-----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, HneWPptf2UQkR3fyuPqoK4yic1Q6KoY8ieQwb4nx+phmUGkE18oRR/8AlCQJeLaf XmKR/jQhmRGofrkul9DtxQ== 0000891804-03-000006.txt : 20030102 0000891804-03-000006.hdr.sgml : 20030101 20030102093350 ACCESSION NUMBER: 0000891804-03-000006 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 PREMIER MUNICIPAL INCOME FUND INC CENTRAL INDEX KEY: 0000880845 FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06456 FILM NUMBER: 03500047 BUSINESS ADDRESS: STREET 1: 333 WEST WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 N-30D 1 nv27931.txt EAN-C-1002D ANNUAL REPORT October 31, 2002 Nuveen Municipal Closed-End Exchange-Traded Funds INVESTMENT QUALITY NQM SELECT QUALITY NQS QUALITY INCOME NQU PREMIER INCOME NPF PHOTO OF: WOMAN PLAYING PIANO AND BOY PLAYING VIOLIN. PHOTO OF: WOMAN AND GIRL PLAYING CHECKERS. 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 (NQM, NQS, NQU, NPF) Portfolio Managers' COMMENTS Portfolio managers Tom Futrell, Rick Huber, and Bill Fitzgerald discuss U.S. economic conditions, key investment strategies, and recent Fund performance. Tom assumed portfolio management responsibility for NQM in 1990 and added NPF in 2001, while Rick has managed NQS since 1998 and Bill has managed NQU since 1991. 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 that 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 this 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 been active buyers in the municipal market. HOW DID THESE NUVEEN FUNDS PERFORM OVER THE TWELVE MONTHS ENDED OCTOBER 31, 2002? Individual results for these Funds, as well as for relevant benchmarks, are presented in the accompanying table. TOTAL RETURN LEHMAN LIPPER MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2 - ----------------------------------------------------------------------------- 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED ENDED ENDED 10/31/02 EQUIVALENT3 10/31/02 10/31/02 10/31/02 - ----------------------------------------------------------------------------- NQM 6.52% 9.31% 5.85% 5.87% 4.93% - ----------------------------------------------------------------------------- NQS 6.71% 9.59% 4.22% 5.87% 4.93% - ----------------------------------------------------------------------------- NQU 6.75% 9.64% 2.71% 5.87% 4.93% - ----------------------------------------------------------------------------- NPF 6.69% 9.56% 6.19% 5.87% 4.93% - ----------------------------------------------------------------------------- Past performance is not predictive of future results. For additional information, see the individual Performance Overview for your Fund in this report. NQM reported a total return for the period that was roughly in line with the performance of the Lehman Index and better than its Lipper leveraged fund peer group average. NPF's total return exceeded both its Lipper peer group average and the Lehman index for over the reporting period. Part of the relatively strong performance of the Fund can be attributed to their durations,4 which is a measure of price sensitivity to interest rate movements. In a market characterized by rising bond values, as was the case during most of this reporting period, funds with longer durations typically would be expected to outperform funds and indexes with shorter durations - all other things being equal. 1 The total annual returns on common share net asset value for these Nuveen Funds are compared with the total annual return 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 56 funds in the Lipper General Leveraged Municipal Debt Funds category. Fund and Lipper returns assume reinvestment of dividends. 3 The taxable-equivalent yield represents the yield that must be earned on a taxable investment 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. Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for a Fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the Fund. References to duration in this commentary are intended to indicate Fund duration unless otherwise noted. 2 As of October 31, 2002, the duration of NPF was 13.86, compared with 7.98 for the unleveraged Lehman Brothers Municipal Bond Index. While NQS also had a relatively long duration of 9.73 on October 31, 2002, it's modest underperformance when compared to its Lipper peer group and the Lehman index can be traced in part to price declines of several airline-backed bonds, including bonds issued to support terminals or facilities of United Air Lines. 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 is part due to the possibility of a bankruptcy declaration by United. (United filed for bankruptcy on December 9, 2002.) Since the United bonds we hold support ongoing operations, we believe the com pany has every intention of continuing to honor the obligations under lying 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 currently depressed levels, are positioned to appreciate in value if and when the outlook for these companies improves. NQU also holds airline-backed bonds whose price decline hurt the Fund's NAV and total return over the reporting period. In addition, NQU was negatively impacted by its holding of bonds issued by the Brazos River Authority for the Texas Utility Electric Company project. Many issues backed by utilities suffered over the reporting period due to concerns about the long-term viability of some companies within this sector. However, we believe that most of the negative concerns about this particular issuer are now priced into these bonds, and we continued to hold them with the expectation that they will appreciate if and when conditions for the utility sector and Texas Utility improve. HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES? As the Fed continued to keep short-term interest rates relatively low, the dividend-payment capabilities of all these Funds benefited from their use of leverage, a strategy that can potentially enhance the dividends paid to common shareholders. The amount of this benefit is tied, in large part, to the short-term rates the Funds pay their MuniPreferred, shareholders. Low short-term rates, such as those currently in effect, can enable the Funds to reduce the amount of income they pay preferred shareholders, which can leave more net earnings to support common share dividends. During the fiscal year ended October 31, 2002, low short-term interest rates enabled us to implement four dividend increases in NQM and NQS, and three increases in NQU and NPF. Over the course of the entire reporting period, the share prices of NQS, NQU and NPF fell modestly, primarily as a result of the previously noted October 2002 bond sell-off. NQM's share price fell through most of October, but rallied in the last week of the month to finish the reporting period slight higher than where it started. As of October 31, 2002, each of the Funds continued to trade at modest discounts to their common share net asset values (see charts on individual Performance Overview pages). WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE FISCAL YEAR ENDED OCTOBER 31, 2002? Over the twelve-month period, our strategic focus continued to be on working to diversify Fund holdings, enhance call protection, and position the Funds for potential changes in the interest rate environment. Specifically, this included purchasing bonds as opportunities arose in the 15- to 20-year part of the yield curve. We believe these purchases will help reduce the Funds' durations over time (making the portfolios less sensitive to interest rate changes), while still providing yields and return potential that are competitive with longer-maturity bonds. 3 One example of this process was the purchase of State of Washington general obligation bonds for NQU. At the time we added them to the portfolio, these bonds offered a maturity of 21 years and a 5% coupon, which we viewed as both attractive and defensive in the current marketplace. In gen eral, as various states recognized potential budget problems we saw many states' financial situations begin to deteriorate. We think this was one of the reasons for the widening credit spreads we observed in the municipal market over the past year. As a result of these widening spreads, we began to increase our allocation to general obligation bonds on a case-by-case basis in all four funds. Over the reporting period, our emphasis generally was on yield curve positioning, income enhancement and credit risk reduction, rather than any sector emphasis. However, in NQM and NPF, we continued to add single-family housing bonds, especially those offered in the secondary market. We believe these bonds, as well as our U.S. guaranteed prerefunded holdings, should perform well if interest rates rise. As of October 31, 2002, each of these four Funds had a significant portion of their portfolios in U.S. guaranteed prerefunded bonds. Given our outlook for the economy and the uncertainty over potential interest rate movements, we expect to maintain our weightings in these high-quality, defensive bonds as we move into 2003. During the past reporting period, we also found what we believe to be attractive opportunities in tobacco settlement bonds and the healthcare and utilities sectors. Given the current geopolitical and economic climate, maintaining strong credit quality remained a key concern. As of October 31, 2002, each of these Funds continued to offer excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 74% to 86% of total net assets. WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN GENERAL AND THESE 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 2003 and 2004, we believe each of these four Funds offers strong levels of call protection. As of October 31, 2002, call exposure over the `03-'04 period ranged from 6% in NQM to 17% in NPF. Actual calls will depend largely on market interest rates over this time. We believe this call exposure is very manageable, and we foresee no problems in working through it. One of the specific areas of concentration in the months ahead will be to continue managing duration through the purchase of bonds in the 15- to 20-year part of the yield curve. In general, we plan to remain focused on utilizing Nuveen's experience and research expertise to find undervalued bonds that we believe will enhance returns and the Fund's dividend-paying capabilities over time. The heavy issuance many anticipate in the municipal market in the coming months should enhance our ability to find attractive opportunities. Overall, we believe the attractive tax-free income, portfolio diversification, and risk reduction potential (for equity-dominated portfolios) represented by these Funds will continue to make them potentially valuable components in your long-term financial plans. 4 Nuveen Investment Quality Municipal Fund, Inc. Performance OVERVIEW As of October 31, 2002 NQM PIE CHART: CREDIT QUALITY AAA/U.S. GUARANTEED 77% AA 9% A 9% BBB 1% NR 3% BB OR LOWER 1% PORTFOLIO STATISTICS - --------------------------------------------------- Share Price $14.99 - --------------------------------------------------- Common Share Net Asset Value $15.63 - --------------------------------------------------- Market Yield 6.52% - --------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.31% - --------------------------------------------------- Net Assets Applicable to Common Shares ($000) $558,604 - --------------------------------------------------- Average Effective Maturity (Years) 19.25 - --------------------------------------------------- Leverage-Adjusted Duration 10.34 - --------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 6/90) - --------------------------------------------------- ON SHARE PRICE ON NAV - --------------------------------------------------- 1-Year 7.71% 5.85% - --------------------------------------------------- 5-Year 5.79% 6.10% - --------------------------------------------------- 10-Year 6.43% 6.99% - --------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - --------------------------------------------------- U.S. Guaranteed 19% - --------------------------------------------------- Tax Obligation/General 15% - --------------------------------------------------- Transportation 11% - --------------------------------------------------- Healthcare 11% - --------------------------------------------------- Tax Obligation/Limited 9% - --------------------------------------------------- BAR CHART: 2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 11/01 0.0735 12/01 0.0755 1/02 0.0755 2/02 0.0755 3/02 0.078 4/02 0.078 5/02 0.078 6/02 0.08 7/02 0.08 8/02 0.08 9/02 0.0815 10/02 0.0815 LINE CHART: SHARE PRICE PERFORMANCE WEEKLY CLOSING PRICE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 11/1/01 14.9 15.03 14.72 14.53 14.63 14.35 14.2 14.03 14.27 14.25 14.6 14.86 14.85 14.89 14.93 14.61 14.67 14.84 14.65 14.32 14.25 14.41 14.29 14.32 14.49 14.52 14.8 14.51 14.45 14.62 14.75 15 14.79 15 15.1 15.15 15.05 15.01 15.12 15.17 15.32 15.23 15.22 15.32 15.4 15.55 15.59 15.69 15.65 15.61 14.7 14.41 10/31/02 14.9 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 capital gains and net ordinary income distributions in December 2001 of $0.0207 per share. 5 Nuveen Select Quality Municipal Fund, Inc. Performance OVERVIEW As of October 31, 2002 NQS PIE CHART: CREDIT QUALITY AAA/U.S. GUARANTEED 67% AA 7% A 17% BBB 6% NR 2% BB OR LOWER 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.40 - -------------------------------------------------- Common Share Net Asset Value $15.00 - -------------------------------------------------- Market Yield 6.71% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.59% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $508,300 - -------------------------------------------------- Average Effective Maturity (Years) 20.19 - -------------------------------------------------- Leverage-Adjusted Duration 9.73 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/91) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 5.24% 4.22% - -------------------------------------------------- 5-Year 5.30% 5.96% - -------------------------------------------------- 10-Year 6.84% 7.04% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- U.S. Guaranteed 15% - -------------------------------------------------- Transportation 12% - -------------------------------------------------- Utilities 12% - -------------------------------------------------- Housing/Single Family 9% - -------------------------------------------------- BAR CHART: 2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 11/01 0.074 12/01 0.076 1/02 0.076 2/02 0.076 3/02 0.0775 4/02 0.0775 5/02 0.0775 6/02 0.0795 7/02 0.0795 8/02 0.0795 9/02 0.0805 10/02 0.0805 LINE CHART: SHARE PRICE PERFORMANCE WEEKLY CLOSING PRICE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 11/1/01 14.77 14.94 14.44 14.28 14.52 14.1 13.85 13.72 14.06 14.07 14.24 14.66 14.49 14.43 14.48 14.5 14.54 14.63 14.15 14.02 13.71 13.89 13.98 14.06 13.93 14.14 14.37 14.2 14.15 14.2 14.3 14.6 14.55 14.68 14.67 14.7 14.86 14.7 14.78 14.95 15 14.95 14.89 15.06 15.13 15.14 15.2 15.12 15.23 15.06 14.05 10/31/02 14.2 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 capital gains and net ordinary income distributions in December 2001 of $0.1582 per share. 6 Nuveen Quality Income Municipal Fund, Inc. Performance OVERVIEW As of October 31, 2002 NQU PIE CHART: CREDIT QUALITY AAA/U.S. GUARANTEED 70% AA 10% A 11% BBB 6% BB OR LOWER 3% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.04 - -------------------------------------------------- Common Share Net Asset Value $14.70 - -------------------------------------------------- Market Yield 6.75% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.64% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $796,591 - -------------------------------------------------- Average Effective Maturity (Years) 19.03 - -------------------------------------------------- Leverage-Adjusted Duration 10.71 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 6/91) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 3.05% 2.71% - -------------------------------------------------- 5-Year 3.72% 5.32% - -------------------------------------------------- 10-Year 6.92% 7.03% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 20% - -------------------------------------------------- U.S. Guaranteed 16% - -------------------------------------------------- Transportation 11% - -------------------------------------------------- Utilities 11% - -------------------------------------------------- Healthcare 9% - -------------------------------------------------- BAR CHART: 2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 11/01 0.076 12/01 0.076 1/02 0.076 2/02 0.076 3/02 0.077 4/02 0.077 5/02 0.077 6/02 0.078 7/02 0.078 8/02 0.078 9/02 0.079 10/02 0.079 LINE CHART: SHARE PRICE PERFORMANCE WEEKLY CLOSING PRICE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 11/1/01 14.71 14.92 14.36 14.26 14.61 13.95 13.68 13.76 13.89 14.11 14.33 14.5 14.25 14.48 14.53 14.28 14.56 14.59 13.95 13.73 13.63 13.81 13.88 13.99 13.82 13.89 14.15 14.18 14.04 14.05 14.23 14.36 14.18 14.32 14.55 14.84 14.58 14.6 14.55 14.72 14.94 14.69 14.66 14.72 14.81 14.85 14.88 14.89 14.9 14.75 13.68 10/31/02 13.81 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 $0.0907 per share. 7 Nuveen Premier Municipal Income Fund, Inc. Performance OVERVIEW As of October 31, 2002 NPF PIE CHART: CREDIT QUALITY AAA/U.S. GUARANTEED 74% AA 9% A 11% BBB 2% NR 4% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.52 - -------------------------------------------------- Common Share Net Asset Value $15.23 - -------------------------------------------------- Market Yield 6.69% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.56% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $305,958 - -------------------------------------------------- Average Effective Maturity (Years) 18.17 - -------------------------------------------------- Leverage-Adjusted Duration 13.85 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/91) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 4.57% 6.19% - -------------------------------------------------- 5-Year 3.95% 6.06% - -------------------------------------------------- 10-Year 7.37% 7.73% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 19% - -------------------------------------------------- Tax Obligation/Limited 18% - -------------------------------------------------- U.S. Guaranteed 14% - -------------------------------------------------- Housing/Multifamily 13% - -------------------------------------------------- Utilities 8% - -------------------------------------------------- BAR CHART: 2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 11/01 0.0775 12/01 0.0785 1/02 0.0785 2/02 0.0785 3/02 0.08 4/02 0.08 5/02 0.08 6/02 0.081 7/02 0.081 8/02 0.081 9/02 0.081 10/02 0.081 LINE CHART: SHARE PRICE PERFORMANCE WEEKLY CLOSING PRICE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. 11/1/01 15.05 15.31 14.96 14.83 14.9 14.52 14.08 13.88 14.24 14.32 14.62 14.68 14.65 14.77 14.93 14.67 14.88 14.87 14.55 14.17 13.9 14.12 14.24 14.15 14.2 14.1 14.42 14.4 14.43 14.34 14.46 14.72 14.54 14.58 14.85 14.92 14.9 14.96 14.7 14.98 15 15.01 15.03 15.2 15.24 15.2 15.11 15.34 15.55 15.1 14.35 10/31/02 14.14 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 $0.0243 per share. 8 Shareholder MEETING REPORT The annual shareholder meeting was held on July 31, 2002, at the Northern Trust Bank, Chicago, Illinois.
