UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-5235
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Nuveen California Municipal Value Fund, Inc.
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(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: August 31
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Date of reporting period: August 31, 2007
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT
August 31, 2007
Nuveen Investments
MUNICIPAL CLOSED-END FUNDS
Photo of: Small child
NUVEEN CALIFORNIA
MUNICIPAL VALUE
FUND, INC.
NCA
NUVEEN CALIFORNIA
PERFORMANCE PLUS
MUNICIPAL FUND, INC.
NCP
NUVEEN CALIFORNIA
MUNICIPAL MARKET
OPPORTUNITY FUND, INC.
NCO
NUVEEN CALIFORNIA
INVESTMENT QUALITY
MUNICIPAL FUND, INC.
NQC
NUVEEN CALIFORNIA
SELECT QUALITY
MUNICIPAL FUND, INC.
NVC
NUVEEN CALIFORNIA
QUALITY INCOME
MUNICIPAL FUND, INC.
NUC
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
Logo: NUVEEN Investments
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LIFE IS COMPLEX.
NUVEEN
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Chairman's
LETTER TO SHAREHOLDERS
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Once again, I am pleased to report that over the twelve-month period covered by
this report your Fund continued to provide you with attractive monthly tax-free
income. For more details about the management strategy and performance of your
Fund, please read the Portfolio Manager's Comments, the Dividend and Share Price
Information, and the Performance Overview sections of this report.
I also wanted to take this opportunity to report some important news about
Nuveen Investments. We have accepted a "buyout" offer from Madison Dearborn
Partners, LLC. While this will affect the corporate structure of Nuveen
Investments, it will have no impact on the investment objectives of the Funds,
portfolio management strategies or their dividend policies. We will provide you
with additional information about this transaction as more details become
available.
For some time, I've used these letters to remind you that municipal bonds can be
an important building block in a well-balanced investment portfolio. In addition
to providing attractive tax-free monthly income, a municipal bond investment
like your Fund may help you achieve and benefit from greater portfolio
diversification. Portfolio diversification is a recognized way to try to reduce
some of the risk that comes with investing. For more information about this
important investment strategy, I encourage you to contact your personal
financial advisor.
We also are pleased to be able to offer you a choice concerning how you receive
your shareholder reports and other Fund information. As an alternative to mailed
copies, you can sign up to receive future Fund reports and other Fund
information by e-mail and the internet. The inside front cover of this report
contains information on how you can sign up.
We are grateful that you have chosen us as a partner as you pursue your
financial goals and we look forward to continuing to earn your trust in the
months and years ahead. At Nuveen Investments, our mission continues to be to
assist you and your financial advisor by offering investment services and
products that can help you to secure your financial objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
October 15, 2007
Portfolio Manager's COMMENTS
Nuveen Investments Municipal Closed-End Funds
NCA, NCP, NCO,
NQC, NVC, NUC
Portfolio manager Scott Romans reviews national and state economic and municipal
market environments, key investment strategies, and the annual performance of
the Nuveen California Municipal Funds. Scott, who joined Nuveen in 2000, has
managed these six Funds since 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL
REPORTING PERIOD ENDED AUGUST 31, 2007?
Between September 1, 2006, and August 31, 2007, the yield on the benchmark
10-year U.S. Treasury note dropped a total of almost 20 basis points to end the
reporting period at 4.54%. In the municipal market, the yield on the Bond Buyer
25 Revenue Bond Index, a widely followed measure of longer-term municipal market
rates, fell to 4.83% at the end of August 2007, a net decline of 8 basis points
from the end of August 2006. Although longer-term municipal bond interest rates
generally declined during the first nine months of this reporting period,
developments in the financial sector, especially in the credit markets, led to
increased volatility, tightening liquidity, and a flight to quality during the
final three months of the period. This was particularly evident in August 2007,
when market concerns about defaults on sub-prime mortgages resulted in a
liquidity crisis across all fixed income asset classes. (We should note that the
Nuveen California Municipal Closed-End Funds had no exposure to the
collateralized debt products that were at the center of this liquidity crisis.)
During the month of August, the yield on the Bond Buyer 25 Revenue Bond Index
jumped 20 basis points from its July 31 level, even as the yield on the 10-year
Treasury note dropped almost 25 basis points. These dramatic changes were
indicative of the highly unusual dislocation between the direction of rate
changes in the municipal and taxable fixed income markets during the last part
of this period.
