Nuveen
Municipal Closed-End
Exchange-Traded
Funds
ANNUAL REPORT March 31, 2003
SELECT PORTFOLIOS
NXP
NXQ
NXR
NXC
NXN
Photo of: Man and child on computer.
Photo of: Man and child hugging.
DEPENDABLE,
TAX-FREE INCOME
BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
Logo: NUVEEN Investments
FASTER INFORMATION
RECEIVE YOUR
NUVEEN FUND REPORT
ELECTRONICALLY
By registering for electronic delivery, you will receive an email as soon as
your Nuveen Fund information is available. Click on the link and you will be
taken directly to the report. Your Fund report can be viewed and saved on your
computer. Your report will arrive faster via email than by traditional mail.
Registering is easy and only takes a few minutes (see instructions at right).
SOME COMMON CONCERNS:
WILL MY EMAIL ADDRESS BE DISTRIBUTED TO OTHER COMPANIES?
No, your email address is strictly confidential and will not be used for
anything other than notification of shareholder information.
WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR
MAIL DELIVERY AGAIN?
If you decide you do not like receiving you reports electronically, it's a
simple process to go back to regular mail delivery.
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.INVESTORDELIVERY.COM
2 Refer to the address sheet that accompanied this report. Enter the personal
13-CHARACTER ENROLLMENT NUMBER imprinted near your name.
3 You'll be taken to a page with several options. Select the NEW
ENROLLMENT-CREATE screen. Once there, enter your email address (e.g.
yourID@providerID.com), and a personal, 4-digit PIN number of your choice.
(Pick a number that's easy to remember.)
4 Click Submit. Confirm the information you just entered is correct, then
click Submit again.
5 You should get a confirmation email within 24 hours. If you do not, go back
through these steps to make sure all the information is correct.
6 Use this same process if you need to change your registration information
or cancel internet viewing.
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME DIRECTLY TO YOU FROM NUVEEN,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.NUVEEN.COM
2 Select ACCESS YOUR ACCOUNT. Select the E-REPORT ENROLLMENT section. Click
on Enrollment Today.
3 You'll be taken to a screen that asks for your Social Security number and
email address. Fill in this information, then click Enroll.
4 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: "I'D ALSO LIKE TO DIRECT YOUR ATTENTION TO THE INSIDE FRONT COVER
OF THIS REPORT, WHICH EXPLAINS THE QUICK AND EASY PROCESS TO BEGIN RECEIVING
FUND REPORTS LIKE THIS VIA EMAIL AND THE INTERNET."
Dear
SHAREHOLDER
Once again, I am pleased to report that over the most recent reporting period
your Nuveen Select Portfolio has continued to provide you with attractive
tax-free monthly income. For specific information about the performance of your
Portfolio, please read the Portfolio Managers' Comments and Performance Overview
sections of this report.
With interest rates at historically low levels, many have begun to wonder how
fixed-income investments will perform if interest rates begin to rise. No one
knows what the future will bring, which is why we think a well-balanced
portfolio that is structured and carefully monitored with the help of an
investment professional is an important component in achieving your long-term
financial goals. A well-diversified portfolio may actually help to reduce your
overall investment risk, and we believe that municipal bond investments like
your Nuveen Portfolio can be important building blocks in a portfolio crafted to
perform well through a variety of market conditions.
I'd also like to direct your attention to the inside front cover of this report,
which explains the quick and easy process to begin receiving Portfolio reports
like this via email and the internet. Many Nuveen Portfolio shareholders already
have signed-up, and they are getting their information faster and more
conveniently than ever. I urge you to consider joining them.
Since 1898, Nuveen Investments has offered financial products and solutions that
incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen us
as a partner as you pursue your financial goals. We look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
May 15, 2003
1
Nuveen Select Portfolios
NXP, NXQ, NXR, NXC, NXN
Portfolio Managers'
COMMENTS
Portfolio managers Tom Spalding, Paul Brennan, Bill Fitzgerald and assistant
portfolio manager Scott Romans review economic conditions, key investment
strategies, and the recent performance of the Portfolios. A 27-year veteran of
Nuveen, Tom has managed the national Portfolios since 1999. With 12 years of
investment experience, Paul took management responsibility for the New York
Portfolio (NXN) in January 2003. Bill and Scott, who have been with Nuveen for
15 years and 3 years, respectively, assumed portfolio management responsibility
for the California Portfolio (NXC) in January 2003.
WHAT WERE THE MAJOR FACTORS AFFECTING THE NATIONAL ECONOMY AND MUNICIPAL MARKET
DURING THIS REPORTING PERIOD?
In a number of ways, underlying economic and market conditions at the national
level have not changed significantly since our last shareholder report dated
September 30, 2002. We believe the most influential factors shaping the U.S.
economy and the municipal market continued to be the slow pace of economic
growth and interest rates that remained at 40-year lows. In addition, continued
geopolitical concerns also had an impact during this reporting period.
In the municipal market, the sluggish economic recovery and a general lack of
inflationary pressures created conditions that helped many bonds perform well
during the reporting period. After a record new issuance of $357 billion in
calendar year 2002, municipal bond new issue supply nationwide remained at very
strong levels during the first quarter of 2003. Over the first three months of
the year $83.5 billion in new municipal securities were brought to market, up
22% over the same period in 2002. Coupled with this robust supply, demand for
municipal bonds also remained strong over most of this reporting period, as many
individual investors continued to seek tax-free income and increased
diversification for their portfolios. Institutional investors, including
traditional municipal bond purchasers such as property/casualty insurance
companies as well as non-traditional purchasers such as hedge funds, arbitrage
accounts, and pension funds, also were active buyers in the municipal market.
WHAT ABOUT SPECIFIC MARKET AND ECONOMIC CONDITIONS IN CALIFORNIA AND NEW YORK?
Municipal supply also continued to be very strong in California and New York,
with $50 billion and $49 billion, respectively, of new bonds in calendar year
2002 and $15.5 billion and $9 billion, respectively, in the first quarter of
2003. Supply has been driven largely by increased spending needs, the low level
of interest rates, and shortfalls in the tax receipts of both states. In
December 2002, California announced a budget gap of $35 billion for fiscal
2003-2004, the highest state deficit in the nation, while New York faces the
second largest state shortfall ($11.5 billion) over the same period. Following
the announcement of the projected California deficit, Moody's, Standard & Poor's
and Fitch downgraded that state's credit rating to A2/A/A from A1/A+/AA,
respectively. New York's ratings of A2/AA/AA, respectively, were reconfirmed in
March 2003, although Moody's lowered its outlook for the state to stable from
positive in December 2002.
In California, proposals for dealing with the budget deficit include $21 billion
in spending cuts, $6 billion in internal and external borrowings, and $8 billion
in tax increases, all of which must be approved by the state legislature. New
York's proposed $90.8 billion fiscal 2004 budget originally recommended closing
the state's shortfall through expenditure reductions, gaming and fee increases,
and the issuance of bonds backed by tobacco company payments. Since the governor
is opposed to broad-based tax increases, various forms of deficit financing are
under discussion as well, and the
2
state has indicated that without some form of such financing, it may face a cash
crisis as 2003 unfolds.
On the economic front, both California and New York continue to struggle through
slow and difficult recoveries. Job growth in California during 2002 was
negligible, and a solid recovery in that state remains largely dependent on
increased business spending, particularly reinvestment in new technologies, as
well as on a strong global recovery, since 12% of the state economy is based on
exports. The New York economy continued to be significantly impacted by declines
in the financial sector, the national recession in manufacturing, tourism's
lingering struggles, and increased security costs.
HOW DID THESE PORTFOLIOS PERFORM OVER THE TWELVE MONTHS ENDED MARCH 31, 2003?
Individual results for the Portfolios, as well as for appropriate benchmarks,
are presented in the accompanying table.
TOTAL RETURN LEHMAN LIPPER
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
--------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
3/31/03 EQUIVALENT3 3/31/03 3/31/03 3/31/03
--------------------------------------------------------------------------
NXP 5.26% 7.51% 7.84% 9.89% 6.82%
--------------------------------------------------------------------------
NXQ 5.38% 7.69% 6.33% 9.89% 6.82%
--------------------------------------------------------------------------
NXR 5.28% 7.54% 6.09% 9.89% 6.82%
--------------------------------------------------------------------------
NXC 5.03% 7.92% 6.86% 9.34% 11.93%
--------------------------------------------------------------------------
NXN 5.03% 7.74% 8.17% 9.67% 11.58%
--------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Portfolio in this report.
For the twelve months ended March 31, 2003, each of these Portfolios
underperformed their respective Lehman index, and all except NXP underperformed
its Lipper fund peer group average. Much of this underperformance relative to
the Lehman indexes is attributable to the Portfolios' relatively short
durations,4 which generally would be expected to constrain performance during
periods of declining interest rates, such as that we experienced over much of
the twelve-month period. For example, as of March 31, 2003, the durations of the
three national Portfolios ranged from 4.86 to 5.56, compared with 7.93 for the
Lehman Brothers Municipal Bond Index. The durations of NXC and NXN were 5.79 and
5.72, respectively, compared with 8.51 for the Lehman California index and 7.55
for the Lehman New York index.
Additionally, the California and New York Portfolios were at a disadvantage when
compared with their Lipper fund group peers over the reporting period because,
unlike most of the other funds, these Nuveen Portfolios do not employ leverage
to enhance yields and returns. Leverage is a strategy that carries some risks,
but generally works very well during periods of low short-term interest rates,
as was the case through this reporting period. The California and New York
Portfolios do not expose their shareholders to the risks of leverage, but are
also unable to take advantage of its benefits when conditions are favorable.
Beyond duration and leverage, the relative performances of these Portfolios also
were influenced by factors such as call exposure, portfolio trading activity,
and the price movement of specific sectors and holdings. For example, the total
return performance of the national Portfolios was impacted by their holdings of
airline-backed bonds. Over the twelve-month period, the market value of most
airline-backed bonds fell, due in part to declining passenger volume and in part
to the market impact of United Air Lines' bankruptcy filing in December 2002. As
of March 31, 2003, the three national Portfolios each held about 1% (par value)
of their portfolios in bonds issued for facilities at Chicago's O'Hare
International Airport and backed by United. Over the period ended March 31,
2003, these bonds depreciated to 10 cents on the dollar from 61 cents,
translating to approximately 50 basis point decrease in total return
performance.
HOW DID THE MARKET ENVIRONMENT AFFECT THE PORTFOLIOS' DIVIDENDS AND SHARE
PRICES?
The Select Portfolios all passed their ten-year anniversaries between March and
July 2002, and continued to experience the increased number of bond calls that
often are associated with this part of a Fund's life cycle. The reinvestment of
proceeds from called bonds into issues paying lower current yields necessitated
several dividend adjustments. During the twelve months ended March 31, 2003,
NXP, NXR, NXQ, and NXC each saw three dividend reductions, while NXN had two
dividend cuts.
1 The total annual returns on common share net asset value (NAV) for the
national Portfolios are compared with the total annual return of the Lehman
Brothers Municipal Bond Index, an unleveraged index comprising a broad
range of investment-grade municipal bonds. The annual returns of NXC and
NXN are compared with those of the Lehman Tax-Exempt Bond indexes for
California and New York, respectively. These unleveraged indexes comprise a
broad range of municipal bonds within each of those states. Results for the
Lehman indexes do not reflect any expenses.
2 The total returns of the national Portfolios are compared with the average
annualized return of the 9 funds in the Lipper General and Insured
Unleveraged Municipal Debt Funds category. NXC's total return is compared
with the average total return of the 25 funds in the Lipper California
Municipal Debt Funds category, while the comparison for NXN is based on the
average total return of the 17 funds in the Lipper New York Municipal Debt
Funds category. Portfolio and Lipper returns assume reinvestment of
dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment in order to equal the yield of the Nuveen portfolio on
an after-tax basis. For the national Portfolios, the taxable-equivalent
yield is based on the portfolio's market yield on the indicated date and a
federal income tax rate of 30%, while the taxable-equivalent yields of NXC
and NXN are based on their market yields on the indicated date and combined
federal and state income tax rates of 36.5% and 35%, respectively.
4 Duration is a measure of a portfolio's NAV volatility in reaction to
interest rate movements.
3
Over the course of this twelve-month period, the share prices of all five
Portfolios were affected by a general weakening of bond prices in late 2002, as
well as by their dividend adjustments. Overall, NXP was the only Portfolio to
finish March 2003 with a share price higher than that of a year earlier. As of
March 31, 2003, all five Portfolios continued to trade at discounts to their
common share net asset values (see charts on individual Performance Overview
pages).
WHAT KEY STRATEGIES WERE USED TO MANAGE THE SELECT PORTFOLIOS DURING THE PERIOD
ENDED MARCH 31, 2003?
Following last year's shareholder vote that eliminated the Portfolios'
termination dates and allowed increased flexibility in portfolio management, the
Portfolios have continued their transition to more a more dynamic, longer-term
oriented investment approach. As a result, our fundamental management strategies
over the twelve-month period have focused on diversifying holdings, enhancing
call protection, and lengthening the Portfolios' durations. Given the recent
steepness of the municipal yield curve, we sought value in bonds that mature in
15 to 20 years. In many cases, bonds in this part of the yield curve were
offering yields similar to those of longer-term bonds but, in our opinion, with
less inherent interest rate risk. The purchase of these long-intermediate bonds
helped to lengthen the duration of each of the Portfolios, allowing them to
offer more competitive yields and returns while still providing them with a
level of price defensiveness in the event of a rise in interest rates.
Although lengthening duration can result in increased interest rate risk, we
believe the overall risk profile of these Portfolios remained moderate when
compared with many other longer-term bond investments. One of the ways we're
trying to control risk is by placing an emphasis on credit quality. As of March
31, 2003, each of the Portfolios continued to offer excellent credit quality,
with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 72% to
100%. In general, our weightings in higher quality and insured bonds benefited
the performance of the Portfolios during the twelve-month period.
Over the period, heavy issuance in the municipal market provided us with
increased opportunities to purchase the types of bond structures we favor and
helped us find individual issues that we believe can perform well regardless of
the future direction of interest rates. In the national Portfolios, we found
good opportunities in the healthcare sector and also added AA and A rated
utilities bonds, such as those issued by the Sam Rayburn Municipal Power Agency
in Texas. In general, the national Portfolios are well diversified
geographically, and we took advantage of the strong issuance to add bonds from
states such as Arizona, Florida, Texas and Illinois.
In NXC, we also remained heavily weighted in the healthcare sector, where we
believe credit spreads have been wider than warranted. We also increased our
weighting in education bonds, one of the top performing groups among the Lehman
revenue sectors for the reporting period. Over the past two years, in
anticipation of a worsening state budget deficit, we sold a number of California
general obligation bonds (GOs). As previously mentioned, California's struggle
with the largest deficit in the nation led to a recent credit rating downgrade
by the major rating agencies. Although California GOs have significantly
underperformed the market in the recent past, NXC was relatively protected from
the impact. Currently, we have begun to rebuild a position in California GOs, as
we believe spreads have widened to the point that these bonds represent an
opportunity to add yield at attractive prices.
