UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05488
---------------------
Nuveen Municipal Income Fund, Inc.
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: October 31
------------------
Date of reporting period: October 31, 2005
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT October 31, 2005
Nuveen Investments
Municipal Exchange-Traded
Closed-End Funds
NUVEEN MUNICIPAL VALUE FUND, INC.
NUV
NUVEEN MUNICIPAL INCOME FUND, INC.
NMI
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Photo of: A child.
DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU
KEEP.(R)
Logo: NUVEEN Investments
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Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Chairman's
LETTER TO SHAREHOLDERS
Once again, I am pleased to report that over the 12-month period covered by this
report your Fund continued to provide you with attractive monthly tax-free
income. For more details about the management strategy and performance of your
Fund, please see the Portfolio Managers' Comments and Performance Overview
sections of this report.
Given recent reports of a strengthening economy, some market commentators are
speculating about whether longer-term interest rates will soon begin to rise
substantially, mirroring the rise that has taken place in shorter-term rates. If
longer-term rates do begin to rise significantly, some have suggested that this
would be a signal to begin selling your holdings of fixed-income investments.
"IN FACT, A WELL-DIVERSIFIED PORTFOLIO MAY ACTUALLY HELP TO REDUCE YOUR OVERALL
INVESTMENT RISK OVER THE LONG TERM."
Nobody knows what the market will do in the future or what investments will turn
out to be tomorrow's best performers. But from our experience, we do know that a
well-balanced portfolio, structured and carefully monitored with the help of a
trusted investment professional, can be an important component in helping you
achieve your long-term financial goals. In fact, a well-diversified portfolio
may actually help to reduce your overall investment risk over the long term.
That is one reason why we believe that a municipal bond investment like your
Fund can be an important building block in a comprehensive investment program
designed to perform well in a variety of market conditions.
As an added convenience for you, I urge you to consider receiving future Fund
reports and other Fund information by e-mail and the Internet. Not only will you
be able to receive the information faster, but this also may help lower your
Fund's expenses. Sign up is quick and easy - see the inside front cover of this
report for instructions.
Earlier in 2005, The St. Paul Travelers Companies, Inc., which owned 79% of
Nuveen Investments, Inc. (the parent of your Fund's investment adviser), sold a
substantial portion of its stake in Nuveen. More recently, St. Paul sold the
balance of its shares to Nuveen Investments or to others. Please be assured that
these transactions only affect Nuveen's corporate structure, and they do not
have any impact on the investment objectives or management of your Fund.
At Nuveen Investments, our mission continues to be to assist you and your
financial advisor by offering investment services and products that can help you
to secure your financial objectives. We are grateful that you have chosen us as
a partner as you pursue your financial goals, and we look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 15, 2005
Nuveen Investments Municipal Exchange-Traded Closed-End Funds
NUV, NMI
Portfolio Managers'
COMMENTS
Portfolio managers Tom Spalding and John Miller discuss the economic and
municipal market environments, key investment strategies and the annual
performance of NUV and NMI. With 30 years of investment experience at Nuveen,
Tom has managed NUV since its inception in 1987. John, who has 12 years of
municipal market experience, including 9 years with Nuveen, assumed portfolio
management responsibility for NMI in 2001.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH
PERIOD ENDED OCTOBER 31, 2005?
Between November 1, 2004, and October 31, 2005, the Federal Reserve implemented
eight 0.25% increases in the closely-watched fed funds rate. These increases,
which were aimed at controlling the pace of inflation, raised this short-term
target rate to 3.75% from 1.75%. (On November 1, 2005 and December 13, 2005, the
fed funds rate was increased by 0.25% to reach 4.25%.) Over this same 12-month
period, shorter-term municipal market rates also rose significantly.
Longer-term yields declined throughout much of this period before rising toward
the end of the fiscal year. The yield on the benchmark 10-year U.S. Treasury
note ended October 2005 at 4.56%, compared with 4.03% one year earlier.
Longer-term yields in the municipal market followed a similar pattern, with the
yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of
longer-term municipal market rates, ending the reporting period at 5.21%, an
increase of 24 basis points from October 31, 2004. Together, the steady rise in
shorter-term rates and the much more modest increase in longer rates over this
period produced an overall flattening of the yield curve, which generally led to
better relative performance for bonds with longer effective maturities and
poorer returns for bonds with shorter maturities or short call dates.
The economy continued to improve over the 12-month period. After expanding at an
annualized rate of 3.3% in the fourth quarter of 2004, the U.S. gross domestic
product (GDP) grew by annualized rates of 3.8% in the first quarter of 2005,
3.3% in the second quarter and 3.8% in the third quarter. The overall employment
picture showed some improvement, with national unemployment at 5.0% in October
2005, down from 5.5% in October 2004. However, the 4.3% year-over-year increase
in the Consumer Price Index as of October 2005 raised some inflation concerns.
Over the 12 months ended October 2005, municipal bond new issue supply
nationwide remained strong, as $363.4 billion in new securities came to market.
A major factor behind this strong supply was the flattening yield curve, which
made advance refundings more economically attractive for many issuers. (Advance
refundings, also known as pre-refundings or refinancings, occur when an issuer
sells new bonds and uses the proceeds to fund the principal and interest
payments of older, previously issued bonds that carry a higher coupon rate. This
process usually results in lower total borrowing costs for bond
4
issuers.) Between January and October 2005, pre-refunding volume was nearly 50%
higher than during the same period in 2004, as issuers sought to take advantage
of the current interest rate environment.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE 12 MONTHS ENDED
OCTOBER 31, 2005?
With the Fed continuing to raise short-term interest rates and the overall
flattening of the yield curve, our focus during this reporting period centered
on finding attractive bonds that we believed would add value to the portfolios
of NUV and NMI and that, in our judgment, also had the potential to perform well
under a variety of future market scenarios.
While both NUV and NMI are diversified, unleveraged Funds, their investment
parameters differ slightly. For example, NMI can invest up to 25% of its
portfolio in below investment-grade quality bonds that may carry more credit
risk but typically offer higher yields. NUV is more restricted in its ability to
invest in below-investment-grade securities. As a result, there were some minor
differences in areas of emphasis between the two Funds during this reporting
period. Overall, the ample new issue supply available during this period
provided both Funds with good opportunities to find the types of bonds they were
seeking, and we kept an opportunistic eye toward all types of issuance that we
believed could add value to the Funds' portfolios.
In NUV, our purchase activity generally emphasized finding bonds with adequate
call protection that matured in about 25 years. In particular, we looked for
premium bonds, which are bonds trading above their par values because their
coupons were higher than the coupon levels of newly issued bonds. Historically,
premium bonds have held their value better than current coupon bonds when
interest rates have risen. Premium bonds also are good candidates for advance
refundings, and trading pre-refunded bonds at opportune times in the interest
rate cycle has historically been a key strategy for adding value to this Fund.
In general in NUV, we tried to buy essential services revenue bonds that would
also help us keep the Fund well diversified geographically. Lower-rated bonds
generally were in great demand during this period. As a result we did not find
many attractive opportunities among lower-rated issues to add securities that we
believed would enhance the value of the portfolio. The majority of our purchase
activity focused on higher quality bonds, especially during the second half of
this 12-month period.
In NMI, we believed the Fund was already aggressively positioned in
higher-yielding, lower-rated credits. Therefore, our new purchases during this
period tended to focus on higher-grade and insured securities, primarily in the
20-year to 30-year part of the yield curve. As mentioned earlier, the flattening
of the yield curve resulted in a dramatic rise in advance refundings. While this
had a positive impact on NMI's performance, it also had a shortening effect on
the Fund's duration.1 The longer durations of the bonds we added to
1 Duration is a measure of a bond's price sensitivity as interest rates
change, with longer duration bonds displaying more sensitivity to these
changes than bonds with shorter durations.
5
NMI's portfolio during this period enabled us to maintain the Fund's duration
within our desired range and helped to improve the Fund's overall call
protection. We found many of the higher-quality, longer maturity bonds that we
sought in the healthcare and public power sectors.
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as for comparative indexes and
averages, are presented in the accompanying table.
TOTAL RETURNS ON NET ASSET VALUE*
For periods ended 10/31/05
1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
NUV 5.73% 6.27% 5.82%
--------------------------------------------------------------------------------
NMI 5.93% 5.36% 5.15%
--------------------------------------------------------------------------------
Lehman Brothers
Municipal
Bond Index2 2.54% 5.98% 5.85%
--------------------------------------------------------------------------------
Lipper General and
Insured Unleveraged
Municipal Debt
Funds Average3 4.28% 5.40% 5.44%
--------------------------------------------------------------------------------
*Annualized
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended October 31, 2005, the total returns on net asset value
(NAV) for both NUV and NMI significantly exceeded the return on the Lehman
Brothers Municipal Bond Index. Both Funds also outperformed the average return
for their Lipper peer group for this period.
As noted earlier, the municipal market yield curve flattened over the course of
this reporting period. Longer maturity bonds generally performed better than
securities with shorter maturities. Relatively heavier exposure to the longer
part of the yield curve helped the performances of both Funds when compared with
the Lehman Brothers index, which is more evenly weighted across the entire yield
curve.
Two of the key elements in the performance of both Funds for this period were
credit exposure and advance refundings. Both Funds benefited from their
allocations of lower-quality bonds, as securities rated BBB and lower generally
outperformed higher-rated credits. This was largely the result of the interest
rate environment during this time, as investor demand for the higher yields
typically associated with lower-quality bonds drove up the value of these bonds
even though values of higher-rated bonds were falling
2 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman index do not reflect any expenses.
3 The Lipper General and Insured Unleveraged Municipal Debt Funds category
average is calculated using the returns of all closed-end exchange-traded
funds in this category for each period as follows: 1 year, 8 funds; 5
years, 8 funds; and 10 years, 8 funds. Fund and Lipper returns assume
reinvestment of dividends.
6
because of rising interest rates. As of October 31, 2005, allocations of bonds
rated BBB and lower and non-rated bonds accounted for 22% of NUV's portfolio and
52% of NMI. In an environment where the high-yield segment of the Lehman
municipal index substantially outperformed the general municipal market, this
higher weighting in lower-quality bonds gave NMI a slight performance advantage
over NUV over this one-year period.
In assessing individual lower-rated credits during this period, deciding which
securities to sell or avoid due to the potential for credit problems was just as
important to the Funds' performances as deciding which securities to buy or
continue to hold. Among the lower-rated holdings making significant
contributions to the Funds' total returns for this period were bonds backed by
the 1998 master tobacco settlement agreement. As the litigation environment
improved and supply/demand dynamics drove tobacco bond prices higher, these
securities made strong, positive contributions to the returns of both Funds.
Both held approximately 6% of their portfolios in tobacco bonds as of October
31, 2005. Lower-rated hospital holdings also contributed to the Funds' total
returns, as the healthcare sector ranked second in terms of performance among
the Lehman municipal revenue sectors for the period. Two of the
better-performing hospital bonds held by both Funds were securities issued for
the Detroit Medical Center, which had its outlook upgraded to positive by all
three major credit rating agencies, and Knox County hospital revenue bonds
issued for Baptist Health System of East Tennessee. NMI sold its Detroit Medical
Center position prior to the end of this reporting period.
An additional positive factor in the performance of these Funds was their
holdings of zero coupon bonds. These bonds do not make periodic interest
payments and therefore typically have very long initial maturities. The prices
of these bonds tend to be very sensitive to changes in interest rates. Zero
coupon bonds in the Lehman Municipal Bond Index outperformed the general market
by 130 basis points.
In addition to yield curve positioning, credit exposure, and specific holdings,
another important factor in the Funds' returns during this period was advance
refundings. Refinancings rose sharply during this period, and the Funds'
performances benefited from the amount of their portfolios that became advance
refunded and the timing of these events. Generally, newly refunded bonds
received a higher credit rating, which usually translates to a higher price.
While newly pre-refunded bonds tended to enhance the Funds' returns, the Funds'
holdings of older, previously pre-refunded bonds tended to underperform the
general municipal market during this period, primarily because of the shorter
effective maturities of these bonds. As more of the Funds' holdings became
advance refunded, we were selling selected issues to keep our allocations of
pre-refunded credits at desired levels.
7
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
OCTOBER 31, 2005?
Even though lower-rated credits continued to perform well during this period, we
believed that maintaining overall strong credit quality was an important
requirement. As of October 31, 2005, NUV held 65% of its portfolio in bonds
rated AAA/U.S. guaranteed and AA. NMI, which can invest up to 25% of its
portfolio in below investment-grade quality bonds, held 82% of its portfolio in
securities either rated investment-grade or in unrated bonds considered by us to
be of investment-grade quality.
As of October 31, 2005, potential call exposure for the period from November
2005 through the end of 2006 totaled 10% in NUV and 12% in NMI. The number of
actual bond calls in these Funds depends largely on future market interest
rates.
8
Dividend and Share Price
INFORMATION
The dividends of both NUV and NMI remained stable throughout the 12-month
reporting period ended October 31, 2005.
In addition, due to normal portfolio activity, common shareholders of these
Funds received capital gains and net ordinary income distributions at the end of
December 2004 as follows:
LONG-TERM CAPITAL GAINS ORDINARY INCOME
(PER SHARE) (PER SHARE)
--------------------------------------------------------------------------------
NUV $ 0.0559 $ 0.0063
--------------------------------------------------------------------------------
NMI $ -- $ 0.0002
--------------------------------------------------------------------------------
Each of these Funds seeks to pay stable dividends at rates that reflect the
Fund's past results and projected future performance. During certain periods,
each Fund may pay dividends at a rate that may be more or less than the amount
of net investment income actually earned by the Fund during the period. If a
Fund has cumulatively earned more than it has paid in dividends, it holds the
excess in reserve as undistributed net investment income (UNII) as part of the
Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of
its earnings, the excess constitutes negative UNII that is likewise reflected in
the Fund's NAV. Each Fund will, over time, pay all of its net investment income
as dividends to shareholders. As of October 31, 2005, both NUV and NMI had
positive UNII balances for both tax purposes and financial statement purposes.
At the end of the reporting period, the Funds' share prices were trading at
discounts to their NAVs as shown in the accompanying chart:
10/31/05 12-MONTH
DISCOUNT AVERAGE DISCOUNT
--------------------------------------------------------------------------------
NUV -5.62% -7.87%
--------------------------------------------------------------------------------
NMI -2.76% -4.80%
--------------------------------------------------------------------------------
9
Nuveen Municipal Value Fund, Inc.