Throughout this 12-month reporting period, the Federal Reserve elected to stay
on the sidelines, leaving monetary policy unchanged as it kept close tabs on the
pace of economic growth, the situation in the housing market, and inflationary
pressures, including higher energy prices. (On September 18, 2007, after the
close of this reporting period, the Fed made its first adjustment to the fed
discount rate in 15 months, cutting this target rate from 5.25% to 4.75%.)
Through much of this period, the U.S. gross domestic product (GDP), a closely
watched measure of economic growth, operated at below-trend levels, expanding at
a rate of 1.1% in the third quarter of 2006, 2.1% in the fourth quarter of 2006,
and 0.6% in the first quarter of 2007, the weakest reading since 2002 (all GDP
numbers annualized). However, in the second quarter of 2007, increases in
government and business spending and exports helped GDP growth rebound sharply
to 3.8%, overcoming a 12% decline in residential investment and noticeable
deceleration in consumer spending. While the Consumer Price Index (CPI)
registered a
Discussions of specific investments are for illustration only and are not
intended as recommendations of individual investments. The views expressed
herein represent those of the portfolio manager as of the date of this report
and are subject to change at any time, based on market conditions and other
factors. The Funds disclaim any obligation to advise shareholders of such
changes.
4
2.0% year-over-year gain as of August 2007, the increase in this inflation gauge
for the first eight months of 2007 was 3.7%, driven largely by gains in energy
and food prices. The core CPI (which excludes food and energy prices) rose 2.3%
between January and August 2007, remaining above the Fed's unofficial target of
2.0% or lower. The labor market continued to be tight, with a national
unemployment rate of 4.6% in August 2007, down from 4.7% in August 2006.
Over the 12 months ended August 2007, municipal bond issuance nationwide totaled
$437.3 billion, up 22% from the previous 12 months. During the first eight
months of 2007, $289.4 billion in new securities came to market, up 21% over the
same period in 2006. A major factor in 2007 volume was the 36% increase in
advance refundings,1 driven by attractive borrowing rates for issuers during the
first part of the year. In the month of August, however, as municipal bond
interest rates rose, advance refundings fell off almost 33%, and several
scheduled issues were postponed. For the majority of the period, the strength
and diversity of demand for municipal bonds were important factors, as the surge
in issuance was absorbed by a broad-based universe of traditional and
non-traditional buyers, including retail investors, institutional investors such
as hedge funds and arbitragers, and overseas investors.
HOW WERE THE ECONOMIC AND MARKET ENVIRONMENTS IN CALIFORNIA DURING THIS PERIOD?
In terms of gross domestic product by state, California ranked as the 13th
fastest growing state economy in the nation in 2006, with growth of 4.2% versus
the national average of 3.4%. The state's economy remained diverse, with
international trade, technology, tourism, finance, and defense serving as key
drivers. California's ports continued to benefit from trade with Asia, and
strong global demand for technology products was positive for the state's
long-term economic outlook. While overall economic growth remained strong, the
California housing market was an area with greater exposure to riskier,
non-traditional mortgage products, and we continued to monitor this situation
for signs of potential impact on the state's economy. In recent months, the
slowdown in the housing sector contributed to job losses in the construction
industry, which were offset to some degree by job creation in other sectors. For
the majority of this reporting period, California ranked second in the nation in
terms of job creation. By August 2007, however, California's unemployment rate
had risen to 5.5%, its highest level in more than two years, up from 4.9% in
August 2006. Demographic trends in the state remained positive, with population
growth of 7.6% over the past six years, compared with the national average of
6.4%.
After a delay of almost two months, the $145.5 billion California state budget
for fiscal 2008 was approved in late August 2007, following final cuts totaling
$700 million. Among the programs affected by the reductions were naturalization
services, the state's discount prescription drug plan, and several Medi-Cal
programs, while the $57 billion budget for elementary and high school education
was largely spared. In March 2007, Moody's and Standard & Poor's confirmed their
ratings on California's general obligation bonds at A1 and A+, respectively,
while Fitch affirmed its A+ rating in June 2007.
1 Advance refundings, also known as pre-refundings or refinancings, occur when
an issuer sells new bonds and uses the proceeds to fund principal and interest
payments of older existing bonds. This process often results in lower borrowing
costs for bond issuers.
