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)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: October 31
------------------
Date of reporting period: October 31, 2008
------------------
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 | Nuveen Investments
October 31, 2008 | MUNICIPAL CLOSED-END FUNDS
Photo of: Small child
NUVEEN MUNICIPAL
VALUE FUND, INC.
NUV
NUVEEN MUNICIPAL
INCOME FUND, INC.
NMI
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
Logo: NUVEEN Investments
Photo of: Man working on computer
LIFE IS COMPLEX.
NUVEEN
MAKES THINGS
E-simple.
It only takes a minute to sign up for e-Reports. Once enrolled,
you'll receive an e-mail as soon as your Nuveen Investments Fund
information is ready--no more waiting for delivery by regular
mail. Just click on the link within the e-mail to see the report
and save it on your computer if you wish.
FREE E-REPORTS RIGHT TO YOUR E-MAIL!
www.investordelivery.com
If you receive your Nuveen Fund
dividends and statements from your
financial advisor or brokerage account.
OR
www.nuveen.com/accountaccess
If you receive your Nuveen Fund dividends
and statements directly from Nuveen.
Logo: NUVEEN Investments
Photo of: Robert P. Bremner
Chairman's
LETTER TO SHAREHOLDERS
| Robert P. Bremner | Chairman of the Board
Dear Shareholders,
I'd like to use my initial letter to you to accomplish several things. First, I
want to report that after fourteen years of service on your Fund's Board,
including the last twelve as chairman, Tim Schwertfeger retired from the Board
in June. The Board has elected me to replace him as the chairman, the first time
this role has been filled by someone who is not an employee of Nuveen
Investments. Electing an independent chairman marks a significant milestone in
the management of your Fund, and it aligns us with what is now considered a
"best practice" in the fund industry. Further, it demonstrates the independence
with which your Board has always acted on your behalf.
Following Tim will not be easy. During my eleven previous years on the Nuveen
Fund Board, I found that Tim always set a very high standard by combining
insightful industry and market knowledge and sound, clear judgment. While the
Board will miss his wise counsel, I am certain we will retain the primary
commitment Tim shared with all of us - an unceasing dedication to creating and
retaining value for Nuveen Fund shareholders. This focus on value over time is a
touchstone that I and all the other Board members will continue to use when
making decisions on your behalf.
Second, I also want to report that we are very fortunate to welcome two new
Board members to our team. John Amboian, the current chairman and CEO of Nuveen
Investments, has replaced Tim as Nuveen's representative on the Board. John's
presence will allow the independent Board members to benefit not only from his
leadership role at Nuveen but also his broad understanding of the fund industry
and Nuveen's role within it. We also added Terry Toth as an independent
director. A former CEO of the Northern Trust Company's asset management group,
Terry will bring extensive experience in the fund industry to our deliberations.
Third, on behalf of the entire Board, I would like you to know that we are
closely monitoring the unprecedented market developments and their distressing
impact on the Funds. We believe that these Funds continue to be actively and
constructively managed for the long term and at the same time we are very aware
that these are trying times for our investors. We appreciate the patience you
have shown with the Board and with Nuveen Investments as they manage your
investment through this extremely difficult period.
Finally, I urge you to take the time to review the Portfolio Managers' Comments,
the Dividend and Share Price Information, and the Performance Overview sections
of this report. All of us are grateful that you have chosen Nuveen Investments
as a partner as you pursue your financial goals, and, on behalf of myself and
the other members of your Fund's Board, let me say we look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Robert P. Bremner
Robert P. Bremner
Chairman of the Board
December 23, 2008
Portfolio Managers' COMMENTS
Nuveen Investments Municipal Closed-End Funds | NUV, NMI
Portfolio managers Tom Spalding, John Miller and Johnathan Wilhelm discuss U.S.
economic and municipal market conditions, key investment strategies, and the
twelve-month performance of NUV and NMI. With thirty-two years of investment
experience at Nuveen, Tom has managed NUV since its inception in 1987. John, who
has fifteen years of municipal market experience, including twelve years with
Nuveen, assumed portfolio management responsibility for NMI in 2001. In December
2007, John was joined by co-portfolio manager Johnathan, who came to Nuveen in
2001 with eighteen years of industry experience.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE
TWELVE-MONTH REPORTING PERIOD ENDED OCTOBER 31, 2008?
During this period, stress in the financial and credit markets led to increased
price volatility for many securities, reduced liquidity and a general flight to
quality. The Federal Reserve (Fed) began in September 2007 a series of interest
rate cuts that lowered the fed funds rate by 325 basis points--from 5.25% to
2.00%--over an eight-month period ending April 2008. In October 2008, the Fed
announced two additional reductions of 50 basis points each, bringing the fed
funds rate to 1.00%, its lowest level since 2003. (On December 16, after the end
of this twelve-month period, the Fed reduced the fed funds rate target to 0.25%
or less.)
The Fed's rate-cutting actions also were a response to concerns about the pace
of U.S. economic growth, as measured by the U.S. gross domestic product (GDP).
After declining at an annual rate of 0.2% in the fourth quarter of 2007, GDP
improved to a positive 0.9% in the first quarter of 2008 and posted growth of
2.8% in the second quarter of 2008 (all GDP numbers annualized). During the
third quarter of 2008, however, GDP contracted at an annual rate of 0.5%, the
biggest decrease since 2001, mainly as the result of the first decline in
consumer spending since 1991 and an 18% drop in residential investment. The
Consumer Price Index (CPI), driven largely by increased energy, food and
transportation prices, registered a 3.7% year-over-year gain as of October 2008,
while the core CPI (which excludes food and energy) rose 2.2% over this same
period, above the Fed's unofficial target of 2.0% or lower. In the labor
markets, October 2008 marked the tenth consecutive month of job losses. The
national unemployment rate for October 2008 was 6.5%, its highest point in more
than fourteen years, up from 4.8% in October 2007.
In the municipal bond market, performance was significantly impacted by concerns
about the credit markets, downgrades of municipal bond insurers, the freeze-up
of the auction rate market, and institutional investors' need to unwind various
leveraging strategies. These events created surges of selling pressure,
especially in late
Discussions of specific investments are for illustrative purposes only and are
not intended as recommendations of individual investments. The views expressed
in this commentary represent those of the portfolio managers as of the date of
this report and are subject to change at any time, based on market conditions
and other factors. The Funds disclaim any obligation to advise shareholders of
such changes.
4
September and early October 2008. While some investors curtailed purchases,
non-traditional buyers of municipal bonds such as hedge funds, traditional
buyers such as tax-exempt money market funds, and institutions were forced to
sell holdings of longer-maturity bonds into a market already experiencing
reduced liquidity.
Combined with the Fed rate cuts, this selling produced a sharp steepening of the
municipal yield curve, as longer-term interest rates rose and short-term rates
declined over this period. In this environment, bonds with shorter maturities
generally outperformed longer maturity bonds, and higher quality bonds tended to
outperform lower quality credits.
Another item of note in the municipal market was the U.S. Supreme Court's May
2008 ruling that individual states could continue to offer their residents
special tax treatment on municipal bonds issued within their borders. The high
court's decision preserved tax rules in forty-two states, allowing them to
continue to exempt from taxation the income their residents earn on in-state
municipal bonds while taxing the income earned on municipal bonds issued in
other states.
Over the twelve months ended October 31, 2008, municipal bond issuance
nationwide totaled $450.3 billion, a drop of 8% from the previous twelve months.
In 2008, insured bonds comprised less than 20% of new supply, compared with the
recent historical figure of approximately 50%. While market conditions during
this period impacted the demand for municipal bonds, we continued to see demand
from investors attracted by higher interest rates and yields relative to taxable
bonds.
WHAT KEY STRATEGIES WERE USED TO MANAGE NUV AND NMI DURING THIS REPORTING
PERIOD?
During this twelve-month period, with the municipal market characterized by
volatility and a relatively steep yield curve, we sought to capitalize on a
turbulent environment by continuing to focus on relative value and investing for
the long term, preserving and enhancing liquidity, and managing duration(1)
risk.
As events in the general financial markets unfolded, we found attractive
opportunities in various sectors of the municipal market, using a fundamental
approach to identify undervalued sectors and individual credits with the
potential to perform well over the long term. In NUV, some portfolio activity
also was driven by our efforts to boost liquidity or cash reserves. Especially
during the commotion of September and October, we believed that it was prudent
to take defensive measures that would reduce exposure to market risk. These
measures included selectively selling some holdings and raising cash reserves.
In addition to selling credits with shorter durations, including a few
pre-refunded(2) bonds, we also took advantage of strong bids to sell bonds that
were attractive to the retail market. Given the market environment, retail
demand was often strongest for higher credit quality bonds. At all times, we
were careful to balance our efforts to enhance liquidity through sales to the
retail market with our focus on maintaining the credit quality of our portfolios
in an uncertain market. Some of our new purchases also were funded by
reinvesting the proceeds from called or matured bonds.
(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.
(2) Pre-refundings, also known as advance refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
5
In NMI, our primary emphasis remained on bottom-up credit analysis and
selection. During this period, we continued to find opportunities to add health
care bonds, a sector that we found attractive in the current market environment
due to its long-term value potential. To fund these purchases, NMI sold selected
bonds, including a Florida community development district credit; reduced
exposure to California general obligation (GO) bonds; and reinvested proceeds
from bond calls. Our decision to sell some of our California GO holdings was
based on the state's weaker economy, resultant declines in revenue and the
anticipation of larger issues of California GOs with more attractive yields in
the near future.
As a key dimension of risk management, a disciplined approach to duration
positioning remained an important component of our management strategies. As
part of this approach, we used inverse floating rate securities(3), a type of
derivative financial instrument, in both NUV and NMI during this period. Inverse
floaters typically provide the dual benefit of bringing the Funds' durations
closer to our strategic target and enhancing their income-generation
capabilities. NMI also invested in additional types of derivatives during this
period. The goal was to help manage net asset value (NAV) volatility without
having a negative impact on income streams or dividends over the short term.
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as relevant index and peer group
information, are presented in the accompanying table.
Annualized Total Returns on Net Asset Value
For periods ended 10/31/08
1-Year 5-Year 10-Year
NUV -10.51% 2.28% 3.46%
NMI -9.53% 2.55% 2.87%
Lipper General and
Insured Unleveraged
Municipal Debt
Funds Average(4) -6.66% 2.59% 3.38%
Barclays Capital
Municipal
Bond Index(5) -3.30% 2.73% 4.14%
S&P National
Municipal Bond Index(6) -4.15% 2.75% N/A
For the twelve months ended October 31, 2008, the total returns on net asset
value (NAV) for both NUV and NMI underperformed the return on the Lipper General
and Insured Unleveraged Municipal Debt Funds Average, the Barclays Capital
Municipal Bond Index and the Standard & Poor's (S&P) National Municipal Bond
Index.
Key management factors that influenced the Funds' returns included duration
positioning, the use of derivatives, credit exposure and sector allocations.
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.
(3) An inverse floating rate security is a financial instrument designed to pay
long-term tax-exempt interest at a rate that varies inversely with a
short-term tax-exempt interest rate index. For the Nuveen Funds, the index
typically used is the Securities Industry and Financial Markets (SIFM)
Municipal Swap Index (previously referred to as the Bond Market Association
Index or BMA). Inverse floaters, including those inverse floating rate
securities in which the Funds invested during this reporting period, are
further defined within the Notes to Financial Statements and Glossary of
Terms Used in this Report sections of this shareholder report.
(4) The Lipper General and Insured Unleveraged Municipal Debt Funds Average is
calculated using the returns of all closed-end funds in this category for
each period as follows: 1 year, 8 funds; 5 years, 7 funds; and 10 years, 7
funds. Fund and Lipper returns assume reinvestment of dividends.
(5) The Barclays Capital (formerly Lehman Brothers) Municipal Bond Index is an
unleveraged, unmanaged national index comprising a broad range of
investment-grade municipal bonds. Results for the Barclays Capital index do
not reflect any expenses.
(6) The Standard & Poor's (S&P) National Municipal Bond Index is an
unleveraged, market value-weighted index designed to measure the
performance of the investment-grade U.S. municipal bond market.
6
Given the changes in the interest rate environment during this period, bonds in
the Barclays Capital Municipal Bond Index with maturities of ten years or less
outperformed the market as a whole, with bonds maturing in one to six years
benefiting the most. Because they were less sensitive to interest rate changes,
these shorter bonds generally outperformed credits with longer maturities, with
the biggest losses posted by bonds with the longest maturities (twenty-two years
and longer). In general, the greater a Fund's exposure to the underperforming
longer part of the yield curve during this period, the greater the negative
impact on the Fund's return. Overall, NMI, which had a shorter duration than
NUV, was the better positioned of these two Funds in terms of duration.
As mentioned earlier, NUV and NMI used inverse floaters during this period to
help bring their durations closer to our strategic target and enhance
income-generation capabilities. In general, these inverse floaters detracted
from performance. This resulted from the fact that the inverse floaters
effectively increased the Funds' exposure to longer maturity bonds at a time
when shorter maturities were in favor in the market.
Credit exposure, including exposure to bonds backed by municipal bond insurers,
also was a factor in performance during this period. Because risk-averse
investors generally sought higher quality investments as disruptions in the
financial markets deepened, bonds with higher credit quality ratings typically
performed very well. However, insured bonds with underlying credits that were
rated BBB or non-rated, originally purchased because of the higher yields they
offered, experienced a disproportionately negative impact (compared with bonds
with underlying credits rated AA or A) if the insurer backing the bond was
downgraded from AAA. As many investors avoided high-yield securities, bonds
rated BBB or below and non-rated bonds generally posted poor returns. As of
October 31, 2008, allocations of bonds rated BBB accounted for approximately 12%
of NUV's portfolio and 26% of NMI, with both Funds allocating an additional 7%
and 6%, respectively, to bonds rated BB or lower (below investment-grade
quality). NMI also held approximately 11% of its portfolio in non-rated bonds,
while NUV allocated less than 1% to this credit category. The Funds' lower-rated
credit exposure, which was generally higher than that of the Barclays Capital
Municipal Bond Index, was a negative influence on the Funds' returns for this
period. Conversely, the Funds' weightings in bonds rated AAA were generally
positive for performance.
Sectors of the market that generally helped the Funds' performances included
general obligation bonds, resource recovery, water and sewer and utilities.
Pre-refunded bonds, which are usually backed by U.S. Treasury securities, were
one of the top performing segments of the market, due primarily to their shorter
effective maturities, higher credit quality, and perceived safety. Holdings of
pre-refunded bonds accounted for 23% of NUV's portfolio and 16% of NMI.
In general, bonds that carried any credit risk, regardless of sector, posted
weak performance. Revenue bonds as a whole, and the industrial development
revenue (IDR) sector in particular, underperformed the general municipal market.
Next to the IDR sector, zero coupon bonds were among the worst performing
categories, followed by the health care and housing sectors. NMI, in particular,
was very heavily weighted in health care bonds.
7
RECENT DEVELOPMENTS IN THE MARKET ENVIRONMENT
Beginning in October, the nation's financial institutions and financial
markets--including the municipal bond market--experienced significant turmoil.
Reductions in demand decreased valuations of municipal bonds across all credit
ratings, especially those with lower credit ratings, and this generally reduced
the Funds' net asset values. The municipal market is one in which dealer firms
make markets in bonds on a principal basis using their proprietary capital, and
during the recent market turmoil these firms'capital was severely constrained.
As a result, some firms were unwilling to commit their capital to purchase and
to serve as a dealer for municipal bonds. This reduction in dealer involvement
in the market was accompanied by significant net selling pressure by investors,
particularly with respect to lower-rated municipal bonds, as institutional
investors generally removed money from the municipal bond market, at least in
part because of their need to reduce the leveraging of their municipal
investments. This de-leveraging was in part driven by the overall reduction in
the amount of financing available for such leverage, the increased costs of such
leverage financing, and the need to reduce leverage levels that had recently
increased due to the decline in municipal bond prices.
Municipal bond prices were further negatively impacted by concerns that the need
for further de-leveraging and a supply overhang as a large amount of new issues
were postponed would cause selling pressure to persist for a period of time. In
addition to falling prices, these market conditions resulted in greater price
volatility of municipal bonds; wider credit spreads (i.e., lower quality bonds
fell in price more than higher quality bonds); significantly reduced liquidity
(i.e., the ability to sell bonds at a price close to their carrying value),
particularly for lower quality bonds; and a lack of price transparency (i.e.,
the ability to accurately determine the price at which a bond would likely
trade). Reduced liquidity was most pronounced in mid-October, and although
liquidity improved considerably over ensuing weeks, it may reoccur if financial
turmoil persists or worsens.
RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES
As mentioned earlier, another factor that had an impact on the performance of
these Funds was their position in bonds backed by municipal bond insurers that
experienced downgrades in their credit ratings. During the period covered by
this report, ACA, AMBAC, FGIC, MBIA, RAAI and SYNCORA (formerly XLCA)
experienced one or more rating reductions by at least one or more rating
agencies. Subsequent to the reporting period, AMBAC, MBIA and SYNCORA
experienced further rating reductions while AGC and FSA received their first
rating reductions by at least one rating agency. At the time this report was
prepared, at least one rating agency has placed each of these insurers except
AGC on "negative outlook" or "negative credit watch," which may presage one or
more rating reductions for such insurer or insurers in the future. As concern
increased about the balance sheets of these insurers, prices on bonds insured by
these companies - especially those bonds with weaker underlying credits -
declined, detracting from the Funds' performance. By the end of this period,
most insured bonds were being valued according to their fundamentals as if they
were uninsured. On the whole, the holdings of all of our Funds continued to be
well diversified not only between insured and uninsured bonds, but also within
the insured bond category. It is important to note that municipal bonds
historically have had a very low rate of default.
8
Dividend and Share Price
INFORMATION
The dividends of both NUV and NMI remained stable throughout the twelve-month
reporting period ended October 31, 2008.
Due to capital gains generated by normal portfolio activity, common shareholders
of NUV received a long-term capital gains distribution of $0.0283 per share and
an ordinary income distribution of $0.0017 per share at the end of December
2007.
Both NUV and NMI seek to pay stable dividends at rates that reflect each Fund's
past results and projected future performance. During certain periods, each Fund
may pay dividends at a rate that may be more or less than the amount of net
investment income actually earned by the Fund during the period. If a Fund has
cumulatively earned more than it has paid in dividends, it holds the excess in
reserve as undistributed net investment income (UNII) as part of the Fund's NAV.
Conversely, if a Fund has cumulatively paid dividends in excess of its earnings,
the excess constitutes negative UNII that is likewise reflected in the Fund's
NAV. Each Fund will, over time, pay all of its net investment income as
dividends to shareholders. As of October 31, 2008, NUV and NMI had positive UNII
balances for both tax and financial statement purposes.
The Funds' Board of Directors approved an open-market share repurchase program
on July 30, 2008, under which each Fund may repurchase up to 10% of its common
shares. As of October 31, 2008, the Funds had not repurchased any of their
outstanding common shares.
As of October 31, 2008, the Funds' share prices were trading at premiums or
discounts to their NAVs as shown in the accompanying chart:
10/31/08 Twelve-Month Average
Premium Discount
NUV 0.58% -0.37%
NMI 6.57% -0.52%
9
NUV
Performance
OVERVIEW
Nuveen Municipal
Value Fund, Inc.
as of October 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S.