NUV
Performance
OVERVIEW As of October 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 53%
AA 12%
A 13%
BBB 14%
BB or Lower 7%
NR 1%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.039
Dec 0.039
Jan 0.039
Feb 0.039
Mar 0.039
Apr 0.039
May 0.039
Jun 0.039
Jul 0.039
Aug 0.039
Sep 0.039
Oct 0.039
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/04 9.33
9.37
9.35
9.38
9.27
9.09
9.27
9.19
9.28
9.33
9.31
9.28
9.32
9.26
9.2
9.23
9.21
9.2
9.16
9.1
9.1
9.17
9.1
9.19
9.21
9.23
9.21
9.24
9.19
9.15
9.14
9.14
9.1
9.09
9.09
9.12
9.08
9.1
9.09
9.12
9.11
9.12
9.19
9.2
9.17
9.17
9.18
9.2
9.23
9.23
9.19
9.17
9.19
9.26
9.25
9.29
9.29
9.32
9.31
9.29
9.3
9.31
9.32
9.32
9.33
9.33
9.36
9.38
9.42
9.42
9.45
9.41
9.42
9.4
9.42
9.38
9.35
9.29
9.35
9.42
9.43
9.4
9.41
9.41
9.39
9.39
9.41
9.42
9.3
9.3
9.18
9.18
9.15
9.13
9.18
9.15
9.09
9.02
8.97
9.07
9.01
9.03
9.06
9.17
9.2
9.19
9.2
9.2
9.15
9.19
9.22
9.24
9.2
9.21
9.24
9.25
9.26
9.24
9.21
9.23
9.23
9.22
9.25
9.26
9.31
9.31
9.29
9.3
9.32
9.33
9.28
9.33
9.37
9.36
9.35
9.36
9.37
9.4
9.46
9.38
9.4
9.41
9.41
9.37
9.4
9.4
9.42
9.47
9.5
9.49
9.53
9.59
9.59
9.57
9.53
9.45
9.4
9.45
9.52
9.53
9.55
9.57
9.58
9.58
9.57
9.53
9.56
9.59
9.61
9.58
9.61
9.64
9.68
9.68
9.68
9.7
9.66
9.66
9.66
9.62
9.67
9.62
9.59
9.6
9.59
9.65
9.62
9.64
9.62
9.62
9.62
9.59
9.62
9.62
9.59
9.56
9.52
9.53
9.56
9.57
9.59
9.61
9.58
9.62
9.67
9.72
9.7
9.72
9.71
9.77
9.81
9.85
9.89
9.9
9.9
9.97
9.95
9.95
9.95
9.92
9.84
9.81
9.75
9.71
9.73
9.68
9.66
9.56
9.53
9.56
9.57
9.62
9.66
9.81
9.79
9.81
9.78
9.75
9.67
9.62
9.64
9.52
9.44
9.46
9.47
9.47
9.55
9.52
9.57
9.56
9.55
9.45
9.52
9.5
10/31/05 9.58
FUND SNAPSHOT
------------------------------------
Share Price $9.58
------------------------------------
Net Asset Value $10.15
------------------------------------
Premium/(Discount) to NAV -5.62%
------------------------------------
Market Yield 4.89%
------------------------------------
Taxable-Equivalent Yield1 6.79%
------------------------------------
Net Assets ($000) 1,979,396
------------------------------------
Average Effective Maturity
on Securities (Years) 19.38
------------------------------------
Modified Duration 5.92
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/17/87)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 8.25% 5.73%
------------------------------------
5-Year 8.30% 6.27%
------------------------------------
10-Year 6.21% 5.82%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
New York 15.5%
------------------------------------
Illinois 11.5%
------------------------------------
California 10.4%
------------------------------------
Texas 6.1%
------------------------------------
Indiana 4.8%
------------------------------------
Michigan 4.6%
------------------------------------
New Jersey 4.4%
------------------------------------
Massachusetts 3.0%
------------------------------------
Colorado 2.9%
------------------------------------
South Carolina 2.8%
------------------------------------
Missouri 2.8%
------------------------------------
Wisconsin 2.6%
------------------------------------
Louisiana 2.2%
------------------------------------
Washington 2.2%
------------------------------------
Georgia 2.2%
------------------------------------
Nevada 2.0%
------------------------------------
District of Columbia 1.9%
------------------------------------
Florida 1.8%
------------------------------------
Pennsylvania 1.6%
------------------------------------
Other 14.7%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Healthcare 19.6%
------------------------------------
Tax Obligation/Limited 16.8%
------------------------------------
U.S. Guaranteed 13.8%
------------------------------------
Transportation 11.2%
------------------------------------
Utilities 10.2%
------------------------------------
Tax Obligation/General 9.8%
------------------------------------
Consumer Staples 5.8%
------------------------------------
Other 12.8%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing the Fund to investments that generate qualified dividend income,
the taxable-equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2004 of $0.0622 per share.
10
Nuveen Municipal Income Fund, Inc.
NMI
Performance
OVERVIEW As of October 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 26%
AA 10%
A 12%
BBB 34%
BB or Lower 9%
NR 9%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.044
Dec 0.044
Jan 0.044
Feb 0.044
Mar 0.044
Apr 0.044
May 0.044
Jun 0.044
Jul 0.044
Aug 0.044
Sep 0.044
Oct 0.044
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/04 10.02
10
9.97
9.94
9.75
9.58
9.68
9.7
9.71
9.75
9.75
9.84
9.92
9.95
9.75
9.75
9.83
10.02
9.96
9.86
9.85
9.84
9.8
9.81
9.98
10.13
10.12
10.14
9.99
10.05
9.91
9.91
9.98
9.9
9.9
10.06
9.89
9.84
9.84
9.89
9.85
9.83
9.85
9.82
9.8
9.85
9.86
9.94
9.92
9.94
9.96
10.01
9.9
9.95
9.96
10.13
9.95
10.17
10.12
10.25
10.18
10.16
10.19
10.25
10.24
10.45
10.82
10.7
10.5
10.6
10.6
10.45
10.47
10.46
10.35
10.27
10.17
10.07
10.04
10.14
10.17
10.11
10.04
10.03
10.04
10.1
10.15
10.19
10
10.02
10
10.02
10.03
10.12
10.06
10.06
10.02
9.82
9.8
9.8
9.86
9.96
9.85
9.94
10.1
10.05
9.92
9.96
9.9
9.82
9.9
9.85
9.81
9.83
9.76
9.92
10.02
9.99
9.94
9.97
9.92
9.85
9.9
10.05
10.03
10.03
9.98
10.03
10.09
10.32
10.55
10.54
10.47
10.6
10.5
10.54
10.55
10.54
10.59
10.66
10.66
10.5
10.57
10.58
10.66
10.8
10.68
10.94
10.91
10.88
10.88
10.85
10.82
10.84
10.87
10.83
10.76
10.88
10.78
10.7
10.66
10.69
10.69
10.65
10.68
10.7
10.69
10.59
10.58
10.56
10.59
10.67
10.62
10.82
11
11.02
11.05
10.99
10.91
10.88
11.15
11.07
11.05
11.33
11.2
11.03
10.86
10.92
10.89
10.89
10.9
11.14
11.09
11.13
10.96
10.89
11.1
11.15
11.09
10.97
10.92
11.05
11.14
11.25
11.29
11.2
11.13
11.15
11.07
11.08
10.86
10.82
10.83
10.8
10.76
10.76
10.71
10.69
10.77
10.94
10.95
11.01
10.95
10.93
10.74
10.74
10.74
10.65
10.55
10.58
10.55
10.63
10.56
10.55
10.62
10.57
10.66
10.67
10.65
10.68
10.62
10.48
10.16
9.94
10.01
9.99
10.05
10.11
10.19
10.26
10.32
10.23
10.36
10.41
10/31/05 10.56
FUND SNAPSHOT
------------------------------------
Share Price $10.56
------------------------------------
Net Asset Value $10.86
------------------------------------
Premium/(Discount) to NAV -2.76%
------------------------------------
Market Yield 5.00%
------------------------------------
Taxable-Equivalent Yield1 6.94%
------------------------------------
Net Assets ($000) 88,147
------------------------------------
Average Effective Maturity
on Securities (Years) 16.63
------------------------------------
Modified Duration 5.24
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 4/20/88)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 10.21% 5.93%
------------------------------------
5-Year 4.37% 5.36%
------------------------------------
10-Year 5.39% 5.15%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
California 19.1%
------------------------------------
Illinois 8.7%
------------------------------------
Texas 7.8%
------------------------------------
New York 6.6%
------------------------------------
Connecticut 6.0%
------------------------------------
Colorado 5.6%
------------------------------------
South Carolina 5.2%
------------------------------------
Indiana 4.2%
------------------------------------
Michigan 3.9%
------------------------------------
Ohio 3.4%
------------------------------------
Virginia 3.3%
------------------------------------
Virgin Islands 3.2%
------------------------------------
Pennsylvania 3.0%
------------------------------------
Louisiana 2.8%
------------------------------------
Tennessee 2.6%
------------------------------------
Other 14.6%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Utilities 18.6%
------------------------------------
Healthcare 16.9%
------------------------------------
Tax Obligation/Limited 12.6%
------------------------------------
U.S. Guaranteed 11.8%
------------------------------------
Tax Obligation/General 10.8%
------------------------------------
Consumer Staples 8.4%
------------------------------------
Education and Civic
Organizations 7.2%
------------------------------------
Materials 5.8%
------------------------------------
Other 7.9%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing the Fund to investments that generate qualified dividend income,
the taxable-equivalent yield is lower.
2 The Fund also paid shareholders a net ordinary income distribution in
December 2004 of $0.0002 per share.
11
Shareholder
MEETING REPORT
The Annual Shareholder Meeting was held on July 26, 2005 at The Northern Trust
Bank, 50 S. LaSalle St., Chicago, Illinois.
NUV NMI
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE NEW INVESTMENT MANAGEMENT
AGREEMENT WAS REACHED AS FOLLOWS:
Common Common
Shares Shares
====================================================================================================================================
For 170,148,082 7,248,537
Against 1,478,926 43,177
Abstain 1,849,732 60,799
------------------------------------------------------------------------------------------------------------------------------------
Total 173,476,740 7,352,513
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
William C. Hunter
For 171,663,398 7,229,051
Withhold 1,813,342 123,462
------------------------------------------------------------------------------------------------------------------------------------
Total 173,476,740 7,352,513
====================================================================================================================================
David J. Kundert
For 171,647,633 7,229,254
Withhold 1,829,107 123,259
------------------------------------------------------------------------------------------------------------------------------------
Total 173,476,740 7,352,513
====================================================================================================================================
Eugene S. Sunshine
For 171,666,743 7,236,304
Withhold 1,809,997 116,209
------------------------------------------------------------------------------------------------------------------------------------
Total 173,476,740 7,352,513
====================================================================================================================================
12
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS
NUVEEN MUNICIPAL VALUE FUND, INC.
NUVEEN MUNICIPAL INCOME FUND, INC.
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Municipal Value Fund, Inc. and Nuveen
Municipal Income Fund, Inc. as of October 31, 2005, and the related statements
of operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended and the financial highlights
for each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the Standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2005, by correspondence with the custodian
and brokers or other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Municipal Value Fund, Inc. and Nuveen Municipal Income Fund, Inc. at
October 31, 2005, 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 their financial highlights for each of the five years in the period then
ended in conformity with U.S. generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
December 14, 2005
13
Nuveen Municipal Value Fund, Inc. (NUV)
Portfolio of
INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.3%
$ 1,240 Alabama Housing Finance Authority, Collateralized Home 4/08 at 102.00 Aaa $ 1,260,683
Mortgage Program Single Family Mortgage Revenue Bonds,
Series 1998A-2, 5.450%, 10/01/28 (Alternative Minimum Tax)
5,000 Courtland Industrial Development Board, Alabama, Solid Waste 11/09 at 101.00 Baa2 5,354,950
Disposal Revenue Bonds, Champion International Paper
Corporation, Series 1999A, 6.700%, 11/01/29 (Alternative
Minimum Tax)
1,750 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 1,832,267
Series 2001A, 5.750%, 6/01/31
4,000 Jasper Medical Clinic Board, Alabama, Hospital Revenue 1/06 at 100.00 Baa2 4,045,400
Bonds, Walker Regional Medical Center Inc., Series 1993,
6.375%, 7/01/18
12,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101.00 AAA 12,852,480
Improvement Warrants, Series 1999A, 5.375%, 2/01/36
(Pre-refunded to 2/01/09) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.5%
3,335 Alaska Housing Finance Corporation, General Housing Purpose 12/14 at 100.00 AAA 3,411,872
Bonds, Series 2005A, 5.000%, 12/01/30 - FGIC Insured
3,000 Anchorage, Alaska, General Obligation Bonds, Series 2003B, 9/13 at 100.00 AAA 3,126,480
5.000%, 9/01/23 - FGIC Insured
2,800 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/10 at 100.00 BBB 2,949,436
Settlement Asset-Backed Bonds, Series 2000, 6.200%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.2%
4,900 Arizona Health Facilities Authority, Hospital System Revenue 11/09 at 100.00 Baa3 4,992,855
Bonds, Phoenix Children's Hospital, Series 1999A,
6.250%, 11/15/29
1,400 Arizona Health Facilities Authority, Hospital System Revenue 2/12 at 101.00 Baa3 1,452,010
Bonds, Phoenix Children's Hospital, Series 2002A,
6.250%, 2/15/21
13,100 Arizona Health Facilities Authority, Hospital Revenue Bonds, 7/10 at 101.00 A- 14,646,848
Catholic Healthcare West, Series 1999A, 6.625%, 7/01/20
3,000 Phoenix Industrial Development Authority, Arizona, GNMA 4/15 at 100.00 Aaa 2,992,320
Collateralized Multifamily Housing Revenue Bonds, Park Lee
Apartments, Series 2004A, 5.050%, 10/20/44 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.8%
10,460 Cabot School District 4, Lonoke County, Arkansas, General 8/08 at 100.00 Aaa 10,633,741
Obligation Refunding Bonds, Series 2003, 5.000%, 2/01/32 -
AMBAC Insured
355 Conway, Arkansas, Sales and Use Tax Capital Improvement 12/06 at 101.00 AAA 365,810
Bonds, Series 1997A, 5.350%, 12/01/17 - FSA Insured
2,750 Jefferson County, Arkansas, Pollution Control Revenue 12/05 at 100.00 Baa2 2,752,943
Refunding Bonds, Entergy Arkansas Inc., Series 1997,
5.600%, 10/01/17
2,000 University of Arkansas, Fayetteville, Various Facilities Revenue 12/12 at 100.00 Aaa 2,048,420
Bonds, Series 2002, 5.000%, 12/01/32 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 10.3%
7,310 California Educational Facilities Authority, Revenue Bonds, 10/09 at 39.19 Aaa 2,496,804
Loyola Marymount University, Series 2000, 0.000%, 10/01/24
(Pre-refunded to 10/01/09) - MBIA Insured
6,830 California Infrastructure Economic Development Bank, Revenue 10/11 at 101.00 A- 6,952,872
Bonds, J. David Gladstone Institutes, Series 2001,
5.250%, 10/01/34
California, General Obligation Bonds, Series 2003:
14,600 5.250%, 2/01/28 8/13 at 100.00 A 15,265,030
11,250 5.000%, 2/01/33 8/13 at 100.00 A 11,397,038
7,500 California, General Obligation Bonds, Series 2004, 5.000%, 2/01/33 2/14 at 100.00 A 7,603,200
14
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
$ 10,000 5.125%, 5/01/19 5/12 at 101.00 A2 $ 10,488,200
10,000 5.250%, 5/01/20 5/12 at 101.00 A2 10,672,300
17,155 California State Public Works Board, Lease Revenue Refunding 12/05 at 100.00 Aa2 17,169,925
Bonds, Various University of California Projects, Series 1993A,
5.500%, 6/01/21
15,500 California Statewide Community Development Authority, 4/09 at 101.00 BBB 15,759,625
Certificates of Participation, Internext Group, Series 1999,
5.375%, 4/01/17
3,000 Capistrano Unified School District, Orange County, California, 9/09 at 102.00 N/R*** 3,310,230
Special Tax Bonds, Community Facilities District 98-2 -
Ladera, Series 1999, 5.750%, 9/01/29 (Pre-refunded
to 9/01/09)
6,005 Central California Joint Powers Health Finance Authority, 2/06 at 100.00 Baa2 5,987,345
Certificates of Participation, Community Hospitals of
Central California, Series 1993, 5.000%, 2/01/23
Foothill/Eastern Transportation Corridor Agency, California,
Toll Road Revenue Bonds, Series 1995A:
30,000 0.000%, 1/01/22 No Opt. Call AAA 14,022,600
2,500 6.000%, 1/01/34 (Pre-refunded to 1/01/07) 1/07 at 100.00 AAA 2,585,375
3,500 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 3,992,625
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39
33,150 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 35,594,813
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2003B, 5.000%, 6/01/38 (Pre-refunded to 6/01/13) -
AMBAC Insured
Golden State Tobacco Securitization Corporation, California,
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A:
5,000 5.000%, 6/01/38 - FGIC Insured 6/15 at 100.00 AAA 5,108,650
2,000 5.000%, 6/01/45 6/15 at 100.00 A- 2,006,720
9,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AA 9,176,130
Waterworks Revenue Refunding Bonds, Series 2001A,
5.125%, 7/01/41
4,000 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B- 3,944,240
California, Sublease Revenue Bonds, Los Angeles International
Airport, American Airlines Inc. Terminal 4 Project, Series 2002C,
7.500%, 12/01/24 (Alternative Minimum Tax)
8,000 Rancho Mirage Joint Powers Financing Authority, California, 7/14 at 100.00 A3 8,298,560
Revenue Bonds, Eisenhower Medical Center, Series 2004,
5.625%, 7/01/34
7,300 San Diego County, California, Certificates of Participation, 9/09 at 101.00 Baa3 7,675,877
Burnham Institute, Series 1999, 6.250%, 9/01/29
2,474 Yuba County Water Agency, California, Yuba River 3/06 at 100.00 Baa3 2,458,785
Development Revenue Bonds, Pacific Gas and Electric
Company, Series 1966A, 4.000%, 3/01/16
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 2.8%
1,800 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 AAA 2,160,828
Charter School Revenue Bonds, Peak-to-Peak Charter School,
Series 2001, 7.625%, 8/15/31 (Pre-refunded to 8/15/11)
2,100 Colorado Health Facilities Authority, Revenue Bonds, Catholic 3/12 at 100.00 AA*** 2,282,826
Health Initiatives, Series 2002A, 5.500%, 3/01/32
500 Colorado Health Facilities Authority, Revenue Bonds, Vail 1/12 at 100.00 BBB 526,425
Valley Medical Center, Series 2001, 5.750%, 1/15/22
2,580 Colorado Health Facilities Authority, Revenue Bonds, Sisters 11/05 at 101.00 AA 2,603,323
of Charity Healthcare Systems Inc., Series 1994,
5.250%, 5/15/14
18,915 Denver, Colorado, Airport System Revenue Refunding Bonds, 11/13 at 100.00 AAA 19,399,035
Series 2003B, 5.000%, 11/15/33 - XLCA Insured
5,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 5,520,900
Bonds, Series 2000A, 5.750%, 9/01/35 - MBIA Insured
E-470 Public Highway Authority, Colorado, Senior Revenue
Bonds, Series 2000B:
39,700 0.000%, 9/01/28 (Pre-refunded to 9/01/10) - MBIA Insured 9/10 at 31.42 AAA 10,362,494
15,000 0.000%, 9/01/32 - MBIA Insured No Opt. Call AAA 3,901,650
10,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, No Opt. Call AAA 1,938,700
Series 2004B, 0.000%, 3/01/36 - MBIA Insured
15
Nuveen Municipal Value Fund, Inc. (NUV) (continued)
Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 1,450 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA $ 1,592,086
Revenue Bonds, Senior Series 2001A, 5.500%, 6/15/19 -
AMBAC Insured
7,000 Northwest Parkway Public Highway Authority, Colorado, 6/16 at 100.00 AAA 5,797,260
Revenue Bonds, Senior Series 2001C, 0.000%, 6/15/21 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.8%
Washington Convention Center Authority, District of Columbia,
Senior Lien Dedicated Tax Revenue Bonds, Series 1998:
2,500 5.250%, 10/01/15 - AMBAC Insured 10/08 at 101.00 AAA 2,640,325
33,555 4.750%, 10/01/28 - AMBAC Insured 10/08 at 100.00 AAA 33,344,946
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.7%
4,000 Escambia County Health Facilities Authority, Florida, Revenue 11/12 at 101.00 AA 4,311,160
Bonds, Ascension Health Credit Group, Series 2002C,
5.750%, 11/15/32
10,690 Jacksonville, Florida, Better Jacksonville Sales Tax Revenue 10/11 at 100.00 AAA 10,922,721
Bonds, Series 2001, 5.000%, 10/01/30 - AMBAC Insured
4,880 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 10/10 at 101.00 AAA 5,328,179
6.000%, 10/01/32 (Alternative Minimum Tax) - FSA Insured
5,000 Orange County Health Facilities Authority, Florida, Hospital 10/09 at 101.00 A 5,250,450
Revenue Bonds, Orlando Regional Healthcare System,
Series 1999E, 6.000%, 10/01/26
8,250 Orange County School Board, Florida, Certificates of 8/12 at 100.00 AAA 8,480,010
Participation, Series 2002A, 5.000%, 8/01/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.1%
2,500 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5/12 at 100.00 AAA 2,556,350
Series 2001A, 5.000%, 11/01/33 - MBIA Insured
10,040 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5/09 at 101.00 AAA 10,225,840
Series 1999A, 5.000%, 11/01/38 - FGIC Insured
4,000 Augusta, Georgia, Water and Sewerage Revenue Bonds, 10/14 at 100.00 AAA 4,225,120
Series 2004, 5.250%, 10/01/39 - FSA Insured
Coffee County Hospital Authority, Georgia, Revenue Anticipation
Certificates, Coffee Regional Medical Center Inc., Series 1997A:
500 6.250%, 12/01/06 No Opt. Call AAA 514,880
21,100 6.750%, 12/01/26 (Pre-refunded to 12/01/06) 12/06 at 102.00 AAA 22,245,730
2,250 Royston Hospital Authority, Georgia, Revenue Anticipation 7/09 at 102.00 N/R 2,092,140
Certificates, Ty Cobb Healthcare System Inc., Series 1999,
6.500%, 7/01/27
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.4%
7,500 Hawaii, General Obligation Bonds, Series 2003DA, 9/13 at 100.00 AAA 8,060,475
5.250%, 9/01/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 11.3%
2,060 Aurora, Illinois, Golf Course Revenue Bonds, Series 2000, 1/10 at 100.00 A+ 2,217,260
6.375%, 1/01/20
Chicago, Illinois, General Obligation Bonds, Series 2002A:
9,715 5.625%, 1/01/39 (Pre-refunded to 7/01/12) - AMBAC Insured 7/12 at 100.00 AAA 10,789,188
285 5.625%, 1/01/39 - AMBAC Insured 7/12 at 100.00 AAA 311,152
2,425 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 2,549,669
Obligation Bonds, Dedicated Tax Revenues, Series 1997A,
5.250%, 12/01/22 - AMBAC Insured
15,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 5,899,800
Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1,
0.000%, 12/01/24 - FGIC Insured
5,000 Chicago Housing Authority, Illinois, Revenue Bonds, Capital 7/12 at 100.00 AA 5,287,300
Fund Program, Series 2001, 5.375%, 7/01/18
1,125 Chicago Greater Metropolitan Sanitary District, Illinois, General No Opt. Call Aaa 1,265,906
Obligation Capital Improvement Bonds, Series 1991,
7.000%, 1/01/11
2,575 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 AAA 2,619,496
Revenue Bonds, O'Hare International Airport, Series 2001C,
5.100%, 1/01/26 (Alternative Minimum Tax) - AMBAC Insured
16
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 3,020 Cook County High School District 209, Proviso Township, 12/16 at 100.00 AAA $ 2,829,861
Illinois, General Obligation Bonds, Series 2004,
0.000%, 12/01/19 - FSA Insured
2,000 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 2,151,580
Illinois, General Obligation Bonds, Series 2003B,
5.250%, 11/01/20 - FSA Insured
5,000 Illinois Development Finance Authority, Gas Supply Revenue 11/13 at 101.00 AAA 5,050,800
Bonds, Peoples Gas, Light and Coke Company, Series 2003E,
4.875%, 11/01/38 (Alternative Minimum Tax) (Mandatory put
11/01/18) - AMBAC Insured
28,030 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 15,243,835
Program Revenue Bonds, Kane, Cook and DuPage Counties
School District U46 - Elgin, Series 2002, 0.000%, 1/01/19 -
FSA Insured
Illinois Development Finance Authority, Revenue Bonds,
Presbyterian Home of Lake Forest, Series 1996B:
6,495 6.400%, 9/01/31 (Pre-refunded to 9/01/06) 9/06 at 102.00 AAA 6,802,084
990 6.400%, 9/01/31 - FSA Insured 9/06 at 102.00 AAA 1,032,926
1,800 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 973,890
Program Revenue Bonds, Winnebago and Boone Counties
School District 205 - Rockford, Series 2000, 0.000%, 2/01/19 -
FSA Insured
3,180 Illinois Development Finance Authority, Revenue Bonds, 12/21 at 100.00 BBB 3,279,629
Chicago Charter School Foundation, Series 2002A,
6.250%, 12/01/32
8,000 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AAA 8,204,000
Illinois Wesleyan University, Series 2001, 5.125%, 9/01/35 -
AMBAC Insured
5,000 Illinois Finance Authority, Revenue Bonds, Northwestern 8/14 at 100.00 AA+ 5,259,150
Memorial Hospital, Series 2004A, 5.500%, 8/15/43
18,015 Illinois Health Facilities Authority, Revenue Bonds, 11/05 at 100.00 AAA 18,037,158
Rush-Presbyterian St. Luke's Medical Center Obligated
Group, Series 1993, 5.250%, 11/15/20 - MBIA Insured
4,350 Illinois Health Facilities Authority, Revenue Bonds, South No Opt. Call A*** 5,233,398
Suburban Hospital, Series 1992, 7.000%, 2/15/18
8,145 Illinois Health Facilities Authority, Revenue Bonds, Sherman 8/07 at 101.00 AAA 8,420,708
Health Systems, Series 1997, 5.250%, 8/01/22 -
AMBAC Insured
15,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 Baa2 16,032,450
Medical Center, Series 2000, 6.500%, 5/15/30
15,000 Illinois Health Facilities Authority, Revenue Bonds, Edward 2/11 at 101.00 AAA 15,508,800
Hospital Obligated Group, Series 2001B, 5.250%, 2/15/34 -
FSA Insured
5,000 Illinois Sports Facility Authority, State Tax Supported Bonds, 6/15 at 101.00 AAA 4,188,750
Series 2001, 0.000%, 6/15/30 - AMBAC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 1992A:
18,955 0.000%, 6/15/17 - FGIC Insured No Opt. Call AAA 11,199,751
12,830 0.000%, 6/15/18 - FGIC Insured No Opt. Call AAA 7,186,340
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 1994B:
7,250 0.000%, 6/15/18 - MBIA Insured No Opt. Call AAA 4,060,870
3,385 0.000%, 6/15/21 - MBIA Insured No Opt. Call AAA 1,618,335
5,190 0.000%, 6/15/28 - MBIA Insured No Opt. Call AAA 1,709,430
10,975 0.000%, 6/15/29 - FGIC Insured No Opt. Call AAA 3,441,650
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project,
Series 1996A:
16,550 0.000%, 12/15/21 - MBIA Insured No Opt. Call AAA 7,727,692
1,650 5.250%, 6/15/27 - AMBAC Insured 6/06 at 102.00 AAA 1,697,636
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 2002A:
10,000 0.000%, 6/15/24 - MBIA Insured 6/22 at 101.00 AAA 5,998,000
21,375 0.000%, 6/15/34 - MBIA Insured No Opt. Call AAA 5,142,398
21,000 0.000%, 12/15/35 - MBIA Insured No Opt. Call AAA 4,688,880
20,000 0.000%, 6/15/36 - MBIA Insured No Opt. Call AAA 4,349,200
22,055 0.000%, 6/15/39 - MBIA Insured No Opt. Call AAA 4,097,819
2,150 5.250%, 6/15/42 - MBIA Insured 6/12 at 101.00 AAA 2,216,435
17
Nuveen Municipal Value Fund, Inc. (NUV) (continued)
Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project,
Series 2002B:
$ 3,775 0.000%, 6/15/20 - MBIA Insured 6/17 at 101.00 AAA $ 2,901,503
2,950 0.000%, 6/15/21 - MBIA Insured 6/17 at 101.00 AAA 2,262,355
720 Tri-City Regional Port District, Illinois, Port and Terminal No Opt. Call N/R 737,748
Facilities Revenue Refunding Bonds, Dock 2 Enhancement
Project, Series 1998B, 5.875%, 7/01/08 (Alternative
Minimum Tax)
1,060 Tri-City Regional Port District, Illinois, Port and Terminal No Opt. Call N/R 1,056,078
Facilities Revenue Refunding Bonds, Delivery Network
Project, Series 2003A, 4.900%, 7/01/14 (Alternative
Minimum Tax)
Will County Community School District 161, Summit Hill,
Illinois, Capital Appreciation School Bonds, Series 1999:
720 0.000%, 1/01/18 - FGIC Insured No Opt. Call Aaa 414,518
1,575 0.000%, 1/01/18 - FGIC Insured No Opt. Call Aaa 901,373
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.7%
10,000 Indiana Bond Bank, State Revolving Fund Program Bonds, 2/13 at 101.00 AAA 10,945,600
Series 2001A, 5.375%, 2/01/19
2,000 Indiana Health Facility Financing Authority, Hospital Revenue 3/14 at 100.00 AAA 2,110,120
Bonds, Deaconess Hospital Inc., Series 2004A,
5.375%, 3/01/34 - AMBAC Insured
10,520 Indiana Health Facility Financing Authority, Hospital Revenue 11/07 at 102.00 AAA 11,053,890
Bonds, Sisters of St. Francis Health Services Inc.,
Series 1997A, 5.375%, 11/01/27 - MBIA Insured
17,105 Indiana Health Facility Financing Authority, Hospital Revenue 2/07 at 102.00 A+ 17,803,739
Bonds, Clarian Health Partners Inc., Series 1996A,
6.000%, 2/15/21
20,000 Indiana Transportation Finance Authority, Highway Revenue 6/13 at 100.00 AAA 20,564,600
Bonds, Series 2003A, 5.000%, 6/01/28 - FSA Insured
Indianapolis Local Public Improvement Bond Bank, Indiana,
Series 1999E:
12,500 0.000%, 2/01/21 - AMBAC Insured No Opt. Call AAA 6,019,000
14,595 0.000%, 2/01/27 - AMBAC Insured No Opt. Call AAA 5,063,881
5,000 Mooresville School Building Corporation, Morgan County, 1/09 at 102.00 AAA 5,277,350
Indiana, First Mortgage Bonds, Series 1998,
5.000%, 7/15/15 - FSA Insured
13,100 Noblesville, Indiana, Revenue Bonds, Catholic High School 7/13 at 101.00 N/R 13,518,152
Corporation, Series 2003, 5.750%, 7/01/22
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.5%
3,500 Iowa Higher Education Loan Authority, Private College Facility 10/12 at 100.00 A 3,645,740
Revenue Bonds, Wartburg College, Series 2002,
5.500%, 10/01/33 - ACA Insured
6,160 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 BBB 6,335,314
Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5%
10,000 Kansas Department of Transportation, Highway Revenue 3/14 at 100.00 AA+ 10,481,800
Bonds, Series 2004A, 5.000%, 3/01/22
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.1%
1,755 Greater Kentucky Housing Assistance Corporation, 1/06 at 100.00 AAA 1,756,720
FHA-Insured Section 8 Mortgage Revenue Refunding
Bonds, Series 1997A, 6.100%, 1/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2%
1,000 East Baton Rouge Parish, Louisiana, Revenue Refunding 3/08 at 102.00 Ba2 995,520
Bonds, Georgia Pacific Corporation Project, Series 1998,
5.350%, 9/01/11 (Alternative Minimum Tax)
5,150 Louisiana Public Facilities Authority, Hospital Revenue 8/15 at 100.00 A+ 5,242,288
Bonds, Franciscan Missionaries of Our Lady Health System,
Series 2005A, 5.250%, 8/15/32
13,385 Louisiana Public Facilities Authority, Hospital Revenue 11/05 at 100.00 AAA 15,348,713
Refunding Bonds, Southern Baptist Hospital, Series 1986,
8.000%, 5/15/12
20,880 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 21,787,445
Tobacco Settlement Asset-Backed Bonds, Series 2001B,
5.875%, 5/15/39
18
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.7%
$ 4,585 Maryland Community Development Administration, 3/07 at 101.50 Aa2 $ 4,707,649
Residential Revenue Bonds, Series 1997B, 5.875%, 9/01/25
(Alternative Minimum Tax)
3,500 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 3,553,585
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
4,600 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 Baa1 4,773,190
Revenue Bonds, MedStar Health, Series 2004, 5.500%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.0%
10,000 Massachusetts Bay Transportation Authority, Senior Sales 7/12 at 100.00 AAA 10,241,200
Tax Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/32
1,720 Massachusetts Development Finance Agency, Resource 12/08 at 102.00 BBB 1,724,506
Recovery Revenue Bonds, Ogden Haverhill Associates,
Series 1998B, 5.100%, 12/01/12 (Alternative Minimum Tax)
4,340 Massachusetts Health and Educational Facilities Authority, 11/11 at 101.00 AA 4,483,524
Revenue Bonds, Cape Cod Health Care Inc., Series 2001C,
5.250%, 11/15/31 - RAAI Insured
Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Northern Berkshire Community Services Inc.,
Series 2004B:
1,340 6.250%, 7/01/24 7/14 at 100.00 BB- 1,406,062
1,000 6.375%, 7/01/34 7/14 at 100.00 BB- 1,047,300
17,400 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 17,604,450
System Revenue Bonds, Senior Series 1997A,
5.000%, 1/01/37 - MBIA Insured
8,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 8,212,560
System Revenue Bonds, Subordinate Series 1997B,
5.125%, 1/01/37 - MBIA Insured
7,405 Massachusetts Turnpike Authority, Metropolitan Highway 1/09 at 101.00 AAA 7,465,425
System Revenue Bonds, Subordinate Series 1999A,
5.000%, 1/01/39 - AMBAC Insured
Massachusetts Water Pollution Abatement Trust, Pooled
Loan Program Bonds, Series 6:
1,750 5.500%, 8/01/30 (Pre-refunded to 8/01/10) 8/10 at 101.00 AAA 1,909,285
4,250 5.500%, 8/01/30 8/10 at 101.00 AAA 4,587,153
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.5%
6,000 Dearborn Hospital Finance Authority, Michigan, Hospital 2/06 at 101.00 AAA 6,067,200
Revenue Refunding Bonds, Oakwood Obligated Group,
Series 1994A, 5.250%, 8/15/21 - MBIA Insured
10,390 Detroit Local Development Finance Authority, Michigan, 5/09 at 101.00 BB- 9,885,566
Tax Increment Bonds, Series 1998A, 5.500%, 5/01/21
14,000 Detroit, Michigan, Second Lien Sewerage Disposal System 7/15 at 100.00 AAA 14,448,700
Revenue Bonds, Series 2005A, 5.000%, 7/01/35 -
MBIA Insured
5,240 Michigan Municipal Bond Authority, Clean Water Revolving 10/12 at 100.00 AAA 5,634,467
Fund Revenue Refunding Bonds, Series 2002,
5.250%, 10/01/19