NQM - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Preferred Preferred Preferred Preferred Preferred Common Shares Shares Shares Shares Shares Shares Series-M Series-T Series-W Series-TH Series-F ==================================================================================================================================== Robert P. Bremner For 32,496,330 2,187 2,324 2,326 1,924 2,346 Withhold 366,749 8 11 12 -- 1 - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,863,079 2,195 2,335 2,338 1,924 2,347 ==================================================================================================================================== Lawrence H. Brown For 32,498,774 2,187 2,324 2,326 1,924 2,346 Withhold 364,305 8 11 12 -- 1 - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,863,079 2,195 2,335 2,338 1,924 2,347 ==================================================================================================================================== Anne E. Impellizzeri For 32,500,510 2,187 2,324 2,324 1,924 2,347 Withhold 362,569 8 11 14 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,863,079 2,195 2,335 2,338 1,924 2,347 ==================================================================================================================================== Peter R. Sawers For 32,501,403 2,187 2,324 2,326 1,924 2,346 Withhold 361,676 8 11 12 -- 1 - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,863,079 2,195 2,335 2,338 1,924 2,347 ==================================================================================================================================== Judith M. Stockdale For 32,524,250 2,187 2,324 2,324 1,924 2,347 Withhold 338,829 8 11 14 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 32,863,079 2,195 2,335 2,338 1,924 2,347 ==================================================================================================================================== William J. Schneider For -- 2,187 2,324 2,326 1,924 2,346 Withhold -- 8 11 12 -- 1 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 2,195 2,335 2,338 1,924 2,347 ==================================================================================================================================== Timothy R. Schwertfeger For -- 2,187 2,324 2,326 1,924 2,346 Withhold -- 8 11 12 -- 1 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 2,195 2,335 2,338 1,924 2,347 ==================================================================================================================================== 9
Shareholder MEETING REPORT (continued)
NQS - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Preferred Preferred Preferred Preferred Preferred Common Shares Shares Shares Shares Shares Shares Series-M Series-T Series-W Series-TH Series-F ==================================================================================================================================== Robert P. Bremner For 30,984,102 1,916 1,877 2,626 1,496 2,791 Withhold 424,172 9 5 10 1 1 - ------------------------------------------------------------------------------------------------------------------------------------ Total 31,408,274 1,925 1,882 2,636 1,497 2,792 ==================================================================================================================================== Lawrence H. Brown For 30,988,945 1,916 1,873 2,626 1,496 2,792 Withhold 419,329 9 9 10 1 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 31,408,274 1,925 1,882 2,636 1,497 2,792 ==================================================================================================================================== Anne E. Impellizzeri For 30,975,590 1,916 1,873 2,626 1,496 2,791 Withhold 432,684 9 9 10 1 1 - ------------------------------------------------------------------------------------------------------------------------------------ Total 31,408,274 1,925 1,882 2,636 1,497 2,792 ==================================================================================================================================== Peter R. Sawers For 30,977,021 1,916 1,877 2,626 1,496 2,792 Withhold 431,253 9 5 10 1 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 31,408,274 1,925 1,882 2,636 1,497 2,792 ==================================================================================================================================== Judith M. Stockdale For 30,986,225 1,916 1,877 2,628 1,496 2,764 Withhold 422,049 9 5 8 1 28 - ------------------------------------------------------------------------------------------------------------------------------------ Total 31,408,274 1,925 1,882 2,636 1,497 2,792 ==================================================================================================================================== William J. Schneider For -- 1,916 1,877 2,626 1,496 2,792 Withhold -- 9 5 10 1 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 1,925 1,882 2,636 1,497 2,792 ==================================================================================================================================== Timothy R. Schwertfeger For -- 1,916 1,877 2,626 1,496 2,792 Withhold -- 9 5 10 1 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 1,925 1,882 2,636 1,497 2,792 ==================================================================================================================================== 10
NQU - ------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Preferred Preferred Preferred Preferred Preferred Preferred Common Shares Shares Shares Shares Shares Shares Shares Series-M Series-T Series-W Series-W2 Series-TH Series-F ==================================================================================================================================== Robert P. Bremner For 48,832,587 2,828 2,700 2,613 1,923 3,879 2,836 Withhold 515,666 -- -- -- 6 5 3 - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,348,253 2,828 2,700 2,613 1,929 3,884 2,839 ==================================================================================================================================== Lawrence H. Brown For 48,846,405 2,828 2,700 2,613 1,923 3,879 2,836 Withhold 501,848 -- -- -- 6 5 3 - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,348,253 2,828 2,700 2,613 1,929 3,884 2,839 ==================================================================================================================================== Anne E. Impellizzeri For 48,802,748 2,828 2,700 2,613 1,923 3,879 2,835 Withhold 545,505 -- -- -- 6 5 4 - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,348,253 2,828 2,700 2,613 1,929 3,884 2,839 ==================================================================================================================================== Peter R. Sawers For 48,840,954 2,828 2,700 2,613 1,923 3,879 2,836 Withhold 507,299 -- -- -- 6 5 3 - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,348,253 2,828 2,700 2,613 1,929 3,884 2,839 ==================================================================================================================================== Judith M. Stockdale For 48,832,334 2,828 2,700 2,613 1,923 3,879 2,835 Withhold 515,919 -- -- -- 6 5 4 - ------------------------------------------------------------------------------------------------------------------------------------ Total 49,348,253 2,828 2,700 2,613 1,929 3,884 2,839 ==================================================================================================================================== William J. Schneider For -- 2,828 2,700 2,613 1,923 3,878 2,836 Withhold -- -- -- -- 6 6 3 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 2,828 2,700 2,613 1,929 3,884 2,839 ==================================================================================================================================== Timothy R. Schwertfeger For -- 2,828 2,700 2,613 1,923 3,879 2,836 Withhold -- -- -- -- 6 5 3 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 2,828 2,700 2,613 1,929 3,884 2,839 ==================================================================================================================================== 11
Shareholder MEETING REPORT (continued)
NPF - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Preferred Preferred Preferred Common Shares Shares Shares Shares Series-M Series-T Series-TH ==================================================================================================================================== Robert P. Bremner For 18,050,725 948 2,681 2,572 Withhold 247,976 2 -- 2 - ------------------------------------------------------------------------------------------------------------------------------------ Total 18,298,701 950 2,681 2,574 ==================================================================================================================================== Lawrence H. Brown For 18,056,006 948 2,681 2,574 Withhold 242,695 2 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 18,298,701 950 2,681 2,574 ==================================================================================================================================== Anne E. Impellizzeri For 18,053,138 948 2,681 2,574 Withhold 245,563 2 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 18,298,701 950 2,681 2,574 ==================================================================================================================================== Peter R. Sawers For 18,052,906 948 2,681 2,574 Withhold 245,795 2 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 18,298,701 950 2,681 2,574 ==================================================================================================================================== Judith M. Stockdale For 18,062,587 948 2,681 2,574 Withhold 236,114 2 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 18,298,701 950 2,681 2,574 ==================================================================================================================================== William J. Schneider For -- 948 2,681 2,574 Withhold -- 2 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 950 2,681 2,574 ==================================================================================================================================== Timothy R. Schwertfeger For -- 948 2,681 2,574 Withhold -- 2 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 950 2,681 2,574 ==================================================================================================================================== 12
Report of INDEPENDENT AUDITORS THE BOARD OF DIRECTORS AND SHAREHOLDERS NUVEEN INVESTMENT QUALITY MUNICIPAL FUND, INC. NUVEEN SELECT QUALITY MUNICIPAL FUND, INC. NUVEEN QUALITY INCOME MUNICIPAL FUND, INC. NUVEEN PREMIER MUNICIPAL INCOME FUND, INC. We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Investment Quality Municipal Fund, Inc., Nuveen Select Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc. and Nuveen Premier 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 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. 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 Investment Quality Municipal Fund, Inc., Nuveen Select Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc. and Nuveen Premier Municipal Income Fund, Inc. at October 31, 2002, and the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended and 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 13 Nuveen Investment Quality Municipal Fund, Inc. (NQM) Portfolio of INVESTMENTS October 31, 2002
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 4.6% $ 22,225 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA $ 25,532,080 Warrants, Series 1999-A, 5.750%, 2/01/38 (Pre-refunded to 2/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 1.8% 10,000 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/10 at 100.00 Aa3 10,103,400 Settlement Asset-Backed Bonds, Series 2000, 6.500%, 6/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.6% 3,995 Arkansas Development Finance Authority, Home Mortgage Revenue 7/08 at 101.50 AAA 4,167,065 Bonds, 1998 Series A, 5.150%, 7/01/17 Van Buren County, Arkansas, Sales and Use Tax Revenue Bonds, Series 2000 Refunding and Construction: 1,055 5.600%, 12/01/25 12/10 at 100.00 Aaa 1,106,990 3,600 5.650%, 12/01/31 12/10 at 100.00 Aaa 3,795,228 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 12.6% 8,795 Alameda County, California, Certificates of Participation (Alameda 9/06 at 102.00 AAA 10,187,424 County Public Facilities Corporation), Series 1991, 6.000%, 9/01/21 (Pre-refunded to 9/01/06) 5,925 State Public Works Board of the State of California, Lease Revenue 6/03 at 102.00 Aa2 6,019,326 Refunding Bonds (The Regents of the University of California), 1993 Series A (Various University of California Projects), 5.500%, 6/01/21 9,740 Huntington Park Redevelopment Agency, California, Single Family No Opt. Call AAA 13,809,469 Residential Mortgage Revenue Refunding Bonds, 1986 Series A, 8.000%, 12/01/19 1,030 Natomas Unified School District, Sacramento County, California, No Opt. Call AAA 1,200,846 General Obligation Bonds, Series 1999 Refunding, 5.950%, 9/01/21 15,770 Ontario Redevelopment Financing Authority, San Bernardino County, No Opt. Call AAA 21,296,596 California, 1995 Revenue Refunding Bonds (Project No. 1), 7.400%, 8/01/25 13,145 City of Perris, California, Single Family Mortgage Revenue Bonds No Opt. Call AAA 17,857,745 (GNMA Mortgage-Backed Securities), 1988 Series B, 8.200%, 9/01/23 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.8% 600 Colorado Housing and Finance Authority, Single Family Program 5/06 at 105.00 Aa2 615,156 Senior Bonds, 1996 Series B, 7.450%, 11/01/27 12,450 City and County of Denver, Colorado, Airport System Revenue 11/10 at 100.00 AAA 13,518,584 Refunding Bonds, Series 2000A, 6.000%, 11/15/19 (Alternative Minimum Tax) 6,200 City and County of Denver, Colorado, Special Facilities Airport 4/03 at 102.00 CCC 2,379,188 Revenue Bonds (United Air Lines, Inc. Project), Series 1992A, 6.875%, 10/01/32 (Alternative Minimum Tax)# 7,865 Colorado Springs School District No. 11, El Paso County, Colorado, 12/07 at 125.00 AA- 10,226,781 General Obligation Improvement Bonds, Series 1996, 7.125%, 12/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 2.8% 6,770 State of Connecticut, General Obligation Bonds, 2000 Series B, 6/10 at 100.00 AA*** 7,859,361 5.875%, 6/15/16 (Pre-refunded to 6/15/10) 7,430 Connecticut Housing Finance Authority, Housing Mortgage Finance 11/07 at 102.00 AAA 7,740,797 Program Bonds, 1997 Series C, Subseries C-2, 5.850%, 11/15/28 (Alternative Minimum Tax) 14 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 6.9% $ 3,000 Washington, District of Columbia, General Obligation Bonds, No Opt. Call AAA $ 3,518,760 Series 1998B, 6.000%, 6/01/16 15,950 District of Columbia, University Revenue Bonds, Georgetown 4/11 at 31.03 AAA 3,015,188 University Issue, Series 2001A, 0.000%, 4/01/31 6,000 District of Columbia Tobacco Settlement Financing Corporation, 5/11 at 101.00 A1 6,107,280 Tobacco Settlement Asset-Backed Bonds, Series 2001, 6.750%, 5/15/40 23,645 District of Columbia Water and Sewer Authority, Public Utility 4/09 at 160.00 AAA 25,764,301 Revenue Bonds, Series 1998, 5.500%, 10/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 5.3% 17,500 City of Atlanta, Georgia, Airport General Revenue and Refunding 1/10 at 101.00 AAA 18,404,050 Bonds, Series 2000A, 5.600%, 1/01/30 2,000 Development Authority of the City of Dalton, Georgia, Revenue No Opt. Call AAA 2,171,760 Certificates (Hamilton Health Care System), Series 1996, 5.500%, 8/15/26 5,980 Development Authority of Fulton County, Georgia, Revenue Bonds 9/11 at 102.00 AAA 6,337,783 (TUFF/Atlanta Housing, LLC Project at Georgia State University), Series 2001A, 5.500%, 9/01/22 2,250 Municipal Electric Authority of Georgia, Project One Special No Opt. Call A+ 2,718,293 Obligation Bonds, Fourth Crossover Series, 6.500%, 1/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.9% 4,810 City of Boise, Idaho, Revenue Refunding Bonds, Series 2001A, 12/11 at 100.00 Aaa 4,991,770 5.375%, 12/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 10.4% 4,705 Village of Bourbonnais, Illinois, Industrial Project Revenue Bonds 3/10 at 101.00 AA 5,178,370 (Olivet Nazarene University Project), Series 2000, 6.250%, 3/01/20 9,000 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call Ca 1,260,540 Special Facility Revenue Bonds (United Air Lines, Inc. Project), Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13)# 7,500 Community College District No. 508, Cook County, Illinois, No Opt. Call AAA 9,214,125 Certificates of Participation, 8.750%, 1/01/07 2,110 Illinois Development Finance Authority, Local Government Program 1/11 at 100.00 Aaa 2,347,776 Revenue Bonds (Elmhurst Community Unit School District Number 205 Project), Series 2000, 6.000%, 1/01/19 12,725 School District No. 46, Elgin, Kane, Cook and DuPage Counties, No Opt. Call Aaa 16,484,983 Illinois, School Bonds, Series 1997, 7.800%, 1/01/12 5,900 Community Unit School District Number 7, Madison County, Illinois, No Opt. Call AAA 6,915,803 School Building Bonds, Series 1994, 5.850%, 2/01/13 3,585 City of Pekin, Illinois, Multifamily Housing Refunding Revenue 5/03 at 103.00 AAA 3,710,045 Bonds (FHA-Insured Mortgage Loan - Section 8 Assisted Project), Series 1992A, 6.875%, 5/01/22 5,390 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 6,781,321 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1992A, 9.000%, 6/01/07 860 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 1,081,992 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1992B, 9.000%, 6/01/07 1,180 Channahon School District Number 17, Will County, Illinois, No Opt. Call Aaa 1,624,801 General Obligation School Building Bonds, Series 2001, 8.400%, 12/01/13 Joliet High School District Number 204, Illinois, General Obligation Bonds, Series 2001: 1,145 8.700%, 12/01/13 No Opt. Call AAA 1,605,782 1,300 8.700%, 12/01/14 No Opt. Call AAA 1,843,894 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.5% 5,530 Allen County Jail Building Corporation, Indiana, First Mortgage 4/11 at 101.00 Aa3 6,021,285 Bonds, Series 2000, 5.750%, 4/01/20 1,880 City of Indianapolis, Indiana, Multifamily Housing Mortgage 7/10 at 102.00 Aaa 1,976,594 Revenue Bonds (GNMA Collateralized Cloverleaf/Phase I Apartments Project), Series 2000, 6.000%, 1/20/31 15 Nuveen Investment Quality Municipal Fund, Inc. (NQM) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 5,065 Metropolitan School District of Steuben County K-5 Building 7/10 at 101.00 AAA $ 5,782,508 Corporation, Steuben County, Indiana, First Mortgage Bonds, Series 2000, Non-Bank Qualified, 6.125%, 1/15/21 2,495 City of Shelbyville, Indiana, Multifamily Housing Mortgage 7/10 at 102.00 Aaa 2,627,734 Revenue Bonds (Blueridge Terrace Project - GNMA Collateralized), Series 2000, 6.050%, 1/20/36 2,765 Wayne County Jail Holding Corporation, Indiana, First Mortgage 1/13 at 101.00 AAA 3,184,202 Bonds, Series 2001, 5.750%, 7/15/14 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.9% 5,290 Iowa Finance Authority, Mortgage Revenue Bonds (Abbey 11/10 at 103.50 Aaa 5,717,538 Healthcare - GNMA Guaranteed), Series 2000A, 6.200%, 5/20/42 4,695 Iowa Finance Authority, Mortgage