Guaranteed 39%
AA 31%
A 10%
BBB 12%
BB or Lower 7%
N/R 1%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Share(3)
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
11/01/07 9.51
9.2
9.22
9.33
9.63
9.56
9.56
9.26
9.2
9.25
9.65
9.77
9.47
9.75
9.89
9.83
9.65
9.69
9.4501
9.78
9.7
9.7
9.81
9.85
9.85
9.97
9.97
10
10.21
10.21
10.13
10.05
10.05
9.89
9.56
9.5606
9.61
9.67
9.77
9.64
9.79
9.92
9.832
9.59
9.7
9.82
9.78
9.52
9.2
9.11
8.2
8.65
8.84
10/31/08 8.65
FUND SNAPSHOT
------------------------------------
Share Price $8.65
------------------------------------
Net Asset Value $8.60
------------------------------------
Premium/(Discount) to NAV 0.58%
------------------------------------
Market Yield 5.41%
------------------------------------
Taxable-Equivalent Yield(2) 7.51%
------------------------------------
Net Assets ($000) $1,684,418
------------------------------------
Average Effective Maturity
on Securities (Years) 17.16
------------------------------------
Modified Duration 9.48
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/17/87)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -3.93% -10.51%
------------------------------------
5-Year 4.40% 2.28%
------------------------------------
10-Year 4.32% 3.46%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Illinois 13.0%
------------------------------------
California 11.7%
------------------------------------
New York 8.1%
------------------------------------
Texas 6.7%
------------------------------------
New Jersey 5.6%
------------------------------------
Colorado 4.1%
------------------------------------
Michigan 3.9%
------------------------------------
Washington 3.7%
------------------------------------
Massachusetts 3.7%
------------------------------------
Florida 3.5%
------------------------------------
Missouri 2.9%
------------------------------------
South Carolina 2.8%
------------------------------------
Louisiana 2.3%
------------------------------------
Puerto Rico 2.3%
------------------------------------
Pennsylvania 2.1%
------------------------------------
Wisconsin 2.0%
------------------------------------
Ohio 2.0%
------------------------------------
Other 19.6%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 23.3%
------------------------------------
Tax Obligation/Limited 17.1%
------------------------------------
Health Care 14.9%
------------------------------------
Transportation 12.2%
------------------------------------
Tax Obligation/General 7.8%
------------------------------------
Utilities 7.1%
------------------------------------
Consumer Staples 5.5%
------------------------------------
Other 12.1%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) 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.
(3) The Fund paid shareholders capital gains and net ordinary income
distributions in December 2007 of $0.030 per share.
10
NMI
Performance
OVERVIEW
Nuveen Municipal
Income Fund, Inc.
as of October 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S.
Guaranteed 24%
AA 17%
A 16%
BBB 26%
BB or Lower 6%
N/R 11%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Share
Nov 0.042
Dec 0.042
Jan 0.042
Feb 0.042
Mar 0.042
Apr 0.042
May 0.042
Jun 0.042
Jul 0.042
Aug 0.042
Sep 0.042
Oct 0.042
Line Chart:
Share Price Performance -- Weekly Closing Price
11/01/07 10.45
10.44
10.25
9.96
9.91
10.35
10.31
10.6
10.64
10.62
10.59
10.75
10.69
10.54
10.76
10.64
10.42
10.46
10.51
10.29
10.27
10.31
10.36
10.32
10.45
10.49
10.7
10.66
10.76
10.62
10.82
10.88
10.67
10.39
10.42
10.5
10.6
10.59
10.25
10.28
10.37
10.21
10.34
10.34
10.49
10.55
10.33
10.33
9.61
9.86
8.45
9.1
9.91
10/31/08 9.89
FUND SNAPSHOT
------------------------------------
Share Price $9.89
------------------------------------
Net Asset Value $9.28
------------------------------------
Premium/(Discount) to NAV 6.57%
------------------------------------
Market Yield 5.10%
------------------------------------
Taxable-Equivalent Yield(2) 7.08%
------------------------------------
Net Assets ($000) $75,553
------------------------------------
Average Effective Maturity
on Securities (Years) 14.63
------------------------------------
Modified Duration 8.21
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 4/20/88)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -1.01% -9.53%
------------------------------------
5-Year 5.66% 2.55%
------------------------------------
10-Year 3.30% 2.87%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
California 17.7%
------------------------------------
Texas 9.3%
------------------------------------
Illinois 7.6%
------------------------------------
South Carolina 6.6%
------------------------------------
Colorado 6.4%
------------------------------------
New York 6.0%
------------------------------------
Missouri 4.1%
------------------------------------
Tennessee 4.0%
------------------------------------
Michigan 3.9%
------------------------------------
Ohio 3.8%
------------------------------------
Indiana 3.6%
------------------------------------
Virginia 3.1%
------------------------------------
Virgin Islands 2.9%
------------------------------------
Florida 2.8%
------------------------------------
Louisiana 2.8%
------------------------------------
Other 15.4%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Health Care 22.8%
------------------------------------
U.S. Guaranteed 15.7%
------------------------------------
Utilities 15.6%
------------------------------------
Tax Obligation/Limited 12.9%
------------------------------------
Tax Obligation/General 11.1%
------------------------------------
Education and Civic
Organizations 5.9%
------------------------------------
Materials 4.5%
------------------------------------
Other 11.5%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) 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.
11
NUV
NMI
Shareholder MEETING REPORT
The annual meeting of shareholders was held on July 29, 2008, at The Northern
Trust Company,
50 South La Salle Street, Chicago, IL 60675; at this meeting the shareholders
were asked to vote on the election of Board Members, the elimination of
Fundamental Investment Policies and the approval of new Fundamental Investment
Policies. The meeting was subsequently adjourned to August 29, 2008.
NUV NMI
------------------------------------------------------------------------------------------------------------------------------------
Common Common
Shares Shares
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUND'S FUNDAMENTAL POLICY RELATING TO
INVESTMENTS IN MUNICIPAL SECURITIES AND BELOW INVESTMENT GRADE SECURITIES.
For 96,683,788 3,996,303
Against 7,662,441 287,287
Abstain 3,592,140 129,416
Broker Non-Votes 26,029,378 1,137,453
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO INVESTMENTS IN MUNICIPAL
SECURITIES FOR THE FUND.
For 97,467,073 4,024,800
Against 6,927,718 268,475
Abstain 3,543,578 119,731
Broker Non-Votes 26,029,378 1,137,453
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL POLICY RELATING TO INVESTING IN
OTHER INVESTMENT COMPANIES.
For 96,360,044 4,003,080
Against 7,856,827 265,520
Abstain 3,721,498 144,406
Broker Non-Votes 26,029,378 1,137,453
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL POLICY RELATING TO DERIVATIVES AND
SHORT SALES.
For 95,715,259 3,993,554
Against 8,436,068 286,057
Abstain 3,787,042 133,395
Broker Non-Votes 26,029,378 1,137,453
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL POLICY RELATING TO COMMODITIES.
For 95,736,231 3,989,462
Against 8,327,499 283,436
Abstain 3,874,639 140,108
Broker Non-Votes 26,029,378 1,137,453
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO COMMODITIES.
For 96,699,546 3,994,193
Against 7,792,673 281,629
Abstain 3,446,150 137,184
Broker Non-Votes 26,029,378 1,137,453
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
John P. Amboian
For 129,351,299 5,336,247
Withhold 4,616,448 214,212
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
William C. Hunter
For 129,364,453 5,334,595
Withhold 4,603,294 215,864
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
David J. Kundert
For 129,325,767 5,330,427
Withhold 4,641,980 220,032
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
Terence J. Toth
For 129,335,632 5,333,375
Withhold 4,632,115 217,084
------------------------------------------------------------------------------------------------------------------------------------
Total 133,967,747 5,550,459
====================================================================================================================================
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. (the "Funds") as of October 31, 2008, 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, 2008, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Municipal Value Fund, Inc. and Nuveen Municipal Income Fund, Inc. at
October 31, 2008, 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 the financial highlights for each of the five years in the period then ended
in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
December 23, 2008
13
NUV
Nuveen Municipal Value Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.1%
$ 5,000 Courtland Industrial Development Board, Alabama, Solid Waste 11/09 at 101.00 Baa3 $ 4,048,500
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 (4) 1,874,425
Series 2001A, 5.750%, 6/01/31 (Pre-refunded 6/01/11)
12,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA 12,227,760
Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded 2/01/09) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
18,750 Total Alabama 18,150,685
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.5%
3,335 Alaska Housing Finance Corporation, General Housing Purpose 12/14 at 100.00 AA 3,071,168
Bonds, Series 2005A, 5.000%, 12/01/30 - FGIC Insured
3,000 Anchorage, Alaska, General Obligation Bonds, Series 2003B, 9/13 at 100.00 AA (4) 3,234,630
5.000%, 9/01/23 (Pre-refunded 9/01/13) - FGIC Insured
1,840 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/10 at 100.00 AAA 1,916,581
Settlement Asset-Backed Bonds, Series 2000, 6.200%, 6/01/22
(Pre-refunded 6/01/10)
------------------------------------------------------------------------------------------------------------------------------------
8,175 Total Alaska 8,222,379
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.9%
13,100 Arizona Health Facilities Authority, Hospital Revenue Bonds, 7/10 at 101.00 A (4) 14,127,695
Catholic Healthcare West, Series 1999A, 6.625%, 7/01/20
(Pre-refunded 7/01/10)
4,900 Arizona Health Facilities Authority, Hospital System Revenue 11/09 at 100.00 Baa3 (4) 5,112,219
Bonds, Phoenix Children's Hospital, Series 1999A,
6.250%, 11/15/29 (Pre-refunded 11/15/09)
1,400 Arizona Health Facilities Authority, Hospital System Revenue 2/12 at 101.00 Baa3 (4) 1,536,066
Bonds, Phoenix Children's Hospital, Series 2002A,
6.250%, 2/15/21 (Pre-refunded 2/15/12)
3,000 Phoenix Industrial Development Authority, Arizona, GNMA 4/15 at 100.00 Aaa 2,177,370
Collateralized Multifamily Housing Revenue Bonds, Park Lee
Apartments, Series 2004A, 5.050%, 10/20/44
(Alternative Minimum Tax)
2,500 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien 7/18 at 100.00 AA- 2,221,425
Airport Revenue Bonds, Series 2008A, 5.000%, 7/01/38
4,000 Quechan Indian Tribe of the Fort Yuma Reservation, Arizona, 12/17 at 102.00 N/R 3,209,800
Government Project Bonds, Series 2007, 7.000%, 12/01/27
5,000 Salt Verde Financial Corporation, Arizona, Senior Gas Revenue No Opt. Call AA- 3,027,350
Bonds, Series 2007, 5.000%, 12/01/37
1,000 Scottsdale Industrial Development Authority, Arizona, Hospital 9/13 at 100.00 A3 803,660
Revenue Bonds, Scottsdale Healthcare, Series 2008A,
5.250%, 9/01/30
------------------------------------------------------------------------------------------------------------------------------------
34,900 Total Arizona 32,215,585
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.2%
2,000 Cabot School District 4, Lonoke County, Arkansas, General 2/09 at 100.00 Aa3 1,820,700
Obligation Refunding Bonds, Series 2003, 5.000%, 2/01/32 -
AMBAC Insured
2,000 University of Arkansas, Fayetteville, Various Facilities Revenue 12/12 at 100.00 Aa3 1,829,960
Bonds, Series 2002, 5.000%, 12/01/32 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
4,000 Total Arkansas 3,650,660
------------------------------------------------------------------------------------------------------------------------------------
14
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 11.7%
California Department of Water Resources, Power Supply Revenue
Bonds, Series 2002A:
$ 10,000 5.125%, 5/01/19 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa $10,831,100
10,000 5.250%, 5/01/20 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 10,872,400
7,310 California Educational Facilities Authority, Revenue Bonds, 10/09 at 39.19 Aaa 2,810,037
Loyola Marymount University, Series 2000, 0.000%, 10/01/24
(Pre-refunded 10/01/09) - MBIA Insured
California Health Facilities Financing Authority, Revenue Bonds,
Kaiser Permanante System, Series 2006:
5,000 5.000%, 4/01/37 - BHAC Insured 4/16 at 100.00 AAA 4,497,100
6,000 5.000%, 4/01/37 4/16 at 100.00 A+ 4,755,660
6,830 California Infrastructure Economic Development Bank, Revenue 10/11 at 101.00 A- 5,974,338
Bonds, J. David Gladstone Institutes, Series 2001,
5.250%, 10/01/34
1,500 California Pollution Control Financing Authority, Revenue Bonds, 6/17 at 100.00 A3 989,460
Pacific Gas and Electric Company, Series 2004C,
4.750%, 12/01/23 - FGIC Insured (Alternative Minimum Tax)
12,660 California Statewide Community Development Authority, 4/09 at 101.00 BBB 11,820,895
Certificates of Participation, Internext Group, Series 1999,
5.375%, 4/01/17
3,600 California Statewide Community Development Authority, 7/18 at 100.00 AA- 3,205,008
Revenue Bonds, St. Joseph Health System, Series 2007A,
5.750%, 7/01/47 - FGIC Insured
California, General Obligation Bonds, Series 2003:
14,600 5.250%, 2/01/28 8/13 at 100.00 A+ 14,001,254
11,250 5.000%, 2/01/33 8/13 at 100.00 A+ 10,152,788
4,000 California, General Obligation Bonds, Trust 2652,
0.751%, 6/01/37 (IF) 6/17 at 100.00 A+ 2,202,960
3,000 Capistrano Unified School District, Orange County, California, 9/09 at 102.00 N/R (4) 3,161,910
Special Tax Bonds, Community Facilities District 98-2 - Ladera,
Series 1999, 5.750%, 9/01/29 (Pre-refunded 9/01/09)
5,000 Coast Community College District, Orange County, California, 8/18 at 100.00 AAA 3,439,350
General Obligation Bonds, Series 2006C, 0.000%, 8/01/32 -
FSA Insured
30,000 Foothill/Eastern Transportation Corridor Agency, California, No Opt. Call AAA 14,989,200
Toll Road Revenue Bonds, Series 1995A, 0.000%, 1/01/22 (ETM)
21,150 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 22,348,992
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2003B, 5.000%, 6/01/38 (Pre-refunded 6/01/13) -
AMBAC Insured
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1:
5,000 5.000%, 6/01/33 6/17 at 100.00 BBB 3,117,800
1,500 5.125%, 6/01/47 6/17 at 100.00 BBB 885,750
3,540 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 3,999,952
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39 (Pre-refunded 6/01/13)
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 A 3,737,950
10,000 5.000%, 6/01/45 6/15 at 100.00 A 7,222,500
9,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AA 8,101,530
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- 2,907,000
California, Sublease Revenue Bonds, Los Angeles International
Airport, American Airlines Inc. Terminal 4 Project, Series 2002C,
7.500%, 12/01/24 (Alternative Minimum Tax)
Merced Union High School District, Merced County, California,
General Obligation Bonds, Series 1999A:
2,500 0.000%, 8/01/23 - FGIC Insured No Opt. Call AA 1,001,375
2,555 0.000%, 8/01/24 - FGIC Insured No Opt. Call AA 953,092
2,365 Montebello Unified School District, Los Angeles County, No Opt. Call AA 728,491
California, General Obligation Bonds, Series 2004,
0.000%, 8/01/27 - FGIC Insured
15
NUV
Nuveen Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 8,000 Rancho Mirage Joint Powers Financing Authority, California, 7/14 at 100.00 A3 (4) $ 8,916,560
Revenue Bonds, Eisenhower Medical Center, Series 2004,
5.625%, 7/01/34 (Pre-refunded 7/01/14)
15,155 Riverside Public Financing Authority, California, University 8/17 at 100.00 AA 12,397,245
Corridor Tax Allocation Bonds, Series 2007C, 5.000%, 8/01/37 -
MBIA Insured
San Bruno Park School District, San Mateo County, California,
General Obligation Bonds, Series 2000B:
2,575 0.000%, 8/01/24 - FGIC Insured No Opt. Call AA 1,002,525
2,660 0.000%, 8/01/25 - FGIC Insured No Opt. Call AA 967,522
7,300 San Diego County, California, Certificates of Participation, 9/09 at 101.00 N/R (4) 7,649,524
Burnham Institute, Series 1999, 6.250%, 9/01/29
(Pre-refunded 9/01/09)
14,605 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AA 2,462,403
County, California, Toll Road Revenue Refunding Bonds,
Series 1997A, 0.000%, 1/15/35 - MBIA Insured
5,000 San Jose, California, Airport Revenue Bonds, Series 2007A, 3/17 at 100.00 AA 4,140,400
6.000%, 3/01/47 - AMBAC Insured (Alternative Minimum Tax)
1,369 Yuba County Water Agency, California, Yuba River Development 3/09 at 100.00 Baa3 1,345,029
Revenue Bonds, Pacific Gas and Electric Company, Series 1966A,
4.000%, 3/01/16
------------------------------------------------------------------------------------------------------------------------------------
254,024 Total California 197,589,100
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 4.1%
5,000 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 BBB 3,817,200
Series 2006, 5.250%, 10/01/40 - SYNCORA GTY Insured
1,800 Colorado Educational and Cultural Facilities Authority, Charter 8/11 at 100.00 AAA 2,029,050
School Revenue Bonds, Peak-to-Peak Charter School, Series 2001,
7.625%, 8/15/31 (Pre-refunded 8/15/11)
5,000 Colorado Health Facilities Authority, Colorado, Revenue Bonds, 9/16 at 100.00 AA 3,685,200
Catholic Health Initiatives, Series 2006A, 4.500%, 9/01/38
2,100 Colorado Health Facilities Authority, Revenue Bonds, Catholic 3/12 at 100.00 AA (4) 2,111,886
Health Initiatives, Series 2002A, 5.500%, 3/01/32 (ETM)
750 Colorado Health Facilities Authority, Revenue Bonds, Longmont 12/16 at 100.00 BBB+ 610,433
United Hospital, Series 2006B, 5.000%, 12/01/23 - RAAI Insured
1,700 Colorado Health Facilities Authority, Revenue Bonds, Poudre 9/18 at 102.00 AAA 1,531,717
Valley Health System, Series 2005C, 5.250%, 3/01/40 -
FSA Insured
500 Colorado Health Facilities Authority, Revenue Bonds, Vail Valley 1/12 at 100.00 BBB+ 453,850
Medical Center, Series 2001, 5.750%, 1/15/22
18,915 Denver, Colorado, Airport System Revenue Refunding Bonds, 11/13 at 100.00 A+ 16,282,789
Series 2003B, 5.000%, 11/15/33 - SYNCORA GTY Insured
5,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 5,378,300
Series 2000A, 5.750%, 9/01/35 (Pre-refunded 9/01/10) -
MBIA Insured
E-470 Public Highway Authority, Colorado, Senior Revenue Bonds,
Series 2000B:
24,200 0.000%, 9/01/31 - MBIA Insured No Opt. Call AA 4,898,322
16,500 0.000%, 9/01/32 - MBIA Insured No Opt. Call AA 3,099,855
39,700 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 31.42 Aaa 11,827,027
Series 2000B, 0.000%, 9/01/28 (Pre-refunded 9/01/10) -
MBIA Insured
10,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, 9/20 at 41.72 AA 1,446,500
Series 2004B, 0.000%, 3/01/36 - MBIA Insured
5,000 Ebert Metropolitan District, Colorado, Limited Tax General 12/17 at 100.00 A3 3,709,650
Obligation Bonds, Series 2007, 5.350%, 12/01/37 - RAAI Insured
1,450 Northwest Parkway Public Highway Authority, Colorado, Revenue 6/11 at 102.00 AA (4) 1,560,519
Bonds, Senior Series 2001A, 5.500%, 6/15/19
(Pre-refunded 6/15/11) - AMBAC Insured
16
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 7,000 Northwest Parkway Public Highway Authority, Colorado, Revenue 6/16 at 100.00 AA (4) $ 6,623,540
Bonds, Senior Series 2001C, 0.000%, 6/15/21
(Pre-refunded 6/15/16) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
