA 3,120,800 2,150 5.250%, 6/15/42 6/12 at 101.00 AAA 2,192,871 16,550 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place No Opt. Call AAA 5,985,473 Expansion Project Refunding Bonds, Series 1996A, 0.000%, 12/15/21 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Bonds, Series 2002A: 10,000 0.000%, 6/15/24 6/22 at 101.00 AAA 4,638,900 21,000 0.000%, 6/15/34 No Opt. Call AAA 3,671,010 11,650 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/04 at 102.00 AAA 12,690,578 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1994A, 6.250%, 6/01/24 (Pre-refunded to 6/01/04) 1,325 Tri-City Regional Port District, Illinois, Port and Terminal No Opt. Call N/R 1,394,841 Facilities Revenue Bonds (1998 Refunding and Dock #2 Enhancement Project), Series 1998B, 5.875%, 7/01/08 (Alternative Minimum Tax) 2,295 School District Number 161, Will County, Illinois, Capital No Opt. Call Aaa 1,070,801 Appreciation School Bonds, Series 1999, 0.000%, 1/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.2% 10,000 Indiana Bond Bank, State Revolving Fund Program Bonds, 2/13 at 101.00 AAA 10,724,000 Series 2001A, 5.375%, 2/01/19 10,000 Indiana Health Facility Financing Authority, Hospital Revenue 11/07 at 102.00 AAA 10,172,600 Bonds, Series 1997A (Sisters of St. Francis Health Services, Inc. Project), 5.375%, 11/01/27 17,105 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 2/07 at 102.00 AA 17,741,306 Series 1996A (Clarian Health Partners, Inc.), 6.000%, 2/15/21 4,840 Indianapolis Airport Authority, Indiana, Special Facilities Revenue 7/04 at 102.00 BBB 5,159,295 Bonds, Series 1994 (Federal Express Corporation Project), 7.100%, 1/15/17 (Alternative Minimum Tax) Indianapolis Local Public Improvement Bond Bank, Indiana, Revenue Bonds, Series 1999E: 12,500 0.000%, 2/01/21 No Opt. Call AAA 4,743,875 14,425 0.000%, 2/01/27 No Opt. Call AAA 3,823,635 9,155 City of South Bend, Indiana, Multifamily Housing Revenue Refunding 11/02 at 102.00 N/R 7,032,963 Bonds, The Pointe at St. Joseph Project, Issue of 1994, Series A, 6.200%, 12/15/18 500 City of South Bend, Indiana, Multifamily Housing Revenue Refunding 11/02 at 102.00 N/R 394,670 Bonds, The Pointe at St. Joseph Project, Issue of 1994, Series B, 6.450%, 12/15/18 (Alternative Minimum Tax) 3,169 City of South Bend, Indiana, Multifamily Housing Revenue Refunding 12/03 at 100.00 N/R 1,724,684 Bonds, The Pointe at St. Joseph Project, Issue of 1994, Series C, 3.850%, 12/15/18 12 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.9% $ 3,500 Iowa Higher Education Loan Authority, Private College Facility 10/12 at 100.00 A $ 3,576,300 Revenue Bonds, Wartburg College Project, Series 2002, 5.500%, 10/01/33 6,410 Iowa Housing Finance Authority, Single Family Housing Bonds, No Opt. Call AAA 1,406,610 1984 Issue A, 0.000%, 9/01/16 36,500 Tobacco Settlement Authority, Iowa, Tobacco Settlement 6/11 at 101.00 A1 31,873,990 Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.4% 6,650 City of Newton, Kansas, Hospital Revenue Bonds (Newton Healthcare 11/04 at 102.00 N/R*** 7,528,199 Corporation), Series 1994A, 7.750%, 11/15/24 (Pre-refunded to 11/15/04) - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.4% 8,135 Greater Kentucky Housing Assistance Corporation, Mortgage 1/03 at 100.00 AAA 8,145,250 Revenue Refunding Bonds, Series 1997A (FHA-Insured Mortgage Loans - Section 8 Assisted Projects), 6.100%, 1/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 2.0% 17,330 Louisiana Public Facilities Authority, Hospital Revenue Refunding 11/02 at 100.00 AAA 21,238,608 Bonds (Southern Baptist Hospitals, Inc. Project), Series 1986, 8.000%, 5/15/12 18,880 Tobacco Settlement Financing Corporation, Louisiana, Asset-Backed 5/11 at 101.00 A1 17,106,413 Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.3% 14,365 Maine State Housing Authority, Mortgage Purchase Bonds, 2/04 at 102.00 AA+ 14,756,159 1994 Series A, 5.550%, 11/15/14 10,275 Maine State Housing Authority, Mortgage Purchase Bonds, 5/05 at 102.00 AA+ 10,722,271 1995 Series A-2, 6.650%, 11/15/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 0.8% 10,900 Community Development Administration of Maryland, Residential 3/07 at 101.50 Aa2 11,360,416 Revenue Bonds, Department of Housing and Community Development, Series 1997B, 5.875%, 9/01/25 (Alternative Minimum Tax) 3,500 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 3,527,510 Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.4% 10,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 9,999,300 Revenue Bonds, Series 2002A Refunding, 5.000%, 7/01/32 (WI, settling 11/14/02) Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue Bonds, 1987 Series A: 110 8.750%, 7/01/18 (Pre-refunded to 1/01/03) 1/03 at 100.00 Aaa 111,288 100 8.750%, 7/01/18 (Pre-refunded to 7/01/03) 7/03 at 100.00 Aaa 104,679 215 8.750%, 7/01/18 (Pre-refunded to 1/01/04) 1/04 at 100.00 Aaa 232,258 220 8.750%, 7/01/18 (Pre-refunded to 7/01/04) 7/04 at 100.00 Aaa 244,926 110 8.750%, 7/01/18 (Pre-refunded to 7/01/05) 7/05 at 100.00 Aaa 128,853 105 8.750%, 7/01/18 (Pre-refunded to 7/01/05) 7/05 at 100.00 Aaa 119,818 16,400 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 16,358,836 Revenue Bonds, 1997 Series A (Senior), 5.000%, 1/01/37 8,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 8,033,840 Revenue Bonds, 1997 Series B (Subordinate), 5.125%, 1/01/37 5,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 101.00 AAA 4,962,400 Revenue Bonds, 1999 Series A (Subordinate), 5.000%, 1/01/39 6,000 Massachusetts Water Pollution Abatement Trust, Pool Program 8/10 at 101.00 AAA 6,277,080 Bonds, Series 6, 5.500%, 8/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 5.8% 6,000 Economic Development Corporation of the City of Dearborn, 8/04 at 102.00 AAA 6,049,680 Michigan, Hospital Revenue Refunding Bonds (Oakwood Obligated Group), Series 1994A, 5.250%, 8/15/21 9,650 City of Detroit Local Development Finance Authority, Michigan, 5/09 at 101.00 BB- 7,764,487 Tax Increment Bonds, Series 1998A, 5.500%, 5/01/21 13 Nuveen Municipal Value Fund, Inc. (NUV) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 1,400 City of Detroit, Michigan, Sewage Disposal System Revenue 7/05 at 101.00 AAA $ 1,483,944 Refunding Bonds, Series 1995-B, 5.250%, 7/01/15 3,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 3,085,530 Revenue Bonds, Detroit Academy of Arts and Sciences, Series 2001, 7.900%, 10/01/21 Michigan State Hospital Finance Authority, Revenue and Refunding Bonds (Detroit Medical Center Obligated Group), Series 1993A: 1,000 6.250%, 8/15/13 8/03 at 102.00 BBB- 1,008,210 12,925 6.500%, 8/15/18 8/03 at 102.00 BBB- 12,988,203 37,055 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101.00 BBB- 30,935,737 (Detroit Medical Center Obligated Group), Series 1998A, 5.250%, 8/15/28 4,320 Michigan State Housing Development Authority, Rental Housing 4/03 at 102.00 AAA 4,417,632 Revenue Bonds, 1993 Series A, 5.875%, 10/01/17 15,750 Michigan State Housing Development Authority, Rental Housing 6/05 at 102.00 AAA 16,516,395 Revenue Bonds, 1995 Series B, 6.150%, 10/01/15 25,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/05 at 102.00 AAA 28,006,500 Bonds (Detroit Edison Company Pollution Control Bonds Project), Collateralized Series 1995AA, 6.400%, 9/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.2% 3,435 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102.00 AAA 3,599,743 1995 Series D, 5.900%, 8/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.7% 13,000 Mississippi Hospital Equipment and Facilities Authority, Revenue 5/03 at 102.00 AAA 13,479,310 Refunding and Improvement Bonds (North Mississippi Health Services), 1993 Series 1, 5.750%, 5/15/16 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.3% Industrial Development Authority of the City of West Plains, Missouri, Hospital Facilities Revenue Bonds (Ozark Medical Center), Series 1997: 1,750 5.500%, 11/15/12 11/07 at 101.00 BB+ 1,677,813 1,000 5.600%, 11/15/17 11/07 at 101.00 BB+ 918,370 3,075 Industrial Development Authority of the City of West Plains, 11/09 at 101.00 BB+ 3,088,868 Missouri, Hospital Facilities Revenue Bonds (Ozark Medical Center), Series 1999, 6.750%, 