Revenue Bonds (GNMA 11/10 at 103.50 Aaa 4,924,820 Collateralized Mortgage Loan - Abbey Healthcare West Des Moines GEAC Project), Series 2001A, 6.000%, 5/20/43 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.9% 4,040 Sedgwick and Shawnee Counties, Kansas, Single Family No Opt. Call Aaa 4,576,431 Mortgage Revenue Bonds (Mortgaged-Backed Securities Program), 1997 Series A-1, 6.950%, 6/01/29 (Alternative Minimum Tax) 4,365 City of Topeka, Kansas, Industrial Revenue Refunding Bonds 8/16 at 100.00 AAA 6,095,766 (Sunwest Hotel Corporation Project), Series 1988, 9.500%, 10/01/16 (Alternative Minimum Tax) (Pre-refunded to 8/15/16) - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 2.8% 2,000 Jefferson County, Kentucky, Health Facilities Revenue Refunding 1/07 at 102.00 AAA 2,110,780 Bonds (Jewiah Hospital Healthcare Services Inc.), Series 1996, 5.700%, 1/01/21 12,500 Jefferson County, Kentucky, Pollution Control Revenue Bonds 4/05 at 102.00 AAA 13,554,625 (Louisville Gas and Electric Company Project), 1995 Series A, 5.900%, 4/15/23 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 8.1% 3,560 East Baton Rouge Mortgage Finance Authority, Louisiana, 10/07 at 102.00 Aaa 3,695,494 Single Family Mortgage Revenue Refunding Bonds (GNMA and FNMA Mortgage-Backed Securities Program), Series 1997D, 5.900%, 10/01/30 (Alternative Minimum Tax) 2,715 Parish of Jefferson Home Mortgage Authority, Louisiana, Single 12/09 at 103.00 Aaa 3,002,763 Family Mortgage Revenue Refunding Bonds, Series 2000A-2, 7.500%, 12/01/30 (Alternative Minimum Tax) Parish of Jefferson Home Mortgage Authority, Louisiana, Single Family Mortgage Revenue Bonds, Series 2000G-2: 3,190 6.300%, 6/01/32 (Alternative Minimum Tax) 12/10 at 102.00 Aaa 3,468,423 1,995 5.550%, 6/01/32 (Alternative Minimum Tax) 12/10 at 102.00 Aaa 2,022,272 1,835 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 1,905,831 Revenue Bonds (Comm-Care Corporation Project), Series 1994, 11.000%, 2/01/04 11,545 Orleans Parish School Board, Louisiana, Public School Refunding No Opt. Call AAA 15,236,860 Bonds, Series 1987, 9.000%, 2/01/09 17,310 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 A1 15,683,899 Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 5.1% 12,000 Commonwealth of Massachusetts, General Obligation Bonds, 10/10 at 100.00 AAA 13,848,000 Consolidated Loan of 2000 Series C, 5.750%, 10/01/19 (Pre-refunded to 10/01/10) 5,000 Commonwealth of Massachusetts, General Obligation Bonds, 9/09 at 101.00 Aa2*** 5,826,650 Consolidated Loan of 1999 Series C, 5.875%, 9/01/17 (Pre-refunded to 9/01/09) 5,345 Massachusetts Development Finance Agency, Assisted Living 12/09 at 102.00 N/R 5,380,170 Revenue Bonds (Prospect House Apartments), Series 1999, 7.000%, 12/01/31 1,640 Massachusetts Health and Educational Facilities Authority, 7/11 at 100.00 BBB 1,691,824 Revenue Bonds (University of Massachusetts Memorial Health Care), Series 2001C, 6.500%, 7/01/21 2,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 1,754,040 Revenue Refunding Bonds (Ogden Haverhill Project), Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax) 16 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 4.0% $ 4,250 School District of the City of Detroit, Wayne County, Michigan, 5/12 at 100.00 AAA $ 4,519,833 School Building and Site Improvement Bonds (Unlimited Tax - General Obligation), Series 2001A, 5.500%, 5/01/20 10,000 City of Detroit, Michigan, Water Supply System Revenue and No Opt. Call AAA 12,279,600 Revenue Refunding Bonds, Series 1993, 6.500%, 7/01/15 5,100 City of Detroit, Michigan, Water Supply System Revenue Senior 7/11 at 101.00 AAA 5,506,827 Lien Bonds, 2001 Series A, 5.750%, 7/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 6.3% 5,000 Dakota County Housing and Redevelopment Authority, Washington No Opt. Call AAA 7,154,150 County Housing and Redevelopment Authority and City of Bloomington, Minnesota, Single Family Residential Mortgage Revenue Bonds (Mortgage-Backed Program), Series 1988, 8.450%, 9/01/19 (Alternative Minimum Tax) 3,355 City of Eden Prairie, Minnesota, Multifamily Housing Revenue 12/10 at 103.50 Aaa 3,592,098 Bonds (GNMA Collateralized Mortgage Loan - Lincoln Parc Project), Series 2000A-1, 6.550%, 12/20/30 2,860 City of Hopkins, Minnesota, Elderly Housing Revenue Refunding 3/04 at 102.00 AAA 3,090,545 Bonds (St. Therese Southwest, Inc. Project), Series 1994A, 6.500%, 3/01/19 (Pre-refunded to 3/01/04) 20,000 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 21,357,600 Healthcare System Revenue Bonds (Fairview Health Services), Series 2000A, 6.375%, 11/15/29 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.9% 7,785 Industrial Development Authority of Kansas City, Missouri, 1/07 at 102.00 AAA 8,334,310 Multifamily Housing Revenue Bonds (Royal Woods Apartments Project), Series 1997, 5.600%, 1/01/30 (Alternative Minimum Tax) (Mandatory put 1/01/10) 1,130 Missouri Housing Development Commission, Single Family 3/07 at 105.00 AAA 1,215,372 Mortgage Revenue Bonds (Homeownership Loan Program), 1997 Series A-2, 7.300%, 3/01/28 (Alternative Minimum Tax) 1,250 Health and Educational Facilities Authority of the State of 6/11 at 101.00 AAA 1,270,750 Missouri, Revenue Bonds (SSM Health Care), Series 2001A, 5.250%, 6/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 3.1% 3,300 Nebraska Higher Education Loan Program Inc., Student Loan Program 3/04 at 102.00 AAA 3,404,676 Revenue Bonds, 1993 Series B, 5.875%, 6/01/14 (Alternative Minimum Tax) 13,330 Nebraska Investment Finance Authority, Single Family Housing 3/05 at 101.50 AAA 13,795,217 Revenue Bonds, 1995 Series B, 6.450%, 3/01/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.9% 11,000 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 11,846,340 Series 2002C, 5.500%, 6/15/19 14,530 Director of the State of Nevada, Department of Business and 1/10 at 102.00 AAA 15,282,945 Industry, Las Vegas Monorail Project Revenue Bonds, 1st Tier Series 2000, 5.625%, 1/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 10.1% 7,770 Metropolitan Transportation Authority, New York, Commuter 7/09 at 100.00 AAA 8,769,533 Facilities Revenue Bonds, Series 1997C, 5.375%, 7/01/27 (Pre-refunded to 7/01/09) City of New York, New York, General Obligation Bonds, Fiscal 1997 Series G: 95 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101.00 Aaa 110,400 9,905 6.000%, 10/15/26 10/07 at 101.00 A 10,454,628 7,000 New York City Municipal Water Finance Authority, New York, Water 6/06 at 101.00 AAA 7,616,560 and Sewer System Revenue Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 3,300 New York City Municipal Water Finance Authority, New York, 6/10 at 101.00 AA*** 4,000,986 Water and Sewer System Revenue Bonds, Fiscal 2000 Series B, 6.500%, 6/15/31 (Pre-refunded to 6/15/10) 5,000 New York City Transitional Finance Authority, New York, Future 5/10 at 101.00 AA+ 5,313,350 Tax Secured Bonds, Fiscal 2000 Series C, 5.500%, 11/01/24 16,445 Port Authority of New York and New Jersey, Special Project Bonds No Opt. Call AAA 20,312,206 (JFK International Air Terminal LLC Project), Series 6, 7.000%, 12/01/12 (Alternative Minimum Tax) 17 Nuveen Investment Quality Municipal Fund, Inc. (NQM) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 5.7% $ 2,795 Charlotte, North Carolina, Mortgage Revenue Refunding Bonds 11/07 at 100.00 AAA $ 2,996,967 (FHA-Insured Mortgage - Double Oaks Apartments), 7.350%, 5/15/26 19,775 North Carolina Eastern Municipal Power Agency, Power System 1/07 at 102.00 AAA 21,651,252 Revenue Bonds, Refunding Series 1996B, 5.875%, 1/01/21 7,420 North Carolina Medical Care Commission, Health System Revenue 10/11 at 101.00 AA 7,450,941 Bonds (Mission-Saint Joseph Health System), Series 2001, 5.250%, 10/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 1.6% 8,650 County of Cuyahoga, Ohio, Hospital Improvement Revenue Bonds 2/09 at 101.00 A- 8,944,360 (The Metrohealth System Project), Series 1999, 6.150%, 2/15/29 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.3% 3,300 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, Revenue 12/08 at 100.00 BB- 1,651,188 Bonds, Refunding Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.1% 11,000 Commonwealth of Pennsylvania, General Obligation Bonds, 10/09 at 101.00 AAA 12,106,820 2nd Series 1999, 5.750%, 10/01/18 5,000 City of Philadelphia, Pennsylvania, General Obligation Bonds, 3/11 at 100.00 AAA 5,289,300 Series 2000, 5.250%, 9/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 5.5% 4,685 Newport Housing Development Corporation, Rhode Island, 6/03 at 100.00 AAA 5,197,305 1995 Multifamily Mortgage Revenue Refunding Bonds (Broadway- West Broadway Apartments - FHA-Insured Mortgage - Section 8 Assisted Project), Series A, 6.800%, 8/01/24 24,000 Rhode Island Health and Educational Building Corporation, 5/07 at 102.00 AAA 25,524,240 Hospital Financing Revenue Bonds, Lifespan Obligated Group Issue, Series 1996, 5.750%, 5/15/23 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.8% 10,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 A1 9,826,500 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 15.0% 3,135 Austin Housing Finance Corporation, Texas, Multifamily Housing 12/10 at 105.00 Aaa 3,589,889 Revenue Bonds (GNMA Collateralized Mortgage Loan - Santa Maria Village Project), Series 2000A, 7.375%, 6/20/35 (Alternative Minimum Tax) 13,400 Bexar County Housing Finance Corporation, Texas, Multifamily 5/16 at 100.00 N/R 13,384,054 Housing Revenue Bonds (American Opportunity for Housing), Series 2001A, 7.500%, 5/01/33 3,000 Bexar County Housing Finance Corporation, Texas, Multifamily 5/16 at 100.00 N/R 2,993,370 Housing Revenue Bonds (American Opportunity for Housing), Series 2001B, 8.250%, 5/01/33 1,655 Cameron County Housing Finance Corporation, Texas, 3/03 at 101.00 AAA 1,673,553 GNMA Collateralized Mortgage Revenue Refunding Bonds, 1990 Series B, 7.850%, 3/01/24 18,710 Clear Creek Independent School District, Galveston and Harris 2/10 at 100.00 AAA 19,476,923 Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds, Series 2000, 5.500%, 2/15/22 Dallas Housing Corporation, Texas, Refunding and Capital Program Revenue Bonds (Section 8 Assisted Projects), Series 1990: 645 7.700%, 8/01/05 2/03 at 100.00 Baa2 645,651 2,000 7.850%, 8/01/13 2/03 at 100.00 Baa2 2,026,000 Harris County Hospital District, Texas, Refunding Revenue Bonds, Series 1990: 5,535 7.400%, 2/15/10 No Opt. Call AAA 6,415,563 7,640 7.400%, 2/15/10 No Opt. Call AAA 8,985,480 5,000 Harris County Hospital District, Texas, Refunding Revenue Bonds, 8/10 at 100.00 AAA 5,583,100 Series 2000, 6.000%, 2/15/14 2,256 Heart of Texas Housing Finance Corporation, Multifamily Housing 6/10 at 105.00 AAA 2,575,044 Revenue Bonds (GNMA Collateralized Mortgage Loan - Robinson Garden Project), Series 2000A, 7.375%, 6/20/35 (Alternative Minimum Tax) 18 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 3,960 Stafford Economic Development Corporation, Texas, Sales 9/15 at 100.00 AAA $ 4,182,156 Tax Revenue Bonds, Series 2000, 5.500%, 9/01/30 6,865 Tarrant County Health Facilities Development Corporation, Texas, 12/10 at 105.00 Aaa 8,139,831 Mortgage Revenue Bonds (GNMA Collateralized Mortgage Loan - Eastview Nursing Home, Ebony Lake Nursing Center, Ft. Stockton Nursing Center, Lynnhaven Nursing Center and Mission Oaks Manor), Series 2000A-1, 7.500%, 12/20/22 3,965 Tyler Health Facilities Development Corporation, Texas, Hospital 11/07 at 102.00 AAA 4,152,426 Revenue Bonds (East Texas Medical Center), Series 1997C, 5.600%, 11/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.3% 1,970 City of Virginia Beach Development Authority, Virginia, 10/14 at 102.00 N/R 1,952,763 Multifamily Residential Rental Housing Revenue Bonds (The Hamptons and Hampton Court Apartments Project), Series 1999, 7.500%, 10/01/39 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.2% 17,075 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AA+ 17,957,778 Bonds, 2000 Series B, 5.750%, 12/01/25 (Alternative Minimum Tax) 5,000 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 10/11 at 100.00 AAA 5,323,400 5.625%, 4/01/17 (Alternative Minimum Tax) 16,750 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 8/10 at 100.00 AAA 17,562,375 5.625%, 2/01/30 175 State of Washington, General Obligation Bonds, Series 1993A, 10/03 at 100.00 AA+*** 179,958 4.750%, 10/01/13 (Pre-refunded to 10/01/03) 16,060 Washington Public Power Supply System, Nuclear Project No. 3 7/03 at 102.00 AAA 16,699,508 Refunding Revenue Bonds, Series 1993B, 5.600%, 7/01/15 4,500 Washington Public Power Supply System, Nuclear Project No. 3 7/03 at 102.00 Aa1 4,602,734 Refunding Revenue Bonds, Series 1993C, 5.375%, 7/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 1.7% 4,850 State of Wisconsin, General Obligation Bonds, Series 2001-1 No Opt. Call AAA 5,506,641 Refunding, 5.500%, 5/01/13 Wisconsin Health and Educational Facilities Authority, Revenue Bonds (Eagle River Memorial Hospital, Incorporated Project), Series 2000: 1,000 5.750%, 8/15/20 8/10 at 101.00 AA 1,040,499 3,000 5.875%, 8/15/30 8/10 at 101.00 AA 3,141,299 - ------------------------------------------------------------------------------------------------------------------------------------ $ 789,066 Total Long-Term Investments (cost $793,081,062) - 151.5% 846,239,956 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.3% $ 1,500 California Statewide Communities Development Authority, A-1 1,500,000 Revenue Bonds (Fremont-Rideout Health Group), Variable Rate Demand Bonds, Series 2001A, 1.900%, 1/01/31+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,500 Total Short-Term Investments (cost $1,500,000) 1,500,000 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.1% 11,864,270 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.9)% (301,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $558,604,226 ==================================================================================================================== (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. # On December 9, 2002, UALCorporation, the holding company of United Air Lines, Inc., filed for federal bankruptcy protection. The Adviser believes United will remain current on their interest payment obligations with respect to these bonds, which relate to essential operating facilities. N/R Investment is not rated. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 19
Nuveen Select Quality Municipal Fund, Inc. (NQS) Portfolio of INVESTMENTS October 31, 2002
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 5.2% Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 1999-A: $ 4,000 5.375%, 2/01/36 (Pre-refunded to 2/01/09) 2/09 at 101.00 AAA $ 4,510,960 5,000 5.750%, 2/01/38 (Pre-refunded to 2/01/09) 2/09 at 101.00 AAA 5,744,000 10,000 Healthcare Authority of Lauderdale County and the City of 7/10 at 102.00 AAA 10,978,300 Florence, Alabama, Revenue Bonds (Coffee Health Group), Series 2000A, 6.000%, 7/01/29 5,155 Phenix City Industrial Development Board, Alabama, Environmental 5/12 at 100.00 BBB 5,037,054 Improvement Revenue Bonds (MeadWestvaco Project), Series 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.1% 4,500 City of Little Rock, Arkansas, Hotel and Restaurant Gross Receipts No Opt. Call A3 5,615,640 Tax Refunding Bonds, Series 1993, 7.375%, 8/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 0.1% 550 California Pollution Control Financing Authority, Pollution Control 4/11 at 102.00 AAA 582,412 Refunding Revenue Bonds (Pacific Gas and Electric Company), Series 1996A Remarketed, 5.350%, 12/01/16 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 9.8% 11,000 State of Colorado Department of Transportation, Revenue 6/10 at 100.50 AAA 12,895,740 Anticipation Bonds, Series 2000, 6.000%, 6/15/15 (Pre-refunded to 6/15/10) 9,250 Colorado Health Facilities Authority, Kaiser Permanente Revenue 7/06 at 102.00 A 9,415,113 Bonds, 1994 Series A Remarketed, 5.350%, 11/01/16 9,590 City and County of Denver, Colorado, Airport System Revenue 11/02 at 102.00 A 9,799,733 Bonds, Series 1992C, 6.750%, 11/15/22 (Alternative Minimum Tax) (Pre-refunded to 11/15/02) 14,000 City and County of Denver, Colorado, Airport System Revenue 11/10 at 100.00 AAA 14,512,120 Refunding Bonds, Series 2000A, 5.625%, 11/15/23 (Alternative Minimum Tax) 105 Jefferson County, Colorado, Single Family Revenue Refunding 4/03 at 101.00 AAA 107,218 Bonds, Series 1991A, 8.875%, 10/01/13 12,355 Northwest Parkway Public Highway Authority, Colorado, Revenue 6/11 at 40.52 AAA 3,043,037 Bonds, Series 2001B (Senior), 0.000%, 6/15/26 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 1.7% 9,285 Connecticut Development Authority, Health Facility Refunding 8/04 at 102.00 N/R 8,723,443 Revenue Bonds (Alzheimer's Resource Center of Connecticut, Inc. Project), Series 1994A, 7.250%, 8/15/21 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 3.3% District of Columbia, General Obligation Bonds, Series 1998B: 5,000 6.000%, 6/01/19 No Opt. Call AAA 5,840,750 7,265 5.250%, 6/01/26 6/08 at 101.00 AAA 7,366,710 3,640 District of Columbia Tobacco Settlement Financing Corporation, 5/11 at 101.00 A1 3,646,334 Tobacco Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 3.8% 5,665 Florida Housing Finance Corporation, Housing Revenue Bonds 7/10 at 100.00 AAA 5,923,834 (The Park at Palm Bay), 2000 Series R-2, 5.875%, 7/01/32 (Alternative Minimum Tax) 4,550 JEA, Florida, Water and Sewer System Revenue Bonds, 4/07 at 100.00 AAA 4,646,460 Series 2002A, 5.375%, 10/01/30 Lee County, Florida, Airport Revenue Bonds, Series 2000A: 3,075 5.875%, 10/01/18 (Alternative Minimum Tax) 10/10 at 101.00 AAA 3,341,849 4,860 5.875%, 10/01/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 5,264,935 20 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.8% $ 3,750 City of Atlanta, Georgia, Airport General Revenue Bonds, 1/10 at 101.00 AAA $ 3,900,825 Series 2000B, 5.625%, 1/01/30 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 17.2% 5,000 City of Chicago, Illinois, General Obligation Bonds, Project and 1/06 at 102.00 AAA 5,018,100 Refunding Series 1996B, 5.125%, 1/01/25 5,865 City of Chicago, Illinois, General Obligation Bonds (Neighborhoods 7/10 at 101.00 AAA 7,099,172 Alive 21 Program), Series 2000A, 6.500%, 1/01/35 (Pre-refunded to 7/01/10) Chicago 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 1997: 4,000 5.750%, 12/01/20 12/07 at 102.00 AAA 4,333,280 10,000 5.750%, 12/01/27 12/07 at 102.00 AAA 10,738,000 7,555 Chicago School Reform Board of Trustees of the Board of 12/07 at 102.00 AAA 7,670,667 Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds (Dedicated Tax Revenues), Series 1997A, 5.250%, 12/01/27 3,415 Chicago School Reform Board of Trustees of the Board of Education No Opt. Call AAA 964,055 of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds (Dedicated Tax Revenues), Series 1998A, 0.000%, 12/01/25 5,000 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call Ca 700,300 Special Facility Revenue Bonds (United Air Lines, Inc. Project), Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13)## 15,000 City of Chicago, Illinois, Chicago O'Hare International Airport, 1/11 at 101.00 AAA 15,290,250 Second Lien Passenger Facility Charge Revenue Bonds, Series 