In addition to focusing on lengthening duration, a major goal of the New York
Select Portfolio (NXN) over the period was to successfully work through bond
calls affecting almost 40% of the Portfolio's holdings. When reinvesting these
proceeds, we emphasized investments in highly-rated and insured bonds,
particularly in the area of essential services such as education bonds and water
and sewer issues.
As of March 31, 2003, each of the Select Portfolios held a portion of its assets
in bonds backed by
4
the master tobacco settlement agreement of 1998. Recently, the increased
issuance of tobacco bonds by states facing budget problems as well as pending
court cases against the tobacco companies weakened the prices of such bonds and
drove up issuing costs. Although both California and New York plan to issue
additional tobacco bonds to help close their budget gaps, current market
conditions have delayed these plans. Since the sector as a whole produced
positive returns over the period, our present strategy is to maintain our
current holdings of tobacco bonds while we continue to monitor developments.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN GENERAL AND THE PORTFOLIOS
IN PARTICULAR?
In general, our outlook for the municipal market remains positive. Despite the
uncertainty that preceded the Iraqi conflict, much of the impact of this war was
priced into the fixed income markets prior to its onset. We continue to believe
the U.S. economy is slowly heading for an eventual recovery, but a recovery that
may be less robust than some originally anticipated. We also expect that
inflation and interest rates will continue to be relatively low over the near
term.
Nationally, new municipal issuance volume should remain strong, as issuers
continue to take advantage of the low rate environment. Given the budget
deficits in both California and New York and their continued need for spending
on infrastructure and essential services, we expect to see significant issuance
of new municipal debt in both of these states. Demand for tax-exempt municipal
bonds also should remain solid, as investors continue to look for ways to
rebalance their portfolios and reduce overall investment risk.
During the remainder of 2003, the Portfolios will continue to work their way
through their still considerable call exposure. As of March 31, 2003, the
percentage of bonds eligible for calls in 2003 ranged from 7% to 29%. Given the
likely reinvestment at current low rates, this could continue to put pressure on
the Portfolios' dividends during this period. However, beginning in 2004 and
looking out to 2007, the call exposure of these Portfolios drops off
significantly.
In coming months, we also will continue to focus on transitioning the Portfolios
and working through their call exposure. As part of this process, we expect
durations to continue to lengthen modestly as we add bonds from the
long-intermediate part of the yield curve. We also plan to focus closely on the
general credit environment, monitor the progress toward resolution of the
California and New York budget deficits, and keep a watch on the direction of
interest rates and inflation. If state governments continue to experience
budgetary pressures, this could present an opportunity to increase our
weightings in general obligation bonds and other tax-backed issues in
anticipation of stronger long-term performance as the economic growth becomes
more apparent. We also expect to see a drop in the Portfolios' allocations of
prerefunded bonds over the next twelve months, since we plan in a number of
cases to capture the appreciation in these bonds by selling them at a premium
and then redeploying the proceeds into securities that we believe present better
long-term potential. In general, we will continue to concentrate on strategies
that can add value for our shareholders and provide support for the Portfolios'
long-term dividend-paying capabilities.
We believe that the Portfolios can serve as a source of attractive tax-free
income and diversification as well as a way to invest in municipal entities -
and the public purposes and taxing power they represent. Overall, therefore, we
remain convinced that these Portfolios are good investments and that they will
continue to benefit shareholders in the months ahead.
5
Nuveen Select Tax-Free Income Portfolio
Performance
OVERVIEW As of March 31, 2003
NXP
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 59%
AA 19%
A 16%
BBB 6%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.15
--------------------------------------------------
Common Share Net Asset Value $14.82
--------------------------------------------------
Market Yield 5.26%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.51%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $242,669
--------------------------------------------------
Average Effective Maturity (Years) 14.04
--------------------------------------------------
Average Duration 4.86
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 9.51% 7.84%
--------------------------------------------------
5-Year 3.95% 5.10%
--------------------------------------------------
10-Year 5.61% 6.15%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
U.S. Guaranteed 22%
--------------------------------------------------
Healthcare 17%
--------------------------------------------------
Transportation 15%
--------------------------------------------------
Tax Obligation/Limited 12%
--------------------------------------------------
Utilities 11%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
4/02 0.071
5/02 0.071
6/02 0.071
7/02 0.071
8/02 0.071
9/02 0.068
10/02 0.068
11/02 0.068
12/02 0.065
1/03 0.065
2/03 0.065
3/03 0.062
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
4/1/02 14.08
13.95
14.05
13.94
14.12
14.05
14.2
14.3
14.38
14.5
14.37
14.25
14.4
14.58
14.63
14.74
14.46
14.86
14.79
14.82
14.09
14.14
14.23
14.3
14.27
14.25
14.36
13.97
13.75
13.59
13.75
13.85
13.51
13.67
13.89
14.01
13.72
13.42
13.6
13.84
13.6
13.7
13.83
13.9
13.8
13.95
13.92
13.91
13.9
13.86
13.78
3/31/03 14.07
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 30%.
2 The Fund also paid shareholders a capital gains distribution in December
2002 of $0.1688 per share.
6
Nuveen Select Tax-Free Income Portfolio 2
Performance
OVERVIEW As of March 31, 2003
NXQ
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 57%
AA 21%
A 13%
BBB 9%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.49
--------------------------------------------------
Common Share Net Asset Value $14.45
--------------------------------------------------
Market Yield 5.38%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.69%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $254,355
--------------------------------------------------
Average Effective Maturity (Years) 16.99
--------------------------------------------------
Average Duration 5.04
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 5/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 6.01% 6.33%
--------------------------------------------------
5-Year 3.72% 4.75%
--------------------------------------------------
10-Year 5.40% 5.94%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Healthcare 16%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Utilities 14%
--------------------------------------------------
U.S. Guaranteed 14%
--------------------------------------------------
Tax Obligation/Limited 10%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
4/02 0.0695
5/02 0.0695
6/02 0.0695
7/02 0.0695
8/02 0.0695
9/02 0.0665
10/02 0.0665
11/02 0.0665
12/02 0.0635
1/03 0.0635
2/03 0.0635
3/03 0.0605
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
4/1/02 13.79
13.66
13.63
13.5
13.61
13.72
13.77
13.65
14.09
14.06
13.8
14
14.11
14.43
14.37
14.34
14.12
14.43
14.28
14.16
14
14.2
14.07
14.18
14.3
14.48
14.66
14.19
13.52
13.33
13.64
13.54
13.3
13.33
13.36
13.58
13.2
13.01
13.2
13.42
13.1
13.18
13.1
13.31
13.39
13.29
13.25
13.45
13.42
13.3
13.14
3/31/03 13.33
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 30%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.1806 per share.
7
Nuveen Select Tax-Free Income Portfolio 3
Performance
OVERVIEW As of March 31, 2003
NXR
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 44%
AA 28%
A 23%
BBB 5%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.06
--------------------------------------------------
Common Share Net Asset Value $14.28
--------------------------------------------------
Market Yield 5.28%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.54%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $185,137
--------------------------------------------------
Average Effective Maturity (Years) 16.73
--------------------------------------------------
Average Duration 5.56
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 7/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 3.51% 6.09%
--------------------------------------------------
5-Year 3.26% 4.78%
--------------------------------------------------
10-Year 5.32% 5.89%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Utilities 22%
--------------------------------------------------
Healthcare 18%
--------------------------------------------------
Tax Obligation/Limited 11%
--------------------------------------------------
Transportation 9%
--------------------------------------------------
U.S. Guaranteed 9%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
4/02 0.0665
5/02 0.0665
6/02 0.0665
7/02 0.0665
8/02 0.0665
9/02 0.0635
10/02 0.0635
11/02 0.0635
12/02 0.0605
1/03 0.0605
2/03 0.0605
3/03 0.0575
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
4/1/02 13.35
13.18
13.12
13.1
13.35
13.32
13.35
13.47
13.4
13.41
13.45
13.47
13.46
13.75
13.9
13.72
13.7
13.92
14
14.05
13.9
13.81
13.79
13.71
13.72
13.88
13.99
13.56
13.07
13.17
13.09
13.12
12.96
12.83
12.81
13
12.89
12.78
12.95
13.22
13.05
12.9
13
13.11
13.18
13.02
12.99
13.13
13.21
12.95
12.87
3/31/03 13
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 30%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.0659 per share.
8
Nuveen California Select Tax-Free Income Portfolio
Performance
OVERVIEW As of March 31, 2003
NXC
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 74%
AA 2%
A 23%
BBB 1%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.59
--------------------------------------------------
Common Share Net Asset Value $14.54
--------------------------------------------------
Market Yield 5.03%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.19%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 7.92%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $90,975
--------------------------------------------------
Average Effective Maturity (Years) 15.71
--------------------------------------------------
Average Duration 5.79
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 6/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 1.34% 6.86%
--------------------------------------------------
5-Year 3.25% 4.70%
--------------------------------------------------
10-Year 4.85% 5.69%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 19%
--------------------------------------------------
Healthcare 15%
--------------------------------------------------
Education and Civic Organizations 15%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Water and Sewer 11%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
4/02 0.064
5/02 0.064
6/02 0.064
7/02 0.064
8/02 0.064
9/02 0.061
10/02 0.061
11/02 0.061
12/02 0.058
1/03 0.058
2/03 0.058
3/03 0.057
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
4/1/02 14.45
14.38
14.43
14.4
14.53
14.75
15
14.8
14.8
14.95
14.94
15.35
15.5
15.7
15.85
15
14.79
15.13
15.03
14.95
14.9
14.5
14.6
14.61
14.62
15.15
14.97
15.05
14.8
14.1
13.92
14.05
14.2
14.07
14.23
14.46
13.62
13.5
13.54
13.73
13.49
13.65
14.35
13.47
13.55
13.55
13.9
13.8
13.95
13.65
13.37
3/31/03 13.57
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 30%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state income taxes. It is based on
a combined federal and state income tax rate of 36.5%.
2 The Fund also paid shareholders a capital gains distribution in December
2002 of $0.1358 per share.
9
Nuveen New York Select Tax-Free Income Portfolio
Performance
OVERVIEW As of March 31, 2003
NXN
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 86%
AA 14%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.60
--------------------------------------------------
Common Share Net Asset Value $14.51
--------------------------------------------------
Market Yield 5.03%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.19%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 7.74%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $56,683
--------------------------------------------------
Average Effective Maturity (Years) 16.98
--------------------------------------------------
Average Duration 5.72
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 6/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 4.73% 8.17%
--------------------------------------------------
5-Year 3.64% 4.88%
--------------------------------------------------
10-Year 4.98% 5.61%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
U.S. Guaranteed 16%
--------------------------------------------------
Education and Civic Organizations 16%
--------------------------------------------------
Water and Sewer 14%
--------------------------------------------------
Long-Term Care 10%
--------------------------------------------------
Housing/Multifamily 9%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
4/02 0.06
5/02 0.06
6/02 0.06
7/02 0.06
8/02 0.06
9/02 0.058
10/02 0.058
11/02 0.058
12/02 0.057
1/03 0.057
2/03 0.057
3/03 0.057
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
4/1/02 13.64
13.56
13.5
13.7
13.71
13.6
13.68
13.68
13.7
13.85
13.97
13.95
13.95
14
14.3
14.1
13.97
13.8
13.9
13.81
13.91
13.75
13.9
13.95
14.08
14.08
14.07
13.89
13.35
13.12
13.04
13.18
13.31
13.15
13.37
13.41
13.2
13.25
13.5
13.86
13.64
13.45
13.55
13.4
13.21
13.25
13.21
13.32
13.38
13.26
13.2
3/31/03 13.7
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 30%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state income taxes. It is based on
a combined federal and state income tax rate of 35%.
2 The Fund also paid shareholders a capital gains distribution in December
2002 of $0.0939 per share.
10
Report of
INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3
NUVEEN CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO
NUVEEN NEW YORK SELECT TAX-FREE INCOME PORTFOLIO
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Select Tax-Free Income Portfolio,
Nuveen Select Tax-Free Income Portfolio 2, Nuveen Select Tax-Free Income
Portfolio 3, Nuveen California Select Tax-Free Income Portfolio, and Nuveen New
York Select Tax-Free Income Portfolio as of March 31, 2003, 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 Trusts'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of March 31, 2003, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Select Tax-Free Income Portfolio, Nuveen Select Tax-Free Income Portfolio
2, Nuveen Select Tax-Free Income Portfolio 3, Nuveen California Select Tax-Free
Income Portfolio, and Nuveen New York Select Tax-Free Income Portfolio at March
31, 2003, and the results of their operations for the year then ended, the
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 accounting principles generally accepted in the United
States.