11/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 1.1% Director of the State of Nevada, Department of Business and Industry, Las Vegas Monorail Project Revenue Bonds, 1st Tier Series 2000: 7,500 0.000%, 1/01/24 No Opt. Call AAA 2,346,825 18,800 5.375%, 1/01/40 1/10 at 100.00 AAA 19,224,504 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 1.1% 20,785 Business Finance Authority of the State of New Hampshire, 10/03 at 102.00 A3 20,874,791 Pollution Control Refunding Revenue Bonds (United Illuminating Company Project), 1993 Series A, 5.875%, 10/01/33 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.2% 25,625 New Jersey Economic Development Authority, Special Facility 9/09 at 101.00 B+ 13,006,738 Revenue Bonds (Continental Airlines, Inc. Project), Series 1999, 6.250%, 9/15/29 (Alternative Minimum Tax) 10,250 New Jersey Economic Development Authority, Special Facilities 11/10 at 101.00 B+ 5,785,100 Revenue Bonds (Continental Airlines, Inc. Project), Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 5,000 New Jersey Health Care Facilities Financing Authority, 7/10 at 101.00 BBB- 5,419,400 Trinitas Hospital Obligated Group Issue, Series 2000, 7.500%, 7/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 10.1% 5,360 Village of East Rochester Housing Authority, New York, FHA-Insured 8/07 at 102.00 AAA 5,730,054 Mortgage Revenue Bonds (St. John's Meadows Project), Series 1997A, 5.600%, 8/01/17 Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 1998A: 11,000 5.250%, 12/01/26 6/08 at 101.00 AAA 11,230,450 32,140 5.500%, 12/01/29 6/03 at 101.00 A- 32,518,931 14 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 15,500 Long Island Power Authority, New York, Electric System General 9/11 at 100.00 A- $ 15,771,405 Revenue Bonds, Series 2001A, 5.375%, 9/01/25 5,000 City of New York, New York, General Obligation Bonds, 8/03 at 101.50 A 5,194,050 Fiscal 1994 Series D, 5.750%, 8/15/10 5,000 City of New York, New York, General Obligation Bonds, 2/06 at 101.50 A 5,355,900 Fiscal 1996 Series G, 5.750%, 2/01/14 10,000 City of New York, New York, General Obligation Bonds, 8/06 at 101.50 A 10,864,300 Fiscal 1997 Series E, 6.000%, 8/01/16 13,395 City of New York, New York, General Obligation Bonds, 8/07 at 101.00 A 14,230,714 Fiscal 1998 Series D, 5.500%, 8/01/10 39,610 City of New York, New York, General Obligation Bonds, 10/07 at 101.00 A 41,807,959 Fiscal 1997 Series G, 6.000%, 10/15/26 15,000 New York City Municipal Water Finance Authority, New York, Water 6/06 at 101.00 AAA 16,321,200 and Sewer System Revenue Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 10,000 New York City Industrial Development Agency, New York, 8/12 at 101.00 BB- 4,399,900 Special Facility Revenue Bonds, American Airlines, Inc. - John F. Kennedy International Airport Project, Series 2002B, 8.500%, 8/01/28 (Alternative Minimum Tax) 5,200 Dormitory Authority of the State of New York, Court Facilities 5/10 at 101.00 A 5,587,816 Lease Revenue Bonds (City of New York Issue), Series 1999, 6.000%, 5/15/39 7,000 Dormitory Authority of the State of New York, Mental Health 8/09 at 101.00 AA- 7,026,320 Services Facilities Improvement Revenue Bonds, Series 1999D, 5.250%, 2/15/29 2,000 New York State Environmental Facilities Corporation, State Clean 6/12 at 100.00 AAA 2,009,760 Water and Drinking Water Revolving Funds Revenue Bonds, Series 2002B (New York City Municipal Water Finance Authority Projects), Second Resolution Bonds, 5.000%, 6/15/27 8,855 New York State Medical Care Facilities Finance Agency, 8/03 at 102.00 AAA 9,263,747 St. Luke's-Roosevelt Hospital Center, FHA-Insured Mortgage Revenue Bonds, 1993 Series A, 5.600%, 8/15/13 8,500 Power Authority of the State of New York, Series 2000A, 11/10 at 100.00 Aa2 8,648,070 Revenue Bonds, 5.250%, 11/15/40 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.5% 2,600 City of Charlotte, North Carolina, Refunding Certificates 12/03 at 102.00 AAA 2,694,146 of Participation (Convention Facility Project), Series 1993C, 5.250%, 12/01/20 13,115 North Carolina Eastern Municipal Power Agency, Power System 9/03 at 102.50 BBB 13,504,122 Revenue Bonds, Series 1985-G, 5.750%, 12/01/16 11,610 North Carolina Eastern Municipal Power Agency, Power System 1/03 at 102.00 BBB 11,888,524 Revenue Bonds, Series 1993-D, 5.875%, 1/01/14 1,000 North Carolina Eastern Municipal Power Agency, Power System 1/07 at 102.00 AAA 1,112,190 Revenue Bonds, Refunding Series 1996A, 5.700%, 1/01/13 14,310 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/03 at 100.00 BBB+ 14,358,511 Revenue Bonds, Series 1992, 5.750%, 1/01/15 13,140 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/03 at 100.00 BBB+ 13,143,416 Revenue Bonds, Series 1985B, 6.000%, 1/01/20 10,000 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/10 at 101.00 BBB+ 10,680,100 Revenue Bonds, Series 1999B, 6.500%, 1/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.4% 5,955 Pennsylvania Convention Center Authority, Refunding Revenue 9/04 at 102.00 BBB 6,385,963 Bonds, 1994 Series A, 6.750%, 9/01/19 11,175 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/03 at 102.00 AA+ 11,436,272 Revenue Bonds, Series 36, 5.450%, 10/01/14 7,670 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102.00 AA+ 8,000,270 Revenue Bonds, Series 1996-51, 6.375%, 4/01/28 (Alternative Minimum Tax) 18,850 Pennsylvania Intergovernmental Cooperation Authority, Special Tax 6/03 at 100.00 AAA 18,853,016 Revenue Refunding Bonds (City of Philadelphia Funding Program), Series 1993A, 5.000%, 6/15/22 4,500 Pennsylvania Higher Educational Facilities Authority, University of 7/08 at 100.00 AA 4,264,515 Pennsylvania Revenue Bonds, Series 1998, 4.500%, 7/15/21 16,180 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue 6/03 at 102.00 AAA 16,778,013 Bonds, Series 1993, 5.500%, 6/15/14 15 Nuveen Municipal Value Fund, Inc. (NUV) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.8% $ 10,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA $ 10,685,800 Bonds, 2000 Series A, 5.500%, 10/01/40 5,500 Puerto Rico Industrial, Tourist, Educational, Medical and 6/10 at 101.00 Baa2 5,705,205 Environmental Control Facilities Financing Authority, Cogeneration Facility Revenue Bonds, 2000 Series A, 6.625%, 6/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.3% 6,250 Rhode Island Health and Educational Building Corporation, Hospital 5/07 at 102.00 AAA 6,299,688 Financing Revenue Bonds, Lifespan Obligated Group Issue, Series 1996, 5.250%, 5/15/26 20,000 Tobacco Settlement Financing Corporation of Rhode Island, 6/12 at 100.00 A1 19,140,400 Asset-Backed Bonds, Series 2002A, 6.250%, 6/01/42 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.0% 13,000 Piedmont Municipal Power Agency, South Carolina, Electric 1/03 at 100.00 BBB- 11,266,320 Revenue Bonds, 1986 Refunding Series, 5.000%, 1/01/25 8,000 South Carolina Jobs-Economic Development Authority, Hospital 12/10 at 102.00 BBB 8,765,840 Revenue Bonds, Palmetto Health Alliance, Series 2000A, 7.375%, 12/15/21 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 4.7% 13,040 Alliance Airport Authority, Inc., Texas, Special Facilities Revenue 12/02 at 100.00 BB- 3,520,800 Bonds, Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29 (Alternative Minimum Tax) 24,265 City of Austin, Texas, Combined Utility Systems Revenue Refunding No Opt. Call AAA 34,972,902 Bonds, Series 1992A, 12.500%, 11/15/07 1,500 Corpus Christi Housing Finance Corporation, Texas, Single Family 1/03 at 102.00 AAA 1,533,255 Mortgage Senior Revenue Refunding Bonds, Series 1991A, 7.700%, 7/01/11 2,700 Harris County-Houston Sports Authority, Texas, Senior Lien Revenue 11/11 at 100.00 AAA 2,755,431 Bonds, Series 2001G, 5.250%, 11/15/30 10,045 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/10 at 100.00 AAA 10,886,168 Bonds, Series 2000A, 5.875%, 7/01/16 (Alternative Minimum Tax) Irving Independent School District, Texas, Unlimited Tax School Building Bonds, Series 1997: 5,685 0.000%, 2/15/10 No Opt. Call AAA 4,253,403 3,470 0.000%, 2/15/11 No Opt. Call AAA 2,464,672 22,060 Leander Independent School District, Williamson and Travis 8/09 at 31.45 AAA 5,026,812 Counties, Texas, Unlimited Tax School Building and