2001A, 5.375%, 1/01/32 (Alternative Minimum Tax) City of Chicago, Illinois, Chicago O'Hare International Airport, Second Lien Passenger Facility Charge Revenue Bonds, Series 2001C: 3,770 5.100%, 1/01/26 (Alternative Minimum Tax) 1/11 at 101.00 AAA 3,757,031 5,360 5.250%, 1/01/32 (Alternative Minimum Tax) 1/11 at 101.00 AAA 5,400,307 Illinois Development Finance Authority, Multifamily Housing Bonds (Affordable Housing Preservation Foundation Project - FHA-Insured Mortgage Loans - Lawless Gardens Project), Series 1990, Subseries A: 775 7.650%, 7/01/07 1/03 at 104.00 AAA 814,796 6,780 7.650%, 12/31/31 1/03 at 104.00 AAA 7,128,967 2,000 Illinois Health Facilities Authority, Revenue Bonds (Midwest 2/11 at 102.00 Aaa 2,077,220 Care Center Inc), Series 2001, 5.950%, 2/20/36 Illinois Health Facilities Authority, Revenue Bonds (Condell Medical Center), Series 2002: 10,000 5.750%, 5/15/22 5/12 at 100.00 A3 10,150,000 4,000 5.500%, 5/15/32 5/12 at 100.00 A3 3,894,560 2,920 Metropolitan Pier and Exposition Authority, Illinois, McCormick 6/12 at 101.00 AAA 2,917,722 Place Expansion Project Revenue Bonds, Series 2002A, 5.000%, 12/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 6.2% 8,640 Avon Community School Building Corporation, Hendricks County, 7/04 at 101.00 AAA 9,254,390 Indiana, First Mortgage Bonds, Series 1994, 5.500%, 1/01/16 (Pre-refunded to 7/01/04) 4,735 Beacon Heights Housing Development Corporation, Indiana, 1991 12/02 at 100.00 AAA 4,742,860 Multifamily Mortgage Revenue Refunding Bonds (FHA-Insured Mortgage - Section 8 Assisted Project), Series A, 7.625%, 2/01/21 5,910 Indiana Housing Finance Authority, Single Family Mortgage 1/10 at 100.00 Aaa 6,161,825 Revenue Bonds, 2000 Series D-3, 5.950%, 7/01/26 (Alternative Minimum Tax) 5,450 City of Indianapolis, Indiana, Economic Development Revenue 7/06 at 102.00 D 2,180,000 Bonds (Willowbrook Apartments Project), Senior Series 1996A, 6.500%, 7/01/26# 1,005 Michigan City Housing Development Corporation, Indiana, 12/02 at 100.00 AAA 1,006,668 1991 Multifamily Mortgage Revenue Refunding Bonds (FHA-Insured Mortgage - Section 8 Assisted Project), Series A, 7.625%, 2/01/21 7,660 Hospital Authority of St. Joseph County, Indiana, Health System 2/11 at 100.00 AAA 7,978,350 Revenue Bonds (Memorial Health System), Series 2000, 5.625%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.0% 5,000 Burlington, Kansas, Environmental Improvement Revenue Bonds No Opt. Call A2 5,043,450 (Kansas City Power and Light Company Project), Series 1998A, 4.750%, 9/01/15 (Mandatory put 10/01/07) 21 Nuveen Select Quality Municipal Fund, Inc. (NQS) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.6% $ 3,015 Lakeland Wesley Village, Inc., Kentucky, Mortgage Revenue 11/02 at 100.00 N/R $ 3,041,381 Refunding Bonds (Lakeland Wesley Village I Elderly - FHA-Insured Mortgage - Section 8 Assisted Project), Series 1991, 7.500%, 11/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.7% 7,500 Maryland Health and Higher Educational Facilities Authority, 7/09 at 101.00 AA*** 8,794,800 Revenue Bonds, The Johns Hopkins University Issue, Series 1999, 6.000%, 7/01/39 (Pre-refunded to 7/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.9% 7,375 Boston Housing Development Corporation, Massachusetts, 1/04 at 102.00 AAA 7,443,588 Mortgage Revenue Refunding Bonds (FHA-Insured Mortgage Loans - Section 8 Assisted Projects), Series 1994A, 5.500%, 7/01/24 1,885 Massachusetts Educational Financing Authority, Education Loan 12/09 at 101.00 AAA 2,071,276 Revenue and Refunding Bonds, Issue G, Series 2000A, 5.700%, 12/01/11 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 7.5% 10,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, 1/10 at 101.00 AAA 11,523,600 Series 1999-A, 5.750%, 7/01/26 (Pre-refunded to 1/01/10) 3,625 Fowlerville Community Schools, Counties of Livingston, Ingham 5/07 at 100.00 AAA 4,068,483 and Shiawassee, State of Michigan, 1996 School Building and Site Bonds, 5.600%, 5/01/26 (Pre-refunded to 5/01/07) 3,275 Michigan State Hospital Finance Authority, Revenue and Refunding 8/03 at 102.00 BBB- 3,291,015 Bonds (Detroit Medical Center Obligated Group), Series 1993A, 6.500%, 8/15/18 6,525 Michigan State Hospital Finance Authority, Revenue Bonds 11/09 at 101.00 AAA 6,936,467 (Ascension Health Credit Group), Series 1999A, 5.750%, 11/15/16 6,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/11 at 100.00 A- 6,099,540 Bonds (Detroit Edison Company Pollution Control Project), Collateralized Series 1999C Fixed Rate Conversion, 5.650%, 9/01/29 (Alternative Minimum Tax) 5,900 City of Royal Oak, Michigan, Hospital Finance Authority, Hospital 11/11 at 100.00 AAA 5,965,431 Revenue Bonds (William Beaumont Hospital), Series 2001M, 5.250%, 11/15/35 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 3.0% 1,285 Chisago County, Southcentral Minnesota Multi-County and Stearns 3/04 at 102.85 AAA 1,340,062 County, Minnesota, Housing and Redevelopment Authorities, Single Family Mortgage Revenue Refunding Bonds (Fannie Mae Mortgage-Backed Securities Program), Series 1994B, 7.050%, 9/01/27 (Alternative Minimum Tax) 7,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 7,136,850 Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32 6,700 Minnesota Housing Finance Agency, Single Family Mortgage 7/09 at 100.00 AA+ 6,970,479 Bonds, 2000 Series C, 6.100%, 7/01/30 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.3% 1,330 Goodman Housing Development Corporation, Mississippi, 2/03 at 100.00 AAA 1,336,437 1991 Multifamily Mortgage Revenue Refunding Bonds (Goodhaven Manor - FHA-Insured Mortgage - Section 8 Assisted Project), Series A, 7.625%, 2/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 2.1% 10,550 Nebraska Investment Finance Authority, Single Family Housing 3/05 at 101.50 AAA 10,919,145 Revenue Bonds, 1995 Series A, 6.800%, 3/01/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 8.7% 4,885 Clark County, Nevada, General Obligation Limited Tax Bond Bank 7/10 at 100.00 AA 5,236,085 Bonds, Series 2000 (Additionally Secured by Pledged Revenues), 5.500%, 7/01/18 7,500 Clark County, Nevada, Airport System Subordinate Lien Revenue 7/10 at 101.00 AAA 8,816,625 Bonds, Series 1999A, 6.000%, 7/01/29 (Pre-refunded to 7/01/10) 10,000 Clark County School District, Nevada, General Obligation Limited 6/06 at 101.00 AAA 11,342,500 Tax School Improvement Bonds, Series 1996, 6.000%, 6/15/15 (Pre-refunded to 6/15/06) 1,500 Director of the State of Nevada, Department of Business and 1/10 at 102.00 AAA 1,578,855 Industry, Las Vegas Monorail Project Revenue Bonds, 1st Tier Series 2000, 5.625%, 1/01/32 22 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA (continued) $ 10,000 Truckee Meadows Water Authority, Nevada, Water Revenue 7/11 at 100.00 AAA $ 10,196,600 Bonds, Series 2001A, 5.250%, 7/01/34 6,000 Washoe County, Nevada, Reno-Sparks Convention and Visitors 1/10 at 100.00 AAA 7,090,980 Authority, General Obligation Limited Tax and Revenue Bonds, Series 1999A, 6.375%, 7/01/23 (Pre-refunded to 1/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 6.1% 3,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/07 at 101.50 AAA 3,096,090 Housing Revenue Bonds, 1997 Series A, 5.550%, 5/01/27 (Alternative Minimum Tax) 17,670 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/10 at 100.00 AAA 18,507,028 Revenue Bonds, 2000 Series CC, 5.850%, 10/01/25 (Alternative Minimum Tax) 9,645 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 A1 9,203,548 Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 4.4% 8,500 City of Farmington, New Mexico, Pollution Control Revenue 4/06 at 101.00 BBB- 8,325,155 Refunding Bonds (Public Service Company of New Mexico San Juan Project), Series 1997B, 5.800%, 4/01/22 New Mexico Hospital Equipment Loan Council, Hospital Revenue Bonds (Presbyterian Healthcare Services), Series 2001A: 8,000 5.500%, 8/01/25 8/11 at 101.00 A+ 8,008,240 6,200 5.500%, 8/01/30 8/11 at 101.00 A+ 6,201,736 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 14.2% 7,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AA- 7,057,890 Contract Refunding Bonds, Series 2002A, 5.125%, 1/01/29 City of New York, New York, General Obligation Bonds, Fiscal 1997 Series G: 90 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101.00 Aaa 104,590 9,200 6.000%, 10/15/26 10/07 at 101.00 A 9,710,508 5,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 5,010,700 Water and Sewer System Revenue Bonds, Fiscal 1999 Series B, 5.000%, 6/15/29 6,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 6,349,500 Water and Sewer System Revenue Bonds, Fiscal 2000 Series A, 5.500%, 6/15/32 2,255 New York City Transit Authority, Metropolitan Transportation 1/10 at 101.00 AAA 2,447,329 Authority, Triborough Bridge and Tunnel Authority, New York, Certificates of Participation, Series 2000A, 5.750%, 1/01/20 9,750 New York City Transitional Finance Authority, New York, Future 5/10 at 101.00 AA+*** 11,473,898 Tax Secured Bonds, Fiscal 2000 Series B, 6.000%, 11/15/29 (Pre-refunded to 5/15/10) 10,000 Dormitory Authority of the State of New York, Court Facilities 5/10 at 101.00 A 10,745,800 Lease Revenue Bonds, City of New York Issue, Series 1999, 6.000%, 5/15/39 5,650 Dormitory Authority of the State of New York, Mental Health 8/09 at 101.00 AAA 5,787,408 Services Facilities Improvement Revenue Bonds, Series 1999D, 5.250%, 8/15/24 5,585 State of New York Mortgage Agency, Homeowner Mortgage 3/09 at 101.00 Aa1 5,670,283 Revenue Bonds, 1999 Series 79, 5.300%, 4/01/29 (Alternative Minimum Tax) 5 New York State Medical Care Facilities Finance Agency, Mental 2/03 at 101.00 AA- 5,121 Health Services Facilities Improvement Revenue Bonds, 1991 Series D, 7.400%, 2/15/18 7,545 New York State Urban Development Corporation, 1996 Corporate 7/06 at 102.00 AAA 7,904,746 Purpose Senior Lien Bonds, 5.500%, 7/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.7% 18,555 North Carolina Eastern Municipal Power Agency, Power System 1/03 at 100.00 AAA 18,640,167 Revenue Bonds, Refunding Series 1993B, 5.500%, 1/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 2.0% 10,000 City of Grand Forks, North Dakota, Sales Tax Revenue Bonds 12/07 at 100.00 AAA 10,358,600 (The Aurora Project), Series 1997A, 5.625%, 12/15/29 23 Nuveen Select Quality Municipal Fund, Inc. (NQS) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 1.3% $ 5,000 County of Montgomery, Ohio, Hospital Facilities Revenue Bonds 4/10 at 101.00 BBB+ $ 5,263,200 (Kettering Medical Center Network Obligated Group), Series 1999, 6.750%, 4/01/22 1,445 Ohio Housing Finance Agency, Residential Mortgage Revenue 8/10 at 100.00 Aaa 1,522,394 Bonds (Mortgage-Backed Securities Program), 2000 Series C, 6.050%, 3/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.0% 10,000 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, Revenue 12/08 at 100.00 BB- 4,903,700 Bonds (American Airlines Inc), Refunding Series 2001B, 5.650%, 12/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 0.0% 95 Delaware River Port Authority, New Jersey and Pennsylvania, 1/10 at 100.00 AAA 105,296 Revenue Bonds, Series 1999, 5.750%, 1/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 8.1% 10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 10,799,300 Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/21 3,750 Greenwood County, South Carolina, Hospital Revenue Bonds 10/11 at 100.00 A+ 3,693,750 (Self Memorial Hospital), Series 2001, 5.500%, 10/01/31 5,000 Oconee County, South Carolina, Pollution Control Facilities Revenue 4/03 at 102.00 Aa3 5,158,650 Refunding Bonds (Duke Power Company Project), Series 1993, 5.800%, 4/01/14 3,020 South Carolina State Housing Finance and Development Authority, 6/10 at 100.00 Aaa 3,237,651 Mortgage Revenue Bonds, Series 2000 A-2, 6.000%, 7/01/20 (Alternative Minimum Tax) Tobacco Settlement Revenue Management Authority, South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B: 11,530 6.000%, 5/15/22 5/11 at 101.00 A1 11,392,562 4,000 6.375%, 5/15/28 5/11 at 101.00 A1 3,930,600 3,000 6.375%, 5/15/30 No Opt. Call A1 2,935,200 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH DAKOTA - 2.4% 2,500 Education Loans Incorporated, South Dakota, Tax-Exempt Fixed 6/08 at 102.00 A2 2,533,750 Rate Student Loan Asset-Backed Callable Notes, Subordinate Series 1998-1K, 5.600%, 6/01/20 (Alternative Minimum Tax) 6,695 City of Sioux Falls, South Dakota, Industrial Revenue Refunding 10/14 at 100.00 AAA 8,857,485 Bonds (Great Plains Hotel Corporation Project), Series 1989, 8.500%, 11/01/16 (Alternative Minimum Tax) (Pre-refunded to 10/15/14) 935 South Dakota Housing Development Authority, Homeownership 11/06 at 102.00 AAA 980,759 Mortgage Bonds, 1996 Series D, 6.300%, 5/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 4.5% 5,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa2 5,119,750 Tennessee, Hospital Facilities Revenue Bonds (Baptist Health System of East Tennessee), Series 2002, 6.500%, 4/15/31 12,500 Health and Educational Facilities Board of the Metropolitan 11/09 at 101.00 AAA 13,396,250 Government of Nashville and Davidson County, Tennessee, Revenue Bonds (Ascension Health Credit Group), Series 1999A, 5.875%, 11/15/28 Tennessee Housing Development Agency, Homeownership Program Bonds, Issue 2000-1: 1,785 5.750%, 7/01/10 (Alternative Minimum Tax) No Opt. Call AA 1,922,802 2,145 6.000%, 7/01/13 (Alternative Minimum Tax) 7/10 at 101.00 AAA 2,283,331 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 11.9% 5,000 Brazos River Authority, Texas, Pollution Control Revenue Bonds No Opt. Call BBB 4,454,350 (Texas Utilities Company), Series 1995B, 5.050%, 6/01/30 (Alternative Minimum Tax) (Mandatory put 6/19/06) 10,000 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa1 8,617,400 Bonds (TXU Electric Company Project), Series 2001C, 5.750%, 5/01/36 (Alternative Minimum Tax) (Mandatory put 11/01/11) 1,065 Comal County Health Facilities Development Corporation, Texas, 1/03 at 101.00 AAA 1,083,989 Hospital Revenue Refunding Bonds (McKenna Memorial Hospital FHA-Insured Project), Series 1991, 7.375%, 1/15/21 5,500 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax Revenue 12/11 at 100.00 AAA 5,478,880 Bonds, Series 2001A, 5.000%, 12/01/31 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 1,550 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal 4/11 at 101.00 BBB $ 1,542,545 Revenue Bonds (Valero Energy Corporation Project), Series 2001, 6.650%, 4/01/32 (Alternative Minimum Tax) 1,020 Harrison County Finance Corporation, Texas, Single Family 12/02 at 102.00 A1 1,043,868 Mortgage Revenue Refunding Bonds, Series 1991, 8.875%, 12/01/11 4,590 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/10 at 100.00 AAA 4,742,434 Bonds, Series 2000A, 5.625%, 7/01/30 (Alternative Minimum Tax) 3,500 City of Houston, Texas, Water and Sewer System Junior Lien 12/12 at 100.00 AAA 3,476,340 Revenue Refunding Bonds, Series 2002A, 5.000%, 12/01/30 9,000 Matagorda County Navigation District Number One, Texas, No Opt. Call AAA 9,014,130 Collateralized Revenue Refunding Bonds (Houston Lighting and Power Company Project), Series 1997, 5.125%, 11/01/28 (Alternative Minimum Tax) 1,355 Panhandle Regional Housing Finance Corporation, Texas, Single 11/02 at 100.00 AAA 1,364,797 Family Mortgage Revenue Bonds (GNMA Mortgage-Backed Securities Program), Series 1991A, 7.500%, 5/01/24 (Alternative Minimum Tax) 4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply System 10/12 at 100.00 Baa2 4,710,481 Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21 5,500 Spring Independent School District, Harris County, Texas, 8/11 at 100.00 AAA 5,495,765 Unlimited Tax Schoolhouse Bonds, Series 2001, 5.000%, 8/15/26 4,520 State of Texas, Water Financial Assistance, General Obligation 8/09 at 100.00 Aa1 4,661,069 Bonds (State Participation Program), Series 1999C, 5.500%, 8/01/35 4,560 Winter Garden Housing Finance Corporation, Texas, Single Family 4/04 at 103.00 AAA 4,752,478 Mortgage Revenue Bonds (GNMA and FNMA Mortgage-Backed Securities Program), Series 1994, 6.950%, 10/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 6.0% Intermountain Power Agency, Utah, Power Supply Revenue Refunding Bonds, 1993 Series A: 8,635 5.500%, 7/01/20 7/03 at 102.00 AAA 8,999,915 5,015 5.500%, 7/01/20 7/03 at 102.00 AAA 5,121,017 16,050 Utah County, Utah, Hospital Revenue Bonds (IHC Health Services, 8/07 at 101.00 AAA 16,172,141 Inc.), Series 1997, 5.250%, 8/15/26 - ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 2.6% Vermont Educational and Health Buildings Financing Agency, Hospital Revenue Bonds (Fletcher Allen Health Care Project), Series 2000A: 3,720 6.125%, 12/01/15 12/10 at 101.00 AAA 4,196,123 4,265 6.250%, 12/01/16 12/10 at 101.00 AAA 4,831,307 4,025 Vermont Housing Finance Agency, Single Family Housing Bonds, 11/09 at 100.00 AAA 4,169,699 Series 13A, 5.950%, 11/01/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 4.8% 8,810 Public Utility District No. 1, Chelan County, Washington, 7/11 at 101.00 AAA 9,176,320 Chelan-Hydro Consolidated System Revenue Bonds, Series 2001A, 5.600%, 1/01/36 (Alternative Minimum Tax) 7,225 Port of Seattle, Washington, Special Facility Revenue Bonds 3/10 at 101.00 AAA 7,789,851 (Terminal 18 Project), Series 1999B, 6.000%, 9/01/20 (Alternative Minimum Tax) Municipality of Metropolitan Seattle, Washington, Sewer Refunding Revenue Bonds, Series Z: 2,990 5.450%, 1/01/17 (Pre-refunded to 1/01/03) 1/03 at 102.00 AAA 3,068,547 2,490 5.450%, 1/01/19 (Pre-refunded to 1/01/03) 1/03 at 102.00 AAA 2,555,411 1,800 5.450%, 1/01/20 (Pre-refunded to 1/01/03) 1/03 at 102.00 AAA 1,847,285 25 Nuveen Select Quality Municipal Fund, Inc. (NQS) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 3.3% $ 10,000 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 A1 $ 9,630,999 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 5,000 Madison, Wisconsin, Industrial Development Revenue Refunding 4/12 at 100.00 AA- 5,136,499 Bonds (Madison Gas and Electric Company Projects), Series 2002A, 5.875%, 10/01/34 (Alternative Minimum Tax) 1,745 Wisconsin Housing and Economic Development Authority, 3/10 at 100.00 AA 1,819,702 Homeownership Revenue Bonds, 2000 Series G, 5.950%, 3/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ $ 765,965 Total Long-Term Investments (cost $743,054,430) - 152.3% 774,016,745 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.6% 13,282,934 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (54.9)% (279,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $508,299,679 ==================================================================================================================== (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. In the case of a bond, non-income producing generally denotes that the issuer has defaulted on the payment of principal or interest or has filed for bankruptcy. ## On December 9, 2002, UALCorporation, the holding company of United Air Lines, Inc., filed for federal bankruptcy protection. The Adviser believes United will remain current on their interest payment obligations with respect to these bonds, which relate to essential operating facilities. N/R Investment is not rated. See accompanying notes to financial statements.