Michigan Municipal Bond Authority, Public School Academy
Revenue Bonds, Detroit Academy of Arts and Sciences Charter
School, Series 2001A:
1,700 7.500%, 10/01/12 10/09 at 102.00 Ba1 1,797,274
5,000 7.900%, 10/01/21 10/09 at 102.00 Ba1 5,419,850
3,500 8.000%, 10/01/31 10/09 at 102.00 Ba1 3,791,935
Michigan State Hospital Finance Authority, Revenue Refunding
Bonds, Detroit Medical Center Obligated Group, Series 1993A:
1,000 6.250%, 8/15/13 2/06 at 100.00 BB- 1,000,340
12,925 6.500%, 8/15/18 2/06 at 100.00 BB- 12,930,946
22,235 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 BB- 20,745,255
Bonds, Detroit Medical Center Obligated Group,
Series 1998A, 5.250%, 8/15/28
7,200 Michigan Strategic Fund, Limited Obligation Resource 12/12 at 100.00 AAA 7,481,088
Recovery Revenue Refunding Bonds, Detroit Edison Company,
Series 2002D, 5.250%, 12/15/32 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.1%
1,750 Breckenridge, Minnesota, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 1,790,128
Initiatives, Series 2004A, 5.000%, 5/01/30
19
Nuveen Municipal Value Fund, Inc. (NUV) (continued)
Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA (continued)
$ 465 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/06 at 101.00 AAA $ 472,394
Series 1995D, 5.900%, 8/01/15 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.7%
2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,058,520
Agency, Mass Transit Sales Tax Appropriation Bonds,
Metrolink Cross County Extension Project, Series 2002B,
5.000%, 10/01/32 - FSA Insured
40,000 Missouri Health and Educational Facilities Authority, Revenue 5/13 at 100.00 AA 41,526,000
Bonds, BJC Health System, Series 2003, 5.250%, 5/15/32
4,000 Sugar Creek, Missouri, Industrial Development Revenue Bonds, 6/13 at 101.00 BBB 4,139,960
Lafarge North America Inc., Series 2003A, 5.650%, 6/01/37
(Alternative Minimum Tax)
West Plains Industrial Development Authority, Missouri, Hospital
Facilities Revenue Bonds, Ozark Medical Center, Series 1997:
1,750 5.500%, 11/15/12 11/07 at 101.00 BB+ 1,779,365
1,000 5.600%, 11/15/17 11/07 at 101.00 BB+ 1,003,910
3,075 West Plains Industrial Development Authority, Missouri, 11/09 at 101.00 BB+ 3,211,868
Hospital Facilities Revenue Bonds, Ozark Medical Center,
Series 1999, 6.750%, 11/15/24
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.2%
3,750 Forsyth, Rosebud County, Montana, Pollution Control Revenue 3/13 at 101.00 AAA 3,853,950
Refunding Bonds, Puget Sound Energy, Series 2003A,
5.000%, 3/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.9%
2,500 Carson City, Nevada, Hospital Revenue Bonds, Carson-Tahoe 9/13 at 100.00 AA 2,539,300
Hospital, Series 2003A, 5.125%, 9/01/29 - RAAI Insured
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000:
15,095 0.000%, 1/01/24 - AMBAC Insured No Opt. Call AAA 6,121,928
11,000 0.000%, 1/01/25 - AMBAC Insured No Opt. Call AAA 4,218,060
2,000 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 AAA 2,168,660
22,010 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 22,745,574
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 4.3%
23,625 New Jersey Economic Development Authority, Special Facilities 9/09 at 101.00 B 19,163,655
Revenue Bonds, Continental Airlines Inc., Series 1999,
6.250%, 9/15/29 (Alternative Minimum Tax)
9,000 New Jersey Economic Development Authority, Special Facilities 11/10 at 101.00 B 7,778,070
Revenue Bonds, Continental Airlines Inc., Series 2000,
7.000%, 11/15/30 (Alternative Minimum Tax)
New Jersey Health Care Facilities Financing Authority, Revenue
Bonds, Trinitas Hospital Obligated Group, Series 2000:
250 7.375%, 7/01/15 7/10 at 101.00 BBB- 281,220
11,200 7.500%, 7/01/30 7/10 at 101.00 BBB- 12,462,688
7,500 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 8,315,100
System Bonds, Series 2003C, 5.500%, 6/15/24
(Pre-refunded to 6/15/13)
New Jersey Turnpike Authority, Revenue Bonds, Series 1991C:
1,490 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 1,746,161
105 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 123,296
310 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 362,461
26,680 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 28,001,727
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/42
7,015 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 BBB 7,755,714
Tobacco Settlement Asset-Backed Bonds, Series 2003,
6.250%, 6/01/43
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.6%
1,500 University of New Mexico, Revenue Refunding Bonds, No Opt. Call AA 1,744,860
Series 1992A, 6.000%, 6/01/21
9,600 University of New Mexico, Subordinate Lien Revenue 6/12 at 100.00 AA 9,801,984
Refunding and Improvement Bonds, Series 2002A,
5.000%, 6/01/32
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 15.2%
$ 5,360 East Rochester Housing Authority, New York, FHA-Insured 8/07 at 102.00 AAA $ 5,670,612
Mortgage Revenue Bonds, St. John's Meadows Project,
Series 1997A, 5.600%, 8/01/17 - MBIA Insured
11,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 11,546,700
General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 -
MBIA Insured
15,500 Long Island Power Authority, New York, Electric System 9/11 at 100.00 A- 16,507,810
General Revenue Bonds, Series 2001A, 5.375%, 9/01/25
39,610 New York City, New York, General Obligation Bonds, 10/07 at 101.00 Aaa 42,154,943
Fiscal Series 1997G, 6.000%, 10/15/26 (Pre-refunded
to 10/15/07)
New York City, New York, General Obligation Bonds, Fiscal
Series 1997E:
8,720 6.000%, 8/01/16 (Pre-refunded to 8/01/06) 8/06 at 101.50 A+*** 9,042,378
1,280 6.000%, 8/01/16 8/06 at 101.50 A+ 1,322,637
New York City, New York, General Obligation Bonds, Fiscal
Series 2003J:
15,000 5.500%, 6/01/21 6/13 at 100.00 A+ 16,108,500
10,000 5.500%, 6/01/22 6/13 at 100.00 A+ 10,712,300
5,000 New York City, New York, General Obligation Bonds, Fiscal 2/06 at 101.50 A+*** 5,110,650
Series 1996G, 5.750%, 2/01/14 (Pre-refunded to 2/01/06)
New York City, New York, General Obligation Bonds, Fiscal
Series 2004C:
8,000 5.250%, 8/15/24 8/14 at 100.00 A+ 8,422,160
6,000 5.250%, 8/15/25 8/14 at 100.00 A+ 6,316,620
New York City, New York, General Obligation Bonds, Fiscal
Series 1998D:
4,075 5.500%, 8/01/10 (Pre-refunded to 8/01/07) 8/07 at 101.00 A+*** 4,281,480
9,320 5.500%, 8/01/10 8/07 at 101.00 A+ 9,722,251
New York City Municipal Water Finance Authority, New York, Water
and Sewerage System Revenue Bonds, Fiscal Series 1996B:
5,280 5.750%, 6/15/26 (Pre-refunded to 6/15/06) - MBIA Insured 6/06 at 101.00 AAA 5,422,930
9,720 5.750%, 6/15/26 - MBIA Insured 6/06 at 101.00 AAA 9,977,094
5,500 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 5,669,565
Water and Sewerage System Revenue Bonds, Fiscal
Series 2005B, 5.000%, 6/15/36 - FSA Insured
10,000 New York City Industrial Development Agency, New York, 8/12 at 101.00 B- 10,137,200
Special Facilities Revenue Bonds, JFK Airport - American
Airlines Inc., Series 2002B, 8.500%, 8/01/28 (Alternative
Minimum Tax)
5,200 Dormitory Authority of the State of New York, New York City, 5/10 at 101.00 A+*** 5,782,088
Lease Revenue Bonds, Court Facilities, Series 1999,
6.000%, 5/15/39 (Pre-refunded to 5/15/10)
2,625 Dormitory Authority of the State of New York, Revenue Bonds, 7/08 at 100.00 Ba1 2,654,243
Mount Sinai NYU Health, Series 2000C, 5.500%, 7/01/26
2,500 Dormitory Authority of the State of New York, Revenue Bonds, 7/08 at 100.00 Ba1 2,527,850
Mount Sinai NYU Health Obligated Group, Series 2000A,
5.500%, 7/01/26
8,500 Dormitory Authority of the State of New York, FHA-Insured 2/14 at 100.00 AAA 8,770,640
Mortgage Revenue Bonds, Kaleida Health, Series 2004,
5.050%, 2/15/25
Dormitory Authority of the State of New York, Improvement
Revenue Bonds, Mental Health Services Facilities, Series 1999D:
6,490 5.250%, 2/15/29 (Pre-refunded to 8/15/09) 8/09 at 101.00 AA-*** 6,981,033
65 5.250%, 2/15/29 (Pre-refunded to 8/15/09) 8/09 at 101.00 AA-*** 69,918
445 5.250%, 2/15/29 8/09 at 101.00 AA- 460,312
6,585 New York State Medical Care Facilities Finance Agency, 2/06 at 100.00 Aa2 6,709,522
FHA-Insured Mortgage Revenue Bonds, St. Luke's-Roosevelt
Hospital Center, Series 1993A, 5.600%, 8/15/13
8,500 New York State Power Authority, General Revenue Bonds, 11/10 at 100.00 Aa2 8,871,960
Series 2000A, 5.250%, 11/15/40
2,500 Port Authority of New York and New Jersey, Special Project No Opt. Call AAA 2,749,450
Bonds, JFK International Air Terminal LLC, Sixth Series 1997,
6.250%, 12/01/10 (Alternative Minimum Tax) - MBIA Insured
New York State Tobacco Settlement Financing Corporation, Tobacco
Settlement Asset-Backed and State Contingency Contract-Backed
Bonds, Series 2003A-1:
10,000 5.500%, 6/01/17 6/11 at 100.00 AA- 10,761,700
26,190 5.500%, 6/01/18 6/12 at 100.00 AA- 28,325,009
33,810 5.500%, 6/01/19 6/13 at 100.00 AA- 36,855,605
21
Nuveen Municipal Value Fund, Inc. (NUV) (continued)
Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.9%
$ 1,500 Charlotte, North Carolina, Certificates of Participation, 6/13 at 100.00 AA+ $ 1,526,460
Governmental Facilities Projects, Series 2003G,
5.000%, 6/01/33
2,500 North Carolina Eastern Municipal Power Agency, Power 1/13 at 100.00 BBB 2,534,225
System Revenue Refunding Bonds, Series 2003D,
5.125%, 1/01/26
1,105 North Carolina Eastern Municipal Power Agency, Power 1/07 at 102.00 AAA 1,157,167
System Revenue Refunding Bonds, Series 1996A,
5.700%, 1/01/13 - MBIA Insured
10,000 North Carolina Municipal Power Agency 1, Catawba Electric 1/10 at 101.00 A3 10,964,200
Revenue Bonds, Series 1999B, 6.500%, 1/01/20
1,500 North Carolina Infrastructure Finance Corporation, 2/14 at 100.00 AA+ 1,558,440
Certificates of Participation, Correctional Facilities,
Series 2004A, 5.000%, 2/01/20
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 0.2%
3,000 Columbus City School District, Franklin County, Ohio, 6/13 at 100.00 AAA 3,084,690
General Obligation Bonds, Series 2003, 5.000%, 12/01/31 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.0%
4,450 Central Oklahoma Transportation and Parking Authority, 7/06 at 100.00 AAA 4,515,549
Oklahoma City, Parking System Revenue Refunding Bonds,
Series 1996, 5.250%, 7/01/16 (Pre-refunded to 7/01/06) -
FSA Insured
15,000 Oklahoma Development Finance Authority, Revenue Bonds, 2/14 at 100.00 AA 15,313,650
St. John Health System, Series 2004, 5.125%, 2/15/31
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.1%
2,500 Clackamas County Hospital Facility Authority, Oregon, 5/11 at 101.00 AA 2,613,250
Revenue Refunding Bonds, Legacy Health System,
Series 2001, 5.250%, 5/01/21
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.5%
4,500 Pennsylvania Higher Educational Facilities Authority, 7/08 at 100.00 AA 4,504,860
Revenue Bonds, University of Pennsylvania, Series 1998,
4.500%, 7/15/21
6,500 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/14 at 100.00 AAA 7,093,905
Series 2004A, 5.500%, 12/01/31 - AMBAC Insured
8,000 Philadelphia School District, Pennsylvania, General Obligation 6/14 at 100.00 AAA 8,294,720
Bonds, Series 2004D, 5.125%, 6/01/34 - FGIC Insured
10,075 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 10,333,424
Revenue Bonds, Philadelphia School District, Series 2003,
5.000%, 6/01/33 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 1.1%
5,000 Puerto Rico, General Obligation Bonds, Series 2000B, 7/10 at 100.00 AAA 5,438,950
5.625%, 7/01/19 - MBIA Insured
10,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 10,841,000
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
5,450 Puerto Rico Industrial, Tourist, Educational, Medical and 6/10 at 101.00 Baa3 5,862,347
Environmental Control Facilities Financing Authority,
Co-Generation Facility Revenue Bonds, Series 2000A,
6.625%, 6/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.2%
6,250 Rhode Island Health and Educational Building Corporation, 5/07 at 102.00 AAA 6,508,000
Hospital Financing Revenue Bonds, Lifespan Obligated Group,
Series 1996, 5.250%, 5/15/26 - MBIA Insured
16,000 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 16,939,360
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.7%
7,000 Dorchester County School District 2, South Carolina, 12/14 at 100.00 A 7,177,590
Installment Purchase Revenue Bonds, GROWTH,
Series 2004, 5.250%, 12/01/29
3,000 Myrtle Beach, South Carolina, Hospitality and Accommodation 6/14 at 100.00 AAA 3,075,840
Fee Revenue Bonds, Series 2004A, 5.000%, 6/01/36 -
FGIC Insured
8,475 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call BBB 8,422,794
Revenue Refunding Bonds, Series 1986, 5.000%, 1/01/25
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA (continued)
$ 20,750 South Carolina JOBS Economic Development Authority, 11/12 at 100.00 A- $ 21,730,230
Economic Development Revenue Bonds, Bon Secours
Health System Inc., Series 2002A, 5.625%, 11/15/30
8,000 South Carolina JOBS Economic Development Authority, 12/10 at 102.00 Baa2*** 9,529,440
Hospital Revenue Bonds, Palmetto Health Alliance,
Series 2000A, 7.375%, 12/15/21 (Pre-refunded to 12/15/10)
4,215 Spartanburg Sanitary Sewer District, South Carolina, Sewer 3/14 at 100.00 AAA 4,328,889
System Revenue Bonds, Series 2003B, 5.000%, 3/01/38 -
MBIA Insured
110 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 116,729
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.3%
Knox County Health, Educational and Housing Facilities Board,
Tennessee, Hospital Revenue Bonds, Baptist Health System
of East Tennessee Inc., Series 2002:
3,000 6.375%, 4/15/22 4/12 at 101.00 Baa3 3,159,630
2,500 6.500%, 4/15/31 4/12 at 101.00 Baa3 2,634,750
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.0%
13,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/05 at 100.00 CCC 9,819,030
Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29
(Alternative Minimum Tax)
1,900 Alliance Airport Authority, Texas, Special Facilities Revenue 4/06 at 102.00 BBB 1,957,095
Bonds, FedEx Inc., Series 1996, 6.375%, 4/01/21
(Alternative Minimum Tax)
Austin, Texas, Combined Utility System Revenue Bonds,
Series 1992A:
5,440 12.500%, 11/15/07 - MBIA Insured No Opt. Call AAA 6,420,179
18,825 12.500%, 11/15/07 - MBIA Insured No Opt. Call AAA 22,183,192
5,110 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Baa2 6,058,058
Refunding Bonds, TXU Electric Company, Series 1999C,
7.700%, 3/01/32 (Alternative Minimum Tax)
4,000 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 AAA 4,095,760
Williamson Counties, Toll Road Revenue Bonds, Series 2005,
5.000%, 1/01/35 - FGIC Insured
2,700 Harris County-Houston Sports Authority, Texas, Senior Lien 11/11 at 100.00 AAA 2,795,877
Revenue Bonds, Series 2001G, 5.250%, 11/15/30 -
MBIA Insured
10,045 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 10,774,870
Bonds, Series 2000A, 5.875%, 7/01/16 (Alternative
Minimum Tax) - FSA Insured
23,875 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call AAA 7,215,980
Bonds, Convention and Entertainment Project, Series 2001B,
0.000%, 9/01/29 - AMBAC Insured
Irving Independent School District, Texas, Unlimited Tax School
Building Bonds, Series 1997:
5,685 0.000%, 2/15/10 No Opt. Call AAA 4,829,294
3,470 0.000%, 2/15/11 No Opt. Call AAA 2,820,659
5,000 Kerrville Health Facilities Development Corporation, Texas, No Opt. Call BBB- 5,027,450
Revenue Bonds, Sid Peterson Memorial Hospital Project,
Series 2005, 5.375%, 8/15/35
22,060 Leander Independent School District, Williamson and Travis 8/09 at 31.45 AAA 5,877,446
Counties, Texas, Unlimited Tax School Building and Refunding
Bonds, Series 2000, 0.000%, 8/15/27
6,000 Matagorda County Navigation District 1, Texas, Revenue 4/08 at 102.00 BBB- 6,534,720
Bonds, Reliant Energy Inc., Series 1999C, 8.000%, 5/01/29
(Mandatory put 4/01/08)
3,250 Midland, Texas, Tax and Limited Pledge Revenue Bonds, 3/10 at 100.00 AAA 3,553,615
Certificates of Obligation, Series 2000, 6.100%, 3/01/27 -
FGIC Insured
5,000 Port Corpus Christi Industrial Development Corporation, Texas, 5/07 at 102.00 Ba1 5,296,300
Environmental Facilities Revenue Bonds, Citgo Petroleum
Corporation, Series 2003, 8.250%, 11/01/31 (Alternative
Minimum Tax)
5,000 Port Corpus Christi Industrial Development Corporation, Texas, 4/08 at 102.00 BBB- 5,178,450
Revenue Refunding Bonds, Valero Refining and Marketing
Company, Series 1997A, 5.400%, 4/01/18
5,000 Richardson Hospital Authority, Texas, Revenue Bonds, 12/13 at 100.00 BBB 5,336,750