144,615 Total Colorado 69,065,838
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.4%
8,670 Mashantucket Western Pequot Tribe, Connecticut, Subordinate 11/17 at 100.00 Baa3 6,074,809
Special Revenue Bonds, Series 2007A, 5.750%, 9/01/34
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.5%
10,000 Washington Convention Center Authority, District of Columbia, 10/16 at 100.00 AA 8,044,300
Senior Lien Dedicated Tax Revenue Bonds, Series 2007A,
4.500%, 10/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.6%
4,000 Escambia County Health Facilities Authority, Florida, Revenue 11/12 at 101.00 Aa1 3,651,040
Bonds, Ascension Health Credit Group, Series 2002C,
5.750%, 11/15/32
10,000 Florida State Board of Education, Public Education Capital 6/15 at 101.00 AAA 8,146,500
Outlay Bonds, Series 2005E, 4.500%, 6/01/35 (UB)
1,750 Hillsborough County Industrial Development Authority, Florida, 10/16 at 100.00 A3 1,230,023
Hospital Revenue Bonds, Tampa General Hospital, Series 2006,
5.250%, 10/01/41
10,690 Jacksonville, Florida, Better Jacksonville Sales Tax Revenue 10/11 at 100.00 AA 9,797,171
Bonds, Series 2001, 5.000%, 10/01/30 - AMBAC Insured
3,000 JEA, Florida, Electric System Revenue Bonds, Series 2006-3A, 4/15 at 100.00 AAA 2,680,830
5.000%, 10/01/41 - FSA Insured
4,880 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 10/10 at 101.00 AAA 4,301,622
6.000%, 10/01/32 - FSA Insured (Alternative Minimum Tax)
5,000 Marion County Hospital District, Florida, Revenue Bonds, Munroe 10/17 at 100.00 A2 3,536,650
Regional Medical Center, Series 2007, 5.000%, 10/01/34
4,895 Orange County Health Facilities Authority, Florida, Hospital 10/09 at 101.00 A 4,578,979
Revenue Bonds, Orlando Regional Healthcare System,
Series 1999E, 6.000%, 10/01/26
105 Orange County Health Facilities Authority, Florida, Hospital 10/09 at 101.00 A (4) 110,018
Revenue Bonds, Orlando Regional Healthcare System,
Series 1999E, 6.000%, 10/01/26 (Pre-refunded 10/01/09)
8,250 Orange County School Board, Florida, Certificates of Participation, 8/12 at 100.00 AA 7,448,430
Series 2002A, 5.000%, 8/01/27 - MBIA Insured
9,250 Port Saint Lucie, Florida, Special Assessment Revenue Bonds, 7/17 at 100.00 AA 7,405,458
Southwest Annexation District 1B, Series 2007, 5.000%, 7/01/40 -
MBIA Insured
2,500 Seminole Tribe of Florida, Special Obligation Bonds, Series 2007A, 10/17 at 100.00 BBB 1,909,575
5.250%, 10/01/27
8,100 South Miami Health Facilities Authority, Florida, Revenue Bonds, 8/17 at 100.00 AA- 4,956,309
Baptist Health Systems of South Florida, Trust 1025,
7.368%, 8/15/42 (IF)
------------------------------------------------------------------------------------------------------------------------------------
72,420 Total Florida 59,752,605
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.0%
10,240 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5/09 at 101.00 A 8,551,219
Series 1999A, 5.000%, 11/01/38 - FGIC Insured
2,500 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5/12 at 100.00 AA 2,163,900
Series 2001A, 5.000%, 11/01/33 - MBIA Insured
4,000 Augusta, Georgia, Water and Sewerage Revenue Bonds, 10/14 at 100.00 AAA 3,927,800
Series 2004, 5.250%, 10/01/39 - FSA Insured
2,250 Royston Hospital Authority, Georgia, Revenue Anticipation 7/09 at 102.00 N/R 1,784,588
Certificates, Ty Cobb Healthcare System Inc., Series 1999,
6.500%, 7/01/27
------------------------------------------------------------------------------------------------------------------------------------
18,990 Total Georgia 16,427,507
------------------------------------------------------------------------------------------------------------------------------------
17
NUV
Nuveen Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.7%
$ 12,325 Honolulu City and County, Hawaii, General Obligation Bonds, 3/13 at 100.00 AA $12,089,346
Series 2003A, 5.250%, 3/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.6%
2,060 Aurora, Illinois, Golf Course Revenue Bonds, Series 2000, 1/10 at 100.00 AA 2,068,137
6.375%, 1/01/20
17,205 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AA 6,838,127
Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1,
0.000%, 12/01/24 - FGIC Insured
1,125 Chicago Greater Metropolitan Sanitary District, Illinois, No Opt. Call AAA 1,180,710
General Obligation Capital Improvement Bonds, Series 1991,
7.000%, 1/01/11 (ETM)
5,000 Chicago Housing Authority, Illinois, Revenue Bonds, Capital Fund 7/12 at 100.00 Aaa 5,386,650
Program, Series 2001, 5.375%, 7/01/18 (Pre-refunded 7/01/12)
285 Chicago, Illinois, General Obligation Bonds, Series 2002A, 7/12 at 100.00 AA 277,909
5.625%, 1/01/39 - AMBAC Insured
9,715 Chicago, Illinois, General Obligation Bonds, Series 2002A, 7/12 at 100.00 AA (4) 10,574,389
5.625%, 1/01/39 (Pre-refunded 7/01/12) - AMBAC Insured
2,575 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 AA 2,089,458
Revenue Bonds, O'Hare International Airport, Series 2001C,
5.100%, 1/01/26 - AMBAC Insured (Alternative Minimum Tax)
3,020 Cook County High School District 209, Proviso Township, Illinois, 12/16 at 100.00 AAA 3,069,045
General Obligation Bonds, Series 2004, 5.000%, 12/01/19 -
FSA Insured
385 DuPage County Community School District 200, Wheaton, Illinois, 11/13 at 100.00 Aaa 391,083
General Obligation Bonds, Series 2003B, 5.250%, 11/01/20 -
FSA Insured
1,615 DuPage County Community School District 200, Wheaton, Illinois, 11/13 at 100.00 Aaa 1,762,563
General Obligation Bonds, Series 2003B, 5.250%, 11/01/20
(Pre-refunded 11/01/13) - FSA Insured
5,000 Illinois Development Finance Authority, Gas Supply Revenue Bonds, 11/13 at 101.00 A1 4,769,450
Peoples Gas, Light and Coke Company, Series 2003E,
4.875%, 11/01/38 (Mandatory put 11/01/18) - AMBAC Insured
(Alternative Minimum Tax)
28,030 Illinois Development Finance Authority, Local Government Program No Opt. Call Aaa 15,986,911
Revenue Bonds, Kane, Cook and DuPage Counties School
District U46 - Elgin, Series 2002, 0.000%, 1/01/19 - FSA Insured
1,800 Illinois Development Finance Authority, Local Government Program No Opt. Call AAA 1,005,552
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, 12/12 at 100.00 BBB (4) 3,512,755
Chicago Charter School Foundation, Series 2002A,
6.250%, 12/01/32 (Pre-refunded 12/01/12)
1,450 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AA 1,262,617
Illinois Wesleyan University, Series 2001, 5.125%, 9/01/35 -
AMBAC Insured
6,550 Illinois Development Finance Authority, Revenue Bonds, Illinois 9/11 at 100.00 AA (4) 6,894,268
Wesleyan University, Series 2001, 5.125%, 9/01/35
(Pre-refunded 9/01/11) - AMBAC Insured
5,245 Illinois Finance Authority, Revenue Bonds, Loyola University of 7/17 at 100.00 AA 3,962,598
Chicago, Tender Option Bond Trust 1137, 7.720%, 7/01/46 (IF)
5,000 Illinois Finance Authority, Revenue Bonds, Northwestern Memorial 8/14 at 100.00 AA+ (4) 5,467,550
Hospital, Series 2004A, 5.500%, 8/15/43 (Pre-refunded 8/15/14)
3,975 Illinois Finance Authority, Revenue Bonds, Sherman Health Systems, 8/17 at 100.00 A- 2,750,064
Series 2007A, 5.500%, 8/01/37
15,000 Illinois Health Facilities Authority, Revenue Bonds, Condell Medical 5/10 at 101.00 Baa3 13,616,100
Center, Series 2000, 6.500%, 5/15/30
15,000 Illinois Health Facilities Authority, Revenue Bonds, Edward Hospital 2/11 at 101.00 AAA 15,970,050
Obligated Group, Series 2001B, 5.250%, 2/15/34
(Pre-refunded 2/15/11) - FSA Insured
8,145 Illinois Health Facilities Authority, Revenue Bonds, Sherman 2/09 at 100.50 AA 7,760,800
Health Systems, Series 1997, 5.250%, 8/01/22 - AMBAC Insured
4,350 Illinois Health Facilities Authority, Revenue Bonds, South Suburban No Opt. Call A (4) 5,008,590
Hospital, Series 1992, 7.000%, 2/15/18 (ETM)
18
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 5,000 Illinois Sports Facility Authority, State Tax Supported Bonds, 6/15 at 101.00 AA $ 4,206,250
Series 2001, 0.000%, 6/15/30 - AMBAC Insured
5,000 Lombard Public Facilities Corporation, Illinois, First Tier 1/16 at 100.00 BB- 3,406,500
Conference Center and Hotel Revenue Bonds, Series 2005A-2,
5.500%, 1/01/36 - ACA 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 AA 12,452,108
12,830 0.000%, 6/15/18 - FGIC Insured No Opt. Call AA 7,826,685
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 4,422,718
3,385 0.000%, 6/15/21 - MBIA Insured No Opt. Call AAA 1,689,927
5,190 0.000%, 6/15/28 - MBIA Insured No Opt. Call AAA 1,651,977
11,610 0.000%, 6/15/29 - FGIC Insured No Opt. Call AAA 3,465,121
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 6,213,000
21,375 0.000%, 6/15/34 - MBIA Insured No Opt. Call AAA 4,618,496
21,000 0.000%, 12/15/35 - MBIA Insured No Opt. Call AAA 4,126,500
21,070 0.000%, 6/15/36 - MBIA Insured No Opt. Call AAA 4,007,093
25,825 0.000%, 6/15/39 - MBIA Insured No Opt. Call AAA 4,040,838
8,460 5.250%, 6/15/42 - MBIA Insured 6/12 at 101.00 AAA 8,027,948
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project, Series 1996A:
16,700 0.000%, 12/15/21 - MBIA Insured No Opt. Call AA 8,111,023
1,650 5.250%, 6/15/27 - AMBAC Insured 12/08 at 100.00 AA 1,533,180
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 3,135,591
5,715 0.000%, 6/15/21 - MBIA Insured 6/17 at 101.00 AAA 4,720,304
1,000 Round Lake, Lake County, Illinois, Special Tax Bonds, Lakewood 3/17 at 100.00 AAA 824,480
Grove Special Service Area 4, Series 2007, 4.700%, 3/01/33 -
AGC Insured
760 Tri-City Regional Port District, Illinois, Port and Terminal Facilities No Opt. Call N/R 672,813
Revenue Refunding Bonds, Delivery Network Project, Series 2003A,
4.900%, 7/01/14 (Alternative Minimum Tax)
1,575 Will County Community School District 161, Summit Hill, Illinois, No Opt. Call N/R 924,273
Capital Appreciation School Bonds, Series 1999,
0.000%, 1/01/18 - FGIC Insured
720 Will County Community School District 161, Summit Hill, Illinois, No Opt. Call N/R (4) 461,146
Capital Appreciation School Bonds, Series 1999,
0.000%, 1/01/18 - FGIC Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
354,555 Total Illinois 212,143,347
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.9%
300 Anderson, Indiana, Economic Development Revenue Bonds, 4/14 at 100.00 N/R 214,017
Anderson University, Series 2007, 5.000%, 10/01/24
10,000 Indiana Bond Bank, State Revolving Fund Program Bonds, 2/13 at 101.00 AAA 10,361,800
Series 2001A, 5.375%, 2/01/19
2,000 Indiana Health Facility Financing Authority, Hospital Revenue 3/14 at 100.00 AA 1,764,880
Bonds, Deaconess Hospital Inc., Series 2004A, 5.375%, 3/01/34 -
AMBAC Insured
4,450 Indiana Municipal Power Agency, Power Supply Revenue Bonds, 1/17 at 100.00 AA 3,635,606
Series 2007A, 5.000%, 1/01/42 - MBIA Insured
Indianapolis Local Public Improvement Bond Bank, Indiana,
Series 1999E:
12,500 0.000%, 2/01/21 - AMBAC Insured No Opt. Call AA 6,190,125
14,595 0.000%, 2/01/27 - AMBAC Insured No Opt. Call AA 4,840,286
19
NUV
Nuveen Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 5,000 Mooresville School Building Corporation, Morgan County, Indiana, 1/09 at 102.00 AAA $ 5,119,300
First Mortgage Bonds, Series 1998, 5.000%, 7/15/15 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
48,845 Total Indiana 32,126,014
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.2%
7,345 Iowa Finance Authority, Single Family Mortgage Revenue Bonds, 7/16 at 100.00 AAA 5,111,312
Series 2007B, 4.800%, 1/01/37 (Alternative Minimum Tax)
3,500 Iowa Higher Education Loan Authority, Private College Facility 10/12 at 100.00 N/R (4) 3,796,030
Revenue Bonds, Wartburg College, Series 2002,
5.500%, 10/01/33 (Pre-refunded 10/01/12) - ACA Insured
7,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB 4,164,230
Revenue Bonds, Series 2005C, 5.625%, 6/01/46
6,160 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 AAA 6,520,114
Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35
(Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
24,005 Total Iowa 19,591,686
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.6%
10,000 Kansas Department of Transportation, Highway Revenue Bonds, 3/14 at 100.00 AAA 10,017,900
Series 2004A, 5.000%, 3/01/22
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.1%
1,125 Greater Kentucky Housing Assistance Corporation, FHA-Insured 1/09 at 100.00 AA 1,125,023
Section 8 Mortgage Revenue Refunding Bonds, Series 1997A,
6.100%, 1/01/24 - MBIA Insured
1,000 Kentucky Economic Development Finance Authority, Louisville 6/18 at 100.00 AAA 950,660
Arena Project Revenue Bonds, Louisville Arena Authority, Inc.,
Series 2008A-1, 6.000%, 12/01/38 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------------
2,125 Total Kentucky 2,075,683
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.3%
1,000 East Baton Rouge Parish, Louisiana, Revenue Refunding 3/09 at 101.00 B2 903,420
Bonds, Georgia Pacific Corporation Project, Series 1998,
5.350%, 9/01/11 (Alternative Minimum Tax)
12,000 Louisiana Local Government Environmental Facilities & 11/17 at 100.00 BB+ 9,128,880
Community Development Authority, Revenue Bonds, Westlake
Chemical Corporation Project, Series 2007, 6.750%, 11/01/32
5,150 Louisiana Public Facilities Authority, Hospital Revenue Bonds, 8/15 at 100.00 A+ 4,043,111
Franciscan Missionaries of Our Lady Health System,
Series 2005A, 5.250%, 8/15/32
8,405 Louisiana Public Facilities Authority, Hospital Revenue Refunding 11/08 at 100.00 AAA 9,227,934
Bonds, Southern Baptist Hospital, Series 1986,
8.000%, 5/15/12 (ETM)
21,255 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 15,206,677
Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
47,810 Total Louisiana 38,510,022
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.4%
3,500 Maryland Energy Financing Administration, Revenue Bonds, 3/09 at 100.00 N/R 2,997,330
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 A- 3,688,004
Revenue Bonds, MedStar Health, Series 2004, 5.500%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
8,100 Total Maryland 6,685,334
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.7%
10,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 10,690,900
Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/32
(Pre-refunded 7/01/12)
1,720 Massachusetts Development Finance Agency, Resource Recovery 12/08 at 102.00 BBB 1,588,334
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 BBB+ 3,027,020
Revenue Bonds, Cape Cod Health Care Inc., Series 2001C,
5.250%, 11/15/31 - RAAI Insured
20
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
$ 500 Massachusetts Health and Educational Facilities Authority, 7/18 at 100.00 A3 $ 339,440
Revenue Bonds, CareGroup Inc., Series 2008E-1,
5.125%, 7/01/38
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 1,063,759
1,000 6.375%, 7/01/34 7/14 at 100.00 BB 754,500
Massachusetts Turnpike Authority, Metropolitan Highway System
Revenue Bonds, Senior Series 1997A:
10,145 5.000%, 1/01/27 - MBIA Insured 1/09 at 100.00 AA 8,738,903
22,440 5.000%, 1/01/37 - MBIA Insured 1/09 at 100.00 AA 17,799,630
8,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/09 at 100.00 AA 6,481,120
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 AA 5,822,329
System Revenue Bonds, Subordinate Series 1999A,
5.000%, 1/01/39 - AMBAC Insured
1,750 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/10 at 101.00 AAA 1,846,355
Program Bonds, Series 2000-6, 5.500%, 8/01/30
(Pre-refunded 8/01/10)
4,250 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/10 at 101.00 AAA 4,273,248
Program Bonds, Series 2000-6, 5.500%, 8/01/30
------------------------------------------------------------------------------------------------------------------------------------
72,890 Total Massachusetts 62,425,538
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.0%
12,565 Detroit Local Development Finance Authority, Michigan, 5/09 at 101.00 BB- 7,927,761
Tax Increment Bonds, Series 1998A, 5.500%, 5/01/21
5,000 Detroit Water Supply System, Michigan, Water Supply System 7/16 at 100.00 AAA 4,060,750
Revenue Bonds, Series 2006D, 4.625%, 7/01/32 - FSA Insured
8,000 Detroit, Michigan, Second Lien Sewerage Disposal System 7/15 at 100.00 AA 6,837,920
Revenue Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured
5,240 Michigan Municipal Bond Authority, Clean Water Revolving Fund 10/12 at 100.00 AAA 5,385,724
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:
1,100 7.500%, 10/01/12 10/09 at 102.00 Ba1 1,102,453
5,000 7.900%, 10/01/21 10/09 at 102.00 Ba1 4,881,300
3,500 8.000%, 10/01/31 10/09 at 102.00 Ba1 3,304,175
22,235 Michigan State Hospital Finance Authority, Hospital Revenue 2/09 at 101.00 BB 14,778,937
Bonds, Detroit Medical Center Obligated Group, Series 1998A,
5.250%, 8/15/28
Michigan State Hospital Finance Authority, Revenue Refunding
Bonds, Detroit Medical Center Obligated Group, Series 1993A:
1,100 6.250%, 8/15/13 2/09 at 100.00 BB 1,053,437
12,925 6.500%, 8/15/18 2/09 at 100.00 BB 11,376,456
7,200 Michigan Strategic Fund, Limited Obligation Resource Recovery 12/12 at 100.00 Baa1 5,885,280
Revenue Refunding Bonds, Detroit Edison Company,
Series 2002D, 5.250%, 12/15/32 - SYNCORA GTY Insured
------------------------------------------------------------------------------------------------------------------------------------
83,865 Total Michigan 66,594,193
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.2%
1,750 Breckenridge, Minnesota, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 1,509,865
Initiatives, Series 2004A, 5.000%, 5/01/30
390 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/09 at 100.00 Aa1 390,920
Series 1995D, 5.900%, 8/01/15 - MBIA Insured
2,000 Saint Paul Housing and Redevelopment Authority, Minnesota, 11/16 at 100.00 Baa1 1,385,080
Health Care Facilities Revenue Bonds, HealthPartners Obligated
Group, Series 2006, 5.250%, 5/15/36
------------------------------------------------------------------------------------------------------------------------------------
4,140 Total Minnesota 3,285,865
------------------------------------------------------------------------------------------------------------------------------------
21
NUV
Nuveen Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.9%
$ 40,000 Missouri Health and Educational Facilities Authority, Revenue 5/13 at 100.00 Aa2 $36,760,800
Bonds, BJC Health System, Series 2003, 5.250%, 5/15/32 (UB)
6,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 5,361,600
Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink
Cross County Extension Project, Series 2002B, 5.000%,
10/01/32 - FSA Insured
4,000 Sugar Creek, Missouri, Industrial Development Revenue Bonds, 6/13 at 101.00 BBB 2,757,440
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:
1,440 5.500%, 11/15/12 11/08 at 100.50 B+ 1,325,189
1,000 5.600%, 11/15/17 11/08 at 100.50 B+ 823,190
3,075 West Plains Industrial Development Authority, Missouri, Hospital 11/09 at 101.00 B+ 2,554,556
Facilities Revenue Bonds, Ozark Medical Center, Series 1999,
6.750%, 11/15/24
------------------------------------------------------------------------------------------------------------------------------------
55,515 Total Missouri 49,582,775
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.2%
3,750 Forsyth, Rosebud County, Montana, Pollution Control Revenue 3/13 at 101.00 AA 3,118,613
Refunding Bonds, Puget Sound Energy, Series 2003A,
5.000%, 3/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.3%
5,000 Omaha Public Power District, Nebraska, Electric System Revenue 2/18 at 100.00 Aa1 4,849,100
Bonds, Series 2008A, 5.500%, 2/01/39 (WI/DD, Settling 11/14/08)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.6%
2,500 Carson City, Nevada, Hospital Revenue Bonds, Carson-Tahoe 9/13 at 100.00 BBB+ 1,898,125
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 AA 3,269,426
11,000 0.000%, 1/01/25 - AMBAC Insured No Opt. Call AA 2,153,910
4,000 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 AA 2,411,720
22,010 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AA 13,231,091
2,500 Reno, Nevada, Health Facility Revenue Bonds, Catholic 7/17 at 100.00 A 1,918,700
Healthcare West, Trust 2634, 0.777%, 7/01/31 (IF)
1,500 Sparks Tourism Improvement District 1, Legends at Sparks 6/18 at 100.00 Ba2 1,272,660