26 Nuveen Quality Income Municipal Fund, Inc. (NQU) Portfolio of INVESTMENTS October 31, 2002
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.2% $ 3,500 Governmental Utility Services Corporation of the City of Bessemer, 6/08 at 102.00 AAA $ 3,555,055 Alabama, Water Supply Revenue Bonds, Series 1998, 5.200%, 6/01/24 20,785 Jefferson County, Alabama, Sewer Revenue Capitol Improvement 2/11 at 101.00 AAA 21,694,136 Warrants, Series 2001A, 5.500%, 2/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 1.6% 6,750 Alaska Housing Finance Corporation, General Housing Purpose 12/02 at 102.00 Aa2*** 6,912,068 Bonds, 1992 Series A, 6.600%, 12/01/23 (Pre-refunded to 12/01/02) 5,835 Alaska Housing Finance Corporation, Governmental Purpose 12/05 at 102.00 AAA 5,986,418 Bonds, 1995 Series A, 5.875%, 12/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 3.1% 5,000 Industrial Development Authority of the County of Maricopa, 9/10 at 103.00 AAA 5,297,150 Arizona, Multifamily Housing Revenue Bonds (Bay Club at Mesa Cove Project), Series 2000A, 5.800%, 9/01/35 1,000 City of Mesa, Arizona, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,104,220 Series 2002, 5.250%, 7/01/17 9,065 Industrial Development Authority of the County of Pima, Arizona, 12/10 at 103.00 Aaa 9,808,874 Multifamily Housing Revenue Bonds (FHA-Insured Mortgage Loan - Fountain Village Apartments Project), Series 2000, 6.100%, 12/20/35 8,010 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 AA 8,137,679 Arizona, Salt River Project Electric System Refunding Revenue Bonds, 2002 Series A, 5.125%, 1/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.7% 4,905 Arkansas Development Finance Authority, Single Family Mortgage 7/05 at 102.00 AAA 5,195,082 Revenue Bonds (Mortgage-Backed Securities Program), 1995 Series B, 6.700%, 7/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 6.0% 3,000 California Health Facilities Financing Authority, Kaiser Permanente 5/03 at 102.00 A 3,012,120 Revenue Bonds, 1993 Series C, 5.600%, 5/01/33 5,000 State of California, General Obligation Veteran's Welfare Bonds, 12/03 at 102.00 AA- 5,048,250 Series 1997BH, 5.600%, 12/01/32 (Alternative Minimum Tax) 10,000 State of California, Various Purpose General Obligation Bonds, 4/09 at 101.00 AAA 9,656,600 4.750%, 4/01/29 17,000 State Public Works Board of the State of California, Department 11/04 at 102.00 Aaa 19,109,360 of Corrections Lease Revenue Bonds (California State Prison, Monterey County (Soledad II)), 1994 Series A, 7.000%, 11/01/19 (Pre-refunded to 11/01/04) 8,500 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 100.00 AAA 8,519,720 Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35 2,500 Community Redevelopment Agency of the City of Los Angeles, 1/03 at 100.00 BBB*** 2,527,250 California, Central Business District Redevelopment Project Tax Allocation Refunding Bonds, Series G, 6.750%, 7/01/10 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.5% 10,000 City and County of Denver, Colorado, Airport System Revenue 11/10 at 100.00 AAA 10,365,800 Refunding Bonds, Series 2000A, 5.625%, 11/15/23 (Alternative Minimum Tax) 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/07 at 101.00 AAA 9,760,300 Series 1997A, 4.750%, 9/01/23 14,400 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 65.63 AAA 6,424,416 Series 2000B, 0.000%, 9/01/17 8,740 Poudre School District R-1, Larimer County, Colorado, General 12/10 at 100.00 AAA 9,069,760 Obligation Bonds, Series 2000, 5.125%, 12/15/19 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.6% 4,395 City of Bridgeport, Connecticut, General Obligation Bonds, 8/11 at 100.00 AAA 4,742,469 Series C, 5.375%, 8/15/17 27 Nuveen Quality Income Municipal Fund, Inc. (NQU) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 0.7% $ 5,000 Orange County Health Facilities Authority, Florida, Hospital 11/10 at 101.00 A- $ 5,358,550 Revenue Bonds (Adventist Health System/Sunbelt Obligated Group), Series 2000, 6.500%, 11/15/30 - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 1.4% 10,000 State of Hawaii, Airports System Revenue Bonds, Refunding 7/10 at 101.00 AAA 10,789,000 Series 2000B, 5.750%, 7/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 14.1% 6,450 City of Chicago, Illinois, General Obligation Bonds, Series 2002A 7/12 at 100.00 AAA 6,661,818 Project and Refunding, 5.000%, 1/01/18 32,670 City of Chicago, Illinois, General Obligation Bonds (City Colleges No Opt. Call AAA 6,543,148 of Chicago Capital Improvement Project), Series 1999, 0.000%, 1/01/32 5,000 City of Chicago, Illinois, General Obligation Bonds (Neighborhoods 7/10 at 101.00 AAA 5,612,000 Alive 21 Program), Series 2000A, 6.000%, 1/01/28 5,045 City of Chicago, Illinois, General Obligation Refunding Bonds, 1/10 at 101.00 AAA 5,391,642 Series 2000D, 5.750%, 1/01/30 Board of Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds (Dedicated Revenues), Series 2001C: 1,000 5.500%, 12/01/18 12/11 at 100.00 AAA 1,079,650 3,690 5.000%, 12/01/19 12/11 at 100.00 AAA 3,775,055 3,000 5.000%, 12/01/20 12/11 at 100.00 AAA 3,042,540 2,000 5.000%, 12/01/21 12/11 at 100.00 AAA 2,013,700 Chicago 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: 9,400 0.000%, 12/01/14 No Opt. Call AAA 5,381,124 4,400 0.000%, 12/01/15 No Opt. Call AAA 2,365,572 12,750 City of Chicago, Illinois, Chicago Midway Airport, Revenue Bonds, 1/09 at 101.00 AAA 12,663,555 Series 1998A, 5.125%, 1/01/35 (Alternative Minimum Tax) City of Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2000: 8,000 5.750%, 1/01/25 1/10 at 101.00 AAA 8,560,320 7,750 6.000%, 1/01/30 (Pre-refunded to 1/01/10) 1/10 at 101.00 AAA 9,047,505 11,000 Illinois Health Facilities Authority, Hospital Revenue Bonds 11/03 at 102.00 AAA 11,762,960 (Hindsdale Hospital), Series 1993-A, 7.000%, 11/15/19 10,000 Illinois Health Facilities Authority, Revenue Bonds (Iowa Health 2/10 at 101.00 AAA 10,695,500 System), Series 2000, 5.875%, 2/15/30 2,610 Illinois Housing Development Authority, Section 8 Elderly Housing 3/03 at 102.00 A 2,664,575 Revenue Bonds (Garden House of Maywood Development), Series 1992, 7.000%, 9/01/18 Illinois Educational Facilities Authority, Student Housing Revenue Bonds (Educational Advancement Foundation Fund - University Center Project), Series 2002: 3,000 6.625%, 5/01/17 5/12 at 101.00 Baa2 3,220,680 1,800 6.000%, 5/01/22 5/12 at 101.00 Baa2 1,802,088 5,000 State of Illinois, General Obligation Bonds (Illinois FIRST), 12/10 at 100.00 AAA 5,234,150 Series 2000, 5.450%, 12/01/21 3,430 Joliet Regional Port District Airport Facilities, Illinois, Revenue 7/07 at 103.00 N/R 3,108,540 Bonds (Lewis University Airport), Series 1997A, 7.250%, 7/01/18 (Alternative Minimum Tax) 2,270 Metropolitan Pier and Exposition Authority, Illinois, McCormick 6/12 at 101.00 AAA 2,268,229 Place Expansion Project Revenue Bonds, Series 2002A, 5.000%, 12/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.7% 3,240 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 3,458,765 Bonds (Marion General Hospital Project), Series 2002, 5.625%, 7/01/19 5,125 City of Petersburg, Indiana, Pollution Control Refunding Revenue 12/04 at 102.00 A 5,361,826 Bonds (Indianapolis Power and Light Company Project), Series 1995A, 6.625%, 12/01/24 5,000 Hospital Authority of St. Joseph County, Indiana, Health System 2/08 at 101.00 AAA 4,605,200 Bonds (Memorial Health System), Series 1998A, 4.625%, 8/15/28 28 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.1% $ 8,585 Iowa Finance Authority, Hospital Facilities Revenue Bonds 7/08 at 102.00 AAA $ 8,597,878 (Iowa Health System), Series 1998A, 5.125%, 1/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.6% 4,585 Unified School District No. 232 of Johnson County, Kansas, 9/10 at 100.00 Aaa 4,640,066 General Obligation Bonds, Series 2000, 4.750%, 9/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.1% 5,540 Kentucky Housing Corporation, Housing Revenue Bonds 1/05 at 102.00 AAA 5,783,317 (Federally Insured or Guaranteed Mortgage Loans), 1995 Series B, 6.625%, 7/01/26 (Alternative Minimum Tax) 2,500 Commonwealth of Kentucky, State Property and Buildings 2/12 at 100.00 AAA 2,672,625 Commission Revenue Bonds (Project No. 74), Refunding Series 2002, 5.375%, 2/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 2.1% 10,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds No Opt. Call AAA 11,103,700 (Franciscan Missionaries of Our Lady Health System Project), Series 1998A, 5.750%, 7/01/25 5,500 Louisiana Public Facilities Authority, Revenue Bonds (Tulane 7/12 at 100.00 AAA 5,499,615 University), Series 2002A, 5.000%, 7/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 7.3% 7,405 Massachusetts Health and Educational Facilities Authority, No Opt. Call AAA 8,204,888 Revenue Bonds (Massachusetts Institute of Technology), 2002 Series K, 5.500%, 7/01/32 6,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 5,262,120 Revenue Refunding Bonds (Ogden Haverhill Project), Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax) 8,500 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 8,478,665 Revenue Bonds, 1997 Series A (Senior), 5.000%, 1/01/37 13,500 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 101.00 AAA 13,398,480 Revenue Bonds, 1999 Series A Refunding (Subordinated), 5.000%, 1/01/39 6,425 Massachusetts Water Pollution Abatement Trust, Water Pollution 8/09 at 101.00 AAA 6,852,006 Abatement Revenue Bonds (MWRA Program), Series 1999A (Subordinated), 5.750%, 8/01/29 10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 10,710,100 Bonds, 2000 Series A, 5.750%, 8/01/39 5,380 University of Massachusetts Building Authority, Project Revenue 11/10 at 100.00 AAA 5,591,811 Bonds, Series 2000-2 (Senior), 5.250%, 11/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 2.2% 1,000 City of Detroit, Michigan, Water Supply System Revenue Senior 7/11 at 101.00 AAA 1,079,770 Lien Bonds, 2001 Series A, 5.750%, 7/01/28 7,425 Michigan State Hospital Finance Authority, Hospital Revenue 11/09 at 101.00 A1 7,689,107 Bonds (Henry Ford Health System), Series 1999A, 6.000%, 11/15/24 8,500 Michigan Strategic Fund, Limited Obligation Revenue Bonds 12/02 at 102.00 BBB 8,677,055 (Waste Management, Inc. Project), Series 1992, 6.625%, 12/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.9% City of Chaska, Minnesota, Electric Revenue Bonds (Generating Facilities), Series 2000A: 1,930 6.000%, 10/01/20 10/10 at 100.00 A3 2,039,952 2,685 6.000%, 10/01/25 10/10 at 100.00 A3 2,811,276 3,655 Dakota County Housing and Redevelopment Authority, Washington No Opt. Call AAA 5,229,684 County Housing and Redevelopment Authority and City of Bloomington, Minnesota, Single Family Residential Mortgage Revenue Bonds (Mortgage-Backed Program), Series 1988, 8.450%, 9/01/19 (Alternative Minimum Tax) 3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/08 at 101.00 AAA 3,002,490 Minnesota, Airport Revenue Bonds, Series 1998A, 5.000%, 1/01/30 2,095 Minnesota Housing Finance Agency, Single Family Mortgage 1/04 at 102.00 AA+ 2,161,244 Bonds, 1994 Series J, 6.950%, 7/01/26 (Alternative Minimum Tax) 29 Nuveen Quality Income Municipal Fund, Inc. (NQU) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.1% $ 3,140 Canton Housing Development Corporation, Mississippi, No Opt. Call AAA $ 3,863,927 1990 Multifamily Mortgage Revenue Refunding Bonds (Canton Estates Apartments Project - FHA-Insured Mortgage - Section 8 Assisted Project), Series A, 7.750%, 8/01/24 1,115 Charter Mortgage Corporation, Mississippi, 1990 Multifamily No Opt. Call AAA 1,355,584 Mortgage Revenue Refunding Bonds (Church Apartments - FHA Insured Mortgage - Section 8 Assisted Project), Series A, 7.750%, 8/01/21 2,500 Mississippi Hospital Equipment and Facilities Authority, 1/11 at 101.00 Aaa 2,586,175 Revenue Bonds (Forrest County General Hospital Project), Series 2000, 5.500%, 1/01/27 1,235 Pearl Housing Development Corporation, Mississippi, 1990 12/02 at 100.00 AAA 1,236,692 Multifamily Mortgage Revenue Refunding Bonds (Rose Garden Apartments Project - FHA-Insured Mortgage - Section 8 Assisted Project), Series A, 7.750%, 8/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.7% Industrial Development Authority of the County of Jackson, State of Missouri, Healthcare System Revenue Bonds (Saint Joseph Health Center), Series 1992: 4,570 6.500%, 7/01/12 1/03 at 102.00 Baa1 4,638,504 5,605 7.000%, 7/01/22 1/03 at 102.00 Baa1 5,695,128 15,350 Public Building Corporation of the City of Springfield, Missouri, No Opt. Call AAA 3,501,949 Leasehold Revenue Bonds (Jordan Valley Park Projects), Series 2000A, 0.000%, 6/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.9% 7,000 City of Forsyth, Rosebud County, Montana, Pollution Control 2/03 at 101.00 AAA 7,097,790 Revenue Refunding Bonds (Puget Sound Power and Light Company Colstrip Project), Series 1992, 7.050%, 8/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 2.5% 11,000 Nebraska Investment Finance Authority, Single Family Housing 3/05 at 101.50 AAA 11,384,890 Revenue Bonds, 1995 Series A, 6.800%, 3/01/35 (Alternative Minimum Tax) 8,000 Nebraska Investment Finance Authority, Single Family Housing 3/05 at 101.50 AAA 8,279,200 Revenue Bonds, 1995 Series B, 6.450%, 3/01/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.3% Clark County School District, Nevada, General Obligation Bonds, Series 2002C: 34,470 5.000%, 6/15/20 6/12 at 100.00 AAA 35,167,673 12,150 5.000%, 6/15/21 6/12 at 100.00 AAA 12,302,118 10,380 5.000%, 6/15/22 6/12 at 100.00 AAA 10,446,432 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.2% 1,350 New Hampshire Housing Finance Authority, Single Family 1/03 at 101.00 Aa3 1,370,358 Residential Mortgage Bonds, 1991 Series C, 7.100%, 1/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 0.9% 4,670 Pollution Control Financing Authority of Camden County, 12/02 at 101.00 B2 4,625,588 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991D, 7.250%, 12/01/10 2,025 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA 2,297,930 System Bonds, 2001 Series B, 6.000%, 12/15/19 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.7% 5,925 New Mexico Hospital Equipment Loan Council, Hospital Revenue 8/11 at 101.00 A+ 5,962,209 Bonds (Presbyterian Healthcare Services), Series 2001A, 5.500%, 8/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 24.3% 25,000 Erie Tobacco Asset Securitization Corporation, Erie County, 7/10 at 101.00 A1 26,163,750 New York, Tobacco Settlement Asset-Backed Bonds, Series 2000 (Senior), 6.125%, 7/15/30 1,130 Long Island Power Authority, New York, Electric System General 9/11 at 100.00 A- 1,149,786 Revenue Bonds, Series 2001A, 5.375%, 9/01/25 15,000 Metropolitan Transportation Authority, New York, Dedicated Tax 4/10 at 100.00 AAA 17,499,750 Fund Bonds, Series 2000A, 6.000%, 4/01/30 (Pre-refunded to 4/01/10) 30 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 2,090 Niagara Falls Housing and Commercial Rehabilitation Corporation, No Opt. Call AA $ 2,441,329 New York, 1992 Multifamily Mortgage Revenue Refunding Bonds (FHA-Insured Mortgage - Section 8 Assisted Project), 7.350%, 8/01/23 16,000 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 A- 17,001,280 Tobacco Settlement Asset-Backed Bonds, Series A, 6.400%, 7/15/33 6,000 City of New York, New York, General Obligation Bonds, 8/07 at 101.00 A 6,369,660 Fiscal 1997 Series H, 6.125%, 8/01/25 5,475 City of New York, New York, General Obligation Bonds, 8/04 at 101.00 Aaa 6,056,774 Fiscal 1995 Series B1, 7.250%, 8/15/19 (Pre-refunded to 8/15/04) 14,800 City of New York, New York, General Obligation Bonds, 6/07 at 101.00 AAA 15,931,164 Fiscal 1997 Series M, 5.500%, 6/01/17 6,700 City of New York, New York, General Obligation Bonds, 2/05 at 101.00 Aaa 7,453,683 Fiscal 1995 Series F, 6.625%, 2/15/25 (Pre-refunded to 2/15/05) City of New York, New York, General Obligation Bonds, Fiscal 2002 Series G: 5,950 5.000%, 8/01/17 8/12 at 100.00 A 5,983,796 10,545 5.750%, 8/01/18 8/12 at 100.00 A 11,244,977 4,190 New York City Municipal Water Finance Authority, New York, 6/05 at 101.00 AAA 4,640,718 Water and Sewer System Revenue Bonds, Fiscal 1996 Series A, 5.875%, 6/15/25 (Pre-refunded to 6/15/05) New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal 2000 Series B: 8,035 5.750%, 11/15/19 (Pre-refunded to 5/15/10) 5/10 at 101.00 AA+*** 9,332,010 2,065 5.750%, 11/15/19 5/10 at 101.00 AA+ 2,255,661 4,250 Dormitory Authority of the State of New York, Mount Sinai No Opt. Call AAA 4,434,068 School of Medicine, Insured Revenue Bonds, Series 1994A, 5.150%, 7/01/24 5,000 Dormitory Authority of the State of New York, Mental Health 2/07 at 102.00 AA- 5,354,800 Services Facilities Improvement Revenue Bonds, Series 1997A, 5.750%, 2/15/27 10,000 Dormitory Authority of the State of New York, Mental Health 2/10 at 100.00 AAA 11,169,300 Services Facilities Improvement Revenue Bonds, Series 2000B, 6.000%, 2/15/30 New York State Environmental Facilities Corporation, State Clean Water and Drinking Water Revolving Funds Revenue Bonds (New York City Municipal Water Finance Authority Projects - Second Resolution), Series 2001C: 6,035 5.000%, 6/15/20 6/11 at 100.00 AAA 6,198,428 6,575 5.000%, 6/15/22 6/11 at 100.00 AAA 6,659,620 8,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 8,956,000 New York Hospital FHA-Insured Mortgage Revenue Bonds, Series 1994A, 6.500%, 8/15/29 (Pre-refunded to 2/15/05) 5,000 New York State Medical Care Facilities Finance Agency, Brookdale 2/05 at 102.00 AAA 5,636,450 Hospital Medical Center Secured Hospital Revenue Bonds, 1995 Series A, 6.850%, 2/15/17 (Pre-refunded to 2/15/05) New York State Medical Care Facilities Finance Agency, FHA-Insured Mortgage Project Revenue Bonds, 1995 Series F: 3,655 6.200%, 8/15/15 (Pre-refunded to 8/15/05) 8/05 at 102.00 AA*** 4,135,706 4,250 6.300%, 8/15/25 (Pre-refunded to 8/15/05) 8/05 at 102.00 AA*** 4,820,435 3,105 Penfield-Crown Oak Housing Development Corporation, New York, 2/03 at 100.00 AAA 3,117,606 1991 Multifamily Mortgage Revenue Refunding Bonds (Crown Oak Estates - FHA-Insured Mortgage - Section 8 Assisted Project), Series A, 7.350%, 8/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.0% 10,500 North Carolina Eastern Municipal Power Agency, Power System No Opt. Call BBB 10,567,830 Revenue Bonds, Refunding Series 1991A, 6.250%, 1/01/03 13,720 North Carolina Medical Care Commission, Hospital Revenue 12/08 at 101.00 AAA 13,135,940 Bonds (Pitt County Memorial Hospital), Series 1998A, 4.750%, 