Richardson Regional Medical Center, Series 2004,
6.000%, 12/01/34
2,000 Sabine River Authority, Texas, Pollution Control Revenue 7/13 at 101.00 Baa2 2,133,720
Refunding Bonds, TXU Electric Company, Series 2003A,
5.800%, 7/01/22
23
Nuveen Municipal Value Fund, Inc. (NUV) (continued)
Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.4%
$ 12,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/06 at 102.00 A+ $ 12,190,680
Refunding Bonds, Series 1996D, 5.000%, 7/01/21
Intermountain Power Agency, Utah, Power Supply Revenue
Refunding Bonds, Series 1997B:
1,655 5.750%, 7/01/19 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 102.00 AAA 1,757,213
3,345 5.750%, 7/01/19 - MBIA Insured 7/07 at 102.00 AAA 3,532,721
3,700 Utah State Board of Regents, Utah State University, Revenue 4/14 at 100.00 AAA 3,803,489
Bonds, Series 2004, 5.000%, 4/01/35 - MBIA Insured
2,250 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 101.50 Aaa 2,275,493
Series 1998G-2, Class I, 5.200%, 7/01/30 (Alternative
Minimum Tax)
3,810 Utah Water Finance Agency, Revenue Bonds, Pooled Loan 10/12 at 100.00 Aaa 4,040,353
Financing Program, Series 2002C, 5.250%, 10/01/28 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 0.1%
2,500 Virgin Islands Public Finance Authority, Revenue Bonds, 1/14 at 100.00 BBB 2,732,900
Refinery Project - Hovensa LLC, Series 2003,
6.125%, 7/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.3%
4,125 Metropolitan Washington D.C. Airports Authority, Airport 10/12 at 100.00 AAA 4,488,413
System Revenue Bonds, Series 2002A, 5.750%, 10/01/16
(Alternative Minimum Tax) - FGIC Insured
15,000 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 28.38 BB- 3,629,100
Bonds, Route 895 Connector Toll Road, Series 1998A,
0.000%, 8/15/30
Pocahontas Parkway Association, Virginia, Senior Lien Revenue
Bonds, Route 895 Connector Toll Road, Series 1998B:
19,400 0.000%, 8/15/33 8/08 at 23.55 BB- 3,898,430
60,500 0.000%, 8/15/35 8/08 at 20.95 BB- 10,812,560
3,245 Virginia Housing Development Authority, Multifamily Housing 1/08 at 102.00 AA+ 3,358,705
Bonds, Series 1997E, 5.600%, 11/01/17 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 2.1%
6,400 Cowlitz County Public Utilities District 1, Washington, 9/14 at 100.00 AAA 6,544,064
Electric Production Revenue Bonds, Series 2004,
5.000%, 9/01/34 - FGIC Insured
12,500 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 14,062,375
Bonds, Columbia Generating Station - Nuclear Project 2,
Series 2002B, 6.000%, 7/01/18 - AMBAC Insured
4,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 4,328,080
Bonds, Nuclear Project 3, Series 2003A, 5.500%, 7/01/17 -
XLCA Insured
3,700 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 4,040,067
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.625%, 6/01/32
Washington, Motor Vehicle Fuel Tax General Obligation Bonds,
Series 2002-03C:
9,000 0.000%, 6/01/29 - MBIA Insured No Opt. Call AAA 2,731,770
16,195 0.000%, 6/01/30 - MBIA Insured No Opt. Call AAA 4,662,217
8,200 Washington Public Power Supply System, Revenue Refunding No Opt. Call Aaa 5,561,730
Bonds, Nuclear Project 3, Series 1989B, 0.000%, 7/01/14
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.5%
Badger Tobacco Asset Securitization Corporation, Wisconsin,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
8,205 6.125%, 6/01/27 6/12 at 100.00 BBB 8,700,500
11,385 6.375%, 6/01/32 6/12 at 100.00 BBB 12,131,856
6,000 Milwaukee Redevelopment Authority, Wisconsin, Lease 8/13 at 100.00 AAA 6,285,840
Revenue Bonds, Public Schools, Series 2003A,
5.125%, 8/01/22 - AMBAC Insured
12,180 Wisconsin Health and Educational Facilities Authority, 8/07 at 102.00 AAA 12,714,458
Revenue Bonds, Aurora Healthcare Inc., Series 1997,
5.250%, 8/15/27 - MBIA Insured
3,750 Wisconsin Health and Educational Facilities Authority, 2/12 at 101.00 A 3,963,070
Revenue Bonds, Wheaton Franciscan Services Inc.,
Series 2002, 5.750%, 8/15/30
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 6,000 Wisconsin Health and Educational Facilities Authority, 9/13 at 100.00 A- $ 6,342,360
Revenue Bonds, Franciscan Sisters of Christian Charity
Healthcare Ministry, Series 2003A, 5.875%, 9/01/33
------------------------------------------------------------------------------------------------------------------------------------
$ 2,233,309 Total Long-Term Investments (cost $1,803,684,101) - 97.8% 1,935,003,186
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.2% 44,392,974
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,979,396,160
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
** Ratings (not covered by the report of independent
registered public accounting firm): 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.
See accompanying notes to financial statements.
25
Nuveen Municipal Income Fund, Inc. (NMI)
Portfolio of
INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.8%
$ 690 Phenix City Industrial Development Board, Alabama, 5/12 at 100.00 BBB $ 740,881
Environmental Improvement Revenue Bonds, MeadWestvaco
Corporation, Series 2002A, 6.350%, 5/15/35 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 18.4%
5,530 Adelanto School District, San Bernardino County, California, No Opt. Call AAA 2,573,551
General Obligation Bonds, Series 1997A, 0.000%, 9/01/22 -
MBIA Insured
Brea Olinda Unified School District, California, General
Obligation Bonds, Series 1999A:
2,000 0.000%, 8/01/21 - FGIC Insured No Opt. Call AAA 951,880
2,070 0.000%, 8/01/22 - FGIC Insured No Opt. Call AAA 932,183
2,120 0.000%, 8/01/23 - FGIC Insured No Opt. Call AAA 902,442
500 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A 523,245
5.200%, 4/01/26
3,000 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A- 3,102,480
Department of Mental Health, Coalinga State Hospital,
Series 2004A, 5.000%, 6/01/25
1,000 California Statewide Community Development Authority, 7/15 at 100.00 BBB+ 982,660
Revenue Bonds, Daughters of Charity Health System,
Series 2005A, 5.000%, 7/01/39
1,150 Foothill/Eastern Transportation Corridor Agency, California, 1/07 at 100.00 AAA 1,189,273
Toll Road Revenue Bonds, Series 1995A, 6.000%, 1/01/34
(Pre-refunded to 1/01/07)
3,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 3,422,250
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39
500 Lake Elsinore Public Financing Authority, California, Local 10/13 at 102.00 N/R 545,215
Agency Revenue Refunding Bonds, Series 2003H,
6.375%, 10/01/33
1,000 Vernon, California, Electric System Revenue Bonds, 4/08 at 100.00 Aaa 1,053,390
Malburg Generating Station Project, Series 2003C,
5.375%, 4/01/18 (Pre-refunded to 4/01/08)
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.3%
480 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 AAA 568,896
Charter School Revenue Bonds, Peak-to-Peak Charter
School, Series 2001, 7.500%, 8/15/21 (Pre-refunded
to 8/15/11)
1,000 Colorado Educational and Cultural Facilities Authority, 6/11 at 100.00 Ba1 1,032,340
Charter School Revenue Bonds, Weld County School
District 6 - Frontier Academy, Series 2001, 7.375%, 6/01/31
870 Colorado Educational and Cultural Facilities Authority, 7/12 at 100.00 BBB 919,738
Charter School Revenue Bonds, Douglas County School
District RE-1 - DCS Montessori School, Series 2002A,
6.000%, 7/15/22
2,000 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 2,178,500
Refunding Bonds, Series 2000A, 6.000%, 11/15/16
(Alternative Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 5.8%
1,480 Capitol Region Education Council, Connecticut, Revenue 4/06 at 102.00 BBB 1,512,027
Bonds, Series 1995, 6.750%, 10/15/15
2,000 Connecticut Health and Educational Facilities Authority, 7/06 at 102.00 BBB-*** 2,084,780
Revenue Bonds, University of New Haven, Series 1996D,
6.700%, 7/01/26 (Pre-refunded to 7/01/06)
500 Eastern Connecticut Resource Recovery Authority, Solid 1/06 at 100.00 BBB 504,550
Waste Revenue Bonds, Wheelabrator Lisbon Project,
Series 1993A, 5.500%, 1/01/14 (Alternative Minimum Tax)
950 Willimantic Housing Authority, Connecticut, GNMA 4/06 at 105.00 AAA 998,621
Collateralized Multifamily Housing Mortgage Revenue Bonds,
Village Heights Apartments, Series 1995A, 8.000%, 10/20/30
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.3%
175 Dade County Industrial Development Authority, Florida, 12/05 at 102.00 N/R 178,542
Revenue Bonds, Miami Cerebral Palsy Residential Services
Inc., Series 1995, 8.000%, 6/01/22
1,250 Martin County Industrial Development Authority, Florida, 12/05 at 101.00 BB+ 1,259,550
Industrial Development Revenue Bonds, Indiantown
Cogeneration LP, Series 1994A, 7.875%, 12/15/25 (Alternative
Minimum Tax)
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (continued)
$ 600 Martin County Industrial Development Authority, Florida, 12/05 at 101.00 BB+ $ 607,512
Industrial Development Revenue Refunding Bonds, Indiantown
Cogeneration LP, Series 1995B, 8.050%, 12/15/25 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 8.4%
1,485 Chicago, Illinois, Tax Increment Allocation Bonds, Irving/Cicero 1/09 at 100.00 N/R 1,582,713
Redevelopment Project, Series 1998, 7.000%, 1/01/14
Illinois Development Finance Authority, Revenue Bonds,
Chicago Charter School Foundation, Series 2002A:
500 6.125%, 12/01/22 12/12 at 100.00 BBB 528,145
1,000 6.250%, 12/01/32 12/21 at 100.00 BBB 1,031,330
1,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Baa2 1,024,310
Revenue Bonds, Educational Advancement Foundation Fund,
University Center Project, Series 2002, 6.250%, 5/01/34
1,765 Joliet Regional Port District, Illinois, Airport Facilities Revenue 7/07 at 103.00 N/R*** 1,862,569
Bonds, Lewis University Airport, Series 1997A,
7.250%, 7/01/18 (Alternative Minimum Tax) (Pre-refunded
to 7/01/07)
1,305 North Chicago, Illinois, General Obligation Bonds, 11/15 at 100.00 AAA 1,358,688
Series 2005B, 5.000%, 11/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.0%
2,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/12 at 101.00 Baa1 2,125,760
Bonds, Riverview Hospital, Series 2002, 6.125%, 8/01/31
1,305 Whitley County, Indiana, Solid Waste and Sewerage Disposal 11/10 at 102.00 N/R 1,414,372
Revenue Bonds, Steel Dynamics Inc., Series 1998,
7.250%, 11/01/18 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.7%
1,880 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 2,369,872
Revenue Bonds, Comm-Care Corporation Project,
Series 1994, 11.000%, 2/01/14
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.2%
1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,015,310
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.1%
500 Massachusetts Development Finance Agency, Resource 12/09 at 102.00 BBB 538,420
Recovery Revenue Bonds, Ogden Haverhill Associates,
Series 1999A, 6.700%, 12/01/14 (Alternative Minimum Tax)
1,000 Massachusetts Industrial Finance Agency, Resource Recovery No Opt. Call BBB 1,000,830
Remarketed Revenue Refunding Bonds, Ogden Haverhill
Project, Series 1992A, 4.850%, 12/01/05
270 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 274,898
Revenue Refunding Bonds, Ogden Haverhill Project,
Series 1998A, 5.450%, 12/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 3.7%
1,000 Delta County Economic Development Corporation, Michigan, 4/12 at 100.00 AAA 1,124,370
Environmental Improvement Revenue Refunding Bonds,
MeadWestvaco Corporation - Escanaba Paper Company,
Series 2002B, 6.450%, 4/15/23 (Alternative Minimum Tax)
(Pre-refunded to 4/15/12)
2,150 Michigan State Hospital Finance Authority, Hospital Revenue 1/06 at 102.00 Ba3 2,167,157
Refunding Bonds, Sinai Hospital, Series 1995, 6.625%, 1/01/16
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.4%
1,200 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 B1 1,246,644
Bonds, Stillwater Mining Company, Series 2000,
8.000%, 7/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.2%
1,000 Washington County, Nebraska, Wastewater Facilities Revenue 11/12 at 101.00 A+ 1,075,070
Bonds, Cargill Inc., Series 2002, 5.900%, 11/01/27
(Alternative Minimum Tax)
27
Nuveen Municipal Income Fund, Inc. (NMI) (continued)
Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.8%
New Hampshire Higher Educational and Health Facilities
Authority, Revenue Bonds, New Hampshire College, Series 1997:
$ 100 6.375%, 1/01/27 (Pre-refunded to 1/01/07) 1/07 at 102.00 BBB-*** $ 105,511
200 6.375%, 1/01/27 (Pre-refunded to 1/01/07) 1/07 at 102.00 BBB-*** 211,260
400 6.375%, 1/01/27 1/07 at 102.00 BBB- 412,636
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.3%
1,000 Dormitory Authority of the State of New York, Revenue Bonds, 7/13 at 100.00 AA 1,085,420
Brooklyn Law School, Series 2003A, 5.500%, 7/01/15 -
RAAI Insured
4,190 Yates County Industrial Development Agency, New York, 2/11 at 101.00 AA+ 4,488,454
FHA-Insured Civic Facility Mortgage Revenue Bonds,
Soldiers and Sailors Memorial Hospital, Series 2000A,
6.000%, 2/01/41
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.3%
400 Ohio Water Development Authority, Solid Waste Disposal 3/06 at 102.00 A+ 408,536
Revenue Bonds, BHP Steel LLC, Series 1995,
6.300%, 9/01/20 (Alternative Minimum Tax)
2,400 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 2,481,264
Revenue Bonds, Bay Shore Power, Series 1998B,
6.625%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.9%
1,080 Allegheny County Hospital Development Authority, 11/10 at 102.00 B1 1,286,172
Pennsylvania, Revenue Bonds, West Penn Allegheny Health
System, Series 2000B, 9.250%, 11/15/30
1,165 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 1,248,193
Resource Recovery Revenue Refunding Bonds, Panther
Creek Partners Project, Series 2000, 6.650%, 5/01/10
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.6%
500 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 529,355
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 5.0%
2,500 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 2,729,525
Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/13
475 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 597,892
Revenue Bonds, Series 1991, 6.750%, 1/01/19 - FGIC Insured
1,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 1,061,170
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.5%
1,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa3 1,053,210
Tennessee, Hospital Revenue Bonds, Baptist Health System
of East Tennessee Inc., Series 2002, 6.375%, 4/15/22
375 Shelby County Health, Educational and Housing Facilities 9/12 at 100.00 A-*** 436,830
Board, Tennessee, Hospital Revenue Bonds, Methodist
Healthcare, Series 2002, 6.500%, 9/01/26 (Pre-refunded
to 9/01/12)
625 Shelby County Health, Educational and Housing Facilities 9/12 at 100.00 A-*** 728,050
Board, Tennessee, Hospital Revenue Bonds, Methodist
Healthcare, Series 2002, 6.500%, 9/01/26 (Pre-refunded
to 9/01/12)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 7.4%
2,000 Gulf Coast Waste Disposal Authority, Texas, Sewerage and 4/12 at 100.00 A+ 2,105,860
Solid Waste Disposal Revenue Bonds, Anheuser Busch
Company, Series 2002, 5.900%, 4/01/36 (Alternative
Minimum Tax)
2,000 Matagorda County Navigation District 1, Texas, Collateralized 10/13 at 101.00 AAA 1,964,340
Revenue Refunding Bonds, Houston Light and Power
Company, Series 1995, 4.000%, 10/15/15 - MBIA Insured
2,000 Weslaco Health Facilities Development Corporation, Texas, 6/12 at 100.00 BBB+ 2,140,400
Hospital Revenue Bonds, Knapp Medical Center,
Series 2002, 6.250%, 6/01/25
1,000 West Texas Independent School District, McLennan and 8/13 at 51.84 AAA 349,160
Hill Counties, General Obligation Refunding Bonds,
Series 1998, 0.000%, 8/15/25
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 3.1%
2,545 Virgin Islands Public Finance Authority, Senior Lien Matching 10/14 at 100.00 BBB 2,696,300
Fund Loan Note, Series 2004A, 5.250%, 10/01/19
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 3.1%
$ 1,000 Chesterfield County Industrial Development Authority, 11/10 at 102.00 A3 $ 1,073,690
Virginia, Pollution Control Revenue Bonds, Virginia Electric
and Power Company, Series 1987A, 5.875%, 6/01/17
1,500 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 A3 1,678,860
Virginia, Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 2.4%
2,050 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 2,087,657