5
All three rating agencies maintained stable outlooks for the state. For the 12
months ended August 31, 2007, municipal issuance in California totaled $67.4
billion, an increase of 38% over the previous 12 months. During the first eight
months of 2007, California supply rose even more sharply, up 62% from that of
January-August 2006, to $49.3 billion. California remained the largest state
issuer in the nation for both the 12-month and year-to-date periods.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE CALIFORNIA FUNDS DURING THIS ANNUAL
REPORTING PERIOD?
In the municipal market environment of the past 12 months, we continued to
emphasize a disciplined approach to duration2 management and yield curve
positioning. In all six of these Funds, our duration management strategies
during this period included the use of inverse floating rate securities,3 a type
of derivative financial instrument. The inverse floaters had the dual benefit of
bringing the Funds' durations closer to our preferred strategic target and
enhancing the Funds' income-generation capabilities. This strategy was deployed
at varying levels depending on the individual needs of each Fund.
As discussed in past shareholder reports, we have also used forward interest
rate swaps (an additional type of derivative instrument) as a duration
management tool when we believed this supported our overall investment
performance strategies. The goal of this strategy is to help us manage net asset
value (NAV) volatility without having a negative impact on the Funds' income
streams or common share dividends over the short term. During this reporting
period, we employed forward interest rate swaps in all six of these Funds.
With California's sizeable increase in municipal issuance during this period,
new supply as well as advance refundings and debt restructurings provided us
with a greater variety of bonds and sectors from which to choose. During the
spring and early summer of 2007, a number of uninsured offerings from major
California health care systems--mostly rated AA or A--came to market at very
attractive prices. Because of the volume of issuance, the spread levels on these
offerings were wider than historical norms, and we added a substantial number of
new hospital and health care related issues. We found these opportunities
attractive based not only on their price, but also on their performance
potential and the support they could provide for the Funds' income streams. We
also participated in the $4.5 billion Golden State Tobacco Securitization
offering in March 2007, the largest municipal bond deal of the first half of
2007. These tobacco bonds were offered at attractive spreads wider than the
national norm, and we added significant positions across the complex of
California Funds in order to bring the Funds' tobacco exposure closer to the
market average. During this period, we also purchased single family housing
bonds as a good way to add income to the California Funds.
As liquidity in the fixed income markets tightened in July and August, we also
took advantage of offerings in the secondary markets to add various credit
positions at very attractive levels. Among our purchases were community
facilities district bonds, marking the first time in several years that we added
these bonds to some of the Funds. Until recently, we believed that yields on
these bonds were too low to compensate us
2 Duration is a measure of a bond's price sensitivity as interest rates change,
with longer duration bonds displaying more sensitivity to these changes than
bonds with shorter durations.
3 An inverse floating rate securities is a financial instrument designed to pay
long-term tax-exempt interest at a rate that varies inversely with a short-term
tax-exempt interest rate index. For the Nuveen Funds, the index typically used
is the Securities Industry and Financial Markets (SIFM) Municipal Swap Index
(previously referred to as the Bond Market Association Index or BMA). Inverse
floaters, including those inverse floating rate securities in which the Funds
invested during the 12-month period, are further defined within the "Notes to
Financial Statements" and "Glossary of Terms Used in This Report" sections of
this shareholder report.
6
for the securities' risk. However, following the municipal market's challenges,
yields on these securities reached six percent, providing what we believed were
compelling opportunities in this sector.
To generate cash for purchases and to help move the Funds' durations closer to
our strategic target, we sold holdings with shorter durations, including
short-dated pre-refunded bonds and callable bonds priced to short calls. As
interest rates rose late in the period, we also found a wide variety of
opportunities to sell holdings that were purchased when yields were lower and
replace them with similar, newer credits that yielded comparatively more. This
process allowed us to maintain the Funds' current portfolio characteristics
while strengthening their future income streams.
HOW DID THE FUNDS PERFORM?
Individual results for these Nuveen California Municipal Funds, as well as
relevant index and peer group information, are presented in the accompanying
table.
Total Returns on Net Asset Value*
For periods ended 8/31/07
1-Year 5-Year 10-Year
NCA4 2.11% 4.45% 5.14%
NCP 0.49% 5.24% 5.78%
NCO 0.07% 5.36% 5.61%
NQC 0.57% 4.86% 5.69%
NVC 0.29% 5.31% 5.94%
NUC 0.74% 5.24% 5.85%
Lehman Brothers CA
Tax-Exempt Bond Index5 2.08% 4.31% 5.37%
Lipper CA Municipal
Debt Funds Average6 0.34% 5.48% 5.63%
For the 12 months ended August 31, 2007, the total return on NAV for NCA
exceeded the return on the Lehman Brothers California Tax-Exempt Bond Index,
while the performances of the remaining five Funds in this report lagged the
index return. The returns on NCA, NCP, NQC, and NUC outperformed the average
return for the Lipper California peer group, while NCO and NVC trailed the group
average.