12/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.5% 3,925 Ohio Housing Finance Agency, Residential Mortgage Revenue 3/05 at 102.00 Aaa 4,159,794 Bonds (GNMA Mortgage-Backed Securities Program), 1995 Series A-2, 6.625%, 3/01/26 (Alternative Minimum Tax) 31 Nuveen Quality Income Municipal Fund, Inc. (NQU) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 5.2% $ 17,510 Pottawatomie County Home Finance Authority, Oklahoma, No Opt. Call AAA $ 23,402,290 Municipal Refunding Collateralized Mortgage Obligations, Series 1991A, 8.625%, 7/01/10 12,750 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, Revenue 12/08 at 100.00 BB- 6,379,590 Bonds, Refunding Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) 23,005 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, Revenue 12/08 at 100.00 BB- 11,280,962 Bonds (American Airlines Inc.), Refunding Series 2001B, 5.650%, 12/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.4% 3,000 Administrative School District No. 1, Bend-La Pine, Deschutes 6/11 at 100.00 Aaa 3,258,060 County, Oregon, General Obligation Bonds, Series 2001A, 5.500%, 6/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.8% 6,880 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 7,232,875 Resource Recovery Revenue Refunding Bonds (Panther Creek Partners Project), 2000 Series, 6.650%, 5/01/10 (Alternative Minimum Tax) 2,975 Falls Township Hospital Authority, Pennsylvania, Refunding 2/03 at 102.00 AAA 3,157,665 Revenue Bonds (Delaware Valley Medical Center Project - FHA-Insured Mortgage), Series 1992, 7.000%, 8/01/22 7,000 Commonwealth of Pennsylvania, General Obligation Bonds, 9/11 at 101.00 AA 7,488,880 Second Series 2001, 5.000%, 9/15/15 School District of Philadelphia, Pennsylvania, General Obligation Bonds, Series 2002B: 6,000 5.625%, 8/01/19 8/12 at 100.00 AAA 6,515,220 5,500 5.625%, 8/01/20 8/12 at 100.00 AAA 5,927,295 - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 1.4% 8,400 Children's Trust Fund, Puerto Rico, Tobacco Settlement Asset-Backed 5/12 at 100.00 A1 8,095,080 Bonds, Series 2002 Refunding, 5.375%, 5/15/33 1,500 Commonwealth of Puerto Rico, Public Improvement General No Opt. Call A- 1,594,770 Obligation Bonds, 2002 Series A, 5.500%, 7/01/29 1,500 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 A- 1,538,070 Facilities Revenue Bonds, Series 2002D Refunding, 5.125%, 7/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 7.5% 24,725 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 25,061,755 Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22 Horry County School District, South Carolina, General Obligation Bonds, Series 2001A: 5,840 5.000%, 3/01/20 3/12 at 100.00 AA+ 5,968,538 5,140 5.000%, 3/01/21 3/12 at 100.00 AA+ 5,218,179 13,615 South Carolina Transportation Infrastructure Bank, Junior Lien 10/11 at 100.00 Aaa 13,939,309 Revenue Bonds, Series 2001B, 5.125%, 10/01/21 10,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 A1 9,826,500 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.7% 3,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa2 3,064,140 Tennessee, Hospital Facilities Revenue Bonds (Baptist Health System of East Tennessee), Series 2002, 6.375%, 4/15/22 7,415 City of Memphis, Tennessee, General Improvement Bonds, 11/10 at 101.00 AA 7,581,986 Series 2002, 5.000%, 11/01/20 10,000 Tennessee Housing Development Agency, Homeownership Program 7/10 at 100.00 AA 10,632,900 Bonds, Issue 2000-2B, 6.350%, 1/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 19.0% 14,360 Alliance Airport Authority, Inc., Texas, Special Facilities Revenue 12/02 at 100.00 BB- 3,877,200 Bonds (American Airlines, Inc. Project), Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) Arlington Independent School District, Tarrant County, Texas, Unlimited Tax Refunding and Improvement Bonds, Series 1995: 3,410 0.000%, 2/15/11 2/05 at 71.95 Aaa 2,291,077 4,105 0.000%, 2/15/14 2/05 at 58.79 Aaa 2,261,034 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 6,500 Bell County Health Facilities Development Corporation, Texas, 11/08 at 101.00 A- $ 6,318,065 Retirement Facility Revenue Bonds (Buckner Retirement Services, Inc. Obligated Group Project), Series 1998, 5.250%, 11/15/19 14,200 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa1 12,236,708 Bonds (TXU Electric Company Project), Series 2001C, 5.750%, 5/01/36 (Alternative Minimum Tax) (Mandatory put 11/01/11) 14,375 Dallas-Fort Worth International Airport Facilities Improvement 11/07 at 100.00 BB- 5,608,550 Corporation, Texas, Revenue Refunding Bonds (American Airlines), Series 2000C, 6.150%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/07) 5,000 Cities of Dallas and Fort Worth, Texas, Dallas-Fort Worth 11/11 at 100.00 AAA 5,222,450 International Airport, Joint Revenue Refunding and Improvement Bonds, Series 2001A, 5.625%, 11/01/21 (Alternative Minimum Tax) 2,400 Fort Worth Housing Finance Corporation, Texas, Home Mortgage 4/03 at 102.00 Aa2 2,450,688 Revenue Refunding Bonds, Series 1991A, 8.500%, 10/01/11 8,235 Grand Prairie Housing Finance Corporation, Texas, Multifamily 9/10 at 105.00 AAA 9,137,309 Housing Revenue Bonds (Landings at Carrier Project), GNMA Series 2000A, 6.875%, 9/20/42 2,700 Harris County-Houston Sports Authority, Texas, Senior Lien 11/11 at 100.00 AAA 2,755,431 Revenue Bonds, Series 2001G, 5.250%, 11/15/30 22,500 City of Houston, Texas, Water and Sewer System Junior Lien 12/10 at 100.00 AAA 22,891,725 Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30 Lubbock Health Facilities Development Corporation, Texas, Revenue Bonds (St. Joseph Health System), Series 1998: 4,900 5.250%, 7/01/15 7/08 at 101.00 AA- 5,066,355 8,495 5.250%, 7/01/16 7/08 at 101.00 AA- 8,728,952 17,655 Matagorda County Navigation District Number One, Texas, 11/08 at 102.00 AAA 17,803,479 Revenue Refunding Bonds (Houston Industries Incorporated Project), Series 1998B, 5.150%, 11/01/29 7,650 Port of Corpus Christi Authority, Nueces County, Texas, Revenue 5/06 at 101.00 BBB 7,591,172 Refunding Bonds (Union Pacific Corporation Project), Series 1992, 5.350%, 11/01/10 11,300 City of San Antonio, Texas, Electric and Gas System Revenue 2/03 at 100.00 AAA 12,146,822 Bonds, New Series 1992 Refunding, 5.000%, 2/01/17 14,680 San Antonio Independent School District, Bexar County, Texas, 8/09 at 100.00 AAA 16,948,060 Unlimited Tax School Building Bonds, Series 1999, 5.800%, 8/15/29 (Pre-refunded to 8/15/09) 3,750 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 3,787,913 Texas, Limited Tax Schoolhouse and Refunding Bonds, Series 2001, 5.125%, 2/01/23 5,000 City of Wichita Falls, Wichita County, Texas, Water and Sewer 8/11 at 100.00 AAA 5,011,900 System Priority Lien Revenue Bonds, Series 2001, 5.000%, 8/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.7% 5,800 Carbon County, Utah, Solid Waste Disposal Refunding Revenue 2/05 at 102.00 BB- 5,754,412 Bonds (Laidlaw/ECDC Project - Guaranteed by Allied Waste Industries), Series 1995, 7.500%, 2/01/10 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 2.2% 4,000 Norfolk Airport Authority, Virginia, Airport Revenue Refunding 7/11 at 100.00 AAA 4,010,800 Bonds, Series 2001B, 5.125%, 7/01/31 (Alternative Minimum Tax) 11,040 Suffolk Redevelopment and Housing Authority, Virginia, No Opt. Call Aaa 11,741,813 Multifamily Housing Revenue Refunding Bonds (Windsor at Potomac Vista Limited Partnership Project), Series 2001, 4.850%, 7/01/31 (Mandatory put 7/01/11) 665 Virginia Housing Development Authority, Rental Housing Bonds, 5/09 at 101.00 AA+ 679,783 1999 Series F, 5.000%, 5/01/15 (Alternative Minimum Tax) Virginia Resources Authority, Water Revenue Refunding Bonds, Series 2002: 500 5.000%, 4/01/18 4/12 at 102.00 AA 528,550 500 5.000%, 4/01/19 4/12 at 102.00 AA 524,195 33 Nuveen Quality Income Municipal Fund, Inc. (NQU) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.9% $ 4,185 Public Utility District No. 1, Douglas County, Washington, 9/06 at 106.00 AA $ 5,314,029 Wells Hydro-Electric Revenue Bonds, Series 1986, 8.750%, 9/01/18 6,750 Energy Northwest, Washington, Columbia Generation Station 7/12 at 100.00 AAA 7,158,915 Electric Revenue Refunding Bonds, Series 2002B, 5.350%, 7/01/18 12,415 Federal Way School District No. 210, King County, Washington, 12/03 at 100.00 A1*** 13,120,048 Unlimited Tax General Obligation Bonds, Series 1991, 6.950%, 12/01/11 (Pre-refunded to 12/01/03) 6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,223,413 5.625%, 2/01/24 (Alternative Minimum Tax) 13,400 City of Seattle, Washington, Municipal Light and Power 12/10 at 100.00 Aa3 13,667,464 Revenue Bonds, Series 2000, 5.400%, 12/01/25 1,675 Spokane Downtown Foundation, Washington, Parking Revenue 8/08 at 102.00 D 904,500 Bonds (River Park Square Project), Series 1998, 5.600%, 8/01/19 9,440 City of Tacoma, Washington, Electric System Revenue Bonds, 1/11 at 101.00 AAA 10,368,518 Series 2001A Refunding, 5.750%, 1/01/18 4,000 North Thurston School District No. 3, Thurston County, 12/02 at 100.00 A*** 4,015,959 Washington, General Obligation Bonds, Series 1992, 6.500%, 12/01/09 (Pre-refunded to 12/01/02) 18,145 State of Washington, Various Purpose General Obligation Bonds, 7/11 at 100.00 AAA 18,213,406 2001 Series 02-A, 5.000%, 7/01/23 State of Washington, Motor Vehicle Fuel Tax General Obligation Bonds, Series 2002C: 7,000 5.000%, 1/01/21 1/12 at 100.00 AAA 7,079,099 7,750 5.000%, 1/01/22 1/12 at 100.00 AAA 7,797,662 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 1.2% 7,545 City of La Crosse, Wisconsin, Pollution Control Refunding Revenue 12/08 at 102.00 AAA 8,118,796 Bonds (Dairyland Power Cooperative Project), Series 1997A, 5.450%, 9/01/14 1,420 Wisconsin Housing and Economic Development Authority, Housing 1/03 at 101.00 AA 1,450,444 Revenue Bonds, 1992 Series A, 6.850%, 11/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,258,855 Total Long-Term Investments (cost $1,185,943,972) - 153.0% 1,218,533,490 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 1.3% $ 10,000 New York City Transitional Finance Authority, New York, Recovery VMIG-1 10,000,000 Notes, Fiscal 2003 Series 1, Subseries 1-C, Variable Rate Demand Obligations, 1.900%, 11/01/22+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 10,000 Total Short-Term Investments (cost $10,000,000) 10,000,000 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.5% 20,057,382 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (56.8)% (452,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $796,590,872 ==================================================================================================================== (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. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 34
Nuveen Premier Municipal Income Fund, Inc. (NPF) Portfolio of INVESTMENTS October 31, 2002
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.8% $ 2,180 Alabama Higher Education Loan Corporation, Student Loan Revenue No Opt. Call AAA $ 2,297,044 Bonds, Series 1994D Refunding, 5.850%, 9/01/04 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.7% 2,000 Alaska Housing Finance Corporation, General Mortgage Revenue 6/09 at 101.00 AAA 2,103,840 Bonds, 1999 Series A, 6.000%, 6/01/49 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 5.9% 3,650 Gilbert Unified School District No. 41, Maricopa County, Arizona, 7/04 at 100.00 AAA 3,909,880 School Improvement Bonds (Project of 1993), Series 1994C, 6.100%, 7/01/14 (Pre-refunded to 7/01/04) 6,000 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 AA 6,580,740 Arizona, Salt River Project Electric System Refunding Revenue Bonds, Series 2002A, 5.250%, 1/01/15 7,500 Salt River Project Agricultural Improvement and Power District, 1/13 at 100.00 AA 7,544,025 Arizona, Salt River Project Electric System Revenue Bonds, Series 2002B, 5.000%, 1/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 2.4% 5,070 Arkansas Development Finance Authority, Single Family Mortgage 1/11 at 100.00 AAA 5,102,347 Revenue Bonds (Mortgage-Backed Securities Program), 2001 Series I, 5.300%, 7/01/33 (Alternative Minimum Tax) 800 Arkansas Development Finance Authority, Single Family Mortgage 7/05 at 102.00 AAA 849,360 Revenue Bonds (Mortgage-Backed Securities Program), 1994 Series C, 6.600%, 7/01/17 1,085 Arkansas Development Finance Authority, Single Family Mortgage 7/05 at 102.00 AAA 1,125,807 Revenue Bonds (Mortgage-Backed Securities Program), 1995 Series B, 6.550%, 7/01/18 (Alternative Minimum Tax) 130 Drew County Public Facilities Board, Arkansas, Single Family 8/03 at 103.00 Aaa 134,245 Mortgage Revenue Refunding Bonds, Series 1993A, 7.900%, 8/01/11 130 Public Facilities Board of Stuttgart, Arkansas, Single Family 9/03 at 103.00 Aaa 135,016 Mortgage Revenue Refunding Bonds, Series 1993A, 7.900%, 9/01/11 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 12.1% 5,690 Department of Veterans Affairs of the State of California, 6/12 at 101.00 AAA 5,949,180 Home Purchase Revenue Bonds, Series 2002A, 5.300%, 12/01/21 Foothill/Eastern Transportation Corridor Agency, California, Toll Road Revenue Bonds, Series 1995A: 33,000 0.000%, 1/01/17 No Opt. Call AAA 17,076,180 10,000 0.000%, 1/01/22 No Opt. Call AAA 3,755,900 10,000 San Diego Redevelopment Agency, California, Merged Area 8/10 at 101.00 AAA 10,479,300 Redevelopment Project Tax Allocation Bonds, Series 2002, 5.000%, 8/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 0.3% 1,000 Colorado Health Facilities Authority, Hospital Revenue Bonds 12/09 at 101.00 Aaa 1,062,640 (Poudre Valley Health Care, Inc.), Series 1999A, 5.750%, 12/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 1.1% 2,000 Connecticut Development Authority, Pollution Control Revenue 10/08 at 102.00 A3 2,092,400 Refunding Bonds (Connecticut Light and Power Company), Series 1993A, 5.850%, 9/01/28 1,300 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/06 at 102.00 AAA 1,382,849 Program Bonds, 1996 Series C-2, 6.250%, 11/15/18 35 Nuveen Premier Municipal Income Fund, Inc. (NPF) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 2.0% District of Columbia, University Revenue Bonds, Georgetown University Issue, Series 2001A: $ 14,105 0.000%, 4/01/24 4/11 at 47.66 AAA $ 4,114,993 7,625 0.000%, 4/01/25 4/11 at 44.82 AAA 2,091,538 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.4% 4,000 Dade County, Florida, Aviation Revenue Bonds, Series 1996A, 10/06 at 102.00 AAA 4,213,520 5.750%, 10/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 2.7% 8,000 George L. Smith II World Congress Center Authority, Georgia, 7/10 at 101.00 AAA 8,292,160 Refunding Revenue Bonds (Domed Stadium Project), Series 2000, 5.500%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.8% 2,250 Department of Budget and Finance of the State of Hawaii, 1/09 at 101.00 AAA 2,490,525 Special Purpose Revenue Bonds (Hawaii Electric Company, Inc. and Subsidiaries Project), Series 1999D, 6.150%, 1/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.3% 775 Idaho Housing and Finance Association, Single Family Mortgage 7/06 at 102.00 Aa1 826,964 Bonds, 1996 Series E, 6.350%, 7/01/14 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 34.6% City of Chicago, Illinois, General Obligation Bonds (City Colleges of Chicago Capital Improvement Project), Series 1999: 8,670 0.000%, 1/01/24 No Opt. Call AAA 2,732,611 16,670 0.000%, 1/01/26 No Opt. Call AAA 4,700,273 Chicago 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: 3,740 0.000%, 12/01/16 No Opt. Call AAA 1,888,812 10,000 0.000%, 12/01/20 No Opt. Call AAA 3,870,900 9,900 0.000%, 12/01/24 No Opt. Call AAA 2,958,516 Chicago 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 1999A: 15,000 0.000%, 12/01/21 No Opt. Call AAA 5,416,050 10,000 0.000%, 12/01/23 No Opt. Call AAA 3,172,600 1,010 Public Building Commission of Chicago, Illinois, Building Revenue No Opt. Call AAA 1,208,950 Bonds (Board of Education of the City of Chicago), Series 1990B, 7.000%, 1/01/15 13,000 City of Chicago, Illinois, Wastewater Transmission Revenue 1/06 at 102.00 AAA 13,047,060 Bonds, Series 1995, 5.125%, 1/01/25 12,130 City of Chicago, Illinois, Senior Lien Water Revenue Bonds, No Opt. Call AAA 13,741,956 Series 2001, 5.750%, 11/01/30 7,065 Town of Cicero, Cook County, Illinois, General Obligation 12/04 at 102.00 N/R*** 7,878,535 Tax Increment Bonds, Series 1995A, 8.125%, 12/01/12 (Pre-refunded to 12/01/04) Illinois Development Finance Authority, Multifamily Housing Bonds (Affordable Housing Preservation Foundation Project - FHA-Insured Mortgage Loans - Lawless Gardens Project), Series 1990, Subseries B: 600 7.650%, 7/01/07 1/03 at 104.00 AAA 630,810 5,270 7.650%, 12/31/31 1/03 at 104.00 AAA 5,541,247 4,410 Illinois Housing Development Authority, Section 8 Elderly Housing 3/03 at 102.00 A 4,502,213 Revenue Bonds (Garden House of Maywood Development), Series 1992, 7.000%, 9/01/18 470 Illinois Housing Development Authority, Section 8 Elderly Housing 1/03 at 102.00 A*** 483,108 Revenue Bonds (Morningside North Development), Series 1992D, 6.600%, 1/01/07 (Pre-refunded to 1/01/03) 1,500 State of Illinois, General Obligation Bonds (Illinois FIRST Program), 2/12 at 100.00 AAA 1,633,095 Series 2002, 5.500%, 2/01/17 9,300 Community Unit School District No. 220 of the Counties of Lake, No Opt. Call AAA 10,175,874 Cook, Kane and McHenry, Illinois, General Obligation Bonds, Series 2002, 5.250%, 12/01/18 2,270 Metropolitan Pier and Exposition Authority, Illinois, McCormick 6/12 at 101.00 AAA 2,268,229 Place Expansion Project Revenue Bonds, Series 2002A, 5.000%, 12/15/28 36 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Refunding Bonds, Series 1996A: $ 8,330 0.000%, 12/15/16 No Opt. Call AAA $ 4,216,396 10,575 0.000%, 12/15/23 No Opt. Call AAA 3,368,666 10,775 0.000%, 12/15/24 No Opt. Call AAA 3,230,453 2,000 Onterie Center Housing Finance Corporation (An Illinois Not For 1/03 at 102.00 AAA 2,066,500 Profit Corporation), Mortgage Revenue Refunding Bonds (FHA-Insured Mortgage Loan - Onterie Center Project), Series 1992A, 7.050%, 7/01/27 4,475 Town of Wood River, Wood River Township Hospital, Madison 2/04 at 102.00 N/R 3,720,828 County, Illinois, General Obligation Bonds (Alternate Revenue Source), Series 1993, 6.625%, 2/01/14 4,650 Town of Wood River, Wood River Township Hospital, Madison 2/04 at 102.00 N/R 3,825,834 County, Illinois, General Obligation Tort Immunity Bonds, Series 1993, 6.500%, 2/01/14 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 6.4% Crown Point Multi-School