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.2%
1,000 Wisconsin Health and Educational Facilities Authority, 10/11 at 100.00 BBB 1,065,130
Revenue Bonds, Carroll College Inc., Series 2001,
6.250%, 10/01/21
------------------------------------------------------------------------------------------------------------------------------------
$ 86,730 Total Long-Term Investments (cost $79,117,145) - 95.9% 84,529,839
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.1% 3,616,687
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 88,146,526
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
** Ratings (not covered by the report of independent
registered public accounting firm): 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.
See accompanying notes to financial statements.
29
Statement of
ASSETS AND LIABILITIES October 31, 2005
MUNICIPAL VALUE MUNICIPAL INCOME
(NUV) (NMI)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $1,803,684,101 and $79,117,145, respectively) $1,935,003,186 $ 84,529,839
Cash -- 343,377
Receivables:
Interest 30,462,375 1,400,105
Investments sold 34,019,027 1,951,875
Other assets 107,834 2,487
------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,999,592,422 88,227,683
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 8,415,181 --
Payable for investments purchased 10,300,164 --
Accrued expenses:
Management fees 870,273 48,075
Other 610,644 33,082
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 20,196,262 81,157
------------------------------------------------------------------------------------------------------------------------------------
Net assets $1,979,396,160 $ 88,146,526
====================================================================================================================================
Shares outstanding 194,959,520 8,113,876
====================================================================================================================================
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 10.15 $ 10.86
====================================================================================================================================
NET ASSETS CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Shares, $.01 par value per share $ 1,949,595 $ 81,139
Paid-in surplus 1,837,696,454 90,828,445
Undistributed net investment income 4,460,954 28,272
Accumulated net realized gain (loss) from investments 3,970,072 (8,204,024)
Net unrealized appreciation of investments 131,319,085 5,412,694
------------------------------------------------------------------------------------------------------------------------------------
Net assets $1,979,396,160 $ 88,146,526
====================================================================================================================================
Authorized shares 350,000,000 200,000,000
====================================================================================================================================
See accompanying notes to financial statements.
30
Statement of
OPERATIONS Year Ended October 31, 2005
MUNICIPAL VALUE MUNICIPAL INCOME
(NUV) (NMI)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $104,496,638 $5,094,154
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 10,414,205 566,650
Shareholders' servicing agent fees and expenses 515,257 27,233
Custodian's fees and expenses 398,942 29,245
Directors' fees and expenses 34,441 1,437
Professional fees 79,818 14,240
Shareholders' reports - printing and mailing expenses 157,154 16,671
Stock exchange listing fees 71,814 10,481
Investor relations expense 298,958 15,107
Other expenses 36,360 6,196
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 12,006,949 687,260
Custodian fee credit (85,140) (8,641)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 11,921,809 678,619
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 92,574,829 4,415,535
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 3,892,592 (132,233)
Change in net unrealized appreciation (depreciation) of investments 14,371,253 824,656
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 18,263,845 692,423
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $110,838,674 $5,107,958
====================================================================================================================================
See accompanying notes to financial statements.
31
Statement of
CHANGES IN NET ASSETS
MUNICIPAL VALUE (NUV) MUNICIPAL INCOME (NMI)
----------------------------------- --------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/05 10/31/04 10/31/05 10/31/04
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 92,574,829 $ 93,827,419 $ 4,415,535 $ 4,521,095
Net realized gain (loss) from investments 3,892,592 10,588,040 (132,233) (931,682)
Change in net unrealized appreciation
(depreciation) of investments 14,371,253 41,903,003 824,656 3,560,613
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 110,838,674 146,318,462 5,107,958 7,150,026
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (92,469,274) (96,249,057) (4,285,750) (4,316,582)
From accumulated net realized gains from investments (10,898,238) (12,577,331) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions
to shareholders (103,367,512) (108,826,388) (4,285,750) (4,316,582)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 7,471,162 37,492,074 822,208 2,833,444
Net assets at the beginning of year 1,971,924,998 1,934,432,924 87,324,318 84,490,874
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $1,979,396,160 $1,971,924,998 $88,146,526 $87,324,318
====================================================================================================================================
Undistributed (Over-distribution of) net
investment income at the end of year $ 4,460,954 $ 4,444,078 $ 28,272 $ (86,400)
====================================================================================================================================
See accompanying notes to financial statements.
32
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding New York
Stock Exchange symbols are Nuveen Municipal Value Fund, Inc. (NUV) and Nuveen
Municipal Income Fund, Inc. (NMI). The Funds are registered under the Investment
Company Act of 1940, as amended, as closed-end, diversified management
investment companies.
Each Fund seeks to provide current income exempt from regular federal income tax
by investing primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities or certain U.S. territories.
Effective January 1, 2005, Nuveen Advisory Corp. ("NAC"), the Funds' previous
Adviser, and its affiliate, Nuveen Institutional Advisory Corp. ("NIAC"), were
merged into Nuveen Asset Management ("NAM"), each wholly owned subsidiaries of
Nuveen Investments, Inc. ("Nuveen"). As a result of the merger, NAM is now the
Adviser to all funds previously advised by either NAC or NIAC.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors. When market
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service or, in the absence of a pricing service for a
particular security, the Board of Directors of the Funds, or its designee, may
establish fair market value using a wide variety of market data including yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, market quotes or indications of value from securities
dealers, evaluations of anticipated cash flows or collateral, general market
conditions and other information and analysis, including the obligor's credit
characteristics considered relevant by the pricing service or the Board of
Directors' designee. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term investments are valued at
amortized cost, which approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued or delayed delivery basis may have
extended settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At October 31, 2005,
there were no such outstanding purchase commitments in either of the funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Professional Fees
Professional fees presented in the Statement of Operations consist of legal fees
incurred in the normal course of operations, audit fees, tax consulting fees
and, in some cases, workout expenditures. Workout expenditures are incurred in
an attempt to protect or enhance an investment, or to pursue other claims or
legal actions on behalf of Fund shareholders.
33
Notes to
FINANCIAL STATEMENTS (continued)
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal income tax, to retain
such tax-exempt status when distributed to shareholders of the Funds. All
monthly tax-exempt income dividends paid during the fiscal year ended October
31, 2005, have been designated Exempt Interest Dividends. Net realized capital
gains and ordinary income distributions paid by the Funds are subject to federal
taxation.
Dividends and Distributions to Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from U.S. generally accepted
accounting principles.
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, 2005.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Indemnifications
Under the Funds' organizational documents, their Officers and Directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
2. FUND SHARES
Neither of the Funds engaged in transactions in their own shares during the
fiscal year ended October 31, 2005, nor during the fiscal year ended October 31,
2004.
34
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the fiscal year ended October 31, 2005, were as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Purchases $148,551,090 $5,836,445
Sales and maturities 172,423,260 8,361,413
================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount and timing differences in recognizing
certain gains and losses on investments transactions.
At October 31, 2005, the cost of investments was as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Cost of investments $1,800,191,314 $78,987,217
================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2005, were as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $143,585,491 $5,738,748
Depreciation (8,773,619) (196,126)
--------------------------------------------------------------------------------
Net unrealized appreciation of investments $134,811,872 $5,542,622
================================================================================
The tax components of undistributed net investment income and net realized gains
at October 31, 2005, were as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Undistributed net tax-exempt income * $7,818,624 $241,511
Undistributed net ordinary income ** 752,964 13,932
Undistributed net long-term capital gains 3,970,072 --
================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 3, 2005, paid on November 1, 2005.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
35
Notes to
FINANCIAL STATEMENTS (continued)
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004, was designated for purposes of the dividends paid
deduction as follows:
MUNICIPAL MUNICIPAL
2005 VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Distributions from net tax-exempt income $91,241,029 $4,284,126
Distributions from net ordinary income ** 1,228,245 1,623
Distributions from net long-term capital gains 10,898,238 --
================================================================================
MUNICIPAL MUNICIPAL
2004 VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Distributions from net tax-exempt income $92,800,716 $4,324,697
Distributions from net ordinary income ** 3,643,302 --
Distributions from net long-term capital gains 12,577,331 --
================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At October 31, 2005, Municipal Income (NMI) had an unused capital loss
carryforward of $8,204,024, available to be applied against future capital
gains, if any. If not applied, $116,138, $7,005,363, $916,759 and $165,764 of
the carryforward will expire in the years 2008, 2011, 2012 and 2013
respectively.
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser, and a specific fund-level component, based only on the amount of assets
within each individual Fund. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each individual fund as
well as from growth in the amount of complex-wide assets managed by the Adviser.
Municipal Value's (NUV) annual fund-level fee, payable monthly, at the rates set
forth below, which are based upon the average daily net assets of the Fund as
follows:
MUNICIPAL VALUE (NUV)
AVERAGE DAILY NET ASSETS FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $500 million .1500%
For the next $500 million .1250
For net assets over $1 billion .1000
================================================================================
In addition, Municipal Value (NUV) pays an annual management fee, payable
monthly, based on gross interest income as follows:
MUNICIPAL VALUE (NUV)
GROSS INTEREST INCOME GROSS INCOME FEE RATE
--------------------------------------------------------------------------------
For the first $50 million 4.125%
For the next $50 million 4.000
For gross income over $100 million 3.875
================================================================================
36
Municipal Income's (NMI) annual fund-level fee, payable monthly, at the rates
set forth below, which are based upon the average daily net assets of the Fund
as follows:
MUNICIPAL INCOME (NMI)
AVERAGE DAILY NET ASSETS FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the table below. As
of October 31, 2005, the complex-level fee rate was .1905%.
COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion .1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion(2) .1400
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds
in the U.S.
(2) With respect to the complex-wide Managed Assets over $91 billion, the fee
rate or rates that will apply to such assets will be determined at a later
date. In the unlikely event that complex-wide Managed Assets reach $91
billion prior to a determination of the complex-level fee rate or rates to
be applied to Managed Assets in excess of $91 billion, the complex-level
fee rate for such complex-wide Managed Assets shall be .1400% until such
time as a different rate or rates is determined.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to their 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 or its affiliates. The Board of Directors has adopted a
deferred compensation plan for independent Directors that enables Directors to
elect to defer receipt of all or a portion of the annual compensation they are
entitled to receive from certain Nuveen advised funds. Under the plan, deferred
amounts are treated as though equal dollar amounts had been invested in shares
of select Nuveen advised Funds.
37
Notes to
FINANCIAL STATEMENTS (continued)
6. ANNOUNCEMENT REGARDING PARENT COMPANY OF ADVISER
In early April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul
Travelers"), which owned 79% of Nuveen, (A) completed a public offering of a
substantial portion of its equity stake in Nuveen, (B) sold Nuveen $200 million
of its Nuveen shares, (C) entered into an agreement with Nuveen to sell an
additional $400 million of its Nuveen shares on a "forward" basis with payment
for and settlement of these shares delayed for several months, and (D) entered
into agreements with two unaffiliated investment banking firms to sell an amount
equal to most or all of its remaining Nuveen shares for current payment but for
future settlement. Transactions (C) and (D) above were settled in late July,
which effectively reduced St. Paul Travelers' controlling stake in Nuveen and
was deemed an "assignment" (as defined in the 1940 Act) of the investment
management agreements between the Funds and the Adviser, which resulted in the
automatic termination of each agreement under the 1940 Act. In anticipation of
such deemed assignment, the Board of Directors had approved new ongoing
investment management agreements for each Fund and the submission of those
agreements for approval by each respective Fund's shareholders, which
shareholder approval was received prior to the settlement of transactions (C)
and (D). The new ongoing management agreements took effect upon such settlement.