One of the key factors in the annual performance of these Funds relative to that
of the unleveraged Lehman Brothers California Tax-Exempt Bond Index was the use
of financial leverage. The total returns of five of these Funds (NCP, NCO, NQC,
NVC, and NUC) were negatively impacted by their use of leverage during this
period; NCA is not leveraged. Although leveraging provides opportunities for
additional income and total returns for common shareholders, it can also expose
shareholders to additional risk when market conditions are unfavorable. With the
dramatic increase in yields on longer municipal bonds during the last part of
this period, the impact of the valuation
*Annualized
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
4 NCA is an unleveraged Fund; the remaining five Funds in this report are
leveraged.
5 The Lehman Brothers California Tax-Exempt Bond Index is an unleveraged,
unmanaged index comprising a broad range of investment-grade California
municipal bonds. Results for the Lehman index do not reflect any expenses.
6 The Lipper California Municipal Debt Funds Average category is calculated
using the returns of all closed-end funds in this category for each period as
follows: 1 year, 24; 5 years, 23; and 10 years, 12. Fund and Lipper returns
assume reinvestment of dividends.
7
changes in these bonds was magnified by the use of leverage in NCP, NCO, NQC,
NVC, and NUC. Since NCA is not leveraged, the impact of these changes was much
less, which was a major factor in the performance differential between NCA and
the other five Funds.
Among the five leveraged Funds, some of the differential in the one-year returns
shown in the above table can be attributed to the variation in the percentage of
assets that was leveraged in each Fund. That is, the greater the percentage of a
Fund's portfolio that was leveraged, the greater the negative impact on that
Fund's performance during this period. While the value provided by leverage was
limited over this reporting period, we firmly believe that the use of this
strategy should work to the benefit of the leveraged Funds over the long term.
This is demonstrated by the five-year and ten-year return performances--both
absolute and relative to the Lehman Brothers California Tax-Exempt Bond
Index--of the five leveraged Funds in this report.
In the interest rate environment over the past 12 months, municipal bonds with
maturities of seven years and less, as measured by the Lehman Brothers Municipal
Bond Index7, performed best, generally outpacing municipal bonds with longer
maturities. The goal among all of these Funds was the same: to reduce relative
risk by decreasing the distance between the Funds' durations and the strategic
target duration. During this period, that involved working to lengthen duration.
However, the Funds' durations continued to be somewhat short of the target, due
in part to a large number of advance refundings, which had a shortening effect
on the Funds' durations, as well as the natural tendency of bond durations to
shorten as time passes. With the strong performance of shorter maturity bonds,
this positioning proved to be positive for the Funds' performances during this
period.
In addition, pre-refunded bonds, especially those that were advance refunded
before longer municipal rates began to rise in mid-2007, performed very well
during this period, and we continued to see positive contributions from advance
refunding activity, which benefited the Funds through both price appreciation
and enhanced credit quality. The varying rates of pre-refundings in several of
the Funds also influenced their relative performances for this period.
While the impact of credit quality and sector allocation on Fund performance was
outweighed by duration and the use of derivatives during this period, we should
note that lower credit quality bonds generally underperformed the municipal
market as a whole for the first time in several years, as longer municipal rates
rose and credit spreads widened. However, structure played an important role in
the relative performance of bonds in this credit quality segment. Lower-rated
credits that had higher coupons tended to remain at a premium as interest rates
backed up during the summer of 2007, enabling these bonds to at least perform in
line with the market during this period. At the same time, some of the
lower-rated bonds added to the Funds during the earlier part of this period did
not have higher coupons and were priced at par or even a slight discount,
leading to underperformance as spreads widened.
7 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged national
index comprising a broad range of investment-grade municipal bonds. Results for
the Lehman index do not reflect any expenses.
8
Revenue bonds in general, and specifically the industrial development and health
care sectors that had ranked among the top performers in the Lehman Brothers
Municipal Bond Index over the past few years, also underperformed the general
municipal market for this period. Zero coupon bonds also generally posted poor
performance due to their longer durations. Sectors of the market that performed
well during this period included transportation, water and sewer and special
tax-backed issues.