Building Corporation, Indiana, First Mortgage Bonds (Crown Point Community School Corporation), Series 2000: 7,480 0.000%, 1/15/21 No Opt. Call AAA 2,850,478 7,980 0.000%, 1/15/22 No Opt. Call AAA 2,841,279 6,180 0.000%, 1/15/23 No Opt. Call AAA 2,068,817 29,255 Indianapolis Local Public Improvement Bond Bank, Indiana, No Opt. Call AAA 8,672,645 Revenue Bonds, Series 1999E, 0.000%, 2/01/25 2,860 PHM Elementary/Middle School Building Corporation, St. Joseph No Opt. Call A 3,262,288 County, Indiana, First Mortgage Bonds, Series 1994, 6.300%, 1/15/09 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.6% 1,655 Iowa Student Loan Liquidity Corporation, Student Loan Revenue 12/02 at 102.00 Aaa 1,691,278 Bonds, Senior Series B, 5.750%, 12/01/06 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.2% 965 City of Hutchinson, Kansas, Single Family Mortgage Revenue 12/02 at 103.00 Aa3 994,819 Refunding Bonds, Series 1992, 8.875%, 12/01/12 6,440 Unified Government of Wyandotte County/Kansas City, No Opt. Call AAA 2,529,568 Kansas, Sales Tax Special Obligation Revenue Bonds (Kansas International Speedway Corporation Project), Series 1999, 0.000%, 12/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 0.5% 1,310 Louisiana Housing Finance Agency, Mortgage Revenue Bonds 9/05 at 103.00 AAA 1,398,857 (GNMA Collateralized Mortgage Loan - St. Dominic Assisted Care Facility), Series 1995, 6.850%, 9/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 2.8% 7,965 Maine Educational Loan Marketing Corporation, Subordinate No Opt. Call A2 8,542,303 Student Loan Revenue Bonds, Series 1994-B2, 6.250%, 11/01/06 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.0% 6,000 Anne Arundel County, Maryland, Multifamily Housing Revenue No Opt. Call BBB- 6,162,960 Bonds (Woodside Apartments Project), Series 1994, 7.450%, 12/01/24 (Alternative Minimum Tax) (Mandatory put 12/01/03) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.0% Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue Bonds, 1987 Series A: 5 8.750%, 7/01/18 (Pre-refunded to 1/01/03) 1/03 at 100.00 Aaa 5,059 5 8.750%, 7/01/18 (Pre-refunded to 1/01/04) 1/04 at 100.00 Aaa 5,401 5 8.750%, 7/01/18 (Pre-refunded to 7/01/04) 7/04 at 100.00 Aaa 5,567 5 8.750%, 7/01/18 (Pre-refunded to 7/01/05) 7/05 at 100.00 Aaa 5,706 37 Nuveen Premier Municipal Income Fund, Inc. (NPF) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS (continued) $ 3,875 Massachusetts Health and Educational Facilities Authority, Revenue 2/04 at 102.00 Aa2*** $ 4,160,161 Refunding Bonds (FHA-Insured Project), Youville Hospital Issue, Series B, 6.000%, 2/15/25 (Pre-refunded to 2/15/04) 2,000 Massachusetts Housing Finance Agency, Rental Housing Mortgage 7/07 at 101.00 AAA 2,030,900 Revenue Bonds, 1997 Series C, 5.625%, 7/01/40 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.7% 1,975 Charter Township of Clinton, County of Macomb, State of 4/09 at 101.00 AAA 1,848,225 Michigan, 1998 General Obligation Unlimited Tax Police Building Bonds, 4.000%, 4/01/18 3,025 Charter County of Wayne, Michigan, Airport Revenue Bonds 12/12 at 100.00 AAA 3,211,068 (Detroit Metropolitan Airport), Series 2002C Refunding, 5.375%, 12/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 7.8% 6,900 Champlin, Minnesota, Senior Housing Revenue Bonds (Champlin 6/12 at 105.00 Aaa 6,871,503 Shores Senior Living Center - GNMA Guaranteed), Series 2002A, 3.000%, 12/20/43 7,990 City of Eden Prairie, Minnesota, Multifamily Housing Revenue 12/10 at 103.50 Aaa 8,551,697 Bonds (GNMA Collateralized Mortgage Loan - Lincoln Parc Project), Series 2000A-1, 6.650%, 6/20/42 10,780 Northwest Minnesota Multi-County Housing and Redevelopment 10/04 at 102.00 N/R 8,308,577 Authority, Governmental Housing Revenue Bonds (Pooled Housing Program), Series 1994A, 8.125%, 10/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.1% 8,610 Mississippi Home Corporation, Residual Revenue Capital 3/04 at 41.66 Aaa 3,461,823 Appreciation Bonds, Series 1992-I, 0.000%, 9/15/16 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.2% 5,000 State of Missouri, General Obligation Bonds, Fourth State Building 10/12 at 100.00 AAA 5,253,200 Refunding Series 2002A, 5.000%, 10/01/18 1,590 Health and Educational Facilities Authority of the State of Missouri, 6/11 at 101.00 AAA 1,616,394 Revenue Bonds (SSM Health Care), Series 2001A, 5.250%, 6/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.9% 2,830 City of Grand Island, Nebraska, Electric System Revenue Bonds, 3/03 at 100.00 A+*** 3,145,488 1977 Series, 6.100%, 9/01/12 2,350 Nebraska Higher Education Loan Program Inc., Senior Subordinate No Opt. Call AAA 2,592,591 Bonds, Series A-5B, 6.250%, 6/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.8% 10,900 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 11,738,646 Series 2002C, 5.500%, 6/15/19 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 1.9% 690 New Hampshire Municipal Bond Bank, Educational Institutions No Opt. Call N/R 703,669 Division Revenue Bonds (1994 Coe-Brown Northwood Academy Project), 7.250%, 5/01/09 5,000 New Hampshire Housing Finance Authority, Multifamily Housing 7/10 at 101.00 Aaa 5,223,250 Revenue Bonds (Countryside Limited Partnership - Countryside Project), 1994 Issue Remarketed, 6.100%, 7/01/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.1% 10,000 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 A1 9,542,300 Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 10.4% 1,000 City of New York, New York, General Obligation Bonds, No Opt. Call A 1,077,390 Fiscal 1995 Series A, 7.000%, 8/01/04 4,000 City of New York, New York, General Obligation Bonds, 2/06 at 101.50 A 4,168,600 Fiscal 1996 Series J1, 5.875%, 2/15/19 New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Fiscal 1998 Series A: 1,750 5.125%, 8/15/21 (Pre-refunded 8/15/07) 8/07 at 101.00 AA+*** 1,958,950 2,730 5.125%, 8/15/21 8/07 at 101.00 AA+ 2,785,446 10,000 Dormitory Authority of the State of New York, State University 5/10 at 101.00 AAA 11,438,500 Educational Facilities Revenue Bonds, Series 2000B, 1999 Resolution, 5.500%, 5/15/30 (Pre-refunded to 5/15/10) 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 1,515 New York State Medical Care Facilities Finance Agency, 2/03 at 102.00 AAA $ 1,548,421 Hospital and Nursing Home FHA-Insured Mortgage Revenue Bonds, 1992 Series B, 6.200%, 8/15/22 4,360 New York State Medical Care Facilities Finance Agency, 8/03 at 102.00 AAA 4,561,258 St. Luke's-Roosevelt Hospital Center, FHA-Insured Mortgage Revenue Bonds, 1993 Series A, 5.600%, 8/15/13 4,000 New York State Medical Care Facilities Finance Agency, Hospital 2/04 at 102.00 AAA 4,171,320 Insured Mortgage Revenue Bonds, 1994 Series A Refunding, 5.500%, 8/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 4.6% 10,300 North Carolina Eastern Municipal Power Agency, Power System No Opt. Call AAA 11,829,756 Revenue Bonds, Refunding Series 1993B, 6.000%, 1/01/22 2,130 North Carolina Housing Finance Agency, Multifamily Revenue 1/03 at 102.00 Aa2 2,178,032 Refunding Bonds (1992 Refunding Bond Resolution), Series B, 6.900%, 7/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.7% 2,110 Cleveland-Rock Glen Housing Assistance Corporation, Ohio, 7/04 at 103.00 AAA 2,209,149 Mortgage Revenue Refunding Bonds (FHA-Insured Mortgage Loans - Section 8 Assisted Projects), Series 1994A, 6.750%, 1/15/25 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.7% 1,990 Falls Township Hospital Authority, Pennsylvania, Refunding 2/03 at 102.00 AAA 2,112,186 Revenue Bonds (Delaware Valley Medical Center Project - FHA-Insured Mortgage), Series 1992, 7.000%, 8/01/22 5,615 City of Philadelphia, Pennsylvania, Water and Sewer Revenue No Opt. Call AAA 6,002,379 Bonds, Tenth Series, 7.350%, 9/01/04 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 4.8% 14,800 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 A1 14,623,584 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%, 5/15/22 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.7% 2,060 Health and Educational Facilities Board of Johnson City, 7/23 at 100.00 AAA 2,098,378 Tennessee, Hospital Revenue Refunding and Improvement Bonds (Johnson City Medical Center Hospital), Series 1998C, 5.125%, 7/01/25 (Pre-refunded to 7/01/23) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 10.7% 6,415 Edgewood Independent School District, Bexar County, Texas, 8/11 at 100.00 Aaa 6,460,547 General Obligation Refunding Bonds, Series 2001, 5.125%, 8/15/31 27,355 City of Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call AAA 6,995,768 Bonds (Convention Project), Series 2001B, 0.000%, 9/01/27 7,500 City of Houston, Texas, Water and Sewer System Junior Lien No Opt. Call AAA 8,529,675 Revenue Refunding Bonds, Series 2002A, 5.750%, 12/01/32 2,000 Mansfield Independent School District, Tarrant County, Texas, 2/11 at 100.00 AAA 2,059,120 General Obligation Bonds, Series 2001, 5.375%, 2/15/26 3,923 Texas General Services Commission, Participation Interests, 9/03 at 100.50 A 3,983,914 Series 1992, 7.500%, 9/01/22 470 Victoria Housing Finance Corporation, Texas, Single Family Mortgage No Opt. Call Aaa 474,399 Revenue Refunding Bonds, Series 1995, 8.125%, 1/01/11 Weatherford Independent School District, Parker County, Texas, Unlimited Tax School Building and Refunding Bonds, Series 2001: 6,945 0.000%, 2/15/23 2/11 at 50.24 AAA 2,186,078 6,945 0.000%, 2/15/24 2/11 at 47.44 AAA 2,060,859 39 Nuveen Premier Municipal Income Fund, Inc. (NPF) (continued) Portfolio of INVESTMENTS October 31, 2002 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.9% $ 1,000 Utah Housing Corporation, Single Family Mortgage Bonds, 7/11 at 100.00 Aa2 $ 1,006,080 2001 Series D, 5.500%, 1/01/21 (Alternative Minimum Tax) 350 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/07 at 102.00 AA 357,550 1996 Series C, 6.450%, 7/01/14 (Alternative Minimum Tax) 1,265 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/07 at 101.50 AA 1,321,722 1997 Series F, 5.750%, 7/01/15 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.1% 3,200 Suffolk Redevelopment and Housing Authority, Virginia, 1/03 at 103.00 Baa2 3,282,303 Multifamily Housing Revenue Refunding Bonds (Chase Heritage at Dulles Project), Series 1994, 7.000%, 7/01/24 (Mandatory put 7/01/04) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 7.5% 6,160 Public Hospital District No. 2, King County, Washington, Limited 6/11 at 101.00 AAA 6,250,058 Tax General Obligation Bonds (Evergreen Healthcare), Series 2001A, 5.250%, 12/01/24 5,000 City of Seattle, Washington, Municipal Light and Power 3/11 at 100.00 AAA 5,577,399 Improvements and Refunding Revenue Bonds, Series 2001, 5.500%, 3/01/12 9,500 State of Washington, General Obligation and General Obligation No Opt. Call AA+ 11,054,769 Refunding Bonds, Series 1992A and AT-6, 6.250%, 2/01/11 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.2% 1,205 Wisconsin Housing and Economic Development Authority, Housing 1/03 at 101.00 AA 1,230,834 Revenue Bonds, 1992 Series A, 6.850%, 11/01/12 5,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/10 at 101.00 AA 5,494,249 Bonds (Marshfield Clinic), Series 1999, 6.250%, 2/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ $ 624,318 Total Long-Term Investments (cost $438,382,565) - 150.4% 460,275,159 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.4% $ 1,345 Industrial Development Authority of the City of Independence, A-1+ 1,345,000 Missouri, Industrial Development Revenue Refunding Bonds (The Groves and Graceland College Nursing Arts Center Projects), Variable Rate Demand Bonds, Series A, 1.950%, 11/01/27+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,345 Total Short-Term Investments (cost $1,345,000) 1,345,000 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.1% 9,337,700 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.9)% (165,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $305,957,859 ==================================================================================================================== (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. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 40
Statement of ASSETS AND LIABILITIES October 31, 2002
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments in municipal securities, at market value $846,239,956 $774,016,745 $1,218,533,490 $460,275,159 Temporary investments in short-term securities, at amortized cost, which approximates market value 1,500,000 -- 10,000,000 1,345,000 Receivables: Interest 15,233,432 13,646,450 23,239,554 6,247,063 Investments sold 190,791 2,841,200 1,090,000 4,658,520 Other assets 33,409 45,528 52,895 26,037 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 863,197,588 790,549,923 1,252,915,939 472,551,779 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 2,845,780 2,606,195 3,278,411 1,188,936 Accrued expenses: Management fees 459,050 422,256 664,434 256,135 Other 245,803 183,956 326,208 124,560 Preferred share dividends payable 42,729 37,837 56,014 24,289 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 3,593,362 3,250,244 4,325,067 1,593,920 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 301,000,000 279,000,000 452,000,000 165,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $558,604,226 $508,299,679 $ 796,590,872 $305,957,859 ==================================================================================================================================== Common shares outstanding 35,748,959 33,887,474 54,204,488 20,091,018 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.63 $ 15.00 $ 14.70 $ 15.23 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 357,490 $ 338,875 $ 542,045 $ 200,910 Paid-in surplus 498,208,644 471,802,511 755,082,093 279,090,126 Undistributed net investment income 5,981,643 5,625,560 7,102,394 2,887,729 Accumulated net realized gain (loss) from investments 897,555 (429,582) 1,274,822 1,886,500 Net unrealized appreciation of investments 53,158,894 30,962,315 32,589,518 21,892,594 Net assets applicable to Common shares $558,604,226 $508,299,679 $ 796,590,872 $305,957,859 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 200,000,000 200,000,000 Preferred 1,000,000 1,000,000 1,000,000 1,000,000 ==================================================================================================================================== See accompanying notes to financial statements. 41
Statement of OPERATIONS Year Ended October 31, 2002
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $47,962,044 $ 44,171,242 $ 70,702,577 $26,990,289 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 5,329,718 4,928,202 7,806,395 2,961,277 Preferred shares - auction fees 752,500 697,500 1,130,000 412,500 Preferred shares - dividend disbursing agent fees 50,000 50,000 60,000 30,000 Shareholders' servicing agent fees and expenses 102,025 90,809 153,183 58,172 Custodian's fees and expenses 182,997 191,904 357,042 123,985 Directors' fees and expenses 8,437 7,618 12,459 4,753 Professional fees 26,147 74,841 38,527 146,105 Shareholders' reports - printing and mailing expenses 67,649 75,831 115,856 47,496 Stock exchange listing fees 19,368 19,368 26,790 19,368 Investor relations expense 106,142 108,644 171,140 68,012 Other expenses 52,631 45,343 59,858 31,206 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit 6,697,614 6,290,060 9,931,250 3,902,874 Custodian fee credit (17,912) (30,136) (79,256) (43,369) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 6,679,702 6,259,924 9,851,994 3,859,505 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 41,282,342 37,911,318 60,850,583 23,130,784 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investments 895,339 (429,582) 1,692,020 1,888,384 Change in net unrealized appreciation (depreciation) of investments (6,641,410) (12,369,670) (34,664,726) (4,481,311) - ------------------------------------------------------------------------------------------------------------------------------------ Net gain (loss) from investments (5,746,071) (12,799,252) (32,972,706) (2,592,927) - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (4,042,793) (3,065,241) (5,357,084) (2,203,634) From accumulated net realized gains from investments (228,928) (1,332,496) (1,401,793) (136,932) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (4,271,721) (4,397,737) (6,758,877) (2,340,566) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $31,264,550 $ 20,714,329 $ 21,119,000 $18,197,291 ==================================================================================================================================== See accompanying notes to financial statements. 42
Statement of CHANGES IN NET ASSETS
INVESTMENT QUALITY (NQM) SELECT QUALITY (NQS) --------------------------------- -------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/02 10/31/01 10/31/02 10/31/01 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 41,282,342 $ 41,517,300 $ 37,911,318 $ 40,332,856 Net realized gain (loss) from investments 895,339 3,148,534 (429,582) 6,782,374 Change in net unrealized appreciation (depreciation) of investments (6,641,410) 32,498,102 (12,369,670) 25,265,085 Distributions to Preferred Shareholders: From net investment income (4,042,793) (9,512,019) (3,065,241) (8,728,935) From accumulated net realized gains from investments (228,928) -- (1,332,496) (208,058) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 31,264,550 67,651,917 20,714,329 63,443,322 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (33,499,195) (30,394,622) (31,783,529) (29,529,048) From accumulated net realized gains from investments (738,605) -- (5,228,137) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (34,237,800) (30,394,622) (37,011,666) (29,529,048) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (2,973,250) 37,257,295 (16,297,337) 33,914,274 Net assets applicable to Common shares at the beginning of year 561,577,476 524,320,181 524,597,016 490,682,742 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $558,604,226 $561,577,476 $508,299,679 $524,597,016 ==================================================================================================================================== Undistributed net investment income at the end of year $ 5,981,643 $ 1,692,282 $ 5,625,560 $ 2,296,205 ==================================================================================================================================== 43 See accompanying notes to financial statements.