Ernst & Young LLP
Chicago, Illinois
May 9, 2003
11
Nuveen Select Tax-Free Income Portfolio (NXP)
Portfolio of
INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.2%
$ 375 Alabama Housing Finance Authority, Single Family Mortgage 4/04 at 102.00 Aaa $ 389,404
Revenue Bonds, Collateralized Home Mortgage Revenue Bonds
Program, 1994 Series A-1, 6.550%, 10/01/14
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 7.7%
3,325 State of California Department of Water Resources, Power 5/12 at 101.00 A3 3,827,042
Supply Revenue Bonds, Series 2002A, 6.000%, 5/01/14
4,750 State Public Works Board of the State of California, Lease 3/04 at 102.00 Aaa 5,103,875
Revenue Bonds, California Community Colleges, 1994 Series B,
Various Community College Projects, 7.000%, 3/01/14
(Pre-refunded to 3/01/04)
3,000 State Public Works Board of the State of California, Lease 11/04 at 102.00 Aaa 3,329,160
Revenue Bonds, Department of Corrections, 1994 Series A,
California State Prison, Monterey County (Soledad II),
6.875%, 11/01/14 (Pre-refunded to 11/01/04)
1,450 California Statewide Communities Development Authority, 8/03 at 101.00 A3 1,484,351
Hospital Revenue Certificates of Participation, Cedars-Sinai
Medical Center, Series 1992, 6.500%, 8/01/15
3,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 A 2,778,000
Tobacco Settlement Asset-Backed Bonds, Series 2003-A1,
6.750%, 6/01/39
2,000 Los Angeles County Metropolitan Transportation Authority, 7/03 at 102.00 AAA 2,062,920
California, Proposition A Sales Tax Revenue Refunding Bonds,
Series 1993-A, 5.625%, 7/01/18 (Pre-refunded to 7/01/03) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 10.4%
3,000 Colorado Health Facilities Authority, Revenue Bonds, Catholic 9/12 at 100.00 AA 3,125,340
Health Initiatives, Series 2002A, 5.500%, 3/01/22
5,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 5,351,550
Refunding Bonds, Series 2001B, 5.625%, 11/15/17 (Alternative
Minimum Tax) - FGIC Insured
10,750 City and County of Denver, Colorado, Airport System Revenue No Opt. Call A 13,258,728
Bonds, Series 1991D, 7.750%, 11/15/13 (Alternative
Minimum Tax)
3,160 Northwest Parkway Public Highway Authority, Colorado, Revenue 6/11 at 102.00 AAA 3,465,382
Bonds, Senior Series 2001A, 5.500%, 6/15/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.5%
1,000 District of Columbia, Hospital Revenue and Refunding Bonds, 8/06 at 102.00 AAA 1,126,620
Medlantic Healthcare Group, Inc. Issue, Series 1996A,
5.750%, 8/15/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 7.0%
250 Escambia County, Florida, Pollution Control Revenue Bonds, 12/03 at 102.00 BBB 247,990
Champion International Corporation Project, Series 1993,
5.875%, 6/01/22 (Alternative Minimum Tax)
10,000 Jacksonville Electric Authority, Florida, St. John's River Power 10/11 at 100.00 AA 10,592,600
Park System Revenue Bonds, Issue 2, 17th Series 2002
Refunding, 5.000%, 10/01/17
6,100 Jacksonville Electric Authority, Florida, St. John's River 4/03 at 101.00 AA 6,124,888
Power Park System Revenue Bonds, Issue 2, Series Nine
Refunding, 5.250%, 10/01/21
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.6%
1,330 State of Hawaii, Certificates of Participation, Kapolei State 11/08 at 101.00 AAA 1,404,387
Office Building, 1998 Series A, 5.000%, 5/01/17 -
AMBAC Insured
12
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.6%
City of Chicago Heights, Illinois, General Obligation Bonds,
Series 1993, Corporate Purpose Bonds:
$ 3,820 5.650%, 12/01/15 - FGIC Insured 12/08 at 100.00 AAA $ 4,316,142
2,600 5.650%, 12/01/17 - FGIC Insured 12/08 at 100.00 AAA 2,931,916
2,500 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call Ca 218,750
Special Facility Revenue Refunding Bonds, United Air Lines,
Inc. Project, Series 2001C, 6.300%, 5/01/16#
1,000 Illinois Educational Facilities Authority, Revenue Bonds, 5/08 at 101.00 A 1,035,780
Midwestern University, Series 1998B, 5.500%, 5/15/18 -
ACA Insured
3,000 Illinois Educational Facilities Authority, Revenue Refunding 7/03 at 102.00 AAA 3,097,620
Bonds, Loyola University of Chicago, Series 1989-A,
6.100%, 7/01/15 (Pre-refunded to 7/01/03)
2,365 Illinois Health Facilities Authority, Revenue and Revenue No Opt. Call N/R*** 2,697,874
Refunding Bonds, Series 1992B, Evangelical Hospitals
Corporation, 6.500%, 4/15/09
1,320 Illinois Health Facilities Authority, Revenue Bonds, Decatur 10/11 at 100.00 A 1,381,274
Memorial Hospital, Series 2001, 5.600%, 10/01/16
2,700 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/12 at 100.00 A- 2,918,538
Hospital, Series 2002A, 6.000%, 7/01/17
2,225 Illinois Health Facilities Authority, Revenue Bonds, Elmhurst 1/13 at 100.00 A2 2,463,609
Memorial Healthcare, Series 2002 Refunding, 6.250%, 1/01/17
800 Illinois Housing Development Authority, Homeowner Mortgage 2/10 at 100.00 AA 859,528
Revenue Bonds, Series 2000-D3, 5.700%, 8/01/17
1,500 Illinois Housing Development Authority, Homeowner Mortgage 7/10 at 100.00 AA 1,617,405
Revenue Bonds, Series 1999-G1, 5.700%, 8/01/17
600 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Baa2 600,186
Revenue Bonds, Educational Advancement Foundation Fund,
University Center Project, Series 2002, 6.000%, 5/01/22
2,000 State of Illinois, General Obligation Bonds, Series 1994, 8/04 at 102.00 Aa2*** 2,163,900
5.875%, 8/01/14 (Pre-refunded to 8/01/04)
3,125 Metropolitan Pier and Exposition Authority, Illinois, McCormick No Opt. Call AAA 1,582,000
Place Expansion Project Bonds, Series 1992A, 0.000%, 6/15/17 -
FGIC Insured
5,000 Metropolitan Pier and Exposition Authority, Illinois, McCormick 6/12 at 101.00 AAA 5,179,650
Place Expansion Project Refunding Revenue Bonds, Series 2002B,
5.000%, 6/15/21 - MBIA Insured
2,500 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/03 at 102.00 AAA 2,569,600
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13 (Pre-refunded to 6/01/03) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 6.4%
5,000 Duneland School Building Corporation, Indiana, First Mortgage 2/09 at 101.00 AAA 5,302,450
Bonds, Series 1999 Refunding, 5.125%, 2/01/18 - MBIA Insured
9,855 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 10,313,849
Revenue Refunding Bonds, Series 2002A, Waterworks Project,
5.125%, 7/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.7%
4,030 City of Wichita, Kansas, Revenue Bonds, CSJ Health System 5/03 at 101.00 A+*** 4,107,215
of Wichita, Inc., Series 1985 XXV Remarketed, 7.200%, 10/01/15
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.9%
1,100 County of Jefferson, Kentucky, Health System Revenue Bonds, 10/08 at 101.00 AAA 1,156,320
Series 1998, Alliant Health System, Inc., 5.125%, 10/01/18 -
MBIA Insured
3,230 Lexington-Fayette Urban County Government, Kentucky, 11/04 at 102.00 AAA 3,573,737
Governmental Project Revenue Bonds, Series 1994, University
of Kentucky Alumni Association, Inc. Commonwealth Library
Project, 6.750%, 11/01/15 (Pre-refunded to 11/01/04) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.2%
500 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA- 555,185
Revenue Bonds, Partners HealthCare System Issue, Series C,
6.000%, 7/01/17
13
Nuveen Select Tax-Free Income Portfolio (NXP) (continued)
Portfolio of INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.5%
$ 2,900 Michigan State Hospital Finance Authority, Revenue Bonds, 12/12 at 100.00 AA- $ 2,932,451
Trinity Health Credit, Series 2002C Refunding,
5.375%, 12/01/30
1,000 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 BBB- 778,780
Bonds, The Detroit Medical Center Obligated Group,
Series 1998A, 5.125%, 8/15/18
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.4%
945 Minnesota Housing Finance Agency, Single Family Mortgage 7/08 at 101.00 AA+ 989,406
Revenue Bonds, Series 1995A, 5.200%, 1/01/17
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.6%
3,600 Calhoun County, Mississippi, Solid Waste Disposal Revenue 4/07 at 103.00 BBB 3,846,384
Bonds, Weyerhauser Company Project, Series 1992,
6.875%, 4/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.4%
6,025 Director of the State of Nevada, Department of Business 1/10 at 100.00 AAA 6,213,522
and Industry, Las Vegas Monorail Project Revenue Bonds,
1st Tier Series 2000, 5.375%, 1/01/40 - AMBAC Insured
4,070 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 6/12 at 100.00 AAA 4,399,670
5.500%, 6/01/21 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.7%
1,545 New Hampshire Housing Finance Authority, Single Family 5/11 at 100.00 Aa2 1,616,240
Mortgage Acquisition Bonds, Series 2001A, 5.600%, 7/01/21
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 3.1%
5,170 The City of New York, New York, General Obligation Bonds, 8/04 at 101.50 Aaa 5,596,887
Fiscal 1995 Series A, 6.250%, 8/01/10 (Pre-refunded to 8/01/04)
1,600 Dormitory Authority of the State of New York, Mount Sinai 7/10 at 101.00 BBB- 1,745,296
New York University Health Obligated Group Revenue Bonds,
Series 2000A, 6.500%, 7/01/17
225 New York State Medical Care Facilities Finance Agency, 8/03 at 101.00 AA- 228,281
Mental Health Services Facilities Improvement Revenue Bonds,
1991 Series D, 7.400%, 2/15/18
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.0%
2,210 Ohio Housing Finance Agency, Residential Mortgage Revenue 9/07 at 102.00 Aaa 2,348,147
Bonds, Series 1997A Remarketed, 6.050%, 9/01/17
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 8.4%
10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 11,070,300
Purchase Revenue Bonds, Series 2002, 5.875%, 12/01/19
1,500 Lexington County Health Services District, South Carolina, 11/13 at 100.00 A 1,621,785
Hospital Revenue Bonds, Series 2003 Refunding and
Improvement, 6.000%, 11/01/18
2,500 South Carolina Jobs Economic Development Authority, 11/12 at 100.00 A- 2,525,725
Revenue Bonds, Bon Secours Health System, Inc., Series 2002A,
5.625%, 11/15/30
5,000 South Carolina Housing Finance and Development Authority, 5/03 at 101.00 Aaa 5,096,300
Multifamily Housing Revenue Bonds, 1992 Series A,
6.875%, 11/15/23
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.4%
5,750 Memphis-Shelby County Airport Authority, Tennessee, 7/03 at 102.00 BBB 5,887,655
Airport Special Facilities and Project Revenue Bonds, Federal
Express Corporation, Series 1993, 6.200%, 7/01/14 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 9.3%
5,000 Brazos River Harbor Navigation District, Brazoria County, Texas, 5/12 at 101.00 A- 5,131,550
Environmental Facilities Revenue Bonds, Dow Chemical Company
Project, 2002 Series A-6, 6.250%, 5/15/33 (Alternative
Minimum Tax) (Mandatory put 5/15/17)
2,000 Conroe Independent School District, Texas, Unlimited Tax 2/04 at 100.00 AAA 2,047,780
Schoolhouse and Refunding Bonds, Series 1993,
5.000%, 2/01/18
6,150 Dallas Independent School District, Dallas County, Texas, 2/12 at 100.00 AAA 6,541,878
General Obligation Bonds, Series 2002 Refunding,
5.250%, 2/15/20
14
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 4,370 Harris County Health Facilities Development Corporation, 6/04 at 100.00 A3*** $ 4,672,491
Texas, Hospital Revenue Bonds, Memorial Hospital System,
Series 1992, 7.125%, 6/01/15 (Pre-refunded to 6/01/04)
3,500 Irving Independent School District, Dallas County, Texas, 2/12 at 100.00 AAA 3,536,050
General Obligation Bonds, Series 2002A Refunding,
5.000%, 2/15/31
City of San Antonio, Texas, Water System Revenue Refunding
Bonds, Series 1992:
95 6.000%, 5/15/16 (Pre-refunded to 5/15/07) - MBIA Insured 5/07 at 100.00 AAA 109,437
465 6.000%, 5/15/16 - MBIA Insured No Opt. Call AAA 553,169
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 10.5%
5,700 Public Utility District No. 1 of Snohomish County, Washington, 7/03 at 101.00 Aaa 6,921,909
Generation System Revenue Bonds, Series 1989,
6.750%, 1/01/12
3,000 Washington State Healthcare Facilities Authority, Revenue 12/07 at 101.00 AAA 3,105,510
Bonds, Series 1997A, Catholic Health Initiatives,
5.125%, 12/01/17 - MBIA Insured
9,750 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 10,222,095
Bonds, Series 2001A, Providence Health System,
5.125%, 10/01/17 - MBIA Insured
5,000 Washington Public Power Supply System, Nuclear Project 7/03 at 102.00 Aa1 5,113,349
No. 1 Refunding Revenue Bonds, Series 1993C,
5.375%, 7/01/15
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.9%
1,885 Marshall County, West Virginia, Special Obligation Refunding No Opt. Call AAA 2,242,847
Bonds, Series 1992, 6.500%, 5/15/10
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.8%
4,400 Wisconsin Health and Educational Facilities Authority, 6/03 at 102.00 AAA 4,477,879
Revenue Bonds, Series 1993, Hospital Sisters Services, Inc.