Refunding Bonds, Series 2000, 0.000%, 8/15/27 14,625 Matagorda County Navigation District Number One, Texas, 4/03 at 100.00 AAA 14,667,266 Collateralized Revenue Refunding Bonds (Houston Lighting & Power Company Project), Series 1995, 5.800%, 10/15/15 5,000 Industrial Development Corporation of Port of Corpus Christi, Texas, 4/08 at 102.00 BBB 4,822,400 Revenue Refunding Bonds (Valero Refining and Marketing Company Project), 5.400%, 4/01/18 6,050 Weslaco Health Facilities Development Corporation, Texas, Hospital 6/04 at 102.00 AAA 6,112,436 Revenue Bonds (Knapp Medical Center Project), Series 1994, 5.375%, 6/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 3.5% 12,000 Intermountain Power Agency, Utah, Power Revenue Refunding 7/06 at 102.00 A+ 11,948,760 Bonds, 1996 Series D, 5.000%, 7/01/21 5,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/07 at 102.00 AAA 5,523,050 Bonds, 1997 Series B, 5.750%, 7/01/19 Intermountain Power Agency, Utah, Power Supply Revenue Refunding Bonds, 1993 Series A: 16,080 5.500%, 7/01/20 7/03 at 102.00 A+*** 16,759,541 21,045 5.500%, 7/01/20 7/03 at 102.00 A+ 21,321,321 8,280 5.000%, 7/01/23 7/03 at 100.00 A+ 8,221,460 4,760 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 101.50 AAA 4,738,866 1998 Series G-2 (Class I), 5.200%, 7/01/30 (Alternative Minimum Tax) 16 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.2% $ 3,245 Virginia Housing Development Authority, Multifamily Housing 1/08 at 102.00 AA+ $ 3,389,824 Bonds, Series 1997E, 5.600%, 11/01/17 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.1% 12,500 Energy Northwest, Washington, Columbia Generation Station 7/12 at 100.00 AAA 14,065,375 Electric Revenue Refunding Bonds, Series 2002B, 6.000%, 7/01/18 12,700 Tobacco Settlement Authority, Washington, Tobacco Settlement 6/13 at 100.00 A1 12,520,803 Asset-Backed Revenue Bonds, Series 2002, 6.625%, 6/01/32 (WI, settling 11/05/02) 9,450 Washington Public Power Supply System, Nuclear Project No. 1 7/03 at 102.00 AAA 9,833,859 Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds, Series 1993C: 27,000 5.400%, 7/01/12 7/03 at 102.00 Aa1 27,722,520 2,970 5.375%, 7/01/15 7/03 at 102.00 Aa1 3,037,805 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue Bonds, Series 1993A: 8,495 5.750%, 7/01/12 (Pre-refunded to 7/01/03) 7/03 at 102.00 Aa1*** 8,894,860 2,895 5.750%, 7/01/12 7/03 at 102.00 Aa1 2,981,589 17,700 Washington Public Power Supply System, Nuclear Project No. 2 Refunding Revenue Bonds, Series 1994A, 7/04 at 102.00 Aa1 18,460,038 5.375%, 7/01/10 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds, Series 1993C: 81,000 5.400%, 7/01/12 7/03 at 102.00 Aa1 83,167,560 15,850 5.375%, 7/01/15 7/03 at 102.00 Aa1 16,211,856 8,200 Washington Public Power Supply System, Nuclear Project No. 3 No Opt. Call Aa1 4,752,720 Refunding Revenue Bonds, Series 1989B, 0.000%, 7/01/14 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds, Series 1993B: 5,895 5.625%, 7/01/12 7/03 at 102.00 Aa1 6,066,545 9,000 5.600%, 7/01/17 7/03 at 102.00 AAA 9,343,890 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.3% 6,345 West Virginia Housing Development Fund, Housing Finance Bonds, 11/06 at 102.00 AAA 6,650,195 Series 1997-A, 6.050%, 5/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.5% 21,385 Wisconsin Public Power Incorporated System, Power Supply System 7/03 at 102.00 AAA 21,597,780 Revenue Bonds, Series 1993A, 5.250%, 7/01/21 8,370 Wisconsin Housing and Economic Development Authority, Home 9/08 at 101.50 AA 8,488,933 Ownership Revenue Bonds, 1998 Series B, 5.600%, 3/01/28 (Alternative Minimum Tax) 17,020 Wisconsin Health and Educational Facilities Authority (Sisters 8/03 at 102.00 AAA 17,516,130 of the Sorrowful Mother - Ministry Corporation), Series 1993D, 5.500%, 8/15/19 1,750 Wisconsin Health and Educational Facilities Authority (Sisters 8/03 at 102.00 AAA 1,799,560 of the Sorrowful Mother- Ministry Corporation), Series 1993C, 5.400%, 8/15/13 - ------------------------------------------------------------------------------------------------------------------------------------ $ 2,111,904 Total Long-Term Investments (cost $1,788,971,727) - 96.6% 1,879,944,228 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.4% 66,463,151 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $1,946,407,379 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 17
Nuveen Municipal Income Fund, Inc. (NMI) Portfolio of INVESTMENTS October 31, 2002
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.8% $ 690 Phenix City, Alabama, Industrial Development Board Environmental 5/12 at 100.00 BBB $ 674,213 Improvement Revenue Bonds, MeadWestvaco Project, Series 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 7.1% 5,530 Adelanto School District, San Bernardino County, California, No Opt. Call AAA 1,961,436 1997 Series A, General Obligation Bonds, 0.000%, 9/01/22 Brea Olinda Unified School District, California, General Obligation Bonds (Election of 1999), Series 1999A: 2,000 0.000%, 8/01/21 No Opt. Call AAA 757,580 2,070 0.000%, 8/01/22 No Opt. Call AAA 731,766 2,120 Brea Olinda Unified School District, California, General Obligation No Opt. Call AAA 706,702 Bonds (Election of 1999), Series 1999A, 0.000%, 8/01/23 2,283 California Pollution Control Financing Authority, Solid Waste 7/07 at 102.00 N/R 324,871 Disposal Revenue Bonds (CanFibre of Riverside Project), Tax-Exempt Series 1997A, 9.000%, 7/01/19 (Alternative Minimum Tax)# 1,150 Foothill/Eastern Transportation Corridor Agency, California, 1/07 at 100.00 AAA 1,310,483 Toll Road Revenue Bonds, Series 1995A, 6.000%, 1/01/34 (Pre-refunded to 1/01/07) 500 Regional Airports Improvement Corporation, California, Los Angeles 12/12 at 102.00 BB- 325,000 International Airport Facilities (American Airlines, Inc. Terminal 4 Project), Sublease Revenue Bonds, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.7% 500 Colorado Educational and Cultural Facilities Authority, Charter 8/11 at 100.00 Ba2 503,585 School Revenue Bonds, Peak to Peak Charter School Project, Boulder Valley, School District No. RE-2, Series 2001, 7.500%, 8/15/21 1,000 Colorado Educational and Cultural Facilities Authority, Charter 6/11 at 100.00 Ba1 998,720 School Revenue Bonds, Frontier Academy Project, Weld County, School District No. 6, Series 2001, 7.375%, 6/01/31 920 Colorado Educational and Cultural Facilities Authority, Charter 7/12 at 100.00 BBB 898,619 School Revenue Bonds, DCS Montessori Project, Douglas County, School District RE-1, Series 2002A, 6.000%, 7/15/22 1,590 City and County of Denver, Colorado, Airport System Revenue 11/02 at 102.00 A 1,625,075 Bonds, Series 1992B, 7.250%, 11/15/23 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 6.1% 1,480 Capitol Region Education Council, Connecticut, Revenue Bonds, 10/05 at 102.00 BBB 1,572,929 Series 1995, 6.750%, 10/15/15 2,000 State of Connecticut Health and Educational Facilities Authority, 7/06 at 102.00 BBB- 2,062,420 Revenue Bonds, University of New Haven Issue, Series D, 6.700%, 7/01/26 500 Eastern Connecticut Resource Recovery Authority, Solid Waste 1/03 at 102.00 BBB 490,970 Revenue Bonds (Wheelabrator Lisbon Project), Series 1993A, 5.500%, 1/01/14 (Alternative Minimum Tax) 980 Housing Authority of the City of Willimantic, Connecticut, 10/05 at 105.00 AAA 1,074,521 Multifamily Housing Revenue Bonds, Series 1995A (GNMA Collateralized Mortgage Loan - Village Heights Apartments Project), 8.000%, 10/20/30 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.0% 1,580 Dade County Industrial Development Authority, Florida, 6/05 at 102.00 N/R 1,607,129 Industrial Development Revenue Bonds, Series 1995 (Miami Cerebral Palsy Residential Services, Inc. Project), 8.000%, 6/01/22 2,000 Martin County Industrial Development Authority, Florida, Industrial 12/04 at 102.00 BBB- 2,059,680 Development Revenue Bonds, Series 1994A (Indiantown Cogeneration Project), 7.875%, 12/15/25 (Alternative Minimum Tax) 600 Martin County Industrial Development Authority, Florida, 12/04 at 102.00 BBB- 622,476 Revenue Refunding Bonds, Series B (Indiantown Cogeneration Project), 8.050%, 12/15/25 (Alternative Minimum Tax) 18 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 