Marina, Nevada, Senior Sales Tax Revenue Bonds Series 2008A,
6.750%, 6/15/28
------------------------------------------------------------------------------------------------------------------------------------
58,605 Total Nevada 26,155,632
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 5.6%
23,625 New Jersey Economic Development Authority, Special Facilities 9/09 at 101.00 B 13,351,669
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 5,827,410
Revenue Bonds, Continental Airlines Inc., Series 2000,
7.000%, 11/15/30 (Alternative Minimum Tax)
4,740 New Jersey Health Care Facilities Financing Authority, Revenue 1/17 at 41.49 Baa2 567,094
Bonds, Saint Barnabas Health Care System, Series 2006A,
0.000%, 7/01/34
11,200 New Jersey Health Care Facilities Financing Authority, Revenue 7/10 at 101.00 BBB- (4) 12,214,496
Bonds, Trinitas Hospital Obligated Group, Series 2000,
7.500%, 7/01/30 (Pre-refunded 7/01/10)
7,500 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 8,228,625
System Bonds, Series 2003C, 5.500%, 6/15/24
(Pre-refunded 6/15/13)
New Jersey Transportation Trust Fund Authority, Transportation
System Bonds, Series 2006C:
30,000 0.000%, 12/15/31 - FGIC Insured No Opt. Call AA 7,502,100
27,000 0.000%, 12/15/32 - FSA Insured No Opt. Call AAA 6,405,480
310 New Jersey Turnpike Authority, Revenue Bonds, Series 1991C, No Opt. Call AA 352,272
6.500%, 1/01/16 - MBIA Insured
22
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (continued)
New Jersey Turnpike Authority, Revenue Bonds, Series 1991C:
$ 105 6.500%, 1/01/16 - MBIA Insured (ETM) No Opt. Call AA (4) $ 122,741
1,490 6.500%, 1/01/16 - MBIA Insured (ETM) No Opt. Call AA (4) 1,662,795
27,185 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 AAA 29,909,203
Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/42
(Pre-refunded 6/01/12)
7,165 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 AAA 8,048,874
Settlement Asset-Backed Bonds, Series 2003, 6.250%, 6/01/43
(Pre-refunded 6/01/13)
------------------------------------------------------------------------------------------------------------------------------------
149,320 Total New Jersey 94,192,759
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.6%
1,500 University of New Mexico, Revenue Refunding Bonds, No Opt. Call AA 1,622,715
Series 1992A, 6.000%, 6/01/21
9,600 University of New Mexico, Subordinate Lien Revenue Refunding 6/12 at 100.00 AA 8,850,624
and Improvement Bonds, Series 2002A, 5.000%, 6/01/32
------------------------------------------------------------------------------------------------------------------------------------
11,100 Total New Mexico 10,473,339
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 8.1%
8,500 Dormitory Authority of the State of New York, FHA-Insured 2/14 at 100.00 AAA 7,833,175
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:
245 5.250%, 2/15/29 (Pre-refunded 8/15/09) 8/09 at 101.00 A1 (4) 254,653
200 5.250%, 2/15/29 (Pre-refunded 8/15/09) 8/09 at 101.00 AA- (4) 207,832
65 5.250%, 2/15/29 (Pre-refunded 8/15/09) 8/09 at 101.00 AA- (4) 67,561
6,490 5.250%, 2/15/29 (Pre-refunded 8/15/09) 8/09 at 101.00 AA- (4) 6,745,706
5,200 Dormitory Authority of the State of New York, New York City, 5/10 at 101.00 AA- (4) 5,551,780
Lease Revenue Bonds, Court Facilities, Series 1999,
6.000%, 5/15/39 (Pre-refunded 5/15/10)
2,500 Dormitory Authority of the State of New York, Revenue Bonds, 1/09 at 100.00 A3 2,173,100
Mount Sinai NYU Health Obligated Group, Series 2000A,
5.500%, 7/01/26
2,625 Dormitory Authority of the State of New York, Revenue Bonds, 1/09 at 100.00 A3 2,276,899
Mount Sinai NYU Health, Series 2000C, 5.500%, 7/01/26
4,170 Dormitory Authority of the State of New York, State Personal 8/16 at 100.00 AA 2,194,921
Income Tax Revenue Bonds, Tender Option Bond Trust 2846,
8.115%, 2/15/35 (IF)
15,500 Long Island Power Authority, New York, Electric System General 9/11 at 100.00 AAA 16,636,615
Revenue Bonds, Series 2001A, 5.375%, 9/01/25
(Pre-refunded 9/01/11)
2,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 A- 1,792,700
Revenue Bonds, Series 2006B, 5.000%, 12/01/35
1,510 New York City Industrial Development Agency, New York, Civic 12/16 at 100.00 BB+ 973,693
Facility Revenue Bonds, Vaughn College of Aeronautics,
Series 2006B, 5.000%, 12/01/31
10,000 New York City Industrial Development Agency, New York, Special 8/12 at 101.00 B- 7,582,000
Facilities Revenue Bonds, JFK Airport - American Airlines Inc.,
Series 2002B, 8.500%, 8/01/28 (Alternative Minimum Tax)
2,750 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 2,259,950
Water and Sewerage System Revenue Bonds, Series 2008,
Trust 1199, 6.714%, 6/15/36 - FSA Insured (IF)
5 New York City, New York, General Obligation Bonds, 2/09 at 100.00 AA 5,013
Fiscal Series 1997E, 6.000%, 8/01/16
3,880 New York City, New York, General Obligation Bonds, 2/09 at 100.50 AA 3,907,742
Fiscal Series 1998D, 5.500%, 8/01/10
New York City, New York, General Obligation Bonds,
Fiscal Series 2003J:
1,450 5.500%, 6/01/21 6/13 at 100.00 AAA 1,461,006
385 5.500%, 6/01/22 6/13 at 100.00 AAA 387,395
New York City, New York, General Obligation Bonds,
Fiscal Series 2004C:
8,000 5.250%, 8/15/24 8/14 at 100.00 AA 7,856,240
6,000 5.250%, 8/15/25 8/14 at 100.00 AA 5,862,120
23
NUV
Nuveen Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
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- $10,112,100
11,190 5.500%, 6/01/18 6/12 at 100.00 AA- 11,287,017
28,810 5.500%, 6/01/19 6/13 at 100.00 AA- 29,028,666
2,500 Port Authority of New York and New Jersey, Special Project No Opt. Call AA 2,494,675
Bonds, JFK International Air Terminal LLC, Sixth Series 1997,
6.250%, 12/01/10 - MBIA Insured (Alternative Minimum Tax)
8,500 Power Authority of the State of New York, General Revenue 11/10 at 100.00 Aa2 8,110,105
Bonds, Series 2000A, 5.250%, 11/15/40
------------------------------------------------------------------------------------------------------------------------------------
142,475 Total New York 137,062,664
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.1%
1,500 Charlotte, North Carolina, Certificates of Participation, 6/13 at 100.00 AA+ 1,374,945
Governmental Facilities Projects, Series 2003G,
5.000%, 6/01/33
2,500 North Carolina Eastern Municipal Power Agency, Power System 1/13 at 100.00 BBB+ 2,115,225
Revenue Refunding Bonds, Series 2003D, 5.125%, 1/01/26
1,500 North Carolina Infrastructure Finance Corporation, Certificates 2/14 at 100.00 AA+ 1,510,005
of Participation, Correctional Facilities, Series 2004A,
5.000%, 2/01/20
2,000 North Carolina Medical Care Commission, Health System 10/17 at 100.00 AA 1,525,220
Revenue Bonds, Mission St. Joseph's Health System,
Series 2007, 4.500%, 10/01/31
10,000 North Carolina Municipal Power Agency 1, Catawba Electric 1/10 at 101.00 A2 10,157,900
Revenue Bonds, Series 1999B, 6.500%, 1/01/20
3,000 The Charlotte-Mecklenberg Hospital Authority, North Carolina, 1/18 at 100.00 AA- 2,422,260
Doing Business as Carolinas HealthCare System, Health Care
Refunding Revenue Bonds, Series 2008A, 5.000%, 1/15/47 -
AGC Insured
------------------------------------------------------------------------------------------------------------------------------------
20,500 Total North Carolina 19,105,555
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.0%
10,000 American Municipal Power Ohio Inc., General Revenue Bonds, 2/18 at 100.00 A1 8,916,300
Series 2008, 5.250%, 2/15/43
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-2:
520 5.125%, 6/01/24 6/17 at 100.00 BBB 407,576
5,350 5.875%, 6/01/30 6/17 at 100.00 BBB 3,750,404
15,165 5.750%, 6/01/34 6/17 at 100.00 BBB 10,099,890
11,785 5.875%, 6/01/47 6/17 at 100.00 BBB 7,372,814
5,150 Buckeye Tobacco Settlement Financing Authority, Ohio, 6/22 at 100.00 BBB 2,565,576
Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-3, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
47,970 Total Ohio 33,112,560
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.8%
9,955 Oklahoma Development Finance Authority, Revenue Bonds, 2/14 at 100.00 AA- 8,616,650
St. John Health System, Series 2004, 5.125%, 2/15/31
5,045 Oklahoma Development Finance Authority, Revenue Bonds, 2/14 at 100.00 AAA 5,442,496
St. John Health System, Series 2004, 5.125%, 2/15/31
(Pre-refunded 2/15/14)
------------------------------------------------------------------------------------------------------------------------------------
15,000 Total Oklahoma 14,059,146
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.3%
2,600 Clackamas County Hospital Facility Authority, Oregon, Revenue 5/11 at 101.00 A+ 2,446,990
Refunding Bonds, Legacy Health System, Series 2001,
5.250%, 5/01/21
2,860 Oregon State Facilities Authority, Revenue Bonds, Willamette 10/17 at 100.00 A 2,428,512
University, Series 2007A, 5.000%, 10/01/32
------------------------------------------------------------------------------------------------------------------------------------
5,460 Total Oregon 4,875,502
------------------------------------------------------------------------------------------------------------------------------------
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.1%
$ 10,300 Allegheny County Hospital Development Authority, Pennsylvania, 11/17 at 100.00 BB $ 5,925,075
Revenue Bonds, West Penn Allegheny Health System,
Series 2007A, 5.000%, 11/15/28
4,500 Pennsylvania Higher Educational Facilities Authority, 1/09 at 100.00 AA+ 4,242,645
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 AA 6,513,000
Series 2004A, 5.500%, 12/01/31 - AMBAC Insured
8,000 Philadelphia School District, Pennsylvania, General Obligation 6/14 at 100.00 Aa3 (4) 8,657,280
Bonds, Series 2004D, 5.125%, 6/01/34 (Pre-refunded 6/01/14) -
FGIC Insured
10,075 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 10,751,335
Revenue Bonds, Philadelphia School District, Series 2003,
5.000%, 6/01/33 (Pre-refunded 6/01/13) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
39,375 Total Pennsylvania 36,089,335
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 2.3%
8,340 Puerto Rico Aqueduct and Sewerage Authority, Revenue Bonds, 7/18 at 100.00 BBB- 7,465,551
Senior Lien Series 2008A, 6.000%, 7/01/44
13,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call BBB+ 10,790,910
Revenue Bonds, Series 2007N, 5.250%, 7/01/39 - FGIC Insured
5,450 Puerto Rico Industrial, Tourist, Educational, Medical and 6/10 at 101.00 Baa3 4,881,020
Environmental Control Facilities Financing Authority, Co-Generation
Facility Revenue Bonds, Series 2000A, 6.625%, 6/01/26
(Alternative Minimum Tax)
7,345 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 7,352,418
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
70,300 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue No Opt. Call AA 2,980,720
Bonds, Series 2007A, 0.000%, 8/01/54 - AMBAC Insured
5,000 Puerto Rico, General Obligation Bonds, Series 2000B, 7/10 at 100.00 AA 4,874,500
5.625%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
109,435 Total Puerto Rico 38,345,119
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.0%
6,250 Rhode Island Health and Educational Building Corporation, 11/08 at 101.00 AA 5,386,563
Hospital Financing Revenue Bonds, Lifespan Obligated Group,
Series 1996, 5.250%, 5/15/26 - MBIA Insured
16,070 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 11,735,760
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
22,320 Total Rhode Island 17,122,323
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.8%
7,000 Dorchester County School District 2, South Carolina, Installment 12/14 at 100.00 AA- 6,462,680
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 A+ 2,459,040
Fee Revenue Bonds, Series 2004A, 5.000%, 6/01/36 -
FGIC Insured
8,475 Piedmont Municipal Power Agency, South Carolina, Electric 1/09 at 100.00 Baa1 7,251,719
Revenue Refunding Bonds, Series 1986, 5.000%, 1/01/25
4,320 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A- (4) 4,721,587
Development Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.625%, 11/15/30 (Pre-refunded 11/15/12)
16,430 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A- 14,024,812
Development Revenue Bonds, Bon Secours Health System Inc.,
Series 2002B, 5.625%, 11/15/30
8,000 South Carolina JOBS Economic Development Authority, 12/10 at 102.00 Baa2 (4) 8,917,840
Hospital Revenue Bonds, Palmetto Health Alliance, Series 2000A,
7.375%, 12/15/21 (Pre-refunded 12/15/10)
4,215 Spartanburg Sanitary Sewer District, South Carolina, Sewer 3/14 at 100.00 AA 3,747,346
System Revenue Bonds, Series 2003B, 5.000%, 3/01/38 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
51,440 Total South Carolina 47,585,024
------------------------------------------------------------------------------------------------------------------------------------
25
NUV
Nuveen Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.8%
$ 10,300 Jackson, Tennessee, Hospital Revenue Refunding Bonds, 4/18 at 100.00 A+ $ 8,488,642
Jackson-Madison County General Hospital Project, Series 2008,
5.625%, 4/01/38
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 A1 2,658,930
2,605 6.500%, 4/15/31 4/12 at 101.00 A1 2,153,658
------------------------------------------------------------------------------------------------------------------------------------
15,905 Total Tennessee 13,301,230
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.7%
5,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/12 at 100.00 CCC+ 1,706,000
Bonds, American Airlines Inc., Series 2007, 5.250%, 12/01/29
(Alternative Minimum Tax)
2,000 Austin Convention Enterprises Inc., Texas, Convention Center 1/17 at 100.00 BB 1,389,820
Hotel Revenue Bonds, First Tier Series 2006B, 5.750%, 1/01/34
5,110 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Caa1 3,801,993
Refunding Bonds, TXU Electric Company, Series 1999C,
7.700%, 3/01/32 (Alternative Minimum Tax)
Central Texas Regional Mobility Authority, Travis and Williamson
Counties, Toll Road Revenue Bonds, Series 2005:
4,000 5.000%, 1/01/35 - FGIC Insured 1/15 at 100.00 AA 3,157,400
31,550 5.000%, 1/01/45 - FGIC Insured 1/15 at 100.00 AA 23,771,977
11,000 Harris County-Houston Sports Authority, Texas, Junior Lien No Opt. Call AA 2,951,850
Revenue Bonds, Series 2001H, 0.000%, 11/15/27 -
MBIA Insured
2,700 Harris County-Houston Sports Authority, Texas, Senior Lien 11/11 at 100.00 AA 2,330,100
Revenue Bonds, Series 2001G, 5.250%, 11/15/30 -
MBIA Insured
12,470 Harris County-Houston Sports Authority, Texas, Third Lien 11/24 at 59.10 AA 2,007,047
Revenue Bonds, Series 2004-A3.,0.000%, 11/15/33 -
MBIA Insured
23,875 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call AA 6,491,374
Bonds, Convention and Entertainment Project, Series 2001B,
0.000%, 9/01/29 - AMBAC Insured
10,045 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 9,928,378
Series 2000A, 5.875%, 7/01/16 - FSA Insured
(Alternative Minimum Tax)
Irving Independent School District, Texas, Unlimited Tax School
Building Bonds, Series 1997:
5,685 0.000%, 2/15/10 No Opt. Call AAA 5,470,960
3,470 0.000%, 2/15/11 No Opt. Call AAA 3,210,860
5,000 Kerrville Health Facilities Development Corporation, Texas, No Opt. Call BBB- 3,784,450
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 6,689,033
Counties, Texas, Unlimited Tax School Building and Refunding
Bonds, Series 2000, 0.000%, 8/15/27
30,000 North Texas Thruway Authority, First Tier System Revenue 1/25 at 100.00 AAA 17,538,900
Refunding Bonds, Capital Appreciation Series 2008I,
0.000%, 1/01/42 - AGC Insured
5,000 Port Corpus Christi Industrial Development Corporation, Texas, 4/09 at 101.00 BBB 4,093,350
Revenue Refunding Bonds, Valero Refining and Marketing
Company, Series 1997A, 5.400%, 4/01/18
5,000 Richardson Hospital Authority, Texas, Revenue Bonds, Richardson 12/13 at 100.00 Baa2 4,068,600
Regional Medical Center, Series 2004, 6.000%, 12/01/34
2,000 Sabine River Authority, Texas, Pollution Control Revenue 7/13 at 101.00 Caa1 1,320,120
Refunding Bonds, TXU Electric Company, Series 2003A,
5.800%, 7/01/22
3,000 San Antonio, Texas, Water System Revenue Bonds, 5/15 at 100.00 AA 2,489,160
Series 2005, 4.750%, 5/15/37 - MBIA Insured
11,585 Tarrant County Cultural & Educational Facilities Financing 2/17 at 100.00 Aa3 7,245,259
Corporation, Texas, Revenue Bonds, Series 2008, Trust 1201,
7.578%, 2/15/36 (IF)
------------------------------------------------------------------------------------------------------------------------------------
200,550 Total Texas 113,446,631
------------------------------------------------------------------------------------------------------------------------------------
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.5%
$ 3,260 Eagle Mountain, Utah, Gas and Electric Revenue Bonds, 6/15 at 100.00 A3 $ 2,726,077
Series 2005, 5.000%, 6/01/24 - RAAI Insured
1,070 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 101.50 AAA 862,805
Series 1998G-2, Class I, 5.200%, 7/01/30 (Alternative
Minimum Tax)
3,700 Utah State Board of Regents, Utah State University, Revenue 4/14 at 100.00 AA (4) 3,961,220
Bonds, Series 2004, 5.000%, 4/01/35 (Pre-refunded 4/01/14) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
8,030 Total Utah 7,550,102
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 0.1%
2,500 Virgin Islands Public Finance Authority, Revenue Bonds, 1/14 at 100.00 BBB 1,977,275
Refinery Project - Hovensa LLC, Series 2003, 6.125%, 7/01/22
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.4%
4,125 Metropolitan Washington D.C. Airports Authority, Virginia, 10/12 at 100.00 AA 4,086,060
Airport System Revenue Bonds, Series 2002A, 5.750%, 10/01/16 -
FGIC Insured (Alternative Minimum Tax)
3,245 Virginia Housing Development Authority, Multifamily Housing 1/09 at 101.00 AA+ 3,173,123
Bonds, Series 1997E, 5.600%, 11/01/17
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,370 Total Virginia 7,259,183
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.7%
6,400 Cowlitz County Public Utilities District 1, Washington, Electric 9/14 at 100.00 A- 5,475,008
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 13,212,875
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 AA- 4,169,840
Bonds, Nuclear Project 3, Series 2003A, 5.500%, 7/01/17 -
SYNCORA GTY Insured
8,200 Washington Public Power Supply System, Revenue Refunding No Opt. Call Aaa 6,372,302
Bonds, Nuclear Project 3, Series 1989B, 0.000%, 7/01/14
2,500 Washington State Health Care Facilities Authority, Revenue No Opt. Call N/R 1,781,300
Bonds, Northwest Hospital and Medical Center of Seattle,
Series 2007, 5.700%, 12/01/32
5,000 Washington State Healthcare Facilities Authority, Revenue 10/16 at 100.00 AA 3,839,450
Bonds, Providence Health Care Services, Series 2006A,
4.625%, 10/01/34 - FGIC Insured
7,930 Washington State Housing Finance Commission, Single Family 12/15 at 100.00 Aaa 5,869,310
Program Bonds, 2006 Series 3A, 5.000%, 12/01/37
(Alternative Minimum Tax)
18,105 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 14,827,090
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.625%, 6/01/32
Washington State, Motor Vehicle Fuel Tax General Obligation
Bonds, Series 2002-03C:
9,000 0.000%, 6/01/29 - MBIA Insured No Opt. Call AA+ 2,723,670
16,195 0.000%, 6/01/30 - MBIA Insured No Opt. Call AA+ 4,602,295
------------------------------------------------------------------------------------------------------------------------------------
89,830 Total Washington 62,873,140
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.0%
Badger Tobacco Asset Securitization Corporation, Wisconsin,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
6,940 6.125%, 6/01/27 6/12 at 100.00 BBB 6,611,599
14,100 6.375%, 6/01/32 6/12 at 100.00 BBB 12,762,897
6,000 Wisconsin Health and Educational Facilities Authority, Revenue 9/13 at 100.00 BBB+ (4) 6,671,100
Bonds, Franciscan Sisters of Christian Charity Healthcare
Ministry, Series 2003A, 5.875%, 9/01/33 (Pre-refunded 9/01/13)
1,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/16 at 100.00 BBB+ 909,000
Bonds, Marshfield Clinic, Series 2006A, 5.000%, 2/15/17