Obligated Group, 5.375%, 6/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 224,615 Total Long-Term Investments (cost $221,564,328) - 97.2% 235,887,538
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.2%
500 Minnesota State Higher Education Facilities Authority, Revenue VMIG-1 500,000
Bonds, St. Olaf College, Series Five-H, Variable Rate Demand
Bonds, 1.150%, 10/01/30+
------------------------------------------------------------------------------------------------------------------------------------
$ 500 Total Short-Term Investments (cost $500,000) 500,000
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.6% 6,281,345
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $242,668,883
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
# On December 9, 2002, UALCorporation, the holding
company of United Air Lines, Inc. filed for federal
bankruptcy protection. Subsequent to the reporting
period, the Adviser determined that it was likely
United would not remain current on their interest
payment obligations with respect to these bonds and
thus has stopped accruing interest.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
15
Nuveen Select Tax-Free Income Portfolio 2 (NXQ)
Portfolio of
INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.6%
$ 1,000 City of Fort Smith, Arkansas, Water and Sewer Revenue 10/11 at 100.00 AAA $ 1,051,950
Bonds, Series 2002A Refunding and Construction,
5.000%, 10/01/19 - FSA Insured
1,000 Sebastian County, Arkansas, Sparks Regional Medical Center, 11/11 at 101.00 A2 1,007,070
Public Health Facilities Board Hospital Revenue Improvement
Bonds, Series 2001A, 5.250%, 11/01/21
2,000 Board of Trustees of the University of Arkansas at Fayetteville, 12/12 at 100.00 Aaa 2,045,280
Various Facilities Revenue Bonds, Series 2002,
5.000%, 12/01/32 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 8.1%
3,325 State of California Department of Water Resources, Power 5/12 at 101.00 A3 3,827,042
Supply Revenue Bonds, Series 2002A, 6.000%, 5/01/14
3,250 State Public Works Board of the State of California, Lease 3/04 at 102.00 Aaa 3,492,125
Revenue Bonds, California Community Colleges, 1994 Series B,
Various Community College Projects, 7.000%, 3/01/14
(Pre-refunded to 3/01/04)
2,000 State Public Works Board of the State of California, Lease No Opt. Call Aa2 2,284,420
Revenue Refunding Bonds, The Regents of the University of
California, 1993 Series A, Various University of California
Projects, 5.500%, 6/01/14
5,000 State Public Works Board of the State of California, Lease 11/04 at 102.00 Aaa 5,548,600
Revenue Bonds, Department of Corrections, 1994 Series A,
California State Prison, Monterey County (Soledad II),
6.875%, 11/01/14 (Pre-refunded to 11/01/04)
500 State Public Works Board of the State of California, Lease 12/08 at 101.00 A2 525,885
Revenue Refunding Bonds, California Community Colleges,
1998 Series A, Various Community College Projects,
5.250%, 12/01/16
500 City of Contra Costa Water District, California, Water Revenue 10/07 at 100.00 AA- 517,385
Bonds, Refunding Series 1997H, 5.000%, 10/01/17
500 County of Contra Costa, California, Certificates of Participation, 11/07 at 102.00 AAA 547,405
Merrithew Memorial Hospital Replacement Project, Refunding
Series 1997, 5.375%, 11/01/17 - MBIA Insured
1,000 City of Fresno, California, Health Facility Revenue Bonds, 12/03 at 102.00 AAA 1,045,870
Series 1993B, Holy Cross Health System Corporation,
5.625%, 12/01/15 - MBIA Insured
3,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 A 2,778,000
Tobacco Settlement Asset-Backed Bonds, Series 2003-A1,
6.750%, 6/01/39
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.3%
3,000 Colorado Health Facilities Authority, Revenue Bonds, Catholic 9/12 at 100.00 AA 3,125,340
Health Initiatives, Series 2002A, 5.500%, 3/01/22
5,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 5,351,550
Refunding Bonds, Series 2001B, 5.625%, 11/15/17 (Alternative
Minimum Tax) - FGIC Insured
3,185 City and County of Denver, Colorado, Airport System Revenue No Opt. Call A 3,928,283
Bonds, Series 1991D, 7.750%, 11/15/13 (Alternative
Minimum Tax)
1,100 University of Colorado Hospital Authority, Hospital Revenue 11/11 at 100.00 A3 1,102,530
Bonds, Series 2001A, 5.600%, 11/15/31
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.2%
500 District of Columbia, Hospital Revenue and Refunding Bonds, 8/06 at 102.00 AAA 563,310
Medlantic Healthcare Group, Inc. Issue, Series 1996A,
5.750%, 8/15/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.4%
6,060 Jacksonville Electric Authority, Florida, St. John's River Power 4/03 at 101.00 AA 6,084,725
Park System Revenue Bonds, Issue 2, Series Nine Refunding,
5.250%, 10/01/21
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.5%
1,100 State of Hawaii, Certificates of Participation, Kapolei State 11/08 at 101.00 AAA 1,161,523
Office Building, 1998 Series A, 5.000%, 5/01/17 -
AMBAC Insured
16
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 19.7%
$ 8,420 Chicago Metropolitan Housing Development Corporation, 7/03 at 101.00 AA $ 8,602,125
Illinois, Housing Development Revenue Refunding Bonds,
FHA-Insured Mortgage Loans - Section 8 Assisted Projects,
Series 1992A, 6.800%, 7/01/17
2,400 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call Ca 210,000
Special Facility Revenue Refunding Bonds, United Air Lines,
Inc. Project, Series 2001C, 6.300%, 5/01/16#
250 Illinois Development Finance Authority, Economic Development 8/08 at 100.00 Baa2 260,463
Revenue Bonds, Series 1998, The Latin School of Chicago
Project, 5.200%, 8/01/11
2,500 Illinois Educational Facilities Authority, Revenue Bonds, 12/03 at 102.00 BBB 2,548,575
Columbia College, Series 1993, 6.125%, 12/01/18
Illinois Educational Facilities Authority, Revenue Refunding
Bonds, Columbia College, Series 1992:
2,610 6.875%, 12/01/17 (Pre-refunded to 12/01/04) 12/04 at 100.00 N/R*** 2,848,972
1,140 6.875%, 12/01/17 12/04 at 100.00 BBB 1,175,693
3,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1993, 11/03 at 102.00 AAA 3,038,250
Rush-Presbyterian-St. Luke's Medical Center Obligated Group,
5.250%, 11/15/20 - MBIA Insured
2,255 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/12 at 100.00 A- 2,407,280
Hospital, Series 2002A, 6.250%, 7/01/22
1,900 Illinois Housing Development Authority, Homeowner Mortgage 2/10 at 100.00 AA 2,041,379
Revenue Bonds, Series 2000-D3, 5.700%, 8/01/17
600 Illinois Educational Facilities Authority, Student Housing Revenue 5/12 at 101.00 Baa2 600,186
Bonds, Educational Advancement Foundation Fund, University
Center Project, Series 2002, 6.000%, 5/01/22
5,700 State of Illinois, Sales Tax Revenue Bonds, First 6/13 at 100.00 AAA 5,890,722
Series 2002, 5.000%, 6/15/22
Metropolitan Pier and Exposition Authority, Illinois, McCormick
Place Expansion Project Bonds, Series 1992A:
2,205 6.500%, 6/15/22 (Pre-refunded to 6/15/03) 6/03 at 102.00 Aaa 2,273,642
45 6.500%, 6/15/22 6/03 at 102.00 Aa3 46,085
7,000 Metropolitan Pier and Exposition Authority, Illinois, McCormick 6/12 at 101.00 AAA 7,251,510
Place Expansion Project Refunding Revenue Bonds, Series 2002B,
5.000%, 6/15/21 - MBIA Insured
5,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/03 at 102.00 AAA 5,139,200
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13 (Pre-refunded to 6/01/03) -
FGIC Insured
5,045 Sauk Village, Illinois, General Obligation Alternate Revenue 12/12 at 100.00 AA 5,050,398
Source Bonds, Series 2002A, Tax Increment,
5.000%, 6/01/22 - RAAI Insured
Sauk Village, Illinois, General Obligation Alternate Revenue Source
Bonds, Series 2002B, Tax Increment:
1,060 0.000%, 12/01/17 - RAAI Insured No Opt. Call AA 495,698
1,135 0.000%, 12/01/18 - RAAI Insured No Opt. Call AA 497,085
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.6%
4,380 Indiana Municipal Power Agency, Power Supply System 1/12 at 100.00 AAA 4,555,638
Revenue Bonds, Series 2002A, 5.125%, 1/01/21 -
AMBAC Insured
2,000 Indiana Housing Finance Authority, Single Family Mortgage 7/11 at 100.00 Aaa 2,056,440
Revenue Bonds, 2002 Series C-2, 5.250%, 7/01/23 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.4%
Tobacco Settlement Authority, Iowa, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
1,000 5.300%, 6/01/25 6/11 at 101.00 A 826,940
3,500 5.600%, 6/01/35 6/11 at 101.00 A 2,701,090
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.2%
3,000 Louisiana Public Facilities Authority, Revenue Bonds, Tulane 7/12 at 100.00 AAA 3,085,470
University, Series 2002A, 5.125%, 7/01/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.7%
4,000 Massachusetts Health and Educational Facilities Authority, 11/03 at 102.00 AAA 4,053,960
Revenue Bonds, Cape Cod Health Systems, Inc. Issue, Series A,
5.250%, 11/15/21 - CONNIE LEE Insured
3,000 Massachusetts Health and Educational Facilities Authority, 10/11 at 101.00 BBB+ 3,061,320
Revenue Bonds, Berkshire Health System Issue, Series 2001E,
6.250%, 10/01/31
17
Nuveen Select Tax-Free Income Portfolio 2 (NXQ) (continued)
Portfolio of INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
$ 2,090 Massachusetts Water Resources Authority, General Revenue No Opt. Call AAA $ 2,321,572
Bonds, 1993 Series C, 5.250%, 12/01/15 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.0%
2,900 Michigan State Hospital Finance Authority, Revenue Bonds, 12/12 at 100.00 AA- 2,932,451
Trinity Health Credit, Series 2002C Refunding, 5.375%, 12/01/30
2,000 Plymouth-Canton Community Schools, Counties of Wayne 5/09 at 100.00 AAA 2,050,340
and Washtenaw, State of Michigan, 1999 School Building and
Site General Obligation Unlimited Tax Bonds, 4.750%, 5/01/18
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 5.6%
500 Clark County, Nevada, General Obligation Limited Tax Las Vegas 7/06 at 101.00 AAA 551,465
Convention and Visitors Authority Bonds, Series 1996,
5.500%, 7/01/17 - MBIA Insured
13,250 Director of the State of Nevada, Department of Business and 1/10 at 100.00 AAA 13,664,593
Industry, Las Vegas Monorail Project Revenue Bonds, 1st Tier
Series 2000, 5.375%, 1/01/40 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 5.2%
2,700 Dormitory Authority of the State of New York, Mount Sinai 7/10 at 101.00 BBB- 2,945,187
New York University Health Obligated Group Revenue Bonds,
Series 2000A, 6.500%, 7/01/17
4,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 4,484,320
New York Hospital FHA-Insured Mortgage Revenue Bonds,
Series 1994A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05) -
AMBAC Insured
5,000 Triborough Bridge and Tunnel Authority, New York, Convention No Opt. Call AA- 5,913,950
Center Bonds, Series E, 7.250%, 1/01/10
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.8%
1,500 The Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/11 at 101.00 AA 1,494,300
Healthcare System Revenue Bonds, DBA Carolinas Healthcare
System, Series 2001A, 5.000%, 1/15/31
5,500 North Carolina Eastern Municipal Power Agency, Power System 7/03 at 102.00 BBB 5,579,475
Revenue Bonds, Series 1993-D, 5.600%, 1/01/16
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.2%
2,800 County of Cuyahoga, Ohio, Hospital Revenue Bonds, 8/05 at 102.00 AAA 3,168,900
Meridia Health System, Series 1995, 6.250%, 8/15/14
(Pre-refunded to 8/15/05)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.2%
1,000 Dauphin County General Authority, Pennsylvania, Health System 2/09 at 101.00 AAA 1,046,700
Revenue Bonds, Series 1999, Pinnacle Health System Project,
5.125%, 8/15/17 - MBIA Insured
1,000 Philadelphia Authority for Industrial Development, Pennsylvania, 7/11 at 101.00 AAA 1,072,170
Airport Revenue Bonds, Series 2001A, Philadelphia Airport
System Project, 5.500%, 7/01/17 (Alternative Minimum Tax) -
FGIC Insured
3,250 The School District of Philadelphia, Pennsylvania, General 2/12 at 100.00 AAA 3,461,348
Obligation Bonds, Series 2002A, 5.500%, 2/01/31 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.7%
5,000 Tobacco Settlement Financing Corporation of Rhode Island, 6/12 at 100.00 A 4,220,800
Asset-Backed Bonds, Series 2002A, 6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 9.1%
4,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 4,428,120
Purchase Revenue Bonds, Series 2002, 5.875%, 12/01/19
2,500 Lexington County Health Services District, South Carolina, 11/13 at 100.00 A 2,702,975
Hospital Revenue Bonds, Series 2003 Refunding and
Improvement, 6.000%, 11/01/18
7,000 Richland County, South Carolina, Solid Waste Disposal 5/03 at 101.00 BBB 7,110,950
Facilities Revenue Bonds, Union Camp Corporation Project,
Series 1992-A, 6.750%, 5/01/22 (Alternative Minimum Tax)
8,085 South Carolina Public Service Authority, Revenue Bonds, 1/06 at 102.00 AAA 8,934,410
1996 Refunding Series A, 5.750%, 1/01/22 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.2%
430 Tennessee Housing Development Agency, Homeownership 7/03 at 101.00 AA 439,262
Program Bonds, Issue WR, 6.800%, 7/01/17
18
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 13.7%
$ 3,275 Bexar County Health Facilities Development Corporation, Texas, 8/04 at 102.00 AAA $ 3,593,428
Hospital Revenue Bonds, Baptist Memorial Hospital System
Project, Series 1994, 6.900%, 2/15/14 (Pre-refunded to
8/15/04) - MBIA Insured
4,000 Brazos River Harbor Navigation District, Brazoria County, Texas, 5/12 at 101.00 A- 4,105,240
Environmental Facilities Revenue Bonds, Dow Chemical Company
Project, 2002 Series A-6, 6.250%, 5/15/33 (Alternative Minimum
Tax) (Mandatory put 5/15/17)
4,615 Cleveland Housing Corporation, Texas, Mortgage Revenue 7/03 at 100.00 AAA 4,621,923
Refunding Bonds, Series 1992-C (FHA-Insured - Section 8),
7.375%, 7/01/24 - MBIA Insured
2,500 Harris County Health Facilities Development Corporation, 10/05 at 102.00 AAA 2,834,225
Texas, Hospital Revenue Bonds, Texas Children's Hospital,
Series 1995, 5.500%, 10/01/16 - MBIA Insured
2,000 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/12 at 100.00 AAA 2,108,780
Bonds, Series 2002A, 5.625%, 7/01/20 (Alternative Minimum
Tax) - FSA Insured
3,125 Katy Independent School District, Counties of Harris, Fort Bend 2/12 at 100.00 AAA 3,154,938
and Waller, Texas, General Obligation Bonds, Series 2002A,
5.000%, 2/15/32
4,750 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 AA 5,062,835
System Revenue Refunding Bonds, Series 2002A,
5.500%, 10/01/17 - RAAI Insured
8,900 Texas Turnpike Authority, Dallas North Tollway System Revenue 1/06 at 102.00 AAA 9,286,705
Bonds, Series 1995, President George Bush Turnpike,
5.250%, 1/01/23 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
VERMONT - 2.7%
3,000 Vermont Housing Finance Agency, Multifamily Housing Bonds, 2/09 at 100.00 AAA 3,170,760