Statement of CHANGES IN NET ASSETS (continued)
QUALITY INCOME (NQU) PREMIER INCOME (NPF) --------------------------------- -------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/02 10/31/01 10/31/02 10/31/01 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 60,850,583 $ 65,537,662 $ 23,130,784 $ 24,762,519 Net realized gain (loss) from investments 1,692,020 6,316,890 1,888,384 2,200,363 Change in net unrealized appreciation (depreciation) of investments (34,664,726) 35,316,355 (4,481,311) 14,544,248 Distributions to Preferred Shareholders: From net investment income (5,357,084) (14,251,122) (2,203,634) (5,227,454) From accumulated net realized gains from investments (1,401,793) (148,749) (136,932) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 21,119,000 92,771,036 18,197,291 36,279,676 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (50,249,044) (49,551,179) (19,246,966) (18,468,147) From accumulated net realized gains from investments (4,915,477) (412,608) (488,220) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (55,164,521) (49,963,787) (19,735,186) (18,468,147) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- -- 580,883 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (34,045,521) 42,807,249 (1,537,895) 18,392,412 Net assets applicable to Common shares at the beginning of year 830,636,393 787,829,144 307,495,754 289,103,342 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $796,590,872 $830,636,393 $305,957,859 $307,495,754 ==================================================================================================================================== Undistributed net investment income at the end of year $ 7,102,394 $ 1,873,911 $ 2,887,729 $ 1,130,168 ==================================================================================================================================== 44 See accompanying notes to financial statements.
Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The National Funds (the "Funds") covered in this report and their corresponding Common Share New York Stock Exchange symbols are Nuveen Investment Quality Municipal Fund, Inc. (NQM), Nuveen Select Quality Municipal Fund, Inc. (NQS), Nuveen Quality Income Municipal Fund, Inc. (NQU) and Nuveen Premier Municipal Income Fund, Inc. (NPF). 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, the Funds had no such outstanding purchase commitments. 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 Common 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 Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. 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. 45 Notes to FINANCIAL STATEMENTS (continued) Preferred Shares The Funds have issued and outstanding $25,000 stated value Preferred shares. Each Fund's Preferred shares are issued in more than one Series. The dividend rate on each Series may change every seven days, as set pursuant to a dutch auction process by the auction agent, and is payable at or near the end of each rate period. The number of Preferred shares outstanding, by Series and in total, for each Fund is as follows:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M 2,500 2,000 3,000 1,000 Series T 2,500 2,000 3,000 2,800 Series W 2,500 2,800 3,000 -- Series W2 -- -- 2,080 -- Series TH 2,040 1,560 4,000 2,800 Series F 2,500 2,800 3,000 -- - --------------------------------------------------------------------------------------------------------- Total 12,040 11,160 18,080 6,600 =========================================================================================================
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. 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 applicable to Common shares 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 applicable to Common shares or the Common share net asset values of the Funds, but resulted in an increase in the cost of securities and a corresponding decrease in net unrealized appreciation based on securities held by the Funds on November 1, 2001, as follows:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - --------------------------------------------------------------------------------------------------------- $574,265 $267,038 $114,353 $96,905 =========================================================================================================
The Statement of Changes in Net Assets and Financial Highlights for the prior periods have not been restated to reflect this change in presentation. 46 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 as follows:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - --------------------------------------------------------------------------------------------------------- $89,838 $112,074 $109,688 $21,604 =========================================================================================================
Classification and Measurement of Redeemable Securities The Funds have adopted the classification requirement of EITF D-98, Classification and Measurement of Redeemable Securities. EITFD-98 requires that Preferred shares, at liquidation value, be presented separately in the Statement of Assets and Liabilities. Accordingly, certain reclassifications have been made to the financial statements and financial highlights for all prior periods presented. The adoption of EITF D-98 had no impact on the Funds' Common share net asset values. 2. FUND SHARES There were no share transactions for any of the Funds during the fiscal year ended October 31, 2002. During the fiscal year ended October 31, 2001, Premier Income (NPF) had 39,069 shares issued to shareholders due to reinvestment of distributions. There were no share transactions for any of the other Funds during the fiscal year ended October 31, 2001. 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:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - --------------------------------------------------------------------------------------------------------- Purchases: Long-term municipal securities $51,552,565 $147,082,858 $396,321,532 $110,531,917 Short-term securities 11,500,000 37,000,000 51,700,000 63,495,000 Sales and maturities: Long-term municipal securities 43,771,581 154,509,298 412,171,678 118,873,574 Short-term securities 12,000,000 37,000,000 41,700,000 62,150,000 =========================================================================================================
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.
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - -------------------------------------------------------------------------------------------------------------- Cost of Investments $794,149,391 $742,732,768 $1,196,134,231 $439,614,411 ==============================================================================================================
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - ----------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $68,021,856 $46,686,780 $73,031,677 $26,916,276 Depreciation (14,431,291) (15,402,803) (40,632,418) (4,910,528) - ----------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments $53,590,565 $31,283,977 $32,399,259 $22,005,748 ===========================================================================================================
The tax components of undistributed net investment income and net realized gains at October 31, 2002, were as follows:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - ---------------------------------------------------------------------------------------------------------- Undistributed tax-exempt income $8,306,281 $8,021,216 $11,216,519 $4,421,589 Undistributed ordinary income * 199,961 48,462 -- 4,647 Undistributed net long-term capital gains 897,555 -- 1,689,131 1,886,500 ==========================================================================================================
47 Notes to FINANCIAL STATEMENTS (continued) 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:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - --------------------------------------------------------------------------------------------------------- Distributions from tax-exempt income $37,269,102 $34,419,253 $55,481,812 $21,382,991 Distributions from ordinary income * 1,870 364,764 -- -- Distributions from net long-term capital gains 967,533 6,367,510 6,317,270 625,152 =========================================================================================================
* Ordinary income consists of taxable market discount income and net short-term capital gains, if any. At October 31, 2002, Select Quality (NQS) had an unused capital loss carryforward of $429,582, available to be applied against future capital gains, if any. If not applied, the carryforward will expire in the year 2010. 5. MANAGEMENT FEE 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 an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE - -------------------------------------------------------------------------------- For the first $125 million .6500 of 1% For the next $125 million .6375 of 1 For the next $250 million .6250 of 1 For the next $500 million .6125 of 1 For the next $1 billion .6000 of 1 For the next $3 billion .5875 of 1 For net assets over $5 billion .5750 of 1 ================================================================================ 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. 6. INVESTMENT COMPOSITION At October 31, 2002, the revenue sources by municipal purpose, expressed as a percent of total investments, were as follows:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - --------------------------------------------------------------------------------------------------------- Consumer Staples 5% 5% 5% 5% Education and Civic Organizations 3 1 2 5 Healthcare 11 16 9 4 Housing/Multifamily 7 6 4 13 Housing/Single Family 5 9 5 4 Tax Obligation/General 15 8 20 19 Tax Obligation/Limited 9 9 7 18 Transportation 11 12 11 2 U.S. Guaranteed 19 15 16 14 Utilities 7 12 11 8 Water and Sewer 6 5 8 8 Other 2 2 2 - - -------------------------------------------------------------------------------------------------------- 100% 100% 100% 100% ========================================================================================================
48 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 (65% for Investment Quality (NQM), 61% for Select Quality (NQS), 60% for Quality Income (NQU) and 60% for Premier Income (NPF)). For additional information regarding each investment security, refer to the Portfolio of Investments of each Fund. 7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 2, 2002, to shareholders of record on November 15, 2002, as follows:
INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) - --------------------------------------------------------------------------------------------------------- Dividend per share $.0815 $.0805 $.0790 $.0810 =========================================================================================================
49 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each year:
Investment Operations Less Distributions ------------------------------------------------------------- ------------------------------ Distributions Distributions from Net from Net Beginning Net Investment Capital Investment Capital Common Realized/ Income to Gains to Income to Gains to Share Net Unrealized Preferred Preferred Common Common Net Asset Investment Investment Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ================================================================================================================================== INVESTMENT QUALITY (NQM) Year Ended 10/31: 2002(a) $15.71 $1.15 $ (.15) $(.11) $(.01) $ .88 $ (.94) $(.02) $ (.96) 2001 14.67 1.16 1.00 (.27) -- 1.89 (.85) -- (.85) 2000 14.03 1.21 .66 (.34) -- 1.53 (.89) -- (.89) 1999 16.00 1.21 (1.96) (.24) -- (.99) (.96) -- (.96) 1998 15.77 1.22 .25 (.25) -- 1.22 (.98) (.01) (.99) SELECT QUALITY (NQS) - ---------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 15.48 1.12 (.38) (.09) (.04) .61 (.94) (.15) (1.09) 2001 14.48 1.19 .95 (.26) (.01) 1.87 (.87) -- (.87) 2000 14.05 1.22 .47 (.34) -- 1.35 (.92) -- (.92) 1999 15.68 1.22 (1.64) (.24) -- (.66) (.96) -- (.96) 1998 15.48 1.23 .19 (.25) -- 1.17 (.97) -- (.97) QUALITY INCOME (NQU) - ---------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 15.32 1.12 (.59) (.10) (.03) .40 (.93) (.09) (1.02) 2001 14.53 1.21 .76 (.26) -- 1.71 (.91) (.01) (.92) 2000 14.33 1.28 .21 (.34) -- 1.15 (.95) -- (.95) 1999 15.83 1.27 (1.48) (.25) -- (.46) (1.03) -- (1.03) 1998 15.73 1.27 .12 (.26) -- 1.13 (1.03) -- (1.03) PREMIER INCOME (NPF) - ---------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 15.31 1.15 (.13) (.11) (.01) .90 (.96) (.02) (.98) 2001 14.42 1.23 .84 (.26) -- 1.81 (.92) -- (.92) 2000 14.24 1.26 .21 (.34) -- 1.13 (.95) -- (.95) 1999 15.76 1.22 (1.51) (.24) -- (.53) (.97) -- (.97) 1998 15.62 1.22 .17 (.25) -- 1.14 (1.00) -- (1.00) ================================================================================================================================== Total Returns ------------------ Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value* Value* ================================================================================== INVESTMENT QUALITY (NQM) Year Ended 10/31: 2002(a) $ -- $15.63 $14.9900 7.71% 5.85% 2001 -- 15.71 14.8400 22.33 13.16 2000 -- 14.67 12.8750 3.70 11.38 1999 (.02) 14.03 13.3125 (8.51) (6.64) 1998 -- 16.00 15.5000 5.97 7.97 SELECT QUALITY (NQS) - ---------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) -- 15.00 14.4000 5.24 4.22 2001 -- 15.48 14.7500 20.09 13.23 2000 -- 14.48 13.0625 6.85 10.02 1999 (.01) 14.05 13.1250 (13.63) (4.55) 1998 -- 15.68 16.1875 10.96 7.77 QUALITY INCOME (NQU) - ---------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) -- 14.70 14.0400 3.05 2.71 2001 -- 15.32 14.6200 18.72 12.09 2000 -- 14.53 13.1250 .73 8.37 1999 (.01) 14.33 14.0000 (11.17) (3.20) 1998 -- 15.83 16.8125 9.64 7.37 PREMIER INCOME (NPF) - ---------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) -- 15.23 14.5200 4.57 6.19 2001 -- 15.31 14.8400 15.93 12.89 2000 -- 14.42 13.6250 9.71 8.22 1999 (.02) 14.24 13.3125 (17.25) (3.71) 1998 -- 15.76 17.1250 10.29 7.49 ================================================================================== 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 Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate =============================================================================================================== INVESTMENT QUALITY (NQM) Year Ended 10/31: 2002(a) $558,604 1.21% 7.48% 1.21% 7.49% 5% 2001 561,577 1.24 7.56 1.23 7.56 17 2000 524,320 1.24 8.57 1.22 8.59 35 1999 501,508 1.17 7.85 1.16 7.86 16 1998 570,150 1.12 7.66 1.12 7.66 7 SELECT QUALITY (NQS) - --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 508,300 1.24 7.46 1.23 7.47 19 2001 524,597 1.24 7.89 1.23 7.89 28 2000 490,683 1.22 8.67 1.21 8.68 30 1999 476,102 1.17 8.07 1.16 8.08 27 1998 529,774 1.14 7.87 1.14 7.87 7 QUALITY INCOME (NQU) - --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 796,591 1.23 7.50 1.22 7.51 32 2001 830,636 1.21 8.05 1.21 8.06 30 2000 787,829 1.21 8.95 1.20 8.95 23 1999 776,845 1.17 8.27 1.16 8.27 13 1998 851,408 1.13 8.08 1.13 8.08 19 PREMIER INCOME (NPF) - --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2002(a) 305,958 1.29 7.66 1.28 7.67 25 2001 307,496 1.28 8.25 1.26 8.26 14 2000 289,103 1.27 8.84 1.26 8.85 9 1999 285,509 1.19 7.98 1.18 7.99 11 1998 314,149 1.15 7.80 1.15 7.80 19 =============================================================================================================== Preferred Shares at End of Year -------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ================================================================ INVESTMENT QUALITY (NQM) Year Ended 10/31: 2002(a) $301,000 $25,000 $71,396 2001 301,000 25,000 71,643 2000 301,000 25,000 68,548 1999 301,000 25,000 66,654 1998 250,000 25,000 82,015 SELECT QUALITY (NQS) - ---------------------------------------------------------------- Year Ended 10/31: 2002(a) 279,000 25,000 70,547 2001 279,000 25,000 72,007 2000 279,000 25,000 68,968 1999 279,000 25,000 67,661 1998 240,000 25,000 80,185 QUALITY INCOME (NQU) - ---------------------------------------------------------------- Year Ended 10/31: 2002(a) 452,000 25,000 69,059 2001 452,000 25,000 70,942 2000 452,000 25,000 68,575 1999 452,000 25,000 67,967 1998 400,000 25,000 78,213 PREMIER INCOME (NPF) - ---------------------------------------------------------------- Year Ended 10/31: 2002(a) 165,000 25,000 71,357 2001 165,000 25,000 71,590 2000 165,000 25,000 68,804 1999 165,000 25,000 68,259 1998 140,000 25,000 81,098 ================================================================ * Total Investment Return on Market Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in stock price per share. Total Return on Common Share Net Asset Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in Common share net asset value per share. Total returns are not annualized. ** After custodian fee credit, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) 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 Common shares as follows: INVESTMENT SELECT QUALITY PREMIER QUALITY QUALITY INCOME INCOME (NQM) (NQS) (NQU) (NPF) ---------------------------------------- 2002 per share impact ($) -- -- -- -- 2002 income ratio impact (%) .02 .02 .01 .01 The Financial Highlights for the prior periods have not been restated to reflect this change in presentation. See accompanying notes to financial statements. 50-51 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. 52 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. 53 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. 54 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.
55 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. 56 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 ANNUAL TOTAL RETURN: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return (including change in NAV and reinvested dividends) that would have been necessary on an annual basis to equal the investment's actual performance over the time period being considered. AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a fund's portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions. LEVERAGE-ADJUSTED DURATION: Duration is a measure of a bond or bond fund's sensitivity to changes in interest rates. Generally, the longer a bond or fund's duration, the more the price of the bond or fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the Fund MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. NET ASSET VALUE (NAV): A fund's NAV is calculated by subtracting the liabilities of the fund from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. - --------- Each Fund intends to repurchase shares of its own common or preferred stock in the future at such times and in such amounts as is deemed advisable. No shares were repurchased during the twelve-month period ended October 31, 2002. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 57 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-C-1002D -----END PRIVACY-ENHANCED MESSAGE-----