27
NUV
Nuveen Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 3,750 Wisconsin Health and Educational Facilities Authority, Revenue 2/12 at 101.00 AAA $ 4,099,538
Bonds, Wheaton Franciscan Services Inc., Series 2002,
5.750%, 8/15/30 (Pre-refunded 2/15/12)
3,235 Wisconsin Housing and Economic Development Authority, 9/14 at 100.00 AA 2,305,585
Home Ownership Revenue Bonds, Series 2005C,
4.875%, 3/01/36 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
35,025 Total Wisconsin 33,359,719
------------------------------------------------------------------------------------------------------------------------------------
$ 2,339,679 Total Long-Term Investments (cost $1,822,527,215) - 98.6% 1,660,235,122
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.6%
7,200 Chicago, Illinois, Industrial Development Revenue Bonds, A-1+ 7,200,000
Enterprise Center VII Project Revenue Bonds, Variable Rate
Demand Obligations, Series 1992n, 1.850%, 6/01/22 (5)
12,515 District of Columbia, Revenue Bonds, Hogar Hispano Inc. VMIG-1 12,515,000
Project, Variable Rate Demand Obligations, Series 2005,
1.500%, 3/01/30 (5)
7,500 Maryland Health and Higher Educational Facilities Authority, A-1+ 7,500,000
Pooled Loan Program Bonds, Variable Rate Demand Obligations,
Series 1994D, 1.450%, 1/01/29 (5)
------------------------------------------------------------------------------------------------------------------------------------
$ 27,215 Total Short-Term Investments (cost $27,215,000) 27,215,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,849,742,215) - 100.2% 1,687,450,122
--------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (1.7)% (28,870,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 25,837,560
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,684,417,682
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the rating on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA,
RAAI and SYNCORA as of October 31, 2008. Please see the
Portfolio Managers' Commentary for an expanded discussion of
the affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Investment has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
28
NMI
Nuveen Municipal Income Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.7%
$ 690 Phenix City Industrial Development Board, Alabama, Environmental 5/12 at 100.00 BBB $ 518,521
Improvement Revenue Bonds, MeadWestvaco Corporation,
Series 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 18.2%
5,530 Adelanto School District, San Bernardino County, California, No Opt. Call AA 2,703,783
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 AA 975,620
2,070 0.000%, 8/01/22 - FGIC Insured No Opt. Call AA 945,597
2,120 0.000%, 8/01/23 - FGIC Insured No Opt. Call AA 906,978
1,000 California Health Facilities Financing Authority, Revenue Bonds, 4/16 at 100.00 A+ 823,780
Kaiser Permanante System, Series 2006, 5.250%, 4/01/39
250 California Housing Finance Agency, California, Home Mortgage 2/17 at 100.00 Aa2 173,500
Revenue Bonds, Series 2007E, 4.800%, 8/01/37
(Alternative Minimum Tax)
3,000 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A 2,779,530
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 648,320
Revenue Bonds, Daughters of Charity Health System,
Series 2005A, 5.000%, 7/01/39
3,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 3,389,790
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39 (Pre-refunded 6/01/13)
500 Lake Elsinore Public Finance Authority, California, Local 10/13 at 102.00 N/R 424,590
Agency Revenue Refunding Bonds, Series 2003H,
6.375%, 10/01/33
------------------------------------------------------------------------------------------------------------------------------------
20,470 Total California 13,771,488
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.5%
780 Colorado Educational and Cultural Facilities Authority, Charter 7/12 at 100.00 BBB 681,369
School Revenue Bonds, Douglas County School District RE-1 -
DCS Montessori School, Series 2002A, 6.000%, 7/15/22
410 Colorado Educational and Cultural Facilities Authority, Charter 8/11 at 100.00 AAA 456,375
School Revenue Bonds, Peak-to-Peak Charter School,
Series 2001, 7.500%, 8/15/21 (Pre-refunded 8/15/11)
1,000 Colorado Educational and Cultural Facilities Authority, Charter 6/11 at 100.00 Ba1 (4) 1,107,360
School Revenue Bonds, Weld County School District 6 -
Frontier Academy, Series 2001, 7.375%, 6/01/31
(Pre-refunded 6/01/11)
1,000 Colorado Health Facilities Authority, Revenue Bonds, Evangelical 6/16 at 100.00 A- 715,450
Lutheran Good Samaritan Society, Series 2005, 5.000%, 6/01/35
2,000 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AA 1,972,420
Refunding Bonds, Series 2000A, 6.000%, 11/15/16 -
AMBAC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
5,190 Total Colorado 4,932,974
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 2.5%
1,480 Capitol Region Education Council, Connecticut, Revenue Bonds, 4/09 at 100.00 BBB 1,480,355
Series 1995, 6.750%, 10/15/15
450 Eastern Connecticut Resource Recovery Authority, Solid Waste 1/09 at 100.00 BBB 414,023
Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A,
5.500%, 1/01/14 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,930 Total Connecticut 1,894,378
------------------------------------------------------------------------------------------------------------------------------------
29
NMI
Nuveen Municipal Income Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.8%
$ 155 Dade County Industrial Development Authority, Florida, Revenue 12/08 at 100.50 N/R $ 135,898
Bonds, Miami Cerebral Palsy Residential Services Inc.,
Series 1995, 8.000%, 6/01/22
1,250 Martin County Industrial Development Authority, Florida, Industrial 12/08 at 100.00 BB+ 1,127,563
Development Revenue Bonds, Indiantown Cogeneration LP,
Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax)
600 Martin County Industrial Development Authority, Florida, 12/08 at 100.00 BB+ 541,878
Industrial Development Revenue Refunding Bonds, Indiantown
Cogeneration LP, Series 1995B, 8.050%, 12/15/25 (Alternative
Minimum Tax)
495 Tolomato Community Development District, Florida, Special 5/14 at 101.00 N/R 335,160
Assessment Bonds, Series 2006, 5.400%, 5/01/37
------------------------------------------------------------------------------------------------------------------------------------
2,500 Total Florida 2,140,499
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 7.9%
1,190 Chicago, Illinois, Tax Increment Allocation Bonds, Irving/Cicero 1/09 at 100.00 N/R 1,187,810
Redevelopment Project, Series 1998, 7.000%, 1/01/14
500 Illinois Development Finance Authority, Revenue Bonds, Chicago 12/12 at 100.00 BBB (4) 549,960
Charter School Foundation, Series 2002A, 6.125%, 12/01/22
(Pre-refunded 12/01/12)
2,200 Illinois Finance Authority, Revenue Bonds, Children's Memorial 8/18 at 100.00 AAA 1,782,000
Hospital, Tender Option Bond Trust 2008-1098, 7.708%, 8/15/33 -
AGC Insured (IF)
1,550 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa3 1,195,655
Medical Center, Series 2002, 5.500%, 5/15/32
1,305 North Chicago, Illinois, General Obligation Bonds, Series 2005B, 11/15 at 100.00 AA 1,225,304
5.000%, 11/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,745 Total Illinois 5,940,729
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.7%
2,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/12 at 101.00 Baa1 1,754,800
Bonds, Riverview Hospital, Series 2002, 6.125%, 8/01/31
1,150 Whitley County, Indiana, Solid Waste and Sewerage Disposal 11/10 at 102.00 N/R 1,038,002
Revenue Bonds, Steel Dynamics Inc., Series 1998,
7.250%, 11/01/18 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,150 Total Indiana 2,792,802
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.9%
500 Louisiana Local Government Environmental Facilities and 1/19 at 100.00 AAA 432,650
Community Development Authority, Revenue Refunding Bonds,
City of Shreveport Airport System Project, Series 2008A,
5.750%, 1/01/28 - FSA Insured
Louisiana Public Facilities Authority, Extended Care Facilities
Revenue Bonds, Comm-Care Corporation Project, Series 1994:
145 11.000%, 2/01/14 (ETM) No Opt. Call N/R (4) 174,403
1,295 11.000%, 2/01/14 (ETM) No Opt. Call N/R (4) 1,557,406
------------------------------------------------------------------------------------------------------------------------------------
1,940 Total Louisiana 2,164,459
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.1%
1,000 Maryland Energy Financing Administration, Revenue Bonds, 3/09 at 100.00 N/R 856,380
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.1%
420 Massachusetts Development Finance Agency, Resource Recovery 12/09 at 102.00 BBB 402,805
Revenue Bonds, Ogden Haverhill Associates, Series 1999A,
6.700%, 12/01/14 (Alternative Minimum Tax)
1,500 Massachusetts Development Finance Agency, Revenue Bonds, 1/17 at 100.00 N/R 949,140
Boston Architectural College, Series 2006, 5.000%, 1/01/37 -
ACA Insured
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
$ 270 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB $ 252,615
Revenue Refunding Bonds, Ogden Haverhill Project, Series 1998A,
5.450%, 12/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,190 Total Massachusetts 1,604,560
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.0%
1,000 Delta County Economic Development Corporation, Michigan, 4/12 at 100.00 AAA 1,102,400
Environmental Improvement Revenue Refunding Bonds,
MeadWestvaco Corporation - Escanaba Paper Company,
Series 2002B, 6.450%, 4/15/23 (Pre-refunded 4/15/12)
(Alternative Minimum Tax)
2,150 Michigan State Hospital Finance Authority, Hospital Revenue 1/09 at 100.00 BB 1,916,360
Refunding Bonds, Sinai Hospital, Series 1995, 6.625%, 1/01/16
------------------------------------------------------------------------------------------------------------------------------------
3,150 Total Michigan 3,018,760
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 4.3%
4,450 Missouri Environmental Improvement and Energy Resources 12/16 at 100.00 A 3,208,228
Authority, Water Facility Revenue Bonds, Missouri-American
Water Company, Series 2006, 4.600%, 12/01/36 - AMBAC
Insured (Alternative Minimum Tax) (UB)
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.3%
1,200 Montana Board of Investments, Exempt Facility Revenue Bonds, 7/10 at 101.00 BB- 990,612
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 926,050
Bonds, Cargill Inc., Series 2002, 5.900%, 11/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.2%
1,000 Dormitory Authority of the State of New York, Revenue Bonds, 7/13 at 100.00 A3 1,000,730
Brooklyn Law School, Series 2003A, 5.500%, 7/01/15 -
RAAI Insured
3,735 Yates County Industrial Development Agency, New York, 2/11 at 101.00 AAA 3,635,459
FHA-Insured Civic Facility Mortgage Revenue Bonds,
Soldiers and Sailors Memorial Hospital, Series 2000A,
6.000%, 2/01/41
------------------------------------------------------------------------------------------------------------------------------------
4,735 Total New York 4,636,189
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.9%
520 Buckeye Tobacco Settlement Financing Authority, Ohio, 6/17 at 100.00 BBB 325,317
Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-2, 5.875%, 6/01/47
1,000 Erie County, Ohio, Hospital Facilities Revenue Bonds, Firelands 8/16 at 100.00 A 739,840
Regional Medical Center Project, Series 2006, 5.250%, 8/15/46
2,200 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 1,886,654
Revenue Bonds, Bay Shore Power, Series 1998B,
6.625%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,720 Total Ohio 2,951,811
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.4%
1,080 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 1,231,556
Revenue Bonds, West Penn Allegheny Health System,
Series 2000B, 9.250%, 11/15/30 (Pre-refunded 11/15/10)
605 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 611,232
Resource Recovery Revenue Refunding Bonds, Panther Creek
Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,685 Total Pennsylvania 1,842,788
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.5%
500 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 365,145
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
31
NMI
Nuveen Municipal Income Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 6.7%
$ 2,500 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA $ 2,651,450
Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/13
475 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call Baa1 (4) 561,179
Revenue Bonds, Series 1991, 6.750%, 1/01/19 -
FGIC Insured (ETM)
1,105 South Carolina JOBS Economic Development Authority, 11/12 at 100.00 A- 943,239
Economic Development Revenue Bonds, Bon Secours Health
System Inc., Series 2002B, 5.625%, 11/15/30
895 Tobacco Settlement Revenue Management Authority, 5/12 at 100.00 BBB (4) 930,827
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22 (Pre-refunded 5/15/12)
------------------------------------------------------------------------------------------------------------------------------------
4,975 Total South Carolina 5,086,695
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 4.1%
1,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 A1 886,310
Tennessee, Hospital Revenue Bonds, Baptist Health System of
East Tennessee Inc., Series 2002, 6.375%, 4/15/22
Shelby County Health, Educational and Housing Facilities Board,
Tennessee, Hospital Revenue Bonds, Methodist Healthcare, Series
2002:
375 6.500%, 9/01/26 (Pre-refunded 9/01/12) 9/12 at 100.00 AAA 417,885
625 6.500%, 9/01/26 (Pre-refunded 9/01/12) 9/12 at 100.00 AAA 696,475
1,500 Sumner County Health, Educational, and Housing Facilities 11/17 at 100.00 N/R 1,112,520
Board, Tennessee, Revenue Refunding Bonds, Sumner Regional
Health System Inc., Series 2007, 5.500%, 11/01/37
------------------------------------------------------------------------------------------------------------------------------------
3,500 Total Tennessee 3,113,190
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 9.6%
1,500 Cameron Education Finance Corporation, Texas, Charter School 8/16 at 100.00 BBB- 984,150
Revenue Bonds, Faith Family Academy Charter School,
Series 2006A, 5.250%, 8/15/36 - ACA Insured
2,000 Gulf Coast Waste Disposal Authority, Texas, Sewerage and 4/12 at 100.00 BBB+ 1,623,960
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 AA 1,886,700
Revenue Refunding Bonds, Houston Light and Power Company,
Series 1995, 4.000%, 10/15/15 - MBIA Insured
1,000 North Texas Thruway Authority, Second Tier System Revenue 1/18 at 100.00 A3 473,668
Refunding Bonds, Tender Option Bond Trust 2903,
-3.640%, 1/01/38 (IF)
Weslaco Health Facilities Development Corporation, Texas,
Hospital Revenue Bonds, Knapp Medical Center, Series 2002:
2,000 6.250%, 6/01/25 6/12 at 100.00 BBB+ 1,859,580
50 6.250%, 6/01/32 6/12 at 100.00 BBB+ 44,335
1,000 West Texas Independent School District, McLennan and 8/13 at 51.84 AAA 373,680
Hill Counties, General Obligation Refunding Bonds,
Series 1998, 0.000%, 8/15/25
------------------------------------------------------------------------------------------------------------------------------------
9,550 Total Texas 7,246,073
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 2.9%
2,545 Virgin Islands Public Finance Authority, Senior Lien Matching 10/14 at 100.00 BBB 2,219,367
Fund Loan Note, Series 2004A, 5.250%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 3.2%
1,000 Chesterfield County Industrial Development Authority, Virginia, 11/10 at 102.00 Baa1 1,010,820
Pollution Control Revenue Bonds, Virginia Electric and Power
Company, Series 1987A, 5.875%, 6/01/17
1,500 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 1,371,675
Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,500 Total Virginia 2,382,495
------------------------------------------------------------------------------------------------------------------------------------
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 0.5%
$ 500 Washington State Health Care Facilities Authority, Revenue No Opt. Call N/R $ 356,260
Bonds, Northwest Hospital and Medical Center of Seattle,
Series 2007, 5.700%, 12/01/32
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 2.4%
2,050 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 1,764,476
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.2%
1,000 Wisconsin Health and Educational Facilities Authority, Revenue 10/11 at 100.00 BBB 932,820
Bonds, Carroll College Inc., Series 2001, 6.250%, 10/01/21
------------------------------------------------------------------------------------------------------------------------------------
$ 92,865 Total Investments (cost $85,654,796) - 102.8% 77,657,749
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (4.4)% (3,335,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 1,230,351
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $75,553,100
====================================================================================================================
FUTURES CONTRACTS OUTSTANDING AT OCTOBER 31, 2008:
UNREALIZED
CONTRACT NUMBER OF CONTRACT VALUE AT APPRECIATION
TYPE POSITION CONTRACTS EXPIRATION OCTOBER 31, 2008 (DEPRECIATION)
--------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bond Long 23 12/08 $2,601,875 $(100,144)
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA,
RAAI and SYNCORA as of October 31, 2008. Please see the
Portfolio Managers' Commentary for an expanded discussion of
the affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
33
Statement of
ASSETS & LIABILITIES
October 31, 2008
MUNICIPAL VALUE MUNICIPAL INCOME
(NUV) (NMI)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $1,849,742,215 and $85,654,796, respectively) $1,687,450,122 $77,657,749
Deposits with brokers for open futures contracts -- 103,500
Cash 1,931,943 30,207
Receivables:
Interest 28,293,871 1,425,693
Investments sold 8,056,445 65,000
Other assets 165,106 2,262
------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,725,897,487 79,284,411
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Floating rate obligations 28,870,000 3,335,000
Payables:
Investments purchased 4,786,850 --
Dividends 6,259,470 286,023
Variation margin on futures contracts -- 27,313
Accrued expenses:
Management fees 815,765 42,172
Other 747,720 40,803
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 41,479,805 3,731,311
------------------------------------------------------------------------------------------------------------------------------------
Net assets $1,684,417,682 $75,553,100
====================================================================================================================================
Shares outstanding 195,756,442 8,138,129
====================================================================================================================================
Net asset value per share outstanding $ 8.60 $ 9.28
====================================================================================================================================
NET ASSETS CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Shares, $.01 par value per share $ 1,957,564 $ 81,381
Paid-in surplus 1,845,367,936 91,081,441
Undistributed (Over-distribution of) net investment income 2,924,085 498,768
Accumulated net realized gain (loss) from investments and derivative transactions (3,539,810) (8,011,299)
Net unrealized appreciation (depreciation) of investments and derivative transactions (162,292,093) (8,097,191)
------------------------------------------------------------------------------------------------------------------------------------
Net assets $1,684,417,682 $75,553,100
====================================================================================================================================
Authorized shares 350,000,000 200,000,000
====================================================================================================================================
See accompanying notes to financial statements.