1999 Series C, 5.800%, 8/15/16 - FSA Insured
3,600 Vermont Industrial Development Authority, Industrial Development 9/03 at 101.00 A 3,677,184
Refunding Revenue Bonds, Stanley Works Project, Series 1992,
6.750%, 9/01/10
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.6%
2,000 Washington State Healthcare Facilities Authority, Revenue 12/07 at 101.00 AAA 2,070,340
Bonds, Series 1997A, Catholic Health Initiatives,
5.125%, 12/01/17 - MBIA Insured
6,715 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 7,040,139
Bonds, Series 2001A, Providence Health System,
5.125%, 10/01/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.6%
4,000 Wisconsin Housing and Economic Development Authority, 3/12 at 100.00 AA 4,135,319
Homeownership Revenue Bonds, 2002 Series G,
4.850%, 9/01/17
------------------------------------------------------------------------------------------------------------------------------------
$ 243,150 Total Long-Term Investments (cost $241,859,890) - 98.3% 250,091,518
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.4%
1,000 Allentown Commercial and Industrial Development Authority, N/R 1,000,000
Pennsylvania, Development Revenue Bonds, Diocese of
Allentown, Variable Rate Demand Bonds, 1.200%, 12/01/29+
------------------------------------------------------------------------------------------------------------------------------------
$ 1,000 Total Short-Term Investments (cost $1,000,000) 1,000,000
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 3,263,690
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $254,355,208
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
# On December 9, 2002, UALCorporation, the holding
company of United Air Lines, Inc. filed for federal
bankruptcy protection. Subsequent to the reporting
period, the Adviser determined that it was likely
United would not remain current on their interest
payment obligations with respect to these bonds and
thus has stopped accruing interest.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
19
Nuveen Select Tax-Free Income Portfolio 3 (NXR)
Portfolio of
INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.3%
$ 500 The Marshall County Healthcare Authority, Alabama, Revenue 1/12 at 101.00 A- $ 534,770
Bonds, Series 2002A, 6.250%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 6.9%
2,105 Azusa Unified School District, Los Angeles County, California, 7/12 at 100.00 AAA 2,263,570
General Obligation Bonds, Series 2002, 5.375%, 7/01/21 -
FSA Insured
3,350 State of California Department of Water Resources, Power 5/12 at 101.00 A3 3,855,817
Supply Revenue Bonds, Series 2002A, 6.000%, 5/01/14
3,000 State Public Works Board of the State of California, Lease 11/04 at 102.00 Aaa 3,329,160
Revenue Bonds, Department of Corrections, 1994 Series A,
California State Prison, Monterey County (Soledad II),
6.875%, 11/01/14 (Pre-refunded to 11/01/04)
500 City of Fresno, California, Health Facility Revenue Refunding 12/03 at 102.00 AAA 522,935
Bonds, Series 1993A, Holy Cross Health System Corporation,
5.625%, 12/01/18 - MBIA Insured
3,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 A 2,778,000
Tobacco Settlement Asset-Backed Bonds, Series 2003-A1,
6.750%, 6/01/39
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 4.0%
4,000 Colorado Health Facilities Authority, Revenue Bonds, Catholic 9/12 at 100.00 AA 4,167,120
Health Initiatives, Series 2002A, 5.500%, 3/01/22
2,700 City and County of Denver, Colorado, Airport System Revenue No Opt. Call A 3,330,099
Bonds, Series 1991D, 7.750%, 11/15/13 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.1%
250 State of Connecticut, Health and Educational Facilities Authority, 7/03 at 101.00 AAA 256,308
Revenue Bonds, Bridgeport Hospital Issue, Series A,
6.625%, 7/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 2.4%
District of Columbia, Washington D.C., General Obligation Bonds,
Series 1993E:
445 6.000%, 6/01/13 (Pre-refunded to 6/01/03) - MBIA Insured 6/03 at 102.00 AAA 457,531
1,305 6.000%, 6/01/13 - MBIA Insured 6/03 at 102.00 AAA 1,341,475
2,495 6.000%, 6/01/13 - MBIA Insured 6/03 at 102.00 AAA 2,562,789
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.0%
4,000 Jacksonville Electric Authority, Florida, Electric System Revenue 10/07 at 100.00 AA- 3,949,400
Bonds, Series 2002D Subordinate Lien, 4.625%, 10/01/22
5,020 Jacksonville Electric Authority, Florida, St. John's River Power 10/11 at 100.00 AA 5,284,403
Park System Revenue Bonds, Issue 2, 17th Series 2002
Refunding, 5.000%, 10/01/18
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 22.0%
3,000 Village of Bryant, Illinois, Pollution Control Revenue Refunding 8/03 at 101.00 A2 2,981,340
Bonds, Central Illinois Light Company Project, Series 1992,
6.500%, 2/01/18
2,475 Chicago Metropolitan Housing Development Corporation, 7/03 at 101.00 AA 2,527,990
Illinois, Housing Development Revenue Refunding Bonds,
FHA-Insured Mortgage Loans - Section 8 Assisted Projects,
Series 1992A, 6.850%, 7/01/22
2,550 City of Chicago, Illinois, Mortgage Revenue Bonds, Series 1992, 6/03 at 101.00 AAA 2,598,221
FHA-Insured Mortgage Loan - Lakeview Towers Project,
6.600%, 12/01/20
700 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call Ca 61,250
Special Facility Revenue Refunding Bonds, United Air Lines,
Inc. Project, Series 2001C, 6.300%, 5/01/16#
1,700 City of Chicago, Illinois, Chicago O'Hare International Airport, 7/03 at 102.00 AAA 1,738,352
General Airport Second Lien Revenue Refunding Bonds,
Series 1993A, 5.600%, 1/01/18 (Alternative Minimum Tax) -
MBIA Insured
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 1,930 Illinois Development Finance Authority, Revenue Bonds, 5/11 at 101.00 BBB+ $ 2,047,209
Midwestern University, Series 2001B, 5.750%, 5/15/16
1,500 Illinois Health Facilities Authority, Revenue Bonds, Series 1992C, No Opt. Call N/R*** 1,791,435
Evangelical Hospitals Corporation, 6.250%, 4/15/22
4,000 Illinois Health Facilities Authority, Revenue Bonds, 9/06 at 100.00 AAA 4,637,400
Series 1992B, Franciscan Sisters Health Care Corporation
Project, 6.625%, 9/01/13 (Pre-refunded to 9/01/06) -
MBIA Insured
4,480 Illinois Health Facilities Authority, Revenue Bonds, University 8/11 at 103.00 Aa1 4,882,573
of Chicago Project, Series 1985A Remarketed, 5.500%, 8/01/20
2,225 Illinois Health Facilities Authority, Revenue Bonds, Elmhurst 1/13 at 100.00 A2 2,463,609
Memorial Healthcare, Series 2002 Refunding, 6.250%, 1/01/17
620 Illinois Housing Development Authority, Homeowner Mortgage 2/10 at 100.00 AA 666,134
Revenue Bonds, Series 2000-D3, 5.700%, 8/01/17
5,700 State of Illinois, Sales Tax Revenue Bonds, First Series 2002, 6/13 at 100.00 AAA 5,890,722
5.000%, 6/15/22
2,000 State of Illinois, Build Illinois Bonds, Sales Tax Revenue Bonds, 6/07 at 101.00 AAA 2,237,320
Series X, 5.600%, 6/15/17
6,000 Metropolitan Pier and Exposition Authority, Illinois, McCormick 6/12 at 101.00 AAA 6,215,580
Place Expansion Project Refunding Revenue Bonds,
Series 2002B, 5.000%, 6/15/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.5%
3,500 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A+ 3,549,735
Bonds, Series 2001, The Methodist Hospital Inc.,
5.375%, 9/15/22
2,000 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 2,077,800
Revenue Refunding Bonds, Series 2002A, Waterworks Project,
5.250%, 7/01/33 - MBIA Insured
2,725 Warrick County, Indiana, Environmental Improvement Revenue 5/03 at 102.00 A- 2,781,571
Bonds, 1993 Series B, Southern Indiana Gas and Electric
Company Project, 6.000%, 5/01/23 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 2.8%
Tobacco Settlement Authority, Iowa, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
3,500 5.300%, 6/01/25 6/11 at 101.00 A 2,894,290
2,850 5.600%, 6/01/35 6/11 at 101.00 A 2,199,459
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.3%
500 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA- 555,185
Revenue Bonds, Partners HealthCare System Issue, Series C,
6.000%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 9.4%
4,000 Michigan State Housing Development Authority, Single Family 6/06 at 102.00 AA+ 4,240,440
Mortgage Revenue Bonds, 1996 Series C, 5.950%, 12/01/17
235 Michigan State Hospital Finance Authority, Revenue and Refunding 8/03 at 102.00 BBB- 214,322
Bonds, The Detroit Medical Center Obligated Group,
Series 1993A, 6.500%, 8/15/18
2,900 Michigan State Hospital Finance Authority, Revenue Bonds, 12/12 at 100.00 AA- 2,932,451
Trinity Health Credit, Series 2002C Refunding,
5.375%, 12/01/30
8,240 Michigan State Housing Development Authority, Limited 9/03 at 102.00 AAA 8,454,982
Obligation Multifamily Housing Revenue Bonds, Greenwood
Villa Project, Series 1992, 6.625%, 9/15/17 - FSA Insured
1,600 Plymouth-Canton Community Schools, Counties of Wayne 5/09 at 100.00 AAA 1,640,272
and Washtenaw, State of Michigan, 1999 School Building
and Site General Obligation Unlimited Tax Bonds,
4.750%, 5/01/18
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.9%
3,500 Nebraska Public Power District, General Revenue Bonds, 1/13 at 100.00 AAA 3,566,045
Series 2002B, 5.000%, 1/01/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.9%
4,000 Director of the State of Nevada, Department of Business 1/10 at 100.00 AAA 4,125,160
and Industry, Las Vegas Monorail Project Revenue Bonds,
1st Tier Series 2000, 5.375%, 1/01/40 - AMBAC Insured
4,510 Reno, Nevada, Capital Improvement Revenue Bonds, 6/12 at 100.00 AAA 4,854,203
Series 2002, 5.500%, 6/01/22 - FGIC Insured
21
Nuveen Select Tax-Free Income Portfolio 3 (NXR) (continued)
Portfolio of INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.1%
$ 1,885 New Hampshire Housing Finance Authority, Single Family 5/11 at 100.00 Aa2 $ 1,971,917
Mortgage Acquisition Bonds, Series 2001A, 5.600%, 7/01/21
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 3.6%
2,335 Long Island Power Authority, New York, Electric System General 9/11 at 100.00 A- 2,414,717
Revenue Bonds, Series 2001A, 5.375%, 9/01/21
35 The City of New York, New York, General Obligation Bonds, 8/03 at 100.75 A 35,398
Fiscal 1992 Series B, 7.000%, 2/01/18
2,130 Dormitory Authority of the State of New York, City University No Opt. Call A3 2,570,995
System Consolidated Second General Resolution Revenue
Bonds, Series 1990C, 7.500%, 7/01/10
1,485 New York State Medical Care Facilities Finance Agency, Hospital 8/04 at 100.00 AAA 1,588,029
and Nursing Home FHA-Insured Mortgage Revenue Bonds,
1992 Series C, 6.250%, 8/15/12 (Pre-refunded to 8/15/04)
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 4.3%
5,000 North Carolina Municipal Power Agency Number 1, Catawba 1/13 at 100.00 AAA 5,405,750
Electric Revenue Bonds, Series 2003A, 5.250%, 1/01/18 -
MBIA Insured
2,345 Piedmont Triad Airport Authority, North Carolina, Airport 7/11 at 101.00 AAA 2,544,489
Revenue Bonds, Series 2001A, 5.250%, 7/01/16 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.2%
2,435 Dauphin County Industrial Development Authority, Pennsylvania, No Opt. Call A- 3,025,561
Water Development Refunding Revenue Bonds, Series 1992B,
Dauphin Consolidated Water Supply Company, 6.700%, 6/01/17
1,755 Pennsylvania Higher Educational Facilities Authority, Drexel 5/03 at 102.00 A 1,796,927
University Revenue Bonds, Series 1993, 6.375%, 5/01/17
1,000 Philadelphia Authority for Industrial Development, Pennsylvania, 7/11 at 101.00 AAA 1,072,170
Airport Revenue Bonds, Series 2001A, Philadelphia Airport
System Project, 5.500%, 7/01/17 (Alternative Minimum Tax) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.2%
1,500 Lexington County Health Services District, South Carolina, 11/13 at 100.00 A 1,621,785
Hospital Revenue Bonds, Series 2003 Refunding and
Improvement, 6.000%, 11/01/18
2,500 South Carolina Jobs Economic Development Authority, Revenue 11/12 at 100.00 A- 2,525,725
Bonds, Bon Secours Health System, Inc., Series 2002A,
5.625%, 11/15/30
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.1%
2,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa2 2,062,720
Tennessee, Hospital Facilities Revenue Bonds, Baptist Health
System of East Tennessee, Series 2002, 6.375%, 4/15/22
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 12.5%
3,755 Grand Prairie Industrial Development Authority, Texas, Industrial 6/03 at 102.00 A 3,844,444
Development Revenue Refunding Bonds, Series 1992, Baxter
International Inc. Project, 6.550%, 12/01/12
2,500 Harris County Health Facilities Development Corporation, 10/04 at 101.00 AAA 2,716,500
Texas, Hospital Revenue Bonds, Hermann Hospital,
Series 1994, 6.375%, 10/01/17 (Pre-refunded to 10/01/04) -
MBIA Insured
3,000 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/12 at 100.00 AAA 3,282,930
Bonds, Series 2002B, 5.500%, 7/01/18
3,125 Katy Independent School District, Counties of Harris, Fort Bend 2/12 at 100.00 AAA 3,154,938
and Waller, Texas, General Obligation Bonds, Series 2002A,
5.000%, 2/15/32
5,000 North Central Texas Health Facilities Development Corporation, 5/06 at 102.00 AA- 5,147,700
Hospital Revenue Refunding Bonds, Baylor Health Care System
Project, Series 1995, 5.250%, 5/15/16
4,750 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 AA 5,062,835
System Revenue Refunding Bonds, Series 2002A,
5.500%, 10/01/17 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.9%
1,710 Intermountain Power Agency, Utah, Power Revenue Refunding 7/06 at 102.00 A+ 1,733,889
Bonds, 1996 Series D, 5.000%, 7/01/21
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 2.1%
3,880 State of Washington, General Obligation Bonds, 10/03 at 100.00 AA+ 3,880,077
Series 1993A, 4.500%, 10/01/18
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 3.0%
$ 2,500 Berkeley County Building Commission, West Virginia, Hospital 5/03 at 102.00 BBB- $ 2,505,499
Revenue Bonds, City Hospital Project, Series 1992,
6.500%, 11/01/09
3,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 4/03 at 102.00 BBB 3,019,919
Appalachian Power Company Project, Series 1992J,
6.600%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
$ 175,235 Total Long-Term Investments (cost $176,205,467) - 98.5% 182,443,341
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 2,693,396
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $185,136,737
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
# On December 9, 2002, UALCorporation, the holding
company of United Air Lines, Inc. filed for federal
bankruptcy protection. Subsequent to the reporting
period, the Adviser determined that it was likely
United would not remain current on their interest
payment obligations with respect to these bonds and
thus has stopped accruing interest.
See accompanying notes to financial statements.