10.1% $ 4,160 City of Chicago, Illinois, Tax Increment Allocation Bonds 1/09 at 100.00 N/R $ 4,122,976 (Irving/Cicero Redevelopment Project), Series 1998, 7.000%, 1/01/14 1,000 Illinois Development Finance Authority, Chicago Charter School 12/21 at 100.00 BBB 980,670 Foundation Project, Series 2002A, 6.250%, 12/01/32 1,000 Illinois Educational Facilities Authority, Student Housing Revenue 5/12 at 101.00 Baa2 999,320 Bonds, Educational Advancement Foundation Fund, University Center Project, Series 2002, 6.250%, 5/01/34 1,915 Joliet Regional Port District Airport Facilities, Illinois, Revenue 7/07 at 103.00 N/R 1,735,526 Bonds, Lewis University Airport, Series 1997A, 7.250%, 7/01/18 (Alternative Minimum Tax) 2,000 Robbins, Illinois, Resource Recovery Revenue Bonds, Restructuring No Opt. Call N/R 882,500 Project (Guaranteed by Foster Wheeler), Series 1999C, 7.250%, 10/15/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 9.2% 2,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/12 at 101.00 Baa1 2,007,580 Bonds, Series 2002, Riverview Hospital Project, 6.125%, 8/01/31 6,300 Whitley County, Indiana, Solid Waste and Sewage Disposal Revenue 11/10 at 102.00 N/R 5,895,981 Bonds (Steel Dynamics, Inc. Project), Series 1998, 7.250%, 11/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 3.1% 3,000 Tobacco Settlement Authority, Iowa, Tobacco Settlement 6/11 at 101.00 A1 2,655,780 Asset-Backed Revenue Bonds, Series 2001B, 5.300%, 6/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.3% Louisiana Public Facilities Authority, Extended Care Facilities Revenue Bonds (Comm-Care Corporation Project), Series 1994: 285 11.000%, 2/01/04 No Opt. Call BBB 296,001 2,000 11.000%, 2/01/14 No Opt. Call BBB 2,536,300 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 3.6% 2,000 Anne Arundel County, Maryland, Multifamily Housing Revenue No Opt. Call BBB- 2,054,320 Bonds (Twin Coves Apartments Project), Series 1994, 7.450%, 12/01/24 (Alternative Minimum Tax) (Mandatory put 12/01/03) 1,000 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 1,007,860 Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.5% 500 Massachusetts Development Finance Agency, Resource Recovery 12/09 at 102.00 BBB 494,670 Revenue Bonds (Ogden Haverhill Project), Series 1999A, 6.700%, 12/01/14 (Alternative Minimum Tax) 435 Massachusetts Health and Educational Facilities Authority, 1/03 at 100.00 AAA 444,570 Revenue Refunding Bonds, Beverly Hospital Issue, Series D, 7.300%, 7/01/13 1,000 Massachusetts Industrial Finance Agency, Resource Recovery No Opt. Call BBB 974,030 Revenue Refunding Bonds (Ogden Haverhill Project), Series 1992A Remarketing, 4.850%, 12/01/05 270 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 245,897 Revenue Refunding Bonds (Ogden Haverhill Project), Series 1998A, 5.450%, 12/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 4.1% 1,000 Delta County Economic Development Corporation, Michigan, 4/12 at 100.00 BBB 988,330 Environmental Improvement Revenue Refunding Bonds, MeadWestvaco Corporation-Escanaba Paper Company Project, Series 2002B, 6.450%, 4/15/23 (Alternative Minimum Tax) 2,150 Michigan State Hospital Finance Authority, Hospital Revenue 1/06 at 102.00 Baa3 2,167,458 Bonds, Sinai Hospital, Refunding Series 1995, 6.625%, 1/01/16 500 Wayne County, Michigan, Special Airport Facilities Revenue Bonds, 12/05 at 102.00 N/R 366,195 Northwest Airlines, Inc., Refunding Series 1995, 6.750%, 12/01/15 19 Nuveen Municipal Income Fund, Inc. (NMI) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.0% $ 965 Housing and Redevelopment Authority of the City of St. Paul, 11/03 at 102.00 Ba2 $ 835,922 Minnesota, Hospital Facility Revenue Bonds, HealthEast Project, Series 1993A Refunding, 6.625%, 11/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.7% 1,500 Montana State Board of Investments, Exempt Facility Revenue 7/10 at 101.00 Ba3 1,466,535 Bonds, Series 2000, Stillwater Mining Company Project, 8.000%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.8% 700 New Hampshire Higher Educational and Health Facilities Authority, 1/07 at 102.00 BBB- 705,054 Revenue Bonds, Series 1997, New Hampshire College Project, 6.375%, 1/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 11.2% 1,455 Cattaraugus County Industrial Development Agency, New York, No Opt. Call N/R 1,317,852 Tax-Exempt Industrial Development Revenue Bonds (Laidlaw Energy & Environmental, Inc. Project), Series 1999A, 8.500%, 7/01/21 (Alternative Minimum Tax) 5,000 Erie County Industrial Development Agency, New York, Solid Waste 12/10 at 103.00 N/R 1,118,750 Disposal Facility Revenue Bonds (1998 CanFibre of Lackawanna Project), 8.875%, 12/01/13 (Alternative Minimum Tax)## 4,190 Yates County Industrial Development Agency, New York, Civic 2/11 at 101.00 AAA 4,493,524 Facility Revenue Bonds (Soldiers and Sailors Memorial Hospital - FHA Insured Mortgage), Series 2000A, 6.000%, 2/01/41 2,500 New York State Medical Care Facilities Finance Agency, Brookdale 2/05 at 102.00 AAA 2,815,450 Hospital Medical Center Secured Hospital Revenue Bonds, 1995 Series A, 6.800%, 8/15/12 (Pre-refunded to 2/15/05) - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.0% 2,600 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/09 at 102.00 N/R 2,579,044 Bonds, Bay Shore Power Project, Convertible Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 7.1% 1,800 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 B+ 1,970,820 Health System Revenue Bonds, Series 2000B, West Penn Allegheny Health System, 9.250%, 11/15/30 1,455 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 1,529,627 Resource Recovery Revenue Refunding Bonds, 2000 Series (Panther Creek Partners Project), 6.650%, 5/01/10 (Alternative Minimum Tax) 1,000 Pennsylvania Convention Center Authority, Refunding Revenue 9/04 at 102.00 BBB 1,072,370 Bonds, 1994 Series A, 6.750%, 9/01/19 1,500 Pennsylvania Economic Development Financing Authority, Resource 12/04 at 102.00 BBB- 1,560,780 Recovery Revenue Bonds, Colver Project, Series 1994D, 7.150%, 12/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 0.6% 500 Tobacco Settlement Financing Corporation of Rhode Island, 6/12 at 100.00 A1 478,510 Asset-Backed Bonds, Series 2002A, 6.250%, 6/01/42 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.2% 1,000 Tobacco Settlement Revenue Management Authority, South Carolina, 5/11 at 101.00 A1 988,080 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%, 5/15/22 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.4% 1,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa2 1,021,380 Tennessee, Hospital Facilities Revenue Bonds, Baptist Health System of East Tennessee, Series 2002, 6.375%, 4/15/22 1,000 Shelby County Health, Educational, and Housing Facilities Board, 9/12 at 100.00 BBB+ 1,045,320 Tennessee, Hospital Revenue Bonds, Methodist Healthcare, Series 2002, 6.500%, 9/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 6.6% 1,055 Alliance Airport Authority, Inc., Texas, Special Facilities Revenue 12/02 at 100.00 BB- 284,850 Bonds, Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29 (Alternative Minimum Tax) 2,000 Gulf Coast Waste Disposal Authority, Texas, Sewage and 4/12 at 100.00 A+ 2,090,060 Solid Waste Disposal Revenue Bonds, Anheuser Busch Company Project, Series 2002, 5.900%, 4/01/36 (Alternative Minimum Tax) 460 Hidalgo County Housing Finance Corporation, Texas, Single Family 4/04 at 102.00 Aaa 475,157 Mortgage Revenue Bonds (GNMA and FNMA Collateralized), Series 1994A, 7.000%, 10/01/27 (Alternative Minimum Tax) 20 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 2,000 Weslaco Health Facilities Development Authority, Texas, Hospital 6/12 at 100.00 BBB+ $ 2,030,240 Revenue Bonds, Knapp Medical Center Project, Series 2002, 6.250%, 6/01/25 West Independent School District, McLennan and Hill Counties, Texas, Unlimited Tax School Building and Refunding Bonds, Series 1998: 1,000 0.000%, 8/15/25 8/13 at 51.84 AAA 266,370 1,000 0.000%, 8/15/26 8/13 at 49.08 AAA 250,760 1,000 0.000%, 8/15/27 8/13 at 46.47 AAA 236,090 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.2% 1,000 Chesterfield County Industrial Development Authority, Virginia, 