7. SUBSEQUENT EVENT - DISTRIBUTIONS TO SHAREHOLDERS
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on December 1, 2005, to shareholders of record on
November 15, 2005, as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Dividend per share $.0390 $.0440
================================================================================
38
Financial
HIGHLIGHTS
39
Financial
HIGHLIGHTS
Selected data for a share outstanding throughout each period:
Investment Operations Less Distributions
------------------------------------- -----------------------------------
Beginning Net Net Realized/ Net Ending
Net Asset Investment Unrealized Investment Capital Net Asset
Value Income Gain (Loss) Total Income Gains Total Value
------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL VALUE (NUV)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2005 $10.11 $.47 $ .10 $.57 $(.47) $(.06) $(.53) $10.15
2004 9.92 .48 .26 .74 (.49) (.06) (.55) 10.11
2003 9.98 .49 (.01) .48 (.50) (.04) (.54) 9.92
2002 10.17 .51 (.18) .33 (.51) (.01) (.52) 9.98
2001 9.77 .51 .42 .93 (.51) (.02) (.53) 10.17
MUNICIPAL INCOME (NMI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2005 10.76 .54 .09 .63 (.53) -- (.53) 10.86
2004 10.41 .56 .32 .88 (.53) -- (.53) 10.76
2003 10.61 .54 (.15) .39 (.59) -- (.59) 10.41
2002 10.92 .61 (.30) .31 (.62) -- (.62) 10.61
2001 11.01 .67 (.06) .61 (.70) -- (.70) 10.92
====================================================================================================================================
Total Returns
------------------------------
Ending Based on Based on Net
Market Value Market Value+ Asset Value+
-----------------------------------------------------------------------------
MUNICIPAL VALUE (NUV)
-----------------------------------------------------------------------------
Year Ended 10/31:
2005 $ 9.58 8.25% 5.73%
2004 9.36 9.01 7.77
2003 9.12 3.66 4.90
2002 9.32 3.80 3.32
2001 9.48 17.32 9.77
MUNICIPAL INCOME (NMI)
-----------------------------------------------------------------------------
Year Ended 10/31:
2005 10.56 10.21 5.93
2004 10.08 10.34 8.69
2003 9.64 3.02 3.71
2002 9.90 (11.93) 2.87
2001 11.90 12.24 5.68
=============================================================================
Ratios/Supplemental Data
---------------------------------------------------------------------------------------
Before Credit After Credit*
-------------------------- ----------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to Portfolio
Net Assets to Average Average to Average Average Turnover
(000) Net Assets Net Assets Net Assets Net Assets Rate
---------------------------------------------------------------------------------------------------------------------
MUNICIPAL VALUE (NUV)
---------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2005 $1,979,396 .60% 4.64% .60% 4.65% 8%
2004 1,971,925 .62 4.83 .61 4.84 13
2003 1,934,433 .64 4.97 .64 4.97 36
2002 1,946,407 .65 5.07 .65 5.08 13
2001 1,982,139 .65 5.09 .64 5.10 10
MUNICIPAL INCOME (NMI)
---------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2005 88,147 .78 4.99 .77 5.00 7
2004 87,324 .82 5.28 .81 5.28 14
2003 84,491 1.12 5.14 1.12 5.14 10
2002 85,897 .91 5.62 .90 5.64 36
2001 88,089 .83 6.14 .83 6.15 11
=====================================================================================================================
* After custodian fee credit, where applicable.
+ Total Investment Return on Market Value is the combination of changes in
the market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Net Asset Value is
the combination of changes in net asset value, reinvested dividend income
at net asset value and reinvested capital gains distributions at net asset
value, if any. Total returns are not annualized.
See accompanying notes to financial statements.
40-41 SPREAD
Board Members
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger(1) Chairman of 1994 Chairman (since 1996) and Director of Nuveen Investments, 156
3/28/49 the Board Inc., Nuveen Investments, LLC, Nuveen Advisory Corp. and
333 W. Wacker Drive and Trustee Nuveen Institutional Advisory Corp.(3); Director (since 1996)
Chicago, IL 60606 of Institutional Capital Corporation; Chairman and Director
(since 1997) of Nuveen Asset Management; Chairman and
Director of Rittenhouse Asset Management, Inc. (since 1999);
Chairman of Nuveen Investments Advisers Inc. (since 2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 156
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice President of The 156
7/29/34 Northern Trust Company; Director (since 2002) Community
333 W. Wacker Drive Advisory Board for Highland Park and Highwood, United
Chicago, IL 60606 Way of the North Shore.
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 156
10/22/48 corporation (since 1996); Director and Vice Chairman, United
333 W. Wacker Drive Fire Group, a publicly held company; Adjunct Faculty Member,
Chicago, IL 60606 University of Iowa; Director, Gazette Companies; Life Trustee
of Coe College; Director, Iowa College Foundation; formerly,
Director, Alliant Energy; formerly, Director, Federal Reserve
Bank of Chicago; formerly, President and Chief Operating Officer,
SCI Financial Group, Inc., a regional financial services firm.
------------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, School of 156
3/6/48 Business at the University of Connecticut (since 2002);
333 W. Wacker Drive previously, Senior Vice President and Director of Research
Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003); Director
(since 1997), Credit Research Center at Georgetown University;
Director (since 2004) of Xerox Corporation.
------------------------------------------------------------------------------------------------------------------------------------
David J. Kundert Board member 2005 Retired (since 2004) as Chairman, JPMorgan Fleming Asset 154
10/28/42 Management, President and CEO, Banc One Investment
333 W. Wacker Drive Advisors Corporation, and President, One Group Mutual
Chicago, IL 60606 Funds; prior thereto, Executive Vice President, Banc One
Corporation and Chairman and CEO, Banc One Investment
Management Group; Board of Regents, Luther College;
currently a member of the American and Wisconsin Bar
Associations.
42
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Board member 1997 Chairman of Miller-Valentine Partners Ltd., a real estate 156
9/24/44 investment company; formerly, Senior Partner and Chief
333 W. Wacker Drive Operating Officer (retired, December 2004), of Miller-Valentine
Chicago, IL 60606 Group; formerly, Vice President, Miller-Valentine Realty, a
construction company; Board Member, Chair of the Finance Committee
and member of the Audit Committee of Premier Health Partners, the
not-for-profit company of Miami Valley Hospital; Vice President,
Dayton Philharmonic Orchestra Association; Board Member, Regional
Leaders Forum, which promotes cooperation on economic development
issues; Director, Dayton Development Coalition; formerly, Member,
Community Advisory Board, National City Bank, Dayton, Ohio and
Business Advisory Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 156
12/29/47 Foundation (since 1994); prior thereto, Executive Director,
333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance, 156
1/22/50 Northwestern University (since 1997); Director (since 2003),
333 W. Wacker Drive Chicago Board Options Exchange; Director (since 2003),
Chicago, IL 60606 National Mentor Holdings, a privately-held, national provider
of home and community-based services; Chairman (since
1997), Board of Directors, Rubicon, a pure captive insurance
company owned by Northwestern University; Director (since
1997), Evanston Chamber of Commerce and Evanston
Inventure, a business development organization.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 156
9/9/56 Administrative Associate General Counsel, formerly, Vice President and
333 W. Wacker Drive Officer Assistant General Counsel, of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (2002-2004), General Counsel (1998-2004)
and Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2002) and Assistant Secretary and
Associate General Counsel, formerly, Vice President (since
1997), of Nuveen Asset Management; Managing Director
(since 2004) and Assistant Secretary (since 1994) of Nuveen
Investments, Inc.; Assistant Secretary of NWQ Investment
Management Company, LLC. (since 2002); Vice President and
Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Managing Director, Associate General Counsel
and Assistant Secretary of Rittenhouse Asset Management,
Inc. (since 2003); Chartered Financial Analyst.
43
Board Members
AND OFFICERS (CONTINUED)
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Julia L. Antonatos Vice President 2004 Managing Director (since 2005), formerly Vice President 156
9/22/63 (since 2002); formerly, Assistant Vice President (since 2000)
333 W. Wacker Drive of Nuveen Investments, LLC; Chartered Financial Analyst.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 156
2/3/66 and Assistant President (since 2000) of Nuveen Investments, LLC.
333 W. Wacker Drive Secretary
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999); Vice 156
11/28/67 and Treasurer President and Treasurer (since 1999) of Nuveen Investments,
333 W. Wacker Drive Inc.; Vice President and Treasurer (1999-2004) of Nuveen
Chicago, IL 60606 Advisory Corp. and Nuveen Institutional Advisory Corp.(3);
Vice President and Treasurer of Nuveen Asset Management
(since 2002) and of Nuveen Investments Advisers Inc. (since
2002); Assistant Treasurer of NWQ Investment Management
Company, LLC. (since 2002); Vice President and Treasurer of
Nuveen Rittenhouse Asset Management, Inc. (since 2003);
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
John N. Desmond Vice President 2005 Vice President, Director of Investment Operations, Nuveen 156
8/24/61 Investments, LLC (since January 2005); formerly, Director,
333 W. Wacker Drive Business Manager, Deutsche Asset Management (2003-2004),
Chicago, IL 60606 Director, Business Development and Transformation, Deutsche
Trust Bank Japan (2002-2003); previously, Senior Vice President, Head
of Investment Operations and Systems, Scudder Investments Japan,
(2000-2002), Senior Vice President, Head of Plan Administration and
Participant Services, Scudder Investments (1995-2002).
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant Secretary and 156
9/24/64 and Secretary Assistant General Counsel (since 1998) formerly, Assistant
333 W. Wacker Drive Vice President (since 1998) of Nuveen Investments, LLC;
Chicago, IL 60606 Vice President (2002-2004) and Assistant Secretary (1998-2004)
formerly, Assistant Vice President of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp.(3); Vice President and
Assistant Secretary (since 2005) of Nuveen Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), formerly, Vice President of 156
10/24/45 Nuveen Investments, LLC, Managing Director (2004) formerly,
333 W. Wacker Drive Vice President (1998-2004) of Nuveen Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional Advisory Corp.(3); Managing Director
(since 2005) of Nuveen Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002), formerly, Vice President of 156
3/2/64 Nuveen Investments; Managing Director (1997-2004) of
333 W. Wacker Drive Nuveen Advisory Corp. and Nuveen Institutional Advisory
Chicago, IL 60606 Corp.(3); Managing Director of Nuveen Asset Management
(since 2001); Vice President of Nuveen Investments Advisers
Inc. (since 2002); Chartered Financial Analyst.
44
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 156
5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and
333 W. Wacker Drive Funds Controller (1998-2004) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance (since 2004) 156
4/13/56 and Chief of Nuveen Investments, LLC, Nuveen Investments Advisers Inc.,
333 W. Wacker Drive Compliance Nuveen Asset Management and Rittenhouse Asset Management,
Chicago, IL 60606 Officer Inc.; previously, Vice President and Deputy Director of Compliance
(2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory
Corp.(3); formerly, Senior Attorney (1994-2004), The Northern
Trust Company.
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 156
3/22/63 LLC; Certified Public Accountant.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, LLC (since 1999). 156
8/27/61
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 156
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and
333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.(3); Vice President (since 2005)
and Assistant Secretary of Nuveen Investments, Inc.; Vice
President (since 2005) and Assistant Secretary (since 1997)
of Nuveen Asset Management; Vice President (since 2000),
Assistant Secretary and Assistant General Counsel (since
1998) of Rittenhouse Asset Management, Inc.; Vice President
and Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Assistant Secretary of NWQ Investment
Management Company, LLC (since 2002).
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and board member of
the Adviser.
(2) Board members serve an indefinite term until his/her successor is elected.
The year first elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
45
ANNUAL INVESTMENT
MANAGEMENT AGREEMENT
APPROVAL PROCESS
At a meeting held on May 10-12, 2005, the Board of Trustees of the Funds,
including the independent Trustees, unanimously approved the Investment
Management Agreement between each Fund and NAM.
THE APPROVAL PROCESS
To assist the Board in its evaluation of an advisory contract with NAM, the
independent Trustees received a report in adequate time in advance of their
meeting which outlined, among other things, the services provided by NAM; the
organization of NAM, including the responsibilities of various departments and
key personnel; the Fund's past performance as well as the Fund's performance
compared to funds of similar investment objectives compiled by an independent
third party (a "Peer Group"); the profitability of NAM and certain industry
profitability analyses for advisers to unaffiliated investment companies; the
expenses of NAM in providing the various services; the management fees of NAM,
including comparisons of such fees with the management fees of comparable funds
in its Peer Group as well as comparisons of NAM's management fees with the fees
NAM assesses to other types of investment products or accounts, if any; the soft
dollar practices of NAM; and the expenses of each Fund, including comparisons of
the Fund's expense ratios (after any fee waivers) with the expense ratios of its
Peer Group. This information supplements that received by the Board throughout
the year regarding Fund performance, expense ratios, portfolio composition,
trade execution and sales activity.
In addition to the foregoing materials, independent legal counsel to the
independent Trustees provided, in advance of the meeting, a legal memorandum
outlining, among other things, the duties of the Trustees under the 1940 Act as
well as the general principles of relevant state law in reviewing and approving
advisory contracts; the requirements of the 1940 Act in such matters; an
adviser's fiduciary duty with respect to advisory agreements and compensation;
the standards used by courts in determining whether investment company boards of
directors have fulfilled their duties and factors to be considered by the board
in voting on advisory agreements.
At the Board meeting, NAM made a presentation to and responded to questions from
the Board. After the presentations and after reviewing the written materials,
the independent Trustees met privately with their legal counsel to review the
Board's duties in reviewing advisory contracts and consider the renewal of the
advisory contracts. It is with this background that the Trustees considered each
Investment Management Agreement with NAM. The independent Trustees, in
consultation with independent counsel, reviewed the factors set out in judicial
decisions and SEC directives relating to the renewal of advisory contracts. As
outlined in more detail below, the Trustees considered all factors they believed
relevant with respect to each Fund, including the following: (a) the nature,
extent and quality of the services to be provided by NAM; (b) the investment
performance of the Fund and NAM; (c) the costs of the services to be provided
and profits to be realized by NAM and its affiliates from the relationship with
the Fund; (d) the extent to which economies of scale would be realized as the
Fund grows; and (e) whether fee levels reflect these economies of scale for the
benefit of Fund investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, extent and quality of NAM's services, the Trustees
reviewed information concerning the types of services that NAM or its affiliates
provide and are expected to provide to the Nuveen Funds; narrative and
statistical information concerning the Fund's performance record and how such
performance compares to the Fund's Peer Group; information describing NAM's
organization and its various departments, the experience and responsibilities of
key personnel, and available resources. In the discussion of key personnel, the
Trustees received materials regarding the changes or additions in personnel of
NAM. The Trustees further noted the willingness of the personnel of NAM to
engage in open, candid discussions with the Board. The Trustees further
considered the quality of NAM's investment process in making portfolio
management decisions, including any refinements or improvements to the portfolio
management processes, enhancements to technology and systems that are available
to portfolio managers, and any additions of new personnel which may strengthen
or expand the research and investment capabilities of NAM. In their review of
the advisory contracts for the fixed income funds, such as the Funds, the
Trustees also noted that Nuveen won the Lipper Award for Best Fund Family: Fixed
Income-Large Asset Class, for 2004. Given the Trustees' experience with the
Funds, other Nuveen funds and NAM, the Trustees noted that they were familiar
with and continue to have a good understanding of the organization, operations
and personnel of NAM.
46
In addition to advisory services, the independent Trustees considered the
quality of the administrative or non-advisory services provided. In this regard,
NAM provides the Funds with such administrative and other services (exclusive
of, and in addition to, any such services provided by others for the Funds) and
officers and other personnel as are necessary for the operations of the
respective Fund. In addition to investment management services, NAM and its
affiliates provide each Fund with a wide range of services, including: preparing
shareholder reports; providing daily accounting; providing quarterly financial
statements; overseeing and coordinating the activities of other service
providers; administering and organizing Board meetings and preparing the Board
materials for such meetings; providing legal support (such as helping to prepare
registration statements, amendments thereto and proxy statements and responding
to regulatory inquiries); and performing other Fund administrative tasks
necessary for the operation of the respective Fund (such as tax reporting and
fulfilling regulatory filing requirements). In addition, in evaluating the
administrative services, the Trustees considered, in particular, NAM's policies
and procedures for assuring compliance with applicable laws and regulations in
light of the new SEC regulations governing compliance. The Trustees noted NAM's
focus on compliance and its compliance systems. In their review, the Trustees
considered, among other things, the additions of experienced personnel to NAM's
compliance group and modifications and other enhancements to NAM's computer
systems. In addition to the foregoing, the Trustees also noted that NAM
outsources certain services that cannot be replicated without significant costs
or at the same level of expertise. Such outsourcing has been a beneficial and
efficient use of resources by keeping expenses low while obtaining quality
services.