34
Statement of
OPERATIONS
Year Ended October 31, 2008
MUNICIPAL VALUE MUNICIPAL INCOME
(NUV) (NMI)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 104,296,047 $ 5,034,470
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 9,980,816 539,736
Shareholders' servicing agent fees and expenses 362,284 19,070
Interest expense on floating rate obligations 872,843 91,215
Custodian's fees and expenses 349,002 21,233
Directors' fees and expenses 36,427 1,793
Professional fees 96,289 11,551
Shareholders' reports - printing and mailing expenses 271,766 18,690
Stock exchange listing fees 67,688 9,302
Investor relations expense 289,314 14,264
Other expenses 37,146 5,413
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 12,363,575 732,267
Custodian fee credit (146,226) (13,214)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 12,217,349 719,053
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 92,078,698 4,315,417
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments (3,904,828) (120,921)
Futures -- 56,305
Change in net unrealized appreciation (depreciation) of:
Investments (287,804,822) (12,150,685)
Futures -- (100,144)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (291,709,650) (12,315,445)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $(199,630,952) $ (8,000,028)
====================================================================================================================================
See accompanying notes to financial statements.
35
Statement of
CHANGES in NET ASSETS
MUNICIPAL VALUE (NUV) MUNICIPAL INCOME (NMI)
------------------------------ -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/08 10/31/07 10/31/08 10/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 92,078,698 $ 90,627,363 $ 4,315,417 $ 4,235,549
Net realized gain (loss) from:
Investments (3,904,828) 5,254,534 (120,921) 194,438
Futures -- -- 56,305 --
Change in net unrealized appreciation (depreciation) of:
Investments (287,804,822) (51,494,937) (12,150,685) (2,487,916)
Futures -- -- (100,144) --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (199,630,952) 44,386,960 (8,000,028) 1,942,071
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (91,737,819) (91,397,947) (4,095,547) (4,153,499)
From accumulated net realized gains (5,519,843) (5,325,986) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (97,257,662) (96,723,933) (4,095,547) (4,153,499)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 6,771,749 907,357 224,555 30,572
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital
share transactions 6,771,749 907,357 224,555 30,572
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (290,116,865) (51,429,616) (11,871,020) (2,180,856)
Net assets at the beginning of year 1,974,534,547 2,025,964,163 87,424,120 89,604,976
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $1,684,417,682 $1,974,534,547 $75,553,100 $87,424,120
====================================================================================================================================
Undistributed (Over-distribution of) net
investment income at the end of year $ 2,924,085 $ 2,963,811 $ 498,768 $ 279,483
====================================================================================================================================
See accompanying notes to financial statements.
36
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
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) (collectively, the "Funds"). The Funds are registered under the
Investment Company Act of 1940, as amended, as closed-end, diversified
management investment companies.
Each Fund seeks to provide current income exempt from regular federal income tax
by investing primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities or certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors. When market
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service may establish fair value based on yields or
prices of municipal bonds of comparable quality, type of issue, coupon, maturity
and rating, indications of value from securities dealers, evaluations of
anticipated cash flows or collateral and general market conditions.
Futures contracts are valued using the closing settlement price, or in the
absence of such a price, at the mean of the bid and asked prices. If the pricing
service is unable to supply a price for an investment or derivative instrument,
each Fund may use market quotes provided by major broker/dealers in such
investments. If it is determined that the market price for an investment or
derivative instrument is unavailable or inappropriate, the Board of Directors of
the Funds, or its designee, may establish fair value in accordance with
procedures established in good faith by the Board of Directors. Temporary
investments in securities that have variable rate and demand features qualifying
them as short-term investments are valued at amortized cost, which approximates
value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At October 31, 2008,
Municipal Value (NUV) had outstanding when-issued/delayed delivery purchase
commitments of $4,786,850. There were no such outstanding purchase commitments
in Municipal Income (NMI).
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.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all of its net investment income and net
capital gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal income tax, to retain
such tax-exempt status when distributed to shareholders of the Funds. Net
realized capital gains and ordinary income distributions paid by the Funds are
subject to federal taxation.
Effective April 30, 2008, the Funds adopted Financial Accounting Standards Board
(FASB) Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN
48). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the affirmative evaluation of tax positions taken or expected to be
taken in the course of preparing the Funds' tax returns to determine whether it
is "more-likely-than-not" (i.e., a greater than 50-percent likelihood) of being
sustained by the applicable tax authority. Tax positions not deemed to meet the
more-likely-than-not threshold may result in a tax expense in the current year.
37
Notes to
FINANCIAL STATEMENTS (continued)
Implementation of FIN 48 required management of the Funds to analyze all open
tax years, as defined by the statute of limitations, for all major
jurisdictions, which includes federal and certain states. Open tax years are
those that are open for examination by taxing authorities (i.e., generally, the
last four tax year ends and the interim tax period since then). The Funds have
no examinations in progress.
For all open tax years and all major taxing jurisdictions through the end of the
reporting period, management of the Funds has reviewed all tax positions taken
or expected to be taken in the preparation of the Funds' tax returns and
concluded the adoption of FIN 48 resulted in no impact to the Funds' net assets
or results of operations as of and during the fiscal year ended October 31,
2008.
The Funds are also not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly
change in the next twelve months.
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 at least 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.
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An
inverse floating rate security is created by depositing a municipal bond,
typically with a fixed interest rate, into a special purpose trust created by a
broker-dealer. In turn, this trust (a) issues floating rate certificates, in
face amounts equal to some fraction of the deposited bond's par amount or market
value, that typically pay short-term tax-exempt interest rates to third parties,
and (b) issues to a long-term investor (such as one of the Funds) an inverse
floating rate certificate (sometimes referred to as an "inverse floater") that
represents all remaining or residual interest in the trust. The income received
by the inverse floater holder varies inversely with the short-term rate paid to
the floating rate certificates' holders, and in most circumstances the inverse
floater holder bears substantially all of the underlying bond's downside
investment risk and also benefits disproportionately from any potential
appreciation of the underlying bond's value. The price of an inverse floating
rate security will be more volatile than that of the underlying bond because the
interest rate is dependent on not only the fixed coupon rate of the underlying
bond but also on the short-term interest paid on the floating rate certificates,
and because the inverse floating rate security essentially bears the risk of
loss of the greater face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). The inverse floater held by a Fund gives the
Fund the right (a) to cause the holders of the floating rate certificates to
tender their notes at par, and (b) to have the broker transfer the fixed-rate
bond held by the trust to the Fund, thereby collapsing the trust. An investment
in an externally-deposited inverse floater is identified in the Portfolio of
Investments as an "Inverse floating rate investment". An investment in a
self-deposited inverse floater is accounted for as a financing transaction in
accordance with Statement of Financial Accounting Standards No. 140 (SFAS No.
140) "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities". In such instances, a fixed-rate bond deposited
into a special purpose trust is identified in the Portfolio of Investments as an
"Underlying bond of an inverse floating rate trust", with the Fund accounting
for the short-term floating rate certificates issued by the trust as "Floating
rate obligations" on the Statement of Assets and Liabilities. In addition, the
Fund reflects in Investment Income the entire earnings of the underlying bond
and the related interest paid to the holders of the short-term floating rate
certificates is included as a component of "Interest expense on floating rate
obligations" on the Statement of Operations.
38
Each Fund may also enter into shortfall and forbearance agreements (sometimes
referred to as a "recourse trust" or "credit recovery swap") (such agreements
referred to herein as "Recourse Trusts") with a broker-dealer by which a Fund
agrees to reimburse the broker-dealer, in certain circumstances, for the
difference between the liquidation value of the fixed-rate bond held by the
trust and the liquidation value of the floating rate certificates issued by the
trust plus any shortfalls in interest cash flows. Under these agreements, a
Fund's potential exposure to losses related to or on inverse floaters may
increase beyond the value of a Fund's inverse floater investments as a Fund may
potentially be liable to fulfill all amounts owed to holders of the floating
rate certificates. At period end, any such shortfall is included as "Unrealized
depreciation on Recourse Trusts" on the Statement of Assets and Liabilities.
During the fiscal year ended October 31, 2008, each Fund invested in externally
deposited inverse floaters and/or self deposited inverse floaters.
At October 31, 2008, each Fund's maximum exposure to externally-deposited
Recourse Trusts, if any, is as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Maximum exposure $19,500,000 $3,005,000
================================================================================
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended October 31, 2008, were as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Average floating rate obligations $31,948,716 $3,314,781
Average annual interest rate and fees 2.73% 2.75%
================================================================================
Futures Contracts
Each Fund is authorized to invest in futures contracts. Upon entering into a
futures contract, a Fund is required to deposit with the broker an amount of
cash or liquid securities equal to a specified percentage of the contract
amount. This is known as the "initial margin." Subsequent payments ("variation
margin") are made or received by a Fund each day, depending on the daily
fluctuation of the value of the contract.
During the period the futures contract is open, changes in the value of the
contract are recognized as an unrealized gain or loss by "marking-to-market" on
a daily basis to reflect the changes in market value of the contract. When the
contract is closed or expired, a Fund records a realized gain or loss equal to
the difference between the value of the contract on the closing date and value
of the contract when originally entered into. Cash held by the broker to cover
initial margin requirements on open futures contracts, if any, is recognized on
the Statement of Assets and Liabilities. Additionally, the Statement of Assets
and Liabilities reflects a receivable or payable for the variation margin, when
applicable. Municipal Income (NMI) was the only Fund to invest in futures
contracts during the fiscal year ended October 31, 2008.
Risks of investments in futures contracts include the possible adverse movement
of the securities or indices underlying the contracts, the possibility that
there may not be a liquid secondary market for the contracts and/or that a
change in the value of the contract may not correlate with a change in the value
of the underlying securities or indices.
Zero Coupon Securities
Each Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. Such securities are included in the Portfolios of Investments
with a 0.000% coupon rate in their description. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which a Fund overdraws its account at the custodian bank.
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.
39
Notes to
FINANCIAL STATEMENTS (continued)
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
On July 30, 2008, the Funds' Board of Directors approved a program under which
each Fund may repurchase an aggregate of up to approximately 10% of its
outstanding shares. The Funds did not repurchase any of their shares during the
fiscal year ended October 31, 2008.
Transactions in shares were as follows:
MUNICIPAL VALUE (NUV) MUNICIPAL INCOME (NMI)
--------------------- ----------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/08 10/31/07 10/31/08 10/31/07
------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
due to reinvestment of distributions 709,000 87,922 21,474 2,779
==================================================================================================================
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended October 31, 2008, were
as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Purchases $303,478,614 $7,391,720
Sales and maturities 357,238,678 7,102,495
================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing taxable market discount,
timing differences in recognizing certain gains and losses on investments
transactions and the treatment of investments in inverse floating rate
transactions subject to SFAS No. 140. To the extent that differences arise that
are permanent in nature, such amounts are reclassified within the capital
accounts on the Statement of Assets and Liabilities presented in the annual
report, based on their federal tax basis treatment; temporary differences do not
require reclassification. Temporary and permanent differences do not impact the
net asset values of the Funds.
At October 31, 2008, the cost of investments was as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Cost of investments $1,817,534,467 $82,210,356
================================================================================
40
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2008, were as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 51,874,360 $ 1,732,473
Depreciation (210,827,652) (9,622,893)
--------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments $(158,953,292) $(7,890,420)
================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at October 31, 2008, the Funds' tax year end,
were as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Undistributed net tax-exempt income * $6,114,417 $730,247
Undistributed net ordinary income ** 394,292 3,695
Undistributed net long-term capital gains -- --
================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 1, 2008, paid on November 3, 2008.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the Funds' tax years ended
October 31, 2008 and October 31, 2007, was designated for purposes of the
dividends paid deduction as follows:
MUNICIPAL MUNICIPAL
2008 VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Distributions from net tax-exempt income*** $91,392,283 $4,094,646
Distributions from net ordinary income ** 333,473 --
Distributions from net long-term capital gains**** 5,504,256 --
================================================================================
MUNICIPAL MUNICIPAL
2007 VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Distributions from net tax-exempt income $91,261,636 $4,090,431
Distributions from net ordinary income ** 132,881 62,951
Distributions from net long-term capital gains 5,325,986 --
================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds hereby designate these amounts paid during the fiscal year ended
October 31, 2008, as Exempt Interest Dividends.
**** The Funds designated as a long-term capital gain dividend, pursuant to the
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce
earnings and profits of the Funds related to net capital gain to zero for
the tax year ended October 31, 2008.
At October 31, 2008, the Funds' tax year end, the following Funds had unused
capital loss carryforwards available for federal income tax purposes to be
applied against future capital gains, if any. If not applied, the carryforwards
will expire as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Expiration:
October 31, 2011 $ -- $6,864,744
October 31, 2012 -- 916,759
October 31, 2013 -- 165,764
October 31, 2016 2,828,731 164,175
--------------------------------------------------------------------------------
Total $2,828,731 $8,111,442
================================================================================
41
Notes to
FINANCIAL STATEMENTS (continued)
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc. ("Nuveen"), a specific fund-level component, based only on the
amount of assets within each individual Fund, and for Municipal Value (NUV) a
gross interest income component. 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, 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 (excluding interest on bonds underlying
a "self-deposited inverse floater" trust that is attributed to the Fund over and
above the net interest earned on the inverse floater itself) 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
================================================================================
Municipal Income's (NMI) annual fund-level fee, payable monthly, at the rates
set forth below, 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 and Municipal Value's (NUV) gross interest income 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 following table. As of October 31, 2008,
the complex-level fee rate was .1998%.
42
The complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
(1) The complex-level component of the management fee for the Funds is
calculated based upon the aggregate daily net assets of all Nuveen Funds,
with such daily net assets to include assets attributable to preferred
stock issued by or borrowings by such Funds but to exclude assets
attributable to investments in other Nuveen Funds.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors who are affiliated with the
Adviser or to its 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.
6. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157 (SFAS No. 157)
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and requires additional disclosures about
fair value measurements. SFAS No. 157 applies to fair value measurements already
required or permitted by existing standards. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The changes to current generally
accepted accounting principles from the application of this standard relate to
the definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. As of October 31, 2008,
management does not believe the adoption of SFAS No. 157 will impact the
financial statement amounts; however, additional disclosures may be required
about the inputs used to develop the measurements and the effect of certain of
the measurements included within the Statement of Operations for the period.
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 161 (SFASNo. 161)
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." This standard is intended to enhance
financial statement disclosures for derivative instruments and hedging
activities and enable investors to understand: a) how and why a fund uses
derivative instruments, b) how derivative instruments and related hedge items
are accounted for, and c) how derivative instruments and related hedge items
affect a fund's financial position, results of operations and cash flows. SFAS
No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. As of October 31, 2008,
management does not believe the adoption of SFAS No. 161 will impact the
financial statement amounts; however, additional footnote disclosures may be
required about the use of derivative instruments and hedging items.