23
Nuveen California Select Tax-Free Income Portfolio (NXC)
Portfolio of
INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.2%
$ 2,000 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 A $ 1,957,360
Settlement Asset-Backed Revenue Bonds, Fresno County Tobacco
Funding Corporation, Series 2002, 5.625%, 6/01/23
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 14.3%
1,410 California Educational Facilities Authority, Refunding Revenue 4/03 at 100.00 AAA 1,415,273
Bonds, Series 1992, Loyola Marymount University,
6.000%, 10/01/14 - MBIA Insured
1,000 California Educational Facilities Authority, Revenue Bonds, 12/09 at 101.00 AAA 1,029,340
Stanford University, Series 1999P, 5.000%, 12/01/23
750 California Educational Facilities Authority, Revenue Bonds, 8/09 at 100.00 A1 781,440
Pepperdine University, Series 2002A, 5.500%, 8/01/32
2,600 California Educational Facilities Authority, Revenue Bonds, 11/11 at 100.00 A2 2,727,088
University of the Pacific, Series 2002, 5.250%, 11/01/21
1,000 California Educational Facilities Authority, Revenue Bonds, 10/12 at 100.00 A2 1,054,850
University of San Diego, Series 2002A, 5.500%, 10/01/32
3,000 California Infrastructure and Economic Development Bank, 10/11 at 101.00 A- 3,207,120
Revenue Bonds, Series 2001, The J. David Gladstone Institutes
Project, 5.500%, 10/01/19
2,000 State Public Works Board of the State of California, Lease 10/12 at 100.00 AAA 2,057,140
Revenue Bonds, Regents of the University of California,
2002 Series A, UCLA Replacement Hospitals,
5.000%, 10/01/22
750 California Statewide Communities Development Authority, 8/12 at 100.00 A 772,845
Student Housing Revenue Bonds, EAH-East Campus
Apartment LLC, Series 2002A, 5.500%, 8/01/22 -
ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 14.3%
2,500 California Health Facilities Financing Authority, Insured Hospital 4/03 at 102.00 AAA 2,586,000
Revenue Bonds, Scripps Memorial Hospitals, Series 1992A,
6.400%, 10/01/12 - MBIA Insured
4,000 California Health Facilities Financing Authority, Insured Hospital 8/03 at 101.00 AAA 4,095,280
Revenue Bonds, San Diego Hospital Association, Series 1992B,
6.125%, 8/01/11 - MBIA Insured
2,000 California Infrastructure and Economic Development Bank, 8/11 at 102.00 A 2,043,220
Revenue Bonds, Kaiser Hospital Assistance I-LLC, Series 2001A,
5.550%, 8/01/31
1,880 California Statewide Communities Development Authority, 6/07 at 101.00 AAA 2,074,730
Revenue Bonds, Los Angeles Orthopaedic Hospital Foundation
and Orthopaedic Hospital, Series 2000, 5.500%, 6/01/17 -
AMBAC Insured
1,500 California Statewide Communities Development Authority, 11/09 at 102.00 A 1,521,540
Insured Mortgage Hospital Revenue Bonds, Mission Community
Hospital, Series 2001, 5.375%, 11/01/26
790 Central Joint Powers Health Financing Authority, Certificates 8/03 at 100.00 Baa1 734,945
of Participation, Series 1993, Community Hospital of Central
California, 5.000%, 2/01/23
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.7%
1,500 ABAG Finance Authority for Nonprofit Corporations, California, 11/12 at 100.00 A 1,512,450
Insured Senior Living Revenue Bonds, Odd Fellows Home of
California, Series 2003A, 5.200%, 11/15/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.1%
2,000 Antelope Valley Union High School District, Los Angeles 8/12 at 101.00 AAA 2,044,260
County, California, General Obligation Bonds, Series 2002A,
5.000%, 2/01/27 - MBIA Insured
1,500 Beverly Hills Unified School District, Los Angeles County, 8/12 at 100.00 AA 1,530,750
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/26
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
Golden West Schools Financing Authority, California, 1999
Revenue Bonds, Series A, School District General Obligation
Refunding Program:
$ 4,650 0.000%, 8/01/16 - MBIA Insured No Opt. Call AAA $ 2,504,537
1,750 0.000%, 2/01/17 - MBIA Insured No Opt. Call AAA 907,358
2,375 0.000%, 8/01/17 - MBIA Insured No Opt. Call AAA 1,202,534
2,345 0.000%, 2/01/18 - MBIA Insured No Opt. Call AAA 1,141,147
Mountain View-Los Altos Union High School District, County of
Santa Clara, California, 1995 General Obligation Capital
Appreciation Bonds, Series C:
1,015 0.000%, 5/01/17 - MBIA Insured No Opt. Call AAA 521,487
1,080 0.000%, 5/01/18 - MBIA Insured No Opt. Call AAA 520,754
2,000 North Orange County Community College District, California, 8/12 at 101.00 AAA 2,072,580
General Obligation Bonds, Series 2002A, 5.000%, 8/01/22 -
MBIA Insured
4,000 City of Oakland, Alameda County, California, General Obligation 6/03 at 101.00 AAA 4,094,680
Bonds, Series 1992, 6.000%, 6/15/17 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 5.9%
3,500 State Public Works Board of the State of California, Lease No Opt. Call AAA 4,340,070
Revenue Bonds, Department of Corrections, 1991 Series A,
Calipatria State Prison in Imperial County, 6.500%, 9/01/17 -
MBIA Insured
1,000 Santa Clara County Board of Education, California, Certificates 4/12 at 101.00 AAA 1,020,920
of Participation, Series 2002, 5.000%, 4/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 13.9%
5,000 Harbor Department of the City of Los Angeles, California, 8/11 at 100.00 AAA 5,335,000
Revenue Refunding Bonds, Series 2001B, 5.500%, 8/01/17
(Alternative Minimum Tax) - AMBAC Insured
3,675 Palm Springs Financing Authority, California, Palm Springs 7/03 at 101.00 AAA 3,723,400
Regional Airport, Revenue Bonds, Series 1992,
6.000%, 1/01/12 (Alternative Minimum Tax) - MBIA Insured
1,000 Port of Oakland, California, Revenue Bonds, Series 2002M, 11/12 at 100.00 AAA 1,072,720
5.250%, 11/01/20 - FGIC Insured
2,500 Port of Oakland, California, Revenue Bonds, Series 2002N, 11/12 at 100.00 AAA 2,533,150
5.000%, 11/01/22 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 9.4%
2,925 Department of Water and Power of the City of Los Angeles, 5/03 at 102.00 AAA 2,938,075
California, Water Works Refunding Revenue Bonds,
Second Issue 1993, 4.500%, 5/15/18 (Pre-refunded
to 5/15/03) - FGIC Insured
1,200 Los Angeles County Metropolitan Transportation Authority, 7/03 at 102.00 AAA 1,237,752
California, Proposition A Sales Tax Revenue Refunding
Bonds, Series 1993-A, 5.625%, 7/01/18 (Pre-refunded
to 7/01/03) - MBIA Insured
4,000 San Diego County, California, Certificates of Participation, 8/04 at 102.00 AAA 4,377,760
1994 Inmate Reception Center and Cooling Plant Financing,
6.750%, 8/01/14 (Pre-refunded to 8/01/04) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 9.2%
State of California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
2,000 5.750%, 5/01/17 5/12 at 101.00 A3 2,205,060
2,000 5.125%, 5/01/19 5/12 at 101.00 A3 2,074,880
2,550 M-S-R Public Power Agency, California, San Juan Project Revenue 7/03 at 100.00 AAA 2,578,305
Bonds, Series 1991E, 6.000%, 7/01/22 - MBIA Insured
1,225 Turlock Irrigation District, California, Revenue Bonds, No Opt. Call AAA 1,468,261
Series 1992A Refunding, 6.250%, 1/01/12 - MBIA Insured
25
Nuveen California Select Tax-Free Income Portfolio (NXC) (continued)
Portfolio of INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 6.5%
$ 3,000 Contra Costa Water District, Contra Costa County, California, 10/04 at 102.00 AAA $ 3,031,139
Water Revenue Bonds, Series G, 5.000%, 10/01/24 -
MBIA Insured
2,800 The City of Los Angeles, California, Wastewater System 6/08 at 101.00 AAA 2,863,251
Revenue Bonds, Series 1998-A, 5.000%, 6/01/23 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 89,770 Total Long-Term Investments (cost $83,113,179) - 95.5% 86,910,451
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.5%
500 Southern California Metropolitan Water District, Waterworks VMIG-1 500,000
Revenue Bonds, Series C-2, Variable Rate Demand Bonds,
1.050%, 7/01/36+
------------------------------------------------------------------------------------------------------------------------------------
$ 500 Total Short-Term Investments (cost $500,000) 500,000
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.0% 3,564,671
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $90,975,122
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
26
Nuveen New York Select Tax-Free Income Portfolio (NXN)
Portfolio of
INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.5%
$ 1,500 TSASC, Inc., New York, Tobacco Asset-Backed Bonds, 7/12 at 100.00 Aa1 $ 1,412,940
Series 2002-1, 5.500%, 7/15/24
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 14.8%
1,700 Town of Amherst Industrial Development Agency, New York, 8/12 at 101.00 AAA 1,757,443
Civic Facility Revenue Bonds, UBF Faculty-Student Housing
Corporation Creekside Project, 2002 Series A, 5.000%, 8/01/22 -
AMBAC Insured
1,000 New York City Industrial Development Agency, New York, Civic 11/04 at 102.00 AAA 1,092,030
Facility Revenue Bonds, USTA National Tennis Center
Incorporated Project, 6.375%, 11/15/14 - FSA Insured
570 Dormitory Authority of the State of New York, City University No Opt. Call AAA 689,164
System Consolidated Second General Resolution Revenue
Bonds, Series 1990C, 7.500%, 7/01/10 - FGIC Insured
1,100 Dormitory Authority of the State of New York, Mount Sinai 7/03 at 100.00 AAA 1,115,664
School of Medicine, Insured Revenue Bonds, Series 1991,
6.750%, 7/01/15 - MBIA Insured
1,425 Dormitory Authority of the State of New York, Rochester 7/07 at 101.00 AAA 1,496,521
Institute of Technology, Insured Revenue Bonds, Series 1997,
5.250%, 7/01/22 - MBIA Insured
1,430 Dormitory Authority of the State of New York, Revenue Bonds, 7/11 at 101.00 AA- 1,451,092
Upstate Community Colleges, 2002 Series A, 5.000%, 7/01/23
785 Dormitory Authority of the State of New York, Insured Revenue 7/12 at 100.00 AAA 806,297
Bonds, Iona College, Series 2002, 5.000%, 7/01/22 -
XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 6.4%
500 New York City Health and Hospitals Corporation, New York, 2/13 at 100.00 AAA 528,170
Health System Revenue Bonds, Series 2003A,
5.250%, 2/15/21 - AMBAC Insured
1,680 Dormitory Authority of the State of New York, Winthrop 7/11 at 101.00 AAA 1,811,897
University Hospital Association Revenue Bonds, Winthrop
South Nassau University Health System Obligated Group,
Series 2001A, 5.250%, 7/01/17 - AMBAC Insured
1,195 Dormitory Authority of the State of New York, South Nassau 7/11 at 101.00 AAA 1,288,819
Communities Hospital Revenue Bonds, Winthrop South Nassau
University Health System Obligated Group, Series 2001B,
5.250%, 7/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 8.3%
1,000 East Rochester Housing Authority, New York, Revenue Bonds, 12/12 at 103.00 AAA 1,056,630
Saint Mary's Residence Project, GNMA/FHA Secured,
Series 2002A, 5.375%, 12/20/22
1,310 New Hartford Housing Development Corporation, New York, 7/03 at 100.00 AAA 1,312,109
Mortgage Revenue Refunding Bonds, Series 1992-A, Village
Point Project - FHA-Insured Mortgage Loan Section 8 Assisted
Project, 7.375%, 1/01/24 - MBIA Insured
1,000 New Hartford-Sunset Woods Funding Corporation, New York, 8/12 at 101.00 AAA 1,059,510
FHA-Insured Mortgage Revenue Bonds, Sunset Woods
Apartments II Project, Series 2002, 5.350%, 2/01/20
1,245 New York State Housing Finance Agency, Insured Multifamily 8/03 at 101.00 AAA 1,271,805
Housing Mortgage Revenue Bonds, Series 1992C, FHA-Insured,
6.450%, 8/15/14 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.2%
2,500 State of New York Mortgage Agency, Mortgage Revenue 4/11 at 100.00 Aaa 2,564,875
Bonds, Thirty First Series A, 5.300%, 10/01/31 (Alternative
Minimum Tax)
2,000 State of New York Mortgage Agency, Homeowner Mortgage 10/11 at 100.00 Aa1 2,072,840
Revenue Bonds, Series 101, 5.000%, 10/01/18 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 9.0%
2,000 East Rochester Housing Authority, New York, Jewish Home 8/12 at 101.00 AAA 2,062,440
of Rochester Revenue Bonds, FHA-Insured Mortgage,
Series 2002 Refunding, 4.625%, 2/15/17
1,000 New York City Industrial Development Agency, New York, 11/12 at 101.00 AAA 1,007,960
GNMA Collateralized Mortgage Revenue Bonds, Eger Harbor
House Inc. Project, Series 2002A, 4.950%, 11/20/32
27
Nuveen New York Select Tax-Free Income Portfolio (NXN) (continued)
Portfolio of INVESTMENTS March 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
$ 2,000 Dormitory Authority of the State of New York, Norwegian 8/11 at 101.00 AAA $ 2,055,580
Christian Home and Health Center, FHA-Insured Mortgage
Nursing Home Revenue Bonds, Series 2001, 5.200%, 8/01/36 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 5.0%
Town of Clarkstown, Rickland County, New York, Various Purposes
Serial Bonds, Series 1992:
505 5.600%, 6/15/10 - AMBAC Insured No Opt. Call AAA 580,735
525 5.600%, 6/15/11 - AMBAC Insured No Opt. Call AAA 602,894
525 5.600%, 6/15/12 - AMBAC Insured No Opt. Call AAA 609,751
1,000 West Islip Union Free School District, Suffolk County, New York, 10/10 at 100.00 Aaa 1,055,290
General Obligation Bonds, Series 2001, 5.000%, 10/01/17 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 3.2%
1,000 Nassau County Interim Finance Authority, New York, Sales Tax 11/06 at 101.00 AAA 1,026,820
Secured Revenue Bonds, Series 2001-A2, 5.125%, 11/15/21 -
AMBAC Insured
750 New York State Thruway Authority, Second General Highway 4/13 at 100.00 AAA 789,645
and Bridge Trust Fund Bonds, Series 2003A, 5.250%, 4/01/23 -
MBIA Insured (WI, settling 4/03/03)
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.8%
2,500 The Port Authority of New York and New Jersey, Consolidated 1/05 at 101.00 AAA 2,700,425
Bonds, Ninety-Seventh Series, 6.500%, 7/15/19 (Alternative
Minimum Tax) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 15.1%
1,000 The City of New York, New York, General Obligation Bonds, 8/04 at 101.00 AAA 1,089,160
Fiscal 1995 Series B1, 6.950%, 8/15/12 (Pre-refunded to
8/15/04) - MBIA Insured
1,465 Dormitory Authority of the State of New York, Judicial Facilities No Opt. Call AAA 1,845,944
Lease Revenue Bonds, Suffolk County Issue, Series 1986,
7.375%, 7/01/16
1,865 New York State Medical Care Facilities Finance Agency, Hospital 8/04 at 100.00 AAA 1,994,394
and Nursing Home FHA-Insured Mortgage Revenue Bonds,
1992 Series C, 6.250%, 8/15/12 (Pre-refunded to 8/15/04) -
MBIA Insured
2,500 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 2,802,700
New York Hospital FHA-Insured Mortgage Revenue Bonds,
Series 1994A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05) -
AMBAC Insured
200 New York State Thruway Authority, Highway and Bridge Trust 4/05 at 102.00 AAA 215,646
Fund Bonds, Series 1995B, 5.125%, 4/01/15 (Pre-refunded
to 4/01/05) - MBIA Insured
485 Suffolk County Water Authority, New York, Waterworks Revenue No Opt. Call AAA 584,949
Bonds, Series 1986-V, 6.750%, 6/01/12
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.6%
2,000 Long Island Power Authority, New York, Electric System General 6/08 at 101.00 AAA 2,050,480
Revenue Bonds, Series 1998A, 5.125%, 12/01/22 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 13.7%
2,500 New York City Municipal Water Finance Authority, New York, 6/11 at 101.00 AA 2,558,775
Water and Sewer System Revenue Bonds, Fiscal 2001 Series C,
5.125%, 6/15/33
New York State Environmental Facilities Corporation, State Clean
Water and Drinking Water Revolving Funds Revenue Bonds, New York
City Municipal Water Finance Authority Projects, Second
Resolution Bonds, Series 2002B:
2,000 5.250%, 6/15/19 6/12 at 100.00 AAA 2,151,720
3,000 5.000%, 6/15/27 6/12 at 100.00 AAA 3,047,370
------------------------------------------------------------------------------------------------------------------------------------
$ 50,760 Total Long-Term Investments (cost $50,794,344) - 94.6% 53,620,484
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 5.4% 3,062,594
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $56,683,078
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
28
Statement of
ASSETS AND LIABILITIES March 31, 2003
SELECT SELECT SELECT CALIFORNIA NEW YORK
TAX-FREE TAX-FREE 2 TAX-FREE 3 SELECT TAX-FREE SELECT TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value
(cost $222,064,328, $242,859,890, $176,205,467,
$83,613,179 and $50,794,344, respectively) $236,387,538 $251,091,518 $182,443,341 $87,410,451 $53,620,484
Cash 146,256 -- -- 84,346 549,403
Receivables:
Interest 4,173,467 4,216,796 2,987,853 1,340,453 745,664
Investments sold 2,105,000 -- 249,900 2,193,000 2,594,167
Other assets 73,495 77,230 59,069 32,172 23,378
------------------------------------------------------------------------------------------------------------------------------------
Total assets 242,885,756 255,385,544 185,740,163 91,060,422 57,533,096
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- 791,572 419,947 -- --
Payable for investments purchased -- -- -- -- 786,863
Accrued expenses:
Surveillance and administration fees 50,408 63,636 46,694 23,226 14,475
Other 166,465 175,128 136,785 62,074 48,680
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 216,873 1,030,336 603,426 85,300 850,018
------------------------------------------------------------------------------------------------------------------------------------
Net assets $242,668,883 $254,355,208 $185,136,737 $90,975,122 $56,683,078
====================================================================================================================================
Shares outstanding 16,378,096 17,607,068 12,964,124 6,257,070 3,907,069
====================================================================================================================================
Net asset value per share outstanding
(net assets divided by shares outstanding) $ 14.82 $ 14.45 $ 14.28 $ 14.54 $ 14.51
====================================================================================================================================
NET ASSETS CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 163,781 $ 176,071 $ 129,641 $ 62,571 $ 39,071
Paid-in surplus 227,635,042 245,690,698 178,372,582 87,121,713 53,605,750
Undistributed (Over-distribution of)
net investment income 452,975 (39,416) (88,622) (75,837) 30,688
Accumulated net realized gain from investments 93,875 296,227 485,262 69,403 181,429
Net unrealized appreciation of investments 14,323,210 8,231,628 6,237,874 3,797,272 2,826,140
------------------------------------------------------------------------------------------------------------------------------------
Net assets $242,668,883 $254,355,208 $185,136,737 $90,975,122 $56,683,078
====================================================================================================================================
See accompanying notes to financial statements.