11/10 at 102.00 A3 1,002,900 Pollution Control Revenue Bonds, Virginia Electric and Power Company, Series 1987A, 5.875%, 6/01/17 (WI, settling 11/08/02) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 1.6% 1,240 Housing Authority of the City of Bellingham, Washington, Housing 11/04 at 100.00 A1*** 1,365,313 Revenue Bonds, Series 1994 (Cascade Meadows Project), 7.100%, 11/01/23 (Pre-refunded to 11/01/04) - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 1.2% 1,000 Wisconsin Health and Educational Facilities Authority, Revenue 10/11 at 100.00 BBB 1,001,620 Bonds, Carroll College, Inc. Project, Series 2001, 6.250%, 10/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ $ 101,928 Total Long-Term Investments (cost $89,914,940) - 99.2% 85,166,517 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.8% 730,027 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 85,896,544 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. # Non-income producing security. On January 1, 2002, CFRHoldings, Inc. (an entity formed by Nuveen for the benefit of the Nuveen Funds owning various interests in CanFibre of Riverside)took possession of the CanFibre of Riverside assets on behalf of the various Nuveen Funds. CFR Holdings, Inc., has determined that a sale of the facility is in the best interests of shareholders and is proceeding accordingly. ## Non-income producing security. In September of 2002, the Erie County Acquisition Corporation, Inc. (an entity formed by Nuveen for the benefit of the Nuveen Funds owning various interests in CanFibre of Lackawanna) took possession of the CanFibre of Lackawanna assets on behalf of the various Nuveen Funds. Erie County Acquisition Corporation, Inc. has determined that a sale of the facility is in the best interests of shareholders and is proceeding accordingly. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 21
Statement of ASSETS AND LIABILITIES October 31, 2002
MUNICIPAL VALUE MUNICIPAL INCOME (NUV) (NMI) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments in municipal securities, at market value $1,879,944,228 $ 85,166,517 Receivables: Interest 33,087,000 2,016,766 Investments sold 62,647,853 60,146 Other assets 50,088 2,225 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 1,975,729,169 87,245,654 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 5,173,863 245,220 Payable for investments purchased 22,067,527 1,000,000 Accrued expenses: Management fees 904,025 47,742 Other 1,176,375 56,148 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 29,321,790 1,349,110 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets $1,946,407,379 $ 85,896,544 ==================================================================================================================================== Shares outstanding 194,959,520 8,092,984 ==================================================================================================================================== Net asset value per share outstanding (net assets divided by shares outstanding) $ 9.98 $ 10.61 ==================================================================================================================================== NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Shares, $.01 par value per share $ 1,949,595 $ 80,930 Paid-in surplus 1,837,697,688 90,727,722 Undistributed (Over-distribution of) net investment income 7,887,053 (47,547) Accumulated net realized gain (loss) from investments 7,900,542 (116,138) Net unrealized appreciation (depreciation) of investments 90,972,501 (4,748,423) - ------------------------------------------------------------------------------------------------------------------------------------ Net assets $1,946,407,379 $ 85,896,544 ==================================================================================================================================== Authorized shares 350,000,000 200,000,000 ==================================================================================================================================== See accompanying notes to financial statements. 22
Statement of OPERATIONS Year Ended October 31, 2002
MUNICIPAL VALUE MUNICIPAL INCOME (NUV) (NMI) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $111,912,071 $ 5,674,166 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 10,711,999 564,555 Shareholders' servicing agent fees and expenses 666,535 38,499 Custodian's fees and expenses 542,937 40,784 Directors' fees and expenses 19,327 986 Professional fees 47,904 89,974 Shareholders' reports - printing and mailing expenses 214,115 19,396 Stock exchange listing fees 90,455 13,855 Investor relations expense 324,099 17,829 Other expenses 63,412 5,506 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit 12,680,783 791,384 Custodian fee credit (41,468) (13,057) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 12,639,315 778,327 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 99,272,756 4,895,839 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain from investments 8,064,722 330,105 Change in net unrealized appreciation (depreciation) of investments (42,196,425) (2,760,792) - ------------------------------------------------------------------------------------------------------------------------------------ Net gain (loss) from investments (34,131,703) (2,430,687) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets from operations $ 65,141,053 $ 2,465,152 ==================================================================================================================================== See accompanying notes to financial statements. 23
Statement of CHANGES IN NET ASSETS
MUNICIPAL VALUE (NUV) MUNICIPAL INCOME (NMI) ----------------------------------- ------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/02 10/31/01 10/31/02 10/31/01 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 99,272,756 $ 99,466,513 $ 4,895,839 $ 5,415,096 Net realized gain from investment transactions 8,064,722 1,440,337 330,105 30,208 Change in net unrealized appreciation (depreciation) of investments (42,196,425) 81,296,118 (2,760,792) (607,664) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets from operations 65,141,053 182,202,968 2,465,152 4,837,640 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS From and in excess of net investment income (99,430,445) (99,918,088) (4,972,156) (5,604,202) From accumulated net realized gains from investment transactions (1,442,700) (4,112,336) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets from distributions to shareholders (100,873,145) (104,030,424) (4,972,156) (5,604,202) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from shares issued to shareholders due to reinvestment of distributions -- -- 314,902 640,957 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets (35,732,092) 78,172,544 (2,192,102) (125,605) Net assets at the beginning of year 1,982,139,471 1,903,966,927 88,088,646 88,214,251 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets at the end of year $1,946,407,379 $1,982,139,471 $85,896,544 $88,088,646 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 7,887,053 $ 1,657,666 $ (47,547) $ 4,942 ==================================================================================================================================== See accompanying notes to financial statements. 24
Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The National Funds (the "Funds") covered in this report and their corresponding New York Stock Exchange symbols are Nuveen Municipal Value Fund, Inc. (NUV) and Nuveen Municipal Income Fund, Inc. (NMI). Each Fund seeks to provide current income exempt from regular federal income tax by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities. The Funds are registered under the Investment Company Act of 1940 as closed-end, diversified management investment companies. 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. 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 and general market conditions. If it is determined that market prices for a security are unavailable or inappropriate, the Board of Directors 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 in a separate account with a current value at least equal to the amount of the when-issued and delayed delivery purchase commitments. At October 31, 2002, Municipal Value (NUV) and Municipal Income (NMI) had outstanding when-issued purchase commitments of $22,067,527 and $1,000,000, respectively. 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, 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, 2002, have been designated Exempt Interest Dividends. Dividends and Distributions to Shareholders Dividends from tax-exempt net investment income are declared and paid 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 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. Accordingly, temporary over-distributions as a result of these differences may occur and will be classified as either distributions in excess of net investment income, distributions in excess of net realized gains and/or distributions in excess of net ordinary taxable income from investment transactions, where applicable. 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, 2002. 25 Notes to FINANCIAL STATEMENTS (continued) 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. 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 from operations during the reporting period. Actual results may differ from those estimates. Change in Accounting Policy As required, effective November 1, 2001, the Funds have adopted the provisions of the new AICPA Audit and Accounting Guide for Investment Companies and began accreting taxable market discount on debt securities. Prior to November 1, 2001, the Funds did not accrete taxable market discount on debt securities until they were sold. The cumulative effect of this accounting change had no impact on the total net assets or the net asset values of the Funds, but resulted in an increase in the cost of securities and a corresponding decrease in net unrealized appreciation or increase in net unrealized depreciation based on securities held by the Funds on November 1, 2001, as follows: MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- $6,387,076 $23,828 ================================================================================ The Statement of Changes in Net Assets and Financial Highlights for the prior periods have not been restated to reflect this change in presentation. The net effect of this change for the fiscal year ended October 31, 2002, was to increase investment income with a corresponding decrease in net unrealized appreciation or increase in net unrealized depreciation as follows: MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- $1,286,468 $34,638 ================================================================================ 2. FUND SHARES Transactions in shares were as follows: MUNICIPAL VALUE (NUV) MUNICIPAL INCOME (NMI) --------------------- ---------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/02 10/31/01 10/31/02 10/31/01 - -------------------------------------------------------------------------------- Shares issued to shareholders due to reinvestment of distributions -- -- 27,850 55,036 ================================================================================ 26 3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities and short-term securities during the fiscal year ended October 31, 2002, were as follows: MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- Purchases: Long-term municipal securities $250,385,695 $31,756,922 Short-term securities 59,055,000 7,500,000 Sales and maturities: Long-term municipal securities 338,458,069 30,806,628 Short-term securities 59,055,000 7,500,000 ================================================================================ 4. INCOME TAX INFORMATION The following information is presented on an income tax basis as of October 31, 2002. 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. MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- Cost of Investments $1,781,475,624 $89,873,150 ================================================================================ MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- Gross unrealized: Appreciation $142,867,489 $3,329,396 Depreciation (44,398,885) (8,036,029) - -------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments $ 98,468,604 $(4,706,633) ================================================================================ The tax components of undistributed net investment income and net realized gains at October 31, 2002, were as follows: MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- Undistributed tax-exempt income $8,502,747 $300,609 Undistributed ordinary income * 162,176 14,703 Undistributed net long-term capital gains 7,912,348 -- ================================================================================ The tax character of distributions paid during the fiscal year ended October 31, 2002, were designated for purposes of the dividends paid deduction as follows: MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- Distributions from tax-exempt income $99,430,445 $5,019,154 Distributions from ordinary income * 643,366 -- Distributions from net long-term capital gains 799,334 -- ================================================================================ * Ordinary income consists of taxable market discount income and net short-term capital gains, if any. At October 31, 2002, Municipal Income (NMI) has an unused capital loss carryforward of $116,138, available to be applied against future capital gains, if any. If not applied, the carryforward will expire in the year 2008. 27 Notes to FINANCIAL STATEMENTS (continued) 5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the Funds' investment management agreements with Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund pays to the Adviser an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets of each Fund as follows: AVERAGE DAILY NET ASSETS MUNICIPAL VALUE (NUV) - -------------------------------------------------------------------------------- For the first $500 million .3500% For the next $500 million .3250 For net assets over $1 billion .3000 ================================================================================ In addition, Municipal Value (NUV) pays an annual management fee, payable monthly, based on gross interest income as follows: GROSS INTEREST INCOME MUNICIPAL VALUE (NUV) - -------------------------------------------------------------------------------- For the first $50 million 4.125% For the next $50 million 4.000 For gross income over $100 million 3.875 ================================================================================ AVERAGE DAILY NET ASSETS MUNICIPAL INCOME (NMI) - -------------------------------------------------------------------------------- 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 ================================================================================ 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 who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Funds from the Adviser. 28 6. INVESTMENT COMPOSITION At October 31, 2002, the revenue sources by municipal purpose, expressed as a percent of total investments, were as follows: MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- Basic Materials --% 11% Consumer Staples 4 7 Education and Civic Organizations 2 6 Healthcare 16 18 Housing/Multifamily 3 4 Housing/Single Family 4 1 Long-Term Care 1 5 Tax Obligation/General 7 6 Tax Obligation/Limited 12 12 Transportation 8 5 U.S. Guaranteed 8 6 Utilities 31 18 Water and Sewer 4 -- Other -- 1 - -------------------------------------------------------------------------------- 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 (44% for Municipal Value (NUV) and 14% for Municipal Income (NMI)). Such insurance or escrow, however, does not guarantee the market value of the municipal securities or the value of the Funds' shares. For additional information regarding each investment security, refer to the Portfolio of Investments of each Fund. 7. SUBSEQUENT EVENT - DISTRIBUTIONS TO SHAREHOLDERS The Funds declared dividend distributions from their tax-exempt net investment income which were paid on December 2, 2002, to shareholders of record on November 15, 2002, as follows: MUNICIPAL MUNICIPAL VALUE (NUV) INCOME (NMI) - -------------------------------------------------------------------------------- Dividend per share $.0425 $.0500 ================================================================================ 29 Financial Highlights Selected data for a share outstanding throughout each period:
Investment Operations Less Distributions ----------------------------------- ----------------------------- From and Net Realized/ in Excess Beginning Net Unrealized of Net Ending Net Asset Investment Investment Investment Capital Net Asset Value Income Gain (Loss) Total Income Gains Total Value - ----------------------------------------------------------------------------------------------------------------- Municipal Value (NUV) - ----------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) $10.17 $.51 $(.18) $ .33 $(.51) $(.01) $(.52) $ 9.98 2001 9.77 .51 .42 .93 (.51) (.02) (.53) 10.17 2000 9.48 .52 .28 .80 (.51) -- (.51) 9.77 1999 10.37 .51 (.80) (.29) (.51) (.09) (.60) 9.48 1998 10.29 .53 .21 .74 (.53) (.13) (.66) 10.37 Municipal Income (NMI) - ----------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 10.92 .61 (.30) .31 (.62) -- (.62) 10.61 2001 11.01 .67 (.06) .61 (.70) -- (.70) 10.92 2000 11.43 .70 (.36) .34 (.70) (.06) (.76) 11.01 1999 12.10 .70 (.61) .09 (.69) (.07) (.76) 11.43 1998 12.02 .71 .11 .82 (.71) (.03) (.74) 12.10 ================================================================================================================= Total Returns ---------------------------- Ending Based on Based on Net Market Value Market Value+ Asset Value+ - ------------------------------------------------------------- Municipal Value (NUV) - ------------------------------------------------------------- Year Ended 10/31: 2002(a) $ 9.3200 3.80% 3.32% 2001 9.4800 17.32 9.77 2000 8.5625 5.46 8.71 1999 8.6250 (7.50) (2.94) 1998 9.9375 10.55 7.49 Municipal Income (NMI) - ------------------------------------------------------------- Year Ended 10/31: 2002(a) 9.9000 (11.93) 2.87 2001 11.9000 12.24 5.68 2000 11.2500 9.45 3.02 1999 11.0000 (5.77) .74 1998 12.4375 5.21 7.06 ============================================================= Ratios/Supplemental Data ----------------------------------------------------------------------------- Before Credit After Credit* ------------------------ ------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Portfolio Net Assets to Average Average to Average Average Turnover (000) Net Assets Net Assets Net Assets Net Assets Rate - ------------------------------------------------------------------------------------------------- Municipal Value (NUV) - ------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) $1,946,407 .65% 5.07% .65% 5.08% 13% 2001 1,982,139 .65 5.09 .64 5.10 10 2000 1,903,967 .65 5.44 .64 5.44 17 1999 1,847,333 .65 5.09 .65 5.10 13 1998 2,022,282 .65 5.18 .65 5.18 19 Municipal Income (NMI) - ------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 85,897 .91 5.62 .90 5.64 36 2001 88,089 .83 6.14 .83 6.15 11 2000 88,214 .80 6.20 .77 6.23 6 1999 91,123 .82 5.88 .82 5.89 31 1998 95,756 .82 5.91 .82 5.91 23 ================================================================================================= * After custodian fee credit, where applicable. + Total Investment Return on Market Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in stock price per share. Total Return on Net Asset Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in net asset value per share. Total returns are not annualized. (a) As required, effective November 1, 2001, the Funds adopted the provisions of the new AICPA Audit and Accounting Guide for Investment Companies and began accreting taxable market discount on debt securities. The effect of this change for the fiscal year ended October 31, 2002, was to increase net investment income per share with a corresponding decrease in net realized/unrealized investment gain (loss) per share and increase each ratio of net investment income to average net assets applicable to shares as follows: MUNICIPAL MUNICIPAL VALUE VALUE (NUV) (NMI) --------------------- 2002 per share impact ($) .01 -- 2002 income ratio impact (%) .07 .04 The Financial Highlights for the prior periods have not been restated to reflect this change in presentation. See accompanying notes to financial statements.
30-31 SPREAD Directors AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds under the Management Agreement, is the responsibility of the Board of Directors of the Funds. The number of directors of the Funds is currently set at seven, one of whom is an "interested person" (as the term is defined in the Investment Company Act of 1940) and six of whom are not interested persons. None of the directors who are not interested persons of the Funds have 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.
YEAR FIRST ELECTED OR NUMBER OF FUNDS APPOINTED AND PRINCIPAL OCCUPATION(S) IN NUVEEN COMPLEX NAME, BIRTHDATE POSITION(S) HELD TERM OF INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUND OFFICE (a) 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 The John 141 3/28/1949 Board and Term: Nuveen Company, Nuveen Investments, Nuveen 333 W. Wacker Drive Director one year (2) Advisory Corp. and Nuveen Institutional Advisory Chicago, IL 60606 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 Financial Services Inc. DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ ROBERT P. BREMNER Director 1997 Private Investor and Management Consultant. 122 8/22/1940 Term: 333 W. Wacker Drive one year (2) Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ LAWRENCE H. BROWN Director 1993 Retired (1989) as Senior Vice President of The 122 7/29/1934 Term: Northern Trust Company. 333 W. Wacker Drive one year (2) Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ ANNE E. IMPELLIZZERI Director 1994 Retired (2002); formerly, Executive Director 122 1/26/1933 Term: (since 1998) of Manitoga (Center for Russel 333 W. Wacker Drive one year (2) Wright's Design with Nature); prior thereto, Chicago, IL 60606 President and Chief Executive Officer of Blanton-Peale Institutes of Religion and Health; prior thereto, Vice President, Metropolitan Life Insurance Co. - ------------------------------------------------------------------------------------------------------------------------------------ PETER R. SAWERS Director 1991 Adjunct Professor of Business and Economics, 122 4/3/1933 Term: University of Dubuque, Iowa; Director, Executive 333 W. Wacker Drive one year (2) Service Corps of Chicago (not-for-profit); Director, Chicago, IL 60606 Hadley School for the Blind (not-for-profit); formerly (1991-2000) Adjunct Professor, Lake Forest Graduate School of Management, Lake Forest, Illinois; prior thereto, Executive Director, Towers Perrin Australia, a management consulting firm; Chartered Financial Analyst; Certified Management Consultant. 32 YEAR FIRST ELECTED OR NUMBER OF FUNDS APPOINTED AND PRINCIPAL OCCUPATION(S) IN NUVEEN COMPLEX NAME, BIRTHDATE POSITION(S) HELD TERM OF INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUND OFFICE (a) DURING PAST 5 YEARS DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ WILLIAM J. SCHNEIDER Director 1997 Senior Partner and Chief Operating Officer, 122 9/24/1944 Term: Miller-Valentine Group, Vice President, 333 W. Wacker Drive one year (2) Miller-Valentine Realty, a construction company; Chicago, IL 60606 Chair, Miami Valley Hospital; Vice Chair, Dayton 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 122 12/29/1947 Term: Donnelley Foundation (since 1994); prior 333 W. Wacker Drive one year (2) thereto, Executive Director, Great Lakes Chicago, IL 60606 Protection Fund (from 1990 to 1994). NUMBER OF FUNDS YEAR FIRST PRINCIPAL OCCUPATION(S) IN NUVEEN COMPLEX NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUND APPOINTED (b) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ MICHAEL T. ATKINSON Vice President 2002 Vice President (since January 2002), formerly, 141 2/3/1966 Assistant Vice President (since 2000), previously, 333 W. Wacker Drive Associate of Nuveen Investments. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ PAUL L. BRENNAN Vice President 2002 Vice President (since January 2002), formerly, 135 11/10/1966 Assistant Vice President of Nuveen 333 W. Wacker Drive Advisory Corp. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ PETER H. D'ARRIGO Vice President and 1999 Vice President of Nuveen Investments (since 141 11/28/1967 Treasurer 1999), prior thereto, Assistant Vice President 333 W. Wacker Drive (from 1997); Chartered Financial Analyst. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ SUSAN M. DESANTO Vice President 2001 Vice President of Nuveen Advisory Corp. (since 141 9/8/1954 2001); previously, Vice President of Van Kampen 333 W. Wacker Drive Investment Advisory Corp. (since 1998); prior Chicago, IL 60606 thereto, Assistant Vice President of Van Kampen Investment Advisory Corp. - ------------------------------------------------------------------------------------------------------------------------------------ JESSICA R. DROEGER Vice President 2002 Vice President (since January 2002), Assistant 141 9/24/1964 and Secretary General Counsel and Assistant Secretary (since 333 W. Wacker Drive 1998), formerly Assistant Vice President of Nuveen Chicago, IL 60606 Investments; Vice President (since January 2002) and Assistant Secretary (since 1998), formerly Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; prior thereto, Associate at the law firm D'Ancona Partners LLC. 33 Directors AND OFFICERS (CONTINUED) NUMBER OF FUNDS YEAR FIRST PRINCIPAL OCCUPATION(S) IN NUVEEN COMPLEX NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUND APPOINTED (b) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ LORNA C. FERGUSON Vice President 1998 Vice President of Nuveen Investments; Vice 141 10/24/1945 President (since 1998) of Nuveen Advisory Corp. 333 W. Wacker Drive and Nuveen Institutional Advisory Corp. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ WILLIAM M. FITZGERALD Vice President 1995 Managing Director (since January 2002) of Nuveen 141 3/2/1964 Investments; Managing Director of Nuveen Advisory 333 W. Wacker Drive Corp. and Nuveen Institutional Advisory Corp. (since Chicago, IL 60606 2001); prior thereto, Vice President of Nuveen Advisory Corp.; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ STEPHEN D. FOY Vice President and 1998 Vice President of Nuveen Investments and 141 5/31/1954 Controller (since 1998) The John Nuveen Company; 333 W. Wacker Drive Certified Public Accountant. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ J. THOMAS FUTRELL Vice President 1992 Vice President of Nuveen Advisory Corp.; 135 7/5/1955 Chartered Financial Analyst. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ RICHARD A. HUBER Vice President 1997 Vice President of Nuveen Institutional Advisory 135 3/26/1963 Corp. (since 1998) and Nuveen Advisory Corp. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ STEVEN J. KRUPA Vice President 1990 Vice President of Nuveen Advisory Corp. 135 8/21/1957 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ DAVID J. LAMB Vice President 2000 Vice President (since 2000) of Nuveen Investments, 141 3/22/1963 previously Assistant Vice President (since 1999); 333 W. Wacker Drive prior thereto, Associate of Nuveen Investments; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ TINA M. LAZAR Vice President 2002 Vice President (since 1999), previously, 141 8/27/1961 Assistant Vice President (since 1993) of 333 W. Wacker Drive Nuveen Investments. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ LARRY W. MARTIN Vice President and 1992 Vice President, Assistant Secretary and 141 7/27/1951 Assistant Secretary Assistant General Counsel of Nuveen 333 W. Wacker Drive Investments; Vice President and Assistant Chicago, IL 60606 Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Vice President and Assistant Secretary of The John Nuveen Company and Nuveen Asset Management, Inc. 34 NUMBER OF FUNDS YEAR FIRST PRINCIPAL OCCUPATION(S) IN NUVEEN COMPLEX NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUND APPOINTED (b) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ EDWARD F. NEILD, IV Vice President 1996 Managing Director (since January 2002) of Nuveen 141 7/7/1965 Investments; Managing Director (since 1997) of 333 W. Wacker Drive Nuveen Advisory Corp. and Nuveen Institutional Chicago, IL 60606 Advisory Corp.; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ THOMAS J. O'SHAUGHNESSY Vice President 2002 Vice President (since January 2002), formerly, 135 9/4/1960 Assistant Vice President (since 1998) of Nuveen 333 W. Wacker Drive Advisory Corp.; prior thereto, Portfolio Manager. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ THOMAS C. SPALDING Vice President 1987 Vice President of Nuveen Advisory Corp. and 135 7/31/1951 Nuveen Institutional Advisory Corp.; Chartered 333 W. Wacker Drive Financial Analyst. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ GIFFORD R. ZIMMERMAN Chief 1992 Managing Director (since January 2002, formerly 141 9/9/1956 Administrative Vice President), Assistant Secretary and Associate 333 W. Wacker Drive Officer General Counsel (formerly Assistant General Counsel) Chicago, IL 60606 of Nuveen Investments; Managing Director (since January 2002, formerly Vice President) and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Vice President and Assistant Secretary of The John Nuveen Company; Chartered Financial Analyst. (a) Year First Elected or Appointed is the year presented or each Fund's respective inception date if later. (b) Year First Elected or Appointed is the year presented or each Fund's respective inception date if later. Officers serve one year terms through July of each year. (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 director of Nuveen Advisory Corp. (2) Directors are elected each year by shareholders and serve a one year term until his/her successor is elected.
35 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. 36 Fund INFORMATION BOARD OF DIRECTORS Robert P. Bremner Lawrence H. Brown Anne E. Impellizzeri Peter R. Sawers William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale FUND MANAGER Nuveen Advisory Corp. 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Morgan, Lewis & Bockius LLP Washington, D.C. INDEPENDENT AUDITORS Ernst & Young LLP Chicago, IL GLOSSARY OF TERMS USED IN THIS REPORT AVERAGE DURATION: Duration is a measure of a bond or bond fund's sensitivity to changes in interest rates. Generally, the longer a bond or fund's duration, the more the price of the bond or fund will change as interest rates change. AVERAGE 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. 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 stock in the future at such times and in such amounts as is deemed advisable. No shares were repurchased during the twelve-month period ended October 31, 2002. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 37 Serving Investors FOR GENERATIONS PHOTO OF: John Nuveen, Sr. For over a century, generations of Americans have relied on Nuveen Investments to help them grow and keep the money they've earned. Financial advisors, investors and their families have associated Nuveen Investments with quality, expertise and dependability since 1898. That is why financial advisors have entrusted the assets of more than 1.3 million investors to Nuveen. With the know-how that comes from a century of experience, Nuveen continues to build upon its reputation for quality. Now, financial advisors and investors can count on Nuveen Investments to help them design customized solutions that meet the far-reaching financial goals unique to family wealth strategies - solutions that can translate into legacies. To find out more about how Nuveen Investments' products and services can help you preserve your financial security, talk with your financial advisor, or call us at (800) 257-8787 for more information, including a prospectus where applicable. Please read that information carefully before you invest. Logo: NUVEEN Investments Nuveen Investments o 333 West Wacker Drive Chicago, IL 60606 o www.nuveen.com EAN-A-1002D -----END PRIVACY-ENHANCED MESSAGE-----