7. SUBSEQUENT EVENTS
Distributions to Shareholders
The Funds declared dividend distributions from their tax-exempt net investment
income which were paid on December 1, 2008, to shareholders of record on
November 15, 2008, as follows:
MUNICIPAL MUNICIPAL
VALUE (NUV) INCOME (NMI)
--------------------------------------------------------------------------------
Dividend per share $.0390 $.0420
================================================================================
43
Financial
HIGHLIGHTS
Selected data for a share outstanding throughout each period:
Investment Operations Less Distributions
------------------------------------ ------------------------------
Net Ending
Beginning Net Realized/ Net Net Ending
Net Asset Investment Unrealized Investment Capital Asset Market
Value Income Gain (Loss) Total Income Gains Total Value Value
====================================================================================================================================
MUNICIPAL VALUE (NUV)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $10.12 $.47 $(1.49) $(1.02) $(.47) $(.03) $(.50) $ 8.60 8.65
2007 10.39 .46 (.23) .23 (.47) (.03) (.50) 10.12 9.49
2006 10.15 .47 .26 .73 (.47) (.02) (.49) 10.39 10.16
2005 10.11 .47 .10 .57 (.47) (.06) (.53) 10.15 9.58
2004 9.92 .48 .26 .74 (.49) (.06) (.55) 10.11 9.36
MUNICIPAL INCOME (NMI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 10.77 .53 (1.52) (.99) (.50) -- (.50) 9.28 9.89
2007 11.04 .52 (.28) .24 (.51) -- (.51) 10.77 10.49
2006 10.86 .53 .16 .69 (.51) -- (.51) 11.04 10.50
2005 10.76 .54 .09 .63 (.53) -- (.53) 10.86 10.56
2004 10.41 .56 .32 .88 (.53) -- (.53) 10.76 10.08
====================================================================================================================================
Total Returns
---------------------
Based on
Based on Net
Market Asset
Value* Value*
==============================================
MUNICIPAL VALUE (NUV)
----------------------------------------------
Year Ended 10/31:
2008 (3.93)% (10.51)%
2007 (1.90) 2.22
2006 11.51 7.40
2005 8.25 5.73
2004 9.01 7.77
MUNICIPAL INCOME (NMI)
----------------------------------------------
Year Ended 10/31:
2008 (1.01) (9.53)
2007 4.78 2.23
2006 4.42 6.50
2005 10.21 5.93
2004 10.34 8.69
==============================================
Ratios/Supplemental Data
------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Before Credit/Refund After Credit/Refund**
--------------------------------------- -------------------------------------
Ending
Net Expenses Expenses Net Expenses Expenses Net Portfolio
Assets Including Excluding Investment Including Excluding Investment Turnover
(000) Interest(a) Interest(a) Income Interest(a) Interest(a) Income Rate
=================================================================================================================================
MUNICIPAL VALUE (NUV)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $1,684,418 .65% .61% 4.86% .65% .60% 4.87% 16%
2007 1,974,535 .62 .59 4.53 .61 .58 4.54 10
2006 2,025,964 .59 .59 4.60 .59 .59 4.61 6
2005 1,979,396 .60 .60 4.64 .60 .60 4.65 8
2004 1,971,925 .62 .62 4.83 .61 .61 4.84 13
MUNICIPAL INCOME (NMI)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 75,553 .86 .76 5.08 .85 .74 5.10 8
2007 87,424 .86 .75 4.76 .84 .73 4.79 6
2006 89,605 .76 .76 4.83 .73 .73 4.86 6
2005 88,147 .78 .78 4.99 .77 .77 5.00 7
2004 87,324 .82 .82 5.28 .81 .81 5.28 14
=================================================================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return Based 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. The last dividend
declared in the period, which is typically paid on the first business day
of the following month, is assumed to be reinvested at the ending net asset
value. The actual reinvest price for the last dividend declared in the
period may often be based on the Fund's market price (and not its net asset
value), and therefore may be different from the price used in the
calculation. Total returns are not annualized.
** After custodian fee credit and legal fee refund, where applicable.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
44-45 spread
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
(referred to herein as "independent board members") has ever been a director or
employee of, or consultant to, Nuveen or its affiliates. The names and business
addresses of the board members and officers of the Funds, their principal
occupations and other affiliations during the past five years, the number of
portfolios each oversees and other directorships they hold are set forth below.
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(1) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
INDEPENDENT BOARD MEMBERS:
[] ROBERT P. BREMNER Private Investor and Management Consultant.
8/22/40 Chairman of
333 W. Wacker Drive the Board 1997 186
Chicago, IL 60606 and Board member
[] JACK B. EVANS President, The Hall-Perrine Foundation, a
10/22/48 private philanthropic corporation (since
333 W. Wacker Drive Board member 1999 186 1996); Director and Vice Chairman, United
Chicago, IL 60606 Fire Group, a publicly held company; Member
of the Board of Regents for the State of
Iowa University System; Director, Gazette
Companies; Life Trustee of Coe College and
Iowa College Foundation; Member of the
Advisory Council of the Department of
Finance in the Tippie College of Business,
University of Iowa; formerly, Director,
Alliant Energy; formerly, Director, Federal
Reserve Bank of Chicago; formerly, President
and Chief Operating Officer, SCI Financial
Group, Inc., a regional financial services
firm.
[] WILLIAM C. HUNTER Dean, Tippie College of Business, University
3/6/48 of Iowa (since July 2006); formerly, Dean
333 W. Wacker Drive Board member 2004 186 and Distinguished Professor of Finance,
Chicago, IL 60606 School of Business at the University of
Connecticut (2003-2006); previously, Senior
Vice President and Director of Research at
the Federal Reserve Bank of Chicago
(1995-2003); Director (since 1997), Credit
Research Center at Georgetown University;
Director (since 2004) of Xerox Corporation;
Director (since 2005), Beta Gamma Sigma
International Honor Society; Director, SS&C
Technologies, Inc. (May 2005-October 2005).
[] DAVID J. KUNDERT Director, Northwestern Mutual Wealth
10/28/42 Management Company; Retired (since 2004) as
333 W. Wacker Drive Board member 2005 186 Chairman, JPMorgan Fleming Asset Management,
Chicago, IL 60606 President and CEO, Banc One Investment
Advisors Corporation, and President, One
Group Mutual Funds; prior thereto, Executive
Vice President, Banc One Corporation and
Chairman and CEO, Banc One Investment
Management Group; Member, Board of Regents,
Luther College; member of the Wisconsin Bar
Association; member of Board of Directors,
Friends of Boerner Botanical Gardens; member
of Investment Committee, Greater Milwaukee
Foundation.
[] WILLIAM J. SCHNEIDER Chairman, formerly, Senior Partner and Chief
9/24/44 Operating Officer (retired, 2004) of
333 W. Wacker Drive Board member 1997 186 Miller-Valentine Partners Ltd., a real
Chicago, IL 60606 estate investment company; Director, Dayton
Development Coalition; formerly, member,
Business Advisory Council, Cleveland Federal
Reserve Bank.
46
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(1) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
INDEPENDENT BOARD MEMBERS:
[] JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy
12/29/47 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board member 1997 186 thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
[] CAROLE E. STONE Director, Chicago Board Options Exchange
6/28/47 (since 2006); Commissioner, New York State
333 W. Wacker Drive Board member 2007 186 Commission on Public Authority Reform (since
Chicago, IL 60606 2005); formerly, Chair New York Racing
Association Oversight Board (2005-2007);
formerly, Director, New York State Division
of the Budget (2000-2004), Chair, Public
Authorities Control Board (2000-2004) and
Director, Local Government Assistance
Corporation (2000-2004).
[] TERENCE J. TOTH
9/29/59 Director, Legal & General Investment
333 W. Wacker Drive Board Member 2008 186 Management (since 2008); Private Investor
Chicago, IL 60606 (since 2007); CEO and President, Northern
Trust Investments (2004-2007); Executive
Vice President, Quantitative Management &
Securities Lending (2007-2004); prior
thereto, various positions with Northern
Trust Company (since 1994); Member: Goodman
Theatre Board (Since 2004); Chicago
Fellowship Boards (since 2005), University
of Illinois Leadership Council Board (since
2007) and Catalyst Schools of Chicago Board
(since 2008); formerly Member: Northern
Trust Mutual Funds Board (2005-2007),
Northern Trust Japan Board (2004-2007),
Northern Trust Securities Inc. Board
(2003-2007) and Northern Trust Hong Kong
Board (1997-2004).
INTERESTED BOARD MEMBER:
[] JOHN P. AMBOIAN(2)(3) Chief Executive Officer (since July 2007)
6/14/61 and Director (since 1999) of Nuveen
333 W. Wacker Drive Board Member 2008 186 Investments, Inc.; Chief Executive Officer
Chicago, IL 60606 (since 2007) of Nuveen Asset Management,
Rittenhouse Asset Management, Nuveen
Investments Advisors, Inc. formerly,
President (1999-2004) of Nuveen Advisory
Corp. and Nuveen Institutional Advisory
Corp.(3)
47
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUNDS:
[] GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant
9/9/56 Chief Secretary and Associate General Counsel of
333 W. Wacker Drive Administrative 1988 186 Nuveen Investments, LLC; Managing Director
Chicago, IL 60606 Officer (since 2002), Associate General Counsel and
Assistant Secretary, of Nuveen Asset
Management; Vice President and Assistant
Secretary of NWQ Investment Management
Company, LLC. (since 2002), Nuveen
Investments Advisers Inc. (since 2002),
Symphony Asset Management LLC, and NWQ
Investment Management Company, LLC (since
2003), Tradewinds Global Investors, LLC, and
Santa Barbara Asset Management, LLC (since
2006), Nuveen HydePark Group LLC and Nuveen
Investment Solutions, Inc. (since 2007);
Managing Director, Associate General Counsel
and Assistant Secretary of Rittenhouse Asset
Management, Inc. (since 2003); Managing
Director (since 2004) and Assistant
Secretary (since 1994) of Nuveen
Investments, Inc.; formerly, Managing
Director (2002-2004), General Counsel
(1998-2004) and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Chartered
Financial Analyst.
[] WILLIAM ADAMS IV Executive Vice President of Nuveen
6/9/55 Investments, Inc.; Executive Vice President,
333 W. Wacker Drive Vice President 2007 120 U.S. Structured Products of Nuveen
Chicago, IL 60606 Investments, LLC, (since 1999), prior
thereto, Managing Director of Structured
Investments.
[] CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004) previously,
1/11/62 Vice President (1993-2004) of Nuveen
333 W. Wacker Drive Vice President 2007 120 Investments, LLC.
Chicago, IL 60606
[] MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen
2/3/66 Vice President Investments, LLC.
333 W. Wacker Drive and Assistant 2000 186
Chicago, IL 60606 Secretary
[] LORNA C. FERGUSON Managing Director (since 2004), formerly,
10/24/45 Vice President of Nuveen Investments, LLC;
333 W. Wacker Drive Vice President 1998 186 Managing Director (since 2005) of Nuveen
Chicago, IL 60606 Asset Management; Managing Director
(2004-2005), formerly, Vice President
(1998-2004) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3)
[] STEPHEN D. FOY Vice President (since 1993) and Funds
5/31/54 Vice President Controller (since 1998) of Nuveen
333 W. Wacker Drive and Controller 1998 186 Investments, LLC; formerly, Vice President
Chicago, IL 60606 and Funds Controller (1998-2004) of Nuveen
Investments, Inc.; Certified Public
Accountant.
[] WALTER M. KELLY Senior Vice President (since 2008), Vice
2/24/70 Chief Compliance President (2006-2008) formerly, Assistant
333 W. Wacker Drive Officer and 2003 186 Vice President and Assistant General Counsel
Chicago, IL 60606 Vice President (2003-2006) of Nuveen Investments, LLC; Vice
President (since 2006) and Assistant
Secretary (since 2008) of Nuveen Asset
Management.
[] DAVID J. LAMB Vice President (since 2000) of Nuveen
3/22/63 Investments, LLC; Certified Public
333 W. Wacker Drive Vice President 2000 186 Accountant.
Chicago, IL 60606
48
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUNDS:
[] TINA M. LAZAR Vice President of Nuveen Investments, LLC
8/27/61 (since 1999).
333 W. Wacker Drive Vice President 2002 186
Chicago, IL 60606
[] LARRY W. MARTIN Vice President, Assistant Secretary and
7/27/51 Vice President Assistant General Counsel of Nuveen
333 W. Wacker Drive and Assistant 1988 186 Investments, LLC; Vice President (since
Chicago, IL 60606 Secretary 2005) and Assistant Secretary of Nuveen
Investments, Inc.; Vice President (since
2005) and Assistant Secretary (since 1997)
of Nuveen Asset Management; Vice President
(since 2000), Assistant Secretary and
Assistant General Counsel (since 1998) of
Rittenhouse Asset Management, Inc.; Vice
President and Assistant Secretary of Nuveen
Investments Advisers Inc. (since 2002); NWQ
Investment Management Company, LLC (since
2002), Symphony Asset Management LLC (since
2003), Tradewinds Global Investors, LLC,
Santa Barbara Asset Management LLC (since
2006) and of Nuveen HydePark LLC and Nuveen
Investment Solutions, Inc. (since 2007);
formerly, Vice President and Assistant
Secretary of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3)
[] KEVIN J. MCCARTHY Managing Director (since 2008), formerly,
3/26/66 Vice President Vice President (2007-2008), Nuveen
333 W. Wacker Drive and Secretary 2007 186 Investments, LLC; Vice President, and
Chicago, IL 60606 Assistant Secretary, Nuveen Asset
Management, Rittenhouse Asset Management,
Inc., Nuveen Investment Advisers Inc.,
Nuveen Investment Institutional Services
Group LLC, NWQ Investment Management
Company, LLC, Tradewinds Global Investors
LLC, NWQHoldings, LLC, Symphony Asset
Management LLC, Santa Barbara Asset
Management LLC, Nuveen HydePark Group, LLC
and Nuveen Investment Solutions, Inc. (since
2007); prior thereto, Partner, Bell, Boyd &
Lloyd LLP (1997-2007).
[] JOHN V. MILLER Managing Director (since 2007), formerly,
4/10/67 Vice President 2007 186 Vice President (2002-2007) of Nuveen Asset
333 W. Wacker Drive Management and Nuveen Investments, LLC;
Chicago, IL 60606 Chartered Financial Analyst.
[] CHRISTOPHER M. ROHRBACHER Vice President, Nuveen Investments, LLC
8/1/71 Vice President (since 2008); Vice President and Assistant
333 W. Wacker Drive and Assistant 2008 186 Secretary, Nuveen Asset Management (since
Chicago, IL 60606 Secretary 2008); prior thereto, Associate, Skadden,
Arps, Slate Meagher & Flom LLP (2002-2008).
[] JAMES F. RUANE Vice President, Nuveen Investments, LLC
7/3/62 Vice President (since 2007); prior thereto, Partner,
333 W. Wacker Drive and Assistant 2007 186 Deloitte & Touche USA LLP (2005-2007),
Chicago, IL 60606 Secretary formerly, senior tax manager (2002-2005);
Certified Public Accountant.
[] MARK L. WINGET Vice President, Nuveen Investments, LLC
12/21/68 Vice President (since 2008); Vice President and Assistant
333 W. Wacker Drive and Assistant 2008 186 Secretary, Nuveen Asset Management (since
Chicago, IL 60606 Secretary 2008); prior thereto, Counsel, Vedder Price
P.C. (1997-2007).
(1) Board Members serve three year terms. The Board of Trustees is divided into
three classes. Class I, Class II, and Class III, with each being elected to
serve until the third succeeding annual shareholders' meeting subsequent to
its election or thereafter in each case when its respective successors are
duly elected or appointed. The first year elected or appointed represents
the year in which the board member was first elected or appointed to any
fund in the Nuveen Complex.
(2) Mr. Amboian is an interested trustee because of his position with Nuveen
Investments, Inc. and certain of its subsidiaries, which are affiliates of
the Nuveen Funds.
(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.
49
Annual Investment
Management Agreement
APPROVAL PROCESS
The Investment Company Act of 1940, as amended (the "1940 Act"), provides, in
substance, that each investment advisory agreement between a fund and its
investment adviser will continue in effect from year to year only if its
continuance is approved at least annually by the fund's board members, including
by a vote of a majority of the board members who are not parties to the advisory
agreement or "interested persons" of any parties (the "Independent Board
Members"), cast in person at a meeting called for the purpose of considering
such approval. In connection with such approvals, the fund's board members must
request and evaluate, and the investment adviser is required to furnish, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. Accordingly, at a meeting held on May 28-29, 2008 (the "May
Meeting"), the Boards of Trustees or Directors (as the case may be)(each, a
"Board" and each Trustee or Director, a "Board Member") of the Funds, including
a majority of the Independent Board Members, considered and approved the
continuation of the advisory agreement (each, an "Advisory Agreement") between
each Fund and Nuveen Asset Management ("NAM") for an additional one-year period.
In preparation for their considerations at the May Meeting, the Board also held
a separate meeting on April 23, 2008 (the "April Meeting"). Accordingly, the
factors considered and determinations made regarding the renewals by the
Independent Board Members include those made at the April Meeting.
In addition, in evaluating the Advisory Agreements, as described in further
detail below, the Independent Board Members reviewed a broad range of
information relating to the Funds and NAM, including absolute performance, fee
and expense information for the Funds as well as comparative performance, fee
and expense information for a comparable peer group of funds, the performance
information of recognized benchmarks (as applicable), the profitability of
Nuveen for its advisory activities (which includes its wholly owned
subsidiaries), and other information regarding the organization, personnel, and
services provided by NAM. The Independent Board Members also met quarterly as
well as at other times as the need arose during the year and took into account
the information provided at such meetings and the knowledge gained therefrom.
Prior to approving the renewal of the Advisory Agreements, the Independent Board
Members reviewed the foregoing information with their independent legal counsel
and with management, reviewed materials from independent legal counsel
describing applicable law and their duties in reviewing advisory contracts, and
met with independent legal counsel in private sessions without management
present. The Independent Board Members considered the legal advice provided by
independent legal counsel and relied upon their knowledge of NAM, its services
and the Funds resulting from their meetings and other interactions throughout
the year and their own business judgment in determining the factors to be
considered in evaluating the Advisory Agreements. Each Board Member may have
accorded different weight to the various factors in reaching his or her
conclusions with respect to a Fund's Advisory Agreement. The Independent Board
Members did not identify any single factor as all-important or controlling. The
Independent Board Members' considerations were instead based on a comprehensive
consideration of all the information presented. The principal factors considered
by the Board and its conclusions are described below.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering renewal of the Advisory Agreements, the Independent Board Members
considered the nature, extent and quality of NAM's services, including advisory
services and administrative services. The Independent Board Members reviewed
materials outlining, among other things, NAM's organization and business; the
types of services that NAM or its affiliates provide and are expected to provide
to the Funds; the performance record of the applicable Fund (as described in
further detail below); and any initiatives Nuveen had taken for the applicable
fund product line. With respect to personnel, the Independent Board Members
evaluated the background, experience and track record of NAM's
50
investment personnel. In this regard, the Independent Board Members considered
the additional investment in personnel to support Nuveen fund advisory
activities, including in operations, product management and marketing as well as
related fund support functions, including sales, executive, finance, human
resources and information technology. The Independent Board Members also
reviewed information regarding portfolio manager compensation arrangements to
evaluate NAM's ability to attract and retain high quality investment personnel.
In evaluating the services of NAM, the Independent Board Members also considered
NAM's ability to supervise the Funds' other service providers and given the
importance of compliance, NAM's compliance program. Among other things, the
Independent Board Members considered the report of the chief compliance officer
regarding the Funds' compliance policies and procedures.
In addition to advisory services, the Independent Board Members considered the
quality of administrative services provided by NAM and its affiliates including
product management, fund administration, oversight of service providers,
shareholder services, administration of Board relations, regulatory and
portfolio compliance and legal support.