29
Statement of
OPERATIONS Year Ended March 31, 2003
SELECT SELECT SELECT CALIFORNIA NEW YORK
TAX-FREE TAX-FREE 2 TAX-FREE 3 SELECT TAX-FREE SELECT TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $13,551,726 $14,424,080 $10,211,719 $4,804,327 $2,994,422
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Surveillance and administration fees 593,045 752,318 548,102 273,384 169,229
Shareholders' servicing agent fees and expenses 55,966 52,197 28,483 15,104 9,950
Custodian's fees and expenses 81,816 83,898 61,300 34,593 22,459
Trustees' fees and expenses 26,806 28,378 18,346 11,525 6,608
Professional fees 23,447 22,110 17,933 11,720 9,741
Shareholders' reports - printing and mailing expenses 55,109 60,058 43,441 15,184 12,899
Stock exchange listing fees 16,274 16,271 16,271 13,840 13,771
Investor relations expense 48,078 51,033 39,165 15,609 10,503
Other expenses 8,651 8,883 7,029 4,894 4,241
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 909,192 1,075,146 780,070 395,853 259,401
Custodian fee credit (23,687) (28,142) (19,033) (14,688) (4,940)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 885,505 1,047,004 761,037 381,165 254,461
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 12,666,221 13,377,076 9,450,682 4,423,162 2,739,961
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain from investments 2,175,032 2,738,597 2,127,842 919,407 630,086
Change in net unrealized appreciation
(depreciation) of investments 3,681,890 (417,458) (545,919) 728,613 1,060,980
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 5,856,922 2,321,139 1,581,923 1,648,020 1,691,066
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $18,523,143 $15,698,215 $11,032,605 $6,071,182 $4,431,027
====================================================================================================================================
See accompanying notes to financial statements.
30
Statement of
CHANGES IN NET ASSETS
SELECT TAX-FREE (NXP) SELECT TAX-FREE 2 (NXQ) SELECT TAX-FREE 3 (NXR)
----------------------------- ------------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/03 3/31/02 3/31/03 3/31/02 3/31/03 3/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 12,666,221 $ 14,424,534 $ 13,377,076 $ 15,094,320 $ 9,450,682 $ 10,498,802
Net realized gain from investments 2,175,032 1,111,671 2,738,597 1,103,729 2,127,842 22,630
Change in net unrealized
appreciation
(depreciation) of investments 3,681,890 (7,241,071) (417,458) (7,340,586) (545,919) (3,682,776)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 18,523,143 8,295,134 15,698,215 8,857,463 11,032,605 6,838,656
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From and in excess of net
investment income (13,364,529) (14,118,971) (14,058,896) (14,816,349) (9,882,044) (10,345,370)
From accumulated net realized
gains from investments (2,764,623) (376,696) (3,171,385) (297,559) (850,958) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (16,129,152) (14,495,667) (17,230,281) (15,113,908) (10,733,002) (10,345,370)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets 2,393,991 (6,200,533) (1,532,066) (6,256,445) 299,603 (3,506,714)
Net assets at the beginning
of year 240,274,892 246,475,425 255,887,274 262,143,719 184,837,134 188,343,848
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $242,668,883 $240,274,892 $254,355,208 $255,887,274 $185,136,737 $184,837,134
====================================================================================================================================
Undistributed (Over-distribution
of) net investment
income at the
end of year $ 452,975 $ 1,458,982 $ (39,416) $ 703,513 $ (88,622) $ 361,155
====================================================================================================================================
See accompanying notes to financial statements.
31
Statement of
CHANGES IN NET ASSETS (continued)
CALIFORNIA SELECT TAX-FREE (NXC) NEW YORK SELECT TAX-FREE (NXN)
----------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/03 3/31/02 3/31/03 3/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,423,162 $ 4,853,758 $ 2,739,961 $ 2,848,534
Net realized gain from investments 919,407 149,331 630,086 245,948
Change in net unrealized appreciation
(depreciation) of investments 728,613 (2,218,344) 1,060,980 (1,540,357)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 6,071,182 2,784,745 4,431,027 1,554,125
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From and in excess of net
investment income (4,592,689) (4,805,497) (2,742,795) (2,871,874)
From accumulated net realized gains
from investments (849,710) (150,170) (366,890) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (5,442,399) (4,955,667) (3,109,685) (2,871,874)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 628,783 (2,170,922) 1,321,342 (1,317,749)
Net assets at the beginning of year 90,346,339 92,517,261 55,361,736 56,679,485
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $90,975,122 $90,346,339 $56,683,078 $55,361,736
====================================================================================================================================
Undistributed (Over-distribution of) net
investment income at the
end of year $ (75,837) $ 107,137 $ 30,688 $ 30,328
====================================================================================================================================
See accompanying notes to financial statements.
32
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The Trusts covered in this report and their corresponding Common share New York
Stock Exchange symbols are Nuveen Select Tax-Free Income Portfolio (NXP), Nuveen
Select Tax-Free Income Portfolio 2 (NXQ), Nuveen Select Tax-Free Income
Portfolio 3 (NXR), Nuveen California Select Tax-Free Income Portfolio (NXC) and
Nuveen New York Select Tax-Free Income Portfolio (NXN). The Trusts are
registered under the Investment Company Act of 1940, as amended, as closed-end,
diversified management investment companies.
Each Trust seeks to provide stable dividends consistent with the preservation of
capital, exempt from regular federal and designated state income taxes, where
applicable, by investing primarily in a diversified portfolio of municipal
obligations.
The following is a summary of significant accounting policies followed by the
Trusts in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Trust's investment portfolio are provided
by a pricing service approved by the Trusts' Board of Trustees. When price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. If it is determined that market prices for a security are
unavailable or inappropriate, the Board of Trustees of the Trusts, or its
designee, may establish a fair value for the security. Temporary investments in
securities that have variable rate and demand features qualifying them as
short-term securities are valued at amortized cost, which approximates market
value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject to
market fluctuation during this period. The Trusts have instructed the custodian
to segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At March 31, 2003, New
York Select Tax-Free (NXN) had an outstanding when-issued purchase commitment of
$786,863. There were no such outstanding purchase commitments in any of the
other Trusts.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Income Taxes
Each Trust is a separate taxpayer for federal income tax purposes. Each Trust
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its net investment
income to its shareholders. Therefore, no federal income tax provision is
required. Furthermore, each Trust intends to satisfy conditions which will
enable interest from municipal securities, which is exempt from regular federal
and designated state income taxes, where applicable, to retain such tax-exempt
status when distributed to shareholders of the Trusts.
Dividends and Distributions to Shareholders
Dividends from tax-exempt net investment income are declared and paid monthly.
Net realized capital gains and/or market discount from investment transactions,
if any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards. All monthly tax-exempt income dividends
paid during the fiscal year ended March 31, 2003, have been designated Exempt
Interest Dividends.
33
Notes to
FINANCIAL STATEMENTS (continued)
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States. Accordingly, temporary
over-distributions as a result of these differences may occur and will be
classified as either distributions in excess of net investment income,
distributions in excess of net realized gains and/or distributions in excess of
net ordinary taxable income from investment transactions, where applicable.
Derivative Financial Instruments
The Trusts are not authorized to invest in derivative financial instruments.
Custodian Fee Credit
Each Trust has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Trust's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
2. TRUST SHARES
None of the Trusts engaged in transactions in their own shares during the fiscal
year ended March 31, 2003, nor during the fiscal year ended March 31, 2002.
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term securities during the fiscal year ended March 31,
2003, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
----------------------------------------------------------------------------------------------------------
Purchases:
Long-term municipal securities $81,856,787 $113,363,131 $89,150,912 $36,447,345 $18,885,884
Short-term securities 27,820,000 31,180,000 28,575,000 28,500,000 5,200,000
Sales and maturities:
Long-term municipal securities 87,466,150 117,430,725 90,046,550 40,657,000 19,237,095
Short-term securities 27,320,000 30,180,000 28,575,000 28,000,000 5,200,000
==========================================================================================================
34
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing income on taxable market
discount securities and timing differences in recognizing certain gains and
losses on security transactions.
At March 31, 2003, the cost of investments were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
----------------------------------------------------------------------------------------------------------
Cost of investments $221,337,545 $242,614,207 $176,093,666 $83,579,815 $50,790,469
==========================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at March 31, 2003, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $17,533,499 $11,950,307 $ 7,919,218 $3,915,299 $2,873,766
Depreciation (2,483,506) (3,472,996) (1,569,543) (84,663) (43,751)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation
on investments $15,049,993 $ 8,477,311 $ 6,349,675 $3,830,636 $2,830,015
==========================================================================================================
The tax components of undistributed net investment income and net realized gains
at March 31, 2003, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $741,634 $780,129 $539,760 $247,448 $249,538
Undistributed net ordinary income* -- -- 5,254 858 --
Undistributed net long-term capital gains 93,875 296,227 485,262 68,545 181,429
=========================================================================================================
The tax character of distributions paid during the fiscal years ended March 31,
2003 and March 31, 2002, was designated for purposes of the dividends paid
deduction as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
2003 (NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Distributed from net tax-exempt income $13,511,932 $14,208,907 $9,995,343 $4,636,488 $2,754,516
Distributed from net ordinary income* 37,830 46,670 3,378 -- --
Distributed from net long-term
capital gains 2,726,793 3,133,168 850,958 849,710 366,890
=========================================================================================================
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
2002 (NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Distributed from net tax-exempt income $14,151,728 $14,842,760 $10,345,372 $4,805,496 $2,883,595
Distributed from net ordinary income* -- -- -- -- --
Distributed from net long-term
capital gains 376,696 297,559 -- 150,170 --
=========================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
35
Notes to
FINANCIAL STATEMENTS (continued)
5. SURVEILLANCE AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Trusts' investment management agreements with Nuveen Institutional
Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments,
Inc. (formerly, The John Nuveen Company), each Trust pays an annual surveillance
and administration fee, payable monthly, at the rates set forth below, which are
based upon the average daily net assets of each Trust as follows:
SELECT TAX-FREE 2 (NXQ)
SELECT TAX-FREE 3 (NXR)
CALIFORNIA SELECT TAX-FREE (NXC)
AVERAGE DAILY NET ASSETS SELECT TAX-FREE (NXP) NEW YORK SELECT TAX-FREE (NXN)
--------------------------------------------------------------------------------------------------------
For the first $125 million .2500% .3000%
For the next $125 million .2375 .2875
For the next $250 million .2250 .2750
For the next $500 million .2125 .2625
For the next $1 billion .2000 .2500
For net assets over $2 billion .1875 .2375
========================================================================================================
The fee compensates the Adviser for performing ongoing administration,
surveillance and portfolio adjustment services. The Trusts pay no compensation
directly to those of its Trustees who are affiliated with the Adviser or to
their officers, all of whom receive remuneration for their services to the
Trusts from the Adviser or its affiliates.
6. INVESTMENT COMPOSITION
At March 31, 2003, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Consumer Staples 1% 4% 4% 2% 3%
Education and Civic Organizations 1 5 6 15 16
Healthcare 17 16 18 15 7
Housing/Multifamily 2 7 7 -- 9
Housing/Single Family 3 3 4 -- 8
Long-Term Care -- -- -- 2 10
Materials 4 4 -- -- --
Tax Obligation/General 8 6 7 19 5
Tax Obligation/Limited 12 10 11 6 3
Transportation 15 14 9 14 5
U.S. Guaranteed 22 14 9 6 16
Utilities 11 14 22 10 4
Water and Sewer 4 2 3 11 14
Other -- 1 -- -- --
---------------------------------------------------------------------------------------------------------
100% 100% 100% 100% 100%
=========================================================================================================
Certain investments owned by the Trusts are covered by insurance issued by
several private insurers or are backed by an escrow or trust containing U.S.
Government or U.S. Government agency securities, both of which ensure the timely
payment of principal and interest in the event of default (51% for Select
Tax-Free (NXP), 55% for Select Tax-Free 2 (NXQ), 36% for Select Tax-Free 3
(NXR), 71% for California Select Tax-Free (NXC), and 62% for New York Select
Tax-Free (NXN)). Such insurance or escrow, however, does not guarantee the
market value of the municipal securities or the value of any of the Trusts'
shares.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Trust.