In addition to the above, in reviewing the variety of additional services that
NAM or its affiliates must provide to closed-end funds, such as the Funds, the
independent Trustees determined that Nuveen's commitment to supporting the
secondary market for the common shares of its closed-end funds is particularly
noteworthy. In this regard, the Trustees noted Nuveen's efforts to sponsor
numerous forums for analysts and specialists regarding the various Nuveen
closed-end funds, its creation of a new senior position dedicated to providing
secondary market support services and enhancing communications with investors
and analysts, and its advertising and media relations efforts designed to raise
investor and analyst awareness of the closed-end funds.
With respect to services provided to municipal funds, including the Funds, the
Trustees also noted, among other things, the enhancements NAM implemented to its
municipal portfolio management processes (e.g., the increased use of benchmarks
to guide and assess the performance of its portfolio managers); the
implementation of a risk management program; and the various initiatives being
undertaken to enhance or modify NAM's computer systems as necessary to support
the innovations of the municipal investment team (such as, the ability to assess
certain historical data in order to create customized benchmarks, perform
attribution analysis and facilitate the use of derivatives as hedging
instruments). With respect to certain of the Nuveen funds with a less seasoned
portfolio, the Trustees also noted the hedging program implemented for such
funds and the team responsible for developing, implementing and monitoring the
hedging procedures. The hedging program was designed to help maintain the
applicable fund's duration with certain benchmarks.
Based on their review, the Trustees concluded that, overall, they were satisfied
with the nature, extent and quality of services provided (and expected to be
provided) to the Funds under the Investment Management Agreements.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND ADVISER
As previously noted, the Board received a myriad of performance information
regarding each Fund and its Peer Group. Among other things, the Board received
materials reflecting a Fund's historic performance and the Fund's performance
compared to its Peer Group. In evaluating the performance information, in
certain limited instances, the Trustees noted that the closest Peer Group for a
Fund still would not adequately reflect such Fund's investment objectives and
strategies, thereby limiting the usefulness of the comparisons of such Fund's
performance with that of the Peer Group.
As noted above, the performance data included, among other things, the
respective Fund's performance relative to its peers. More specifically, a Fund's
one-, three- and five-year total returns (as applicable) for the periods ending
December 31, 2004 were evaluated relative to the unaffiliated funds in its
respective Peer Group (including the returns of individual peers as well as the
Peer Group average) as well as additional performance information with respect
to all funds in the Peer Group. Based on their review, the Trustees determined
that the respective Fund's absolute and relative investment performance over
time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
In evaluating the management fees and expenses that a Fund is expected to
bear, the Trustees considered the respective Fund's current management fee
structure and the Fund's expected expense ratios in absolute terms as well as
compared with the fees and expense ratios of the unaffiliated funds in its
Peer Group. The Trustees reviewed the financial information of NAM, including
its respective revenues, expenses and profitability. In reviewing fees, the
Trustees, among other things, reviewed comparisons of the Fund's gross
management fees (fees after fund-level and complex-wide level breakpoints but
before reimbursement and fee waivers), net management fees (after breakpoints
and reimbursements and fee waivers) and total expense ratios (before and
after waivers) with those of the unaffiliated funds in the Peer Group and
peer averages. In this regard, the Trustees noted that the relative ranking
of the Nuveen funds on fees and expenses was aided by the significant level
of fee reductions provided by the fund-level and complex-wide breakpoint
schedules, and the fee waivers and reimbursements provided by Nuveen for
certain funds launched since 1999. The complex-wide breakpoint schedule was
instituted in 2004 and is described in further detail below in Section D
entitled "Economies of Scale and Whether Fee Levels Reflect these Economies
of Scale." In their review of the fee and expense information provided,
including, in particular, the expense ratios of the unaffiliated funds in the
respective Peer Group, the Trustees determined that each Fund's net total
expense ratio was within an acceptable range compared to such peers.
47
ANNUAL INVESTMENT MANAGEMENT
AGREEMENT APPROVAL PROCESS (continued)
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Trustees further compared the fees of NAM to the fees NAM assessed for
other types of clients investing in municipal funds (such as municipal
managed accounts). With respect to such separately managed accounts, the
advisory fees for such accounts are generally lower than those charged to the
comparable Funds. The Trustees noted, however, the additional services that
are provided and the costs incurred by Nuveen in managing and operating
registered investment companies, such as the Funds, compared to individually
managed separate accounts. For instance, as described above, NAM and its
affiliates provide numerous services to the Funds including, but not limited
to, preparing shareholder reports; providing daily accounting; preparing
quarterly financial statements; overseeing and coordinating the activities of
other service providers; administering and organizing Board meetings and
preparing the Board materials for such meetings; providing legal support; and
administering all other aspects of the Fund's operations. Further, the
Trustees noted the increased compliance requirements for funds in light of
new SEC regulations and other legislation. These services are generally not
required to the same extent, if at all, for separate accounts. In addition to
the differences in services, the Trustees also considered, among other
things, the differences in product distribution, investment policies,
investor profiles and account sizes. Accordingly, the Trustees believe that
the nature and number of services provided to operate a Fund merit the higher
fees than those to separate managed accounts.
3. PROFITABILITY OF NAM
In conjunction with its review of fees, the Trustees also considered NAM's
profitability. The Trustees reviewed NAM's revenues, expenses and
profitability margins (on both a pre-tax and after-tax basis). In reviewing
profitability, the Trustees recognized that one of the most difficult issues
in determining profitability is establishing a method of allocating expenses.
Accordingly, the Trustees reviewed NAM's assumptions and methodology of
allocating expenses. In this regard, the methods of allocation used appeared
reasonable but the Board noted the inherent limitations in allocating costs
among various advisory products. The Trustees also recognized that individual
fund or product line profitability of other advisers is generally not
publicly available. Further, profitability may be affected by numerous
factors including the types of funds managed, expense allocations, business
mix, etc. and therefore comparability of profitability is somewhat limited.
Nevertheless, to the extent available, the Trustees considered NAM's profit
margin compared to the profitability of various publicly-traded investment
management companies and/or investment management companies that publicly
disclose some or all of their financial results compiled by three independent
third-party service providers. The Trustees also reviewed the revenues,
expenses and profit margins of various unaffiliated advisory firms with
similar amounts of assets under management for the last year prepared by NAM.
Based on their review, the Trustees were satisfied that NAM's level of
profitability from its relationship with each Fund was reasonable in light of
the services provided.
In evaluating the reasonableness of the compensation, the Trustees also
considered any other revenues paid to NAM as well as any indirect benefits
(such as soft dollar arrangements, if any) NAM and its affiliates are
expected to receive that are directly attributable to their management of the
Funds, if any. See Section E below for additional information. Based on their
review of the overall fee arrangements of the applicable Fund, the Trustees
determined that the advisory fees and expenses of the respective Fund were
reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
In reviewing the compensation, the Trustees have long understood the benefits of
economies of scale as the assets of a fund grow and have sought to ensure that
shareholders share in these benefits. One method for shareholders to share in
economies of scale is to include breakpoints in the advisory fee schedules that
reduce fees as fund assets grow. Accordingly, the Trustees received and reviewed
the schedules of advisory fees for each Fund, including fund-level breakpoints
thereto. In addition, after lengthy negotiations with management, the Board in
May, 2004 approved a complex-wide fee arrangement pursuant to which fees of the
funds in the Nuveen complex, including the Funds, are reduced as the assets in
the fund complex reach certain levels. The complex-wide fee arrangement was
introduced on August 1, 2004 and the Trustees reviewed data regarding the
reductions of fees for the Nuveen funds for the period of August 1, 2004 to
December 31, 2004. In evaluating the complex-wide fee arrangement, the Trustees
considered, among other things, the historic and expected fee savings to
shareholders as assets grow, the amount of fee reductions at various asset
levels, and that the arrangement would extend to all funds in the Nuveen
complex. The Trustees also considered the impact, if any, the complex-wide fee
arrangement may have on the level of services provided. Based on their review,
the Trustees concluded that the breakpoint schedule and complex-wide fee
arrangement currently were acceptable and desirable in providing benefits from
economies of scale to shareholders.
48
E. INDIRECT BENEFITS
In evaluating fees, the Trustees also considered any indirect benefits or
profits NAM or its affiliates may receive as a result of its relationship with
each Fund. In this regard, the Trustees considered any benefits from soft dollar
arrangements. The Trustees noted that although NAM manages a large amount of
assets, it has very little, if any, brokerage to allocate. This is due to the
fact that NAM typically manages the portfolios of the municipal funds in the
Nuveen complex and municipal bonds generally trade on a principal basis.
Accordingly, NAM does not currently have any soft dollar arrangements and does
not pay excess brokerage commissions (or spreads on principal transactions) in
order to receive research services. In addition to soft dollar arrangements, the
Trustees also considered any other revenues, if any, received by NAM or its
affiliates. In this regard, the Trustees considered revenues received by Nuveen
for serving as agent for broker-dealers at its preferred trading desk and for
acting as co-manager in the initial public offering of new closed-end
exchange-traded funds.
F. OTHER CONSIDERATIONS
Nuveen, until recently, was a majority-owned subsidiary of St. Paul Travelers
Companies, Inc. ("St. Paul"). As noted, St. Paul earlier this year announced its
intention to divest its equity stake in Nuveen. Nuveen is the parent of NAM.
Pursuant to a series of transactions, St. Paul had begun to reduce its interest
in Nuveen which will ultimately result in a change of control of Nuveen and
therefore NAM. As mandated by the 1940 Act, such a change in control would
result in an assignment of the Investment Management Agreements with NAM and the
automatic termination of such agreements. Accordingly, the Board also considered
the approval of a New Investment Management Agreement with each Fund in light
of, and which would take effect upon, the anticipated change of control. More
specifically, the Board considered for each Fund a New Investment Management
Agreement on substantially identical terms to the existing Investment Management
Agreement, to take effect after the change of control has occurred and the
contract has been approved by Fund shareholders. In its review, the Board
considered whether the various transactions necessary to divest St. Paul's
interest will have an impact on the various factors they considered in approving
NAM, such as the scope and quality of services to be provided following the
change of control. In reviewing the St. Paul transactions, the Board considered,
among other things, the impact, if any, on the operations and organizational
structure of NAM; the possible benefits and costs of the transactions to the
respective Fund; the potential implications of any arrangements used by Nuveen
to finance certain of the transactions; the ability of NAM to perform its duties
after the transactions; whether a fee structure or expense ratio would change;
any changes to the current practices of the respective Fund; any changes to the
terms of the advisory agreement; and any anticipated changes to the respective
operations of NAM. Based on its review, the Board determined that St. Paul's
divestiture would not affect the nature and quality of services provided by NAM,
the terms of the respective Investment Management Agreement, including the fees
thereunder, and would not materially affect the organization or operations of
NAM. Accordingly, the Board determined that their analysis of the various
factors regarding their approval of NAM would continue to apply after the change
of control.
G. APPROVAL
The Trustees did not identify any single factor discussed previously as
all-important or controlling. The Trustees, including a majority of independent
Trustees, concluded that the terms of the Investment Management Agreements were
fair and reasonable, that NAM's fees are reasonable in light of the services
provided to each Fund, that the renewal of the NAM Investment Management
Agreements should be approved and that the new, post-change of control NAM
Investment Managements Agreement be approved and recommended to shareholders.
49
Reinvest Automatically
EASILY AND CONVENIENTLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN EXCHANGE-TRADED CLOSED-END FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Exchange-Traded Closed-End Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
the shares may increase before purchases are completed, the average purchase
price per share may exceed the market price at the time of valuation, resulting
in the acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
50
Other Useful
INFORMATION
In April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul Travelers")
sold the majority of its controlling equity interest in Nuveen Investments, Inc.
("Nuveen") to the general public. Nuveen is the parent of Nuveen Asset
Management ("NAM"), which is each Fund's investment manager. This sale was
deemed to be an "assignment" of the investment management agreement between each
Fund and NAM and, if applicable, of the sub-advisory agreement between NAM and
the Fund's sub-adviser. As required by law, the shareholders of each Fund were
asked to approve a new investment management agreement and, if applicable, a new
subadvisory agreement that reflected this change in ownership. The shareholders
of each Fund voted this approval at a Shareholders' Meeting on July 26, 2005.
There were no changes to the investment objectives or management of any Fund as
a result of these actions.
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2005, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a
Fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
MODIFIED DURATION: Duration is a measure of the expected period over which a
bond's principal and interest will be paid, and consequently is a measure of the
sensitivity of a bond's or bond Fund's value to changes when market interest
rates change. Generally, the longer a bond's or Fund's duration, the more the
price of the bond or Fund will change as interest rates change.
MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's
current annualized dividend divided by its current market price.
NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then dividing
the remainder by the number of shares outstanding. Fund NAVs are calculated at
the end of each business day.
TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
BOARD OF DIRECTORS
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Eugene S. Sunshine
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. No shares were
repurchased during the period covered by this report. Any future repurchases
will be reported to shareholders in the next annual or semiannual report.
51
Nuveen Investments:
SERVING Investors
For GENERATIONS
Photo of: 2 women looking at a photo album.
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Managing more than $131 billion in assets, Nuveen Investments offers access to a
number of different asset classes and investing solutions through a variety of
products. Nuveen Investments markets its capabilities under four distinct
brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; and
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest.
Be sure to obtain a prospectus, where applicable. Investors should consider the
investment objective and policies, risk considerations, charges and expenses of
the Fund carefully before investing. The prospectus contains this and other
information relevant to an investment in the Fund. For a prospectus, please
contact your securities representative or Nuveen Investments, 333 W. Wacker Dr.,
Chicago, IL 60606. Please read the prospectus carefully before you invest or
send money.
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about Nuveen Funds at o Investor education
WWW.NUVEEN.COM/ETF o Interactive planning tools
Logo: NUVEEN Investments
EAN-A-1005D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Municipal Income Fund, Inc.
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that Ernst & Young LLP provided to the Fund, except for those non-audit services
that were subject to the pre-approval exception under Rule 2-01 of Regulation
S-X (the "pre-approval exception"). The pre-approval exception for services
provided directly to the Fund waives the pre-approval requirement for services
other than audit, review or attest services if: (A) the aggregate amount of all
such services provided constitutes no more than 5% of the total amount of
revenues paid by the Fund to its accountant during the fiscal year in which the
services are provided; (B) the Fund did not recognize the services as non-audit
services at the time of the engagement; and (C) the services are promptly
brought to the Audit Committee's attention, and the Committee (or its delegate)
approves the services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2005 $ 7,729 $ 0 $ 410 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2004 $ 7,286 $ 0 $ 364 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" were billed for professional services for tax advice, tax
compliance, and tax planning.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
---------------------------------------------------------------------------------------------------------------------
October 31, 2005 $ 0 $ 282,575 $ 0
---------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------------------
October 31, 2004 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" are primarily fees billed to the Adviser for Fund tax
return preparation.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. For
engagements entered into on or after May 6, 2003, the Audit Committee is
required to pre-approve non-audit services that Ernst & Young LLP provides to
the Adviser and any Affiliated Fund Services Provider, if the engagement related
directly to the Fund's operations and financial reporting (except for those
subject to the de minimis exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the Fund's last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2005 $ 410 $ 282,575 $ 0 $ 282,985
October 31, 2004 $ 364 $ 0 $ 0 $ 364
The above "Non-Audit Fees billed to Adviser" for 2005 include "Tax-Fees" billed
to Adviser in the amount of $282,575 from previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the audit
committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the audit committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the audit committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the audit committee at
the next audit committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B.
Evans, William J. Schneider and Eugene S. Sunshine.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
the Adviser would either engage an independent third party to determine how the
proxy should be voted or vote the proxy with the consent, or based on the
instructions, of the Fund's Board of Directors or Trustees or its
representative. In the case of a conflict of interest, the proxy would be
submitted to the applicable Fund's Board to determine how the proxy should be
voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17
CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the
results were provided to the Board of Directors or Trustees and made available
to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable at this time.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Municipal Income Fund, Inc.
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: January 6, 2006
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: January 6, 2006
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: January 6, 2006
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.