In addition to the foregoing services, the Independent Board Members also noted
the additional services that NAM or its affiliates provide to closed-end funds,
including, in particular, its secondary market support activities and the costs
of such activities. The Independent Board Members recognized Nuveen's continued
commitment to supporting the secondary market for the common shares of its
closed-end funds through a variety of programs designed to raise investor and
analyst awareness and understanding of closed-end funds. These efforts include
maintaining an investor relations program to timely provide information and
education to financial advisers and investors; providing advertising and
marketing for the closed-end funds; maintaining its closed-end fund website; and
providing educational seminars. With respect to closed-end funds that utilize
leverage through the issuance of auction rate preferred securities ("ARPS"), the
Board has recognized the unprecedented market conditions in the auction rate
market industry with the failure of the auction process. The Independent Board
Members noted Nuveen's efforts and the resources and personnel employed to
analyze the situation, explore potential alternatives and develop and implement
solutions that serve the interests of the affected funds and all of their
respective shareholders. The Independent Board Members further noted Nuveen's
commitment and efforts to keep investors and financial advisers informed as to
its progress in addressing the ARPS situation through, among other things,
conference calls, press releases, and information posted on its website as well
as its refinancing activities. The Independent Board Members also noted Nuveen's
continued support for holders of preferred shares of its closed-end funds by,
among other things, seeking distribution for preferred shares with new market
participants, managing relations with remarketing agents and the broker
community, maintaining the leverage and risk management of leverage and
maintaining systems necessary to test compliance with rating agency criteria.
Based on their review, the Independent Board Members found that, overall, the
nature, extent and quality of services provided (and expected to be provided) to
the respective Funds under the Advisory Agreements were satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
The Board considered the investment performance of each Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives (the "Performance Peer Group") based on data
provided by an independent third party (as described below). The Independent
Board Members also reviewed portfolio level performance (which does not reflect
fund level fees, expenses and leverage), as described in further detail below.
In evaluating the performance information, the Board considered whether the Fund
has operated within its investment objectives and parameters and the impact that
the investment mandates may have had on performance. In addition, in comparing a
Fund's performance with that of its Performance Peer Group, the Independent
Board Members took into account that the closest Performance Peer Group in
certain
51
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
instances may not adequately reflect the respective fund's investment objectives
and strategies thereby hindering a meaningful comparison of the fund's
performance with that of the Performance Peer Group.
The Independent Board Members reviewed performance information including, among
other things, total return information compared with the Fund's Performance Peer
Group and recognized benchmarks for the one-, three-, and five-year periods (as
applicable) ending December 31, 2007 and with the Performance Peer Group for the
quarter and same yearly periods ending March 31, 2008 (as applicable). The
Independent Board Members also reviewed the Fund's portfolio level performance
(which does not reflect fund level fees and expenses (and leverage for
closed-end funds)) compared to recognized benchmarks for the one-, three-, and
five-year periods ending December 31, 2007 (as applicable). The analysis was
used to assess the efficacy of investment decisions against appropriate measures
of risk and total return, within specific market segments. This information
supplemented the Fund performance information provided to the Board at each of
its quarterly meetings. Based on their review, the Independent Board Members
determined that each Fund's investment performance over time had been
satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
The Board evaluated the management fees and expenses of each Fund
reviewing, among other things, such Fund's gross management fees (which
take into account breakpoints), net management fees (which take into
account fee waivers or reimbursements) and total expense ratios (before and
after expense reimbursements and/or waivers) in absolute terms as well as
compared to the gross management fees, net management fees (after waivers
and/or reimbursements) and total expense ratios (before and after waivers)
of a comparable universe of unaffiliated funds based on data provided by an
independent data provider (the "Peer Universe") and/or a more focused
subset of funds therein (the "Peer Group"). The Independent Board Members
further reviewed data regarding the construction of Peer Groups as well as
the methods of measurement for the fee and expense analysis and the
performance analysis. In reviewing the comparisons of fee and expense
information, the Independent Board Members took into account that in
certain instances various factors such as the size of the Fund relative to
peers, the size and particular composition of the Peer Group, the
investment objectives of the peers, expense anomalies, and the timing of
information used may impact the comparative data, thereby limiting the
ability to make a meaningful comparison. The Independent Board Members also
considered, among other things, the differences in the use of leverage and
the differences in the use of insurance, if any. In reviewing the fee
schedule for a Fund, the Independent Board Members also considered the
fund-level and complex-wide breakpoint schedules (described in further
detail below) and any fee waivers and reimbursements provided by Nuveen
(applicable, in particular, for certain closed-end funds launched since
1999). Based on their review of the fee and expense information provided,
the Independent Board Members determined that each Fund's management fees
and net total expense ratio were reasonable in light of the nature, extent
and quality of services provided to the Fund.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Independent Board Members further reviewed information regarding the
nature of services and fee rates offered by NAM to other clients. Such
other clients include NAM's municipal separately managed accounts. In
evaluating the comparisons of fees, the Independent Board Members noted
that the fee rates charged to the Funds and other clients vary, among other
things, because of the different services involved and the additional
regulatory and compliance requirements associated with registered
investment companies, such as the Funds. Accordingly, the Independent Board
Members considered the differences in the product types, including, but not
limited to, the services provided, the structure and operations, product
distribution and costs thereof, portfolio investment policies, investor
profiles, account sizes and regulatory requirements. The Independent Board
Members noted, in particular, that
52
the range of services provided to the Funds (as discussed above) is much
more extensive than that provided to separately managed accounts. Given the
inherent differences in the products, particularly the extensive services
provided to the Funds, the Independent Board Members believe such facts
justify the different levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the Independent Board Members also
considered the profitability of Nuveen for its advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers) and its
financial condition. The Independent Board Members reviewed the revenues
and expenses of Nuveen's advisory activities for the last two years and the
allocation methodology used in preparing the profitability data. The
Independent Board Members noted this information supplemented the
profitability information requested and received during the year to help
keep them apprised of developments affecting profitability (such as changes
in fee waivers and expense reimbursement commitments). In this regard, the
Independent Board Members noted that they had also appointed an Independent
Board Member as a point person to review and keep them apprised of changes
to the profitability analysis and/or methodologies during the year. The
Independent Board Members considered Nuveen's profitability compared with
other fund sponsors prepared by two independent third party service
providers as well as comparisons of the revenues, expenses and profit
margins of various unaffiliated management firms with similar amounts of
assets under management prepared by Nuveen.
In reviewing profitability, the Independent Board Members recognized the
subjective nature of determining profitability which may be affected by
numerous factors including the allocation of expenses. Further, the
Independent Board Members recognized the difficulties in making comparisons
as the profitability of other advisers generally is not publicly available
and the profitability information that is available for certain advisers or
management firms may not be representative of the industry and may be
affected by, among other things, the adviser's particular business mix,
capital costs, types of funds managed and expense allocations.
Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen's
methodology and assumptions for allocating expenses across product lines to
determine profitability. In reviewing profitability, the Independent Board
Members recognized Nuveeninvestment in its fund business.
Based on its review, the Independent Board Members concluded that Nuveen's level
of profitability for its advisory activities was reasonable in light of the
services provided.
In evaluating the reasonableness of the compensation, the Independent Board
Members also considered other amounts paid to NAM by the Funds as well as any
indirect benefits (such as soft dollar arrangements, if any) NAM and its
affiliates receive, or are expected to receive, that are directly attributable
to the management of the Funds, if any. See Section E below for additional
information on indirect benefits NAM may receive as a result of its relationship
with the Funds. Based on their review of the overall fee arrangements of each
Fund, the Independent Board Members 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
With respect to economies of scale, the Independent Board Members recognized the
potential benefits resulting from the costs of a fund being spread over a larger
asset base. The Independent Board Members therefore considered whether the Funds
have appropriately benefited from any economies of scale and whether there is
potential realization of any further economies of scale. In considering
economies of scale, the Independent Board Members have recognized that economies
of scale are difficult to measure and predict with precision, particularly on a
fund-by-fund basis. Notwithstanding the foregoing, one method to help ensure the
shareholders share in these benefits is to include breakpoints in the advisory
fee schedule. Accordingly, the Independent Board Members reviewed and considered
the fund-level breakpoints in the
53
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
advisory fee schedules that reduce advisory fees. In this regard, given that the
Funds are closed-end funds, the Independent Board Members recognized that
although the Funds may from time to time make additional share offerings, the
growth in their assets will occur primarily through appreciation of each Fund's
investment portfolio.
In addition to fund-level advisory fee breakpoints, the Board also considered
the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee
arrangement, the fees of the funds in the Nuveen complex, including the Funds,
are reduced as the assets in the fund complex reach certain levels. In
evaluating the complex-wide fee arrangement, the Independent Board Members
recognized that the complex-wide fee schedule was recently revised in 2007 to
provide for additional fee savings to shareholders and considered the amended
schedule. The Independent Board Members further considered that the complex-wide
fee arrangement seeks to provide the benefits of economies of scale to fund
shareholders when total fund complex assets increase, even if assets of a
particular fund are unchanged or have decreased. The approach reflects the
notion that some of Nuveen's costs are attributable to services provided to all
its funds in the complex and therefore all funds benefit if these costs are
spread over a larger asset base. Based on their review, the Independent Board
Members concluded that the breakpoint schedule and complex-wide fee arrangement
were acceptable and desirable in providing benefits from economies of scale to
shareholders.
E. INDIRECT BENEFITS
In evaluating fees, the Independent Board Members received and considered
information regarding potential "fall out" or ancillary benefits NAM or its
affiliates may receive as a result of its relationship with each Fund. In this
regard, the Independent Board Members considered revenues received by affiliates
of NAM for serving as agent at Nuveen's preferred trading desk and for serving
as a co-manager in the initial public offering of new closed-end exchange traded
funds.
In addition to the above, the Independent Board Members considered whether NAM
received any benefits from soft dollar arrangements whereby a portion of the
commissions paid by a Fund for brokerage may be used to acquire research that
may be useful to NAM in managing the assets of the Funds and other clients. The
Independent Board Members noted that NAM does not currently have any soft dollar
arrangements; however, to the extent certain bona fide agency transactions that
occur on markets that traditionally trade on a principal basis and riskless
principal transactions are considered as generating "commissions," NAM intends
to comply with the applicable safe harbor provisions.
Based on their review, the Independent Board Members concluded that any indirect
benefits received by NAM as a result of its relationship with the Funds were
reasonable and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Independent Board Members did not identify any single factor discussed
previously as all-important or controlling. The Board Members, including the
Independent Board Members, unanimously concluded that the terms of the Advisory
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the Advisory Agreements be renewed.
54
Reinvest Automatically
EASILY and CONVENIENTLY
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price per share may exceed
the market price at the time of valuation, resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the Fund. A pro rata portion of any applicable brokerage commissions on open
market purchases will be paid by Plan participants. These commissions usually
will be lower than those charged on individual transactions.
55
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.
56
NOTES
57
Glossary of
TERMS USED in this REPORT
[] AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed", with current holders receiving a
formula-based interest rate until the next scheduled auction.
[] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period.
It expresses the return that would have been necessary each year to equal
the investment's actual cumulative performance (including change in NAV or
market price and reinvested dividends and capital gains distributions, if
any) over the time period being considered.
[] AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments or
the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. The market value weighting
for an investment in an inverse floating rate security is the value of the
portfolio's residual interest in the inverse floating rate trust, and does
not include the value of the floating rate securities issued by the trust.
[] INVERSE FLOATERS: Inverse floating rate securities are created by
depositing a municipal bond, typically with a fixed interest rate, into a
special purpose trust created by a broker-dealer. This trust, in turn, (a)
issues floating rate certificates typically paying short-term tax-exempt
interest rates to third parties in amounts equal to some fraction of the
deposited bond's par amount or market value, and (b) issues an inverse
floating rate certificate (sometimes referred to as an "inverse floater")
to an investor (such as a Fund) interested in gaining investment exposure
to a long-term municipal bond. The income received by the holder of the
inverse floater varies inversely with the short-term rate paid to the
floating rate certificates' holders, and in most circumstances the holder
of the inverse floater bears substantially all of the underlying bond's
downside investment risk. The holder of the inverse floater typically also
benefits disproportionately from any potential appreciation of the
underlying bond's value. Hence, an inverse floater essentially represents
an investment in the underlying bond on a leveraged basis.
[] 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 NAV per share is calculated by subtracting
the liabilities of the Fund from its total assets and then dividing the
remainder by the number of shares outstanding. Fund NAVs are calculated at
the end of each business day.
[] TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
[] ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon
to its holders during the life of the bond. Tax-exempt income to the holder
of the bond comes from accretion of the difference between the original
purchase price of the bond at issuance and the par value of the bond at
maturity and is effectively paid at maturity. The market prices of zero
coupon bonds generally are more volatile than the market prices of bonds
that pay interest periodically.
58
Other Useful INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) each Fund's quarterly portfolio of investments, (ii)
information regarding how the Funds voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2008, and (iii) a
description of the policies and procedures that the Funds used to determine how
to vote proxies relating to portfolio securities 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 (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 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
(NYSE) 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.
BOARD OF DIRECTORS
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. No shares were
repurchased during the period covered by this report. Any future repurchases
will be reported to shareholders in the next annual or semi-annual report.
59
Nuveen Investments:
-------------------
SERVING INVESTORS FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
We offer many different investing solutions for our clients' different needs.
Nuveen Investments is a global investment management firm that seeks to help
secure the long-term goals of institutions and high net worth investors as well
as the consultants and financial advisors who serve them. Nuveen Investments
markets its growing range of specialized investment solutions under the
high-quality brands of HydePark, NWQ, Nuveen, Rittenhouse, Santa Barbara,
Symphony and Tradewinds. In total, the Company managed $134 billion of assets on
September 30, 2008.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/etf
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
EAN-A-1008D
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 Shareholder 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, 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 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
TABLE A
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND
-------------------------------------------------------------------------------------------------------------------------------
October 31, 2008 $ 9,826 $ 0 $ 0 $ 0
-------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------------------------
October 31, 2007 $ 8,701 $ 0 $ 500 $ 0
-------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
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, 2008 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------
October 31, 2007 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
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, 2008 $ 0 $ 0 $ 0 $ 0
October 31, 2007 $ 500 $ 0 $ 0 $ 500
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Jack B. Evans, Terence J.
Toth, William J. Schneider and David J. Kundert.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board of Trustees on its
control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board of Trustees or its representative. A member of NAM's
legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed
with the SEC on Form N-PX, and the results provided to the registrant's Board of
Trustees and made available to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGERS
The following individuals have primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
JOHN V. MILLER Nuveen Municipal Income Fund, Inc.
JOHNATHAN WILHELM Nuveen Municipal Income Fund, Inc.
Other Accounts Managed. In addition to managing the registrant, the portfolio
managers are also primarily responsible for the day-to-day portfolio management
of the following accounts:
NUMBER OF
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
John V. Miller Registered Investment Company 5 $3.80 billion
Other Pooled Investment Vehicles 3 $117 million
Other Accounts 10 $1.4 million
NUMBER OF
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
Johnathan Wilhelm Registered Investment Company 5 $4.19 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 7 $1.0 million
* Assets are as of October 31, 2008. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation, including
these three elements, to the market in order to create a compensation structure
that is competitive and consistent with similar financial services companies. As
discussed below, several factors are considered in determining each portfolio
manager's total compensation. In any year these factors may include, among
others, the effectiveness of the investment strategies recommended by the
portfolio manager's investment team, the investment performance of the accounts
managed by the portfolio manager, and the overall performance of Nuveen
Investments, Inc. (the parent company of NAM). Although investment performance
is a factor in determining the portfolio manager's compensation, it is not
necessarily a decisive factor. The portfolio manager's performance is evaluated
in part by comparing manager's performance against a specified investment
benchmark. This fund-specific benchmark is a customized subset (limited to bonds
in each Fund's specific state and with certain maturity parameters) of the
S&P/Investortools Municipal Bond index, an index comprised of bonds held by
managed municipal bond fund customers of Standard & Poor's Securities Pricing,
Inc. that are priced daily and whose fund holdings aggregate at least $2
million. As of October 31, 2008, the S&P/Investortools Municipal Bond index was
comprised of 52,959 securities with an aggregate current market value of $1,009
billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. In connection with the acquisition of Nuveen
Investments, Inc., by a group of investors lead by Madison Dearborn Partners in
November 2007, certain employees, including portfolio managers, received profit
interests in Nuveen's parent. These profit interests entitle the holders to
participate in the appreciation in the value of Nuveen beyond the issue date and
vest over five to seven years, or earlier in the case of a liquidity event.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager, although the
allocation procedures may provide allocation preferences to funds with special
characteristics (such as favoring state funds versus national funds for
allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct
that sets forth policies regarding conflicts of interest.
Beneficial Ownership of Securities. As of October 31, 2008, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
DOLLAR RANGE OF
EQUITY SECURITIES
DOLLAR RANGE OF BENEFICIALLY OWNED
EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS MANAGED
BENEFICIALLY BY NAM'S MUNICIPAL
NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM
-------------------------------------------------------------------------------------------------------------------
John V. Miller Nuveen Municipal Income Fund, Inc. $0 $100,001-$500,000
-------------------------------------------------------------------------------------------------------------------
Johnathan Wilhelm Nuveen Municipal Income Fund, Inc. $0 $50,001-$100,000
-------------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGER BIOGRAPHIES:
John V. Miller, CFA, joined Nuveen's investment management team as a credit
analyst in 1996, with three prior years of experience in the municipal market
with C.W. Henderson & Assoc., a municipal bond manager for private accounts. He
has a BA in Economics and Political Science from Duke University, and an MA in
Economics from Northwestern University and an MBA with honors in Finance from
the University of Chicago. He has been responsible for analysis of high yield
credits in the utility, solid waste and energy related sectors. He is currently
a Vice President of Nuveen (since 2002). He manages investments for six
Nuveen-sponsored investment companies.
John Wilhelm joined Nuveen Investments in 1999 and currently serves as Vice
President of Nuveen Investments. He has served as co-portfolio manager of the
Fund since December 2007. Mr. Wilhelm has over eighteen years of industry
experience. From 1999 to 2006, Mr. Wilhelm headed the research activities for
industrial development bonds, utilities and real estate-backed financings. Prior
to joining NAM in 1999, Mr. Wilhelm was Senior Credit Analyst in the Van Kampen
Senior Loan Group. He received his B.S. in Business from Miami University of
Ohio and his J.D. from DePaul University. He manages investments for six
Nuveen-sponsored investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Period* (a) (b) (c) (d)*
TOTAL NUMBER OF AVERAGE TOTAL NUMBER OF SHARES MAXIMUM NUMBER (OR
SHARES (OR PRICE (OR UNITS) PURCHASED AS APPROXIMATE DOLLAR VALUE) OF
UNITS) PAID PER PART OF PUBLICLY SHARES (OR UNITS) THAT MAY YET
PURCHASED SHARE (OR ANNOUNCED PLANS OR BE PURCHASED UNDER THE PLANS OR
UNIT) PROGRAMS PROGRAMS
AUGUST 7-31, 2008 0 $0 0 815,000
SEPTEMBER 1-30, 2008 0 $0 0 815,000
OCTOBER 1-31, 2008 0 $0 0 815,000
TOTAL 0
* The registrant's repurchase program, which authorized the repurchase of
815,000 shares, was announced August 7, 2008. Any repurchases made by the
registrant pursuant to the program were made through open-market
transactions.
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/ Kevin J. McCarthy
----------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: January 9, 2009
-------------------------------------------------------------------
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 9, 2009
-------------------------------------------------------------------
By (Signature and Title) /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: January 9, 2009
-------------------------------------------------------------------