36
7. SUBSEQUENT EVENT - DISTRIBUTIONS TO SHAREHOLDERS
The Trusts declared dividend distributions from their tax-exempt net investment
income which were paid May 1, 2003, to shareholders of record on April 15, 2003,
as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0620 $.0605 $.0575 $.0570 $.0570
=========================================================================================================
37
Financial
HIGHLIGHTS
Selected data for a share outstanding throughout each year:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------- --------------------------------
NET FROM AND
REALIZED/ IN EXCESS ENDING
BEGINNING NET UNREALIZED OF NET NET ENDING
NET ASSET INVESTMENT INVESTMENT INVESTMENT CAPITAL ASSET MARKET
VALUE INCOME GAIN (LOSS) TOTAL INCOME GAINS TOTAL VALUE VALUE
====================================================================================================================================
SELECT TAX-FREE (NXP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 $14.67 $.77 $ .37 $1.14 $(.82) $(.17) $(.99) $14.82 $14.1500
2002 15.05 .88 (.38) .50 (.86) (.02) (.88) 14.67 13.8500
2001 14.89 .91 .15 1.06 (.90) -- (.90) 15.05 14.5000
2000 15.55 .90 (.66) .24 (.90) -- (.90) 14.89 13.6875
1999 15.62 .90 (.07) .83 (.90) -- (.90) 15.55 16.3750
SELECT TAX-FREE 2 (NXQ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 14.53 .76 .14 .90 (.80) (.18) (.98) 14.45 13.4900
2002 14.89 .86 (.36) .50 (.84) (.02) (.86) 14.53 13.6600
2001 14.75 .87 .14 1.01 (.87) -- (.87) 14.89 14.1500
2000 15.41 .87 (.66) .21 (.87) -- (.87) 14.75 13.3750
1999 15.43 .87 (.02) .85 (.87) -- (.87) 15.41 15.8750
SELECT TAX-FREE 3 (NXR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 14.26 .73 .12 .85 (.76) (.07) (.83) 14.28 13.0600
2002 14.53 .81 (.28) .53 (.80) -- (.80) 14.26 13.4200
2001 14.32 .81 .21 1.02 (.81) -- (.81) 14.53 13.7000
2000 14.98 .82 (.66) .16 (.82) -- (.82) 14.32 12.8750
1999 14.96 .82 .02 .84 (.82) -- (.82) 14.98 15.2500
CALIFORNIA SELECT
TAX-FREE (NXC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 14.44 .71 .26 .97 (.73) (.14) (.87) 14.54 13.5900
2002 14.79 .78 (.34) .44 (.77) (.02) (.79) 14.44 14.2500
2001 14.57 .79 .23 1.02 (.79) (.01) (.80) 14.79 13.9400
2000 15.26 .79 (.67) .12 (.79) (.02) (.81) 14.57 13.7500
1999 15.21 .79 .05 .84 (.79) -- (.79) 15.26 15.7500
NEW YORK SELECT
TAX-FREE (NXN)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 14.17 .70 .43 1.13 (.70) (.09) (.79) 14.51 13.6000
2002 14.51 .73 (.33) .40 (.74) -- (.74) 14.17 13.7600
2001 14.31 .78 .20 .98 (.78) -- (.78) 14.51 14.0500
2000 14.92 .78 (.61) .17 (.78) -- (.78) 14.31 12.6875
1999 14.91 .78 .01 .79 (.78) -- (.78) 14.92 15.1250
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------
TOTAL RETURNS BEFORE CREDIT AFTER CREDIT**
-------------------- -------------------------- -------------------------
RATIO OF NET RATIO OF NET
BASED ON ENDING RATIO OF INVESTMENT RATIO OF INVESTMENT
BASED ON NET NET EXPENSES TO INCOME TO EXPENSES TO INCOME TO PORTFOLIO
MARKET ASSET ASSETS AVERAGE AVERAGE AVERAGE AVERAGE TURNOVER
VALUE* VALUE* (000) NET ASSETS NET ASSETS NET ASSETS NET ASSETS RATE
====================================================================================================================================
SELECT TAX-FREE (NXP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 9.51% 7.84% $242,669 .37% 5.20% .36% 5.21% 35%
2002 1.54 3.41 240,275 .38 5.89 .37 5.89 26
2001 12.63 7.32 246,475 .35 6.06 .35 6.07 2
2000 (11.09) 1.62 243,814 .36 5.97 .36 5.97 --
1999 9.02 5.43 254,635 .36 5.78 .36 5.78 1
SELECT TAX-FREE 2 (NXQ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 6.01 6.33 254,355 .42 5.20 .41 5.21 46
2002 2.57 3.41 255,887 .43 5.79 .42 5.80 21
2001 12.46 7.04 262,144 .41 5.89 .40 5.90 2
2000 (10.38) 1.43 259,660 .40 5.82 .40 5.82 1
1999 9.51 5.63 271,240 .40 5.65 .40 5.65 1
SELECT TAX-FREE 3 (NXR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 3.51 6.09 185,137 .42 5.09 .41 5.10 51
2002 3.84 3.70 184,837 .44 5.59 .42 5.60 9
2001 12.97 7.36 188,344 .47 5.66 .46 5.67 2
2000 (10.29) 1.11 185,671 .41 5.65 .41 5.65 --
1999 7.78 5.76 194,165 .42 5.45 .42 5.45 --
CALIFORNIA SELECT
TAX-FREE (NXC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 1.34 6.86 90,975 .43 4.84 .42 4.85 42
2002 7.95 3.03 90,346 .44 5.27 .43 5.28 12
2001 7.23 7.21 92,517 .43 5.38 .42 5.39 2
2000 (7.57) .90 91,166 .45 5.37 .45 5.38 3
1999 8.22 5.65 95,501 .44 5.20 .44 5.20 1
NEW YORK SELECT
TAX-FREE (NXN)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2003 4.73 8.17 56,683 .46 4.85 .45 4.86 35
2002 3.17 2.75 55,362 .49 5.04 .48 5.05 28
2001 17.36 7.02 56,679 .48 5.39 .47 5.40 3
2000 (11.18) 1.21 55,924 .50 5.36 .49 5.37 --
1999 6.14 5.40 58,303 .49 5.19 .49 5.19 --
====================================================================================================================================
* Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Net Asset Value is the
combination of reinvested dividend income, reinvested capital gains
distributions, if any, and changes in net asset value per share. Total
returns are not annualized.
** After custodian fee credit, where applicable.
See accompanying notes to financial statements.
38-39 SPREAD
Trustees
AND OFFICERS
The management of the Fund, including general supervision of the duties
performed for the Fund under the management agreement between Nuveen Advisory
and the Fund, is the responsibility of the Board of Trustees of the Fund. The
number of trustees of the Fund is currently set at seven. None of the trustees
who are not "interested" persons of the Fund has ever been a director or
employee of, or consultant to, Nuveen or its affiliates. The names and business
addresses of the trustees and officers of the Fund, their principal occupations
and other affiliations during the past five years, the number of portfolios each
oversees and other directorships they hold are set forth below.
NUMBER OF
PORTFOLIOS
IN FUND
YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND APPOINTED(2) DURING PAST 5 YEARS TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger (1) Chairman of the 1996 Chairman and Director (since 1996) of Nuveen 142
3/28/49 Board and Investments, Inc. and Nuveen Investments, LLC;
333 W. Wacker Drive Trustee Director (since 1992) and Chairman (since 1996) of
Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.; Chairman and Director (since 1997)
of Nuveen Asset Management, Inc.; Director (since 1996)
of Institutional Capital Corporation; Chairman and Director
(since 1999) of Rittenhouse Asset Management, Inc.;
Chairman of Nuveen Investments Advisers Inc. (since 2002).
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
James E. Bacon*** Trustee 1992 Treasurer, Cathedral of St. John the Devine (New York City) 20
2/27/31 (since 1997); formerly, Director of Lone Star Industries,
333 W. Wacker Drive Inc., a manufacturer of cement, concrete and construction
Chicago, IL 60606 products (1992-1999); previously, Director and Executive
Vice President of U.S. Trust Corporation and Trustee of
United States Trust Company of New York.
------------------------------------------------------------------------------------------------------------------------------------
William E. Bennett Trustee 2001 Private Investor; previously, President and Chief Executive 20
10/16/46 Officer, Draper & Kramer, Inc., a private company that
333 W. Wacker Drive handles mortgage banking, real estate development, pension
Chicago, IL 60606 advisory and real estate management (1995-1998).
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Trustee 1999 President, The Hall-Perrine Foundation, a private 20
10/22/48 philanthropic corporation (since 1996); Director, Alliant
333 W. Wacker Drive Energy; Director and Vice Chairman, United Fire & Casualty
Chicago, IL 60606 Company; Director, Federal Reserve Bank of Chicago;
formerly, President and Chief Operating Officer, SCI
Financial Group, Inc., a regional financial services firm.
------------------------------------------------------------------------------------------------------------------------------------
William L. Kissick Trustee 1992 Professor Emeritus, School of Medicine and the Wharton 20
7/29/32 School of Management and former Chairman, Leonard Davis
333 W. Wacker Drive Institute of Health Economics, University of Pennsylvania;
Chicago, IL 60606 Adjunct Professor, Health Policy and Management, Yale
University.
------------------------------------------------------------------------------------------------------------------------------------
Thomas E. Leafstrand Trustee 1992 Retired; previously, Vice President in charge of Municipal 20
11/11/31 Underwriting and Dealer Sales at The Northern Trust
333 W. Wacker Drive Company.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Sheila W. Wellington Trustee 1994 President (since 1993) of Catalyst (a not-for-profit 20
2/24/32 organization focusing on women's leadership development in
333 W. Wacker Drive business and the professions).
Chicago, IL 60606
40
NUMBER OF
PORTFOLIOS
IN FUND
YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND APPOINTED(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 2002 Managing Director (since 2002), Assistant Secretary 142
9/9/56 Administrative and Associate General Counsel, formerly, Vice President
333 W. Wacker Drive Officer and Assistant General Counsel of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (since 2002), General Counsel and
Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.;
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel, formerly, Vice President (since
2000), of Nuveen Asset Management, Inc.; Assistant
Secretary of Nuveen Investments, Inc. (since 1994);
Assistant Secretary of NWQ Investment Management
Company, LLC (since 2002); Vice President and
Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Managing Director, Associate General
Counsel and Assistant Secretary of Rittenhouse Asset
Management, Inc. (since May 2003); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant 142
2/3/66 and Assistant Vice President (since 2000), previously, Associate of
333 W. Wacker Drive Secretary Nuveen Investments, LLC.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Paul L. Brennan Vice President 1999 Vice President (since 2002), formerly, Assistant 135
11/10/66 Vice President (since 1997), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager of Flagship Financial Inc.;
Chicago, IL 60606 Chartered Financial Analyst and Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 142
11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice
333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc.
Chicago, IL 60606 (since 1999); Vice President and Treasurer of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp
(since 1999); Vice President and Treasurer of Nuveen
Asset Management, Inc. (since 2002) and of Nuveen
Investments Advisers Inc. (since 2002); Assistant
Treasurer of NWQ Investment Management Company,
LLC (since 2002); Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Susan M. DeSanto Vice President 2001 Vice President of Nuveen Advisory Corp. (since 2001); 142
9/8/54 previously, Vice President of Van Kampen Investment
333 W. Wacker Drive Advisory Corp. (since 1998); Vice President of Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 2002); prior thereto,
Assistant Vice President of Van Kampen Investment
Advisory Corp. (since 1994).
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 142
9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998)
333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002)
Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant
Vice President of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
41
Trustees
AND OFFICERS (CONTINUED)
NUMBER OF
PORTFOLIOS
IN FUND
YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND APPOINTED(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Vice President of Nuveen Investments, LLC; Vice 142
10/24/45 President (since 1998) of Nuveen Advisory Corp. and
333 W. Wacker Drive Nuveen Institutional Advisory Corp.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 142
3/2/64 LLC; Managing Director (since 2001), formerly Vice
333 W. Wacker Drive President of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 1995); Managing
Director of Nuveen Asset Management, Inc. (since 2001);
Vice President of Nuveen Investment Advisers Inc.
(since 2002); Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 142
5/31/54 and Controller 1998) of Nuveen Investments, LLC and Vice President and
333 W. Wacker Drive Funds Controller (since 1998) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
J. Thomas Futrell Vice President 1992 Vice President of Nuveen Advisory Corp.; 135
7/5/55 Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Richard A. Huber Vice President 1997 Vice President of Nuveen Institutional Advisory Corp. 135
3/26/63 (since 1998) and Nuveen Advisory Corp. (since 1997);
333 W. Wacker Drive prior thereto, Vice President and Portfolio Manager of
Chicago, IL 60606 Flagship Financial, Inc.
------------------------------------------------------------------------------------------------------------------------------------
Steven J. Krupa Vice President 1992 Vice President of Nuveen Advisory Corp. 135
8/21/57
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, LLC, 142
3/22/63 previously Assistant Vice President (since 1999); prior
333 W. Wacker Drive thereto, Associate of Nuveen Investments, LLC; Certified
Chicago, IL 60606 Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 142
8/27/61 President (since 1993) of Nuveen Investments, LLC.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1992 Vice President, Assistant Secretary and Assistant General 142
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and
333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen
Investments, Inc. and (since 1997) Nuveen Asset Management,
Inc.; Vice President (since 2000), Assistant Secretary and
Assistant General Counsel (since 1998) of Rittenhouse Asset
Management, Inc.; Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002); Assistant
Secretary of NWQ Investment Management Company, LLC
(since 2002).
42
NUMBER OF
PORTFOLIOS
IN FUND
YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND APPOINTED(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, 142
7/7/65 LLC; Managing Director (since 1997), formerly Vice
333 W. Wacker Drive President (since 1996) of Nuveen Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional Advisory Corp.; Managing Director
of Nuveen Asset Management, Inc. (since 1999).
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. O'Shaughnessy Vice President 1999 Vice President (since 2002), formerly, Assistant 135
9/4/60 Vice President (since 1998), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Thomas C. Spalding Vice President 1992 Vice President of Nuveen Advisory Corp. and Nuveen 135
7/31/51 Institutional Advisory Corp.; Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
*** Mr. Bacon is expected to retire from his postion as a trustee of the Nuveen
Funds on July 1, 2003 pursuant to the Funds' retirement policy.
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and trustee of
Nuveen Institutional Advisory Corp.
(2) Trustees serve a one-year term until his/her successor is elected.
(3) Officers serve one year terms through July of each year.
43
Build Your Wealth
AUTOMATICALLY
SIDEBAR TEXT: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
44
Fund
INFORMATION
BOARD OF TRUSTEES
James F. Bacon
William E. Bennett
Jack B. Evans
William T. Kissick
Thomas E. Leafstrand
Timothy R. Schwertfeger
Sheila W. Wellington
FUND MANAGER
Nuveen Institutional
Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
POLICY CHANGE
On November 14, 2002, the Board adopted a policy that allows these Funds, in
addition to investments in municipal bonds, to invest up to 5% of its net assets
(including assets attributable to preferred shares, if any) in tax-exempt or
taxable fixed-income securities or equity securities for the purpose of
acquiring control of an issuer whose municipal bonds (a) the Fund already owns
and (b) have deteriorated or are expected shortly to deteriorate significantly
in credit quality, provided Nuveen Advisory determines that such investment
should enable the Fund to better maximize the value of its existing investment
in such issuer. This policy is a non-fundamental policy of each Fund which means
that it can be changed at any time by the Board of Trustees without vote of the
shareholders.
GLOSSARY OF TERMS USED IN THIS REPORT
Average Annual Total Return: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return (including change in NAV and reinvested dividends) that
would have been necessary on an annual basis to equal the investment's actual
performance over the time period being considered.
Average Duration: Duration is a measure of a bond or bond fund's sensitivity to
changes in interest rates. Generally, the longer a bond or fund's duration, the
more the price of the bond or fund will change as interest rates change.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Market Yield (also known as Dividend Yield or Current Yield): An investment's
current annualized dividend divided by its current market price.
Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities
of the fund from its total assets and then dividing the remainder by the number
of shares outstanding. Fund NAVs are calculated at the end of each business day.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
Each Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. No shares were
repurchased during the twelve-month period ended March 31, 2003. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
45
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.
A premier asset management firm managing $80 billion in assets, Nuveen
Investments offers access to a number of different asset classes and investing
solutions through a variety of products. Nuveen Investments markets its
capabilities under four distinct brands: Nuveen, a leader in tax-free
investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in
growth-style equities; and Symphony, a leading institutional manager of
market-neutral alternative investment portfolios.
To learn more about the products and services Nuveen Investments offers and for
a prospectus, where applicable, talk to your financial advisor, or call us at
(800) 257-8787. Please read the information carefully before you invest.
Distributed by
NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive |
Chicago, Illinois 60606 | www.nuveen.com
EAN-B-0303D