9
Dividend and Share Price
INFORMATION
As previously noted, all of the Funds in this report except NCA use leverage to
potentially enhance opportunities for additional income for common shareholders.
Although the Funds' use of this strategy continued to provide incremental
income, the extent of this benefit was reduced during this period due to
short-term interest rates that remained relatively high, which, in turn, kept
the Funds' borrowing costs high. The Funds' income streams were also impacted as
the proceeds from older, higher-yielding bonds that matured or were called were
reinvested into bonds currently available in the market, which generally offered
lower yields during the majority of this period. These factors resulted in a
single monthly dividend reduction in NVC and NUC and two reductions in NCO over
the 12-month period ended August 31, 2007. NCA's dividend was also cut once
during this period. The dividends of NCP and NQC remained stable throughout this
reporting period.
Due to capital gains generated by normal portfolio activity, common shareholders
of these Funds received capital gains and/or net ordinary income distributions
at the end of December 2006 as follows:
Short-Term Capital Gains
Long-Term Capital Gains and/or Ordinary Income
(per share) (per share)
NCA $0.0282 $0.0001
NCP $0.0380 $0.0149
NCO -- $0.0226
NQC $0.0610 $0.0048
NVC $0.0459 $0.0041
NUC $0.0269 $0.0027
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of August 31, 2007, all of
the Funds in this report except NQC had a positive UNII balance for tax purposes
and a negative UNII balance for financial statement purposes. NQC had a positive
UNII balance for both tax and financial statement purposes.
10
As of August 31, 2007, the Funds' share prices were trading at discounts to
their NAVs as shown in the accompanying chart:
8/31/07 12-Month Average
Discount Discount
NCA -2.23% -1.83%
NCP -4.74% -4.79%
NCO -3.62% -0.31%
NQC -7.22% -4.92%
NVC -5.29% -2.65%
NUC -5.69% -1.49%
11
NCA
Performance
OVERVIEW
Nuveen California Municipal Value Fund, Inc.
as of August 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S.
Guaranteed 64%
AA 6%
A 9%
BBB 13%
N/R 8%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share2
Sep 0.0385
Oct 0.0385
Nov 0.0385
Dec 0.0385
Jan 0.0385
Feb 0.0385
Mar 0.0385
Apr 0.0385
May 0.0385
Jun 0.0365
Jul 0.0365
Aug 0.0365
Line Chart:
Share Price Performance -- Weekly Closing Price
9/01/06 9.67
9.72
9.76
9.93
10.09
10.1287
9.93
9.87
9.95
10
10.06
10.01
10.0897
10.07
10.04
10.02
10.04
10.26
9.95
9.9601
10.1
9.97
10.1
10
10.01
9.97
10.0234
9.97
9.93
9.94
10.2
10.16
10.01
9.96
10.2
10.19
10.3
10.27
9.99
10.06
9.79
9.63
9.56
9.58
9.56
9.48
9.5
9.25
9.3
9.328
9.32
9.7
8/31/07 9.65
FUND SNAPSHOT
------------------------------------
Common Share Price $9.65
------------------------------------
Common Share
Net Asset Value $9.87
------------------------------------
Premium/(Discount) to NAV -2.23%
------------------------------------
Market Yield 4.54%
------------------------------------
Taxable-Equivalent Yield1 6.95%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $249,022
------------------------------------
Average Effective Maturity
on Securities (Years) 14.87
------------------------------------
Modified Duration 6.75
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 10/07/87)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 4.74% 2.11%
------------------------------------
5-Year 4.93% 4.45%
------------------------------------
10-Year 5.07% 5.14%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 36.3%
------------------------------------
Tax Obligation/Limited 26.7%
------------------------------------
Health Care 9.2%
------------------------------------
Tax Obligation/General 5.6%
------------------------------------
Long-Term Care 4.4%
------------------------------------
Water and Sewer 3.9%
------------------------------------
Other 13.9%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully
taxable investment in order to equal the yield of the Fund on an after-tax
basis. It is based on a combined federal and state income tax rate of 34.7%.
When comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income distributions
in December 2006 of $0.0283 per share.
12
NCP
Performance
OVERVIEW
Nuveen California Performance Plus Municipal Fund, Inc.
as of August 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S.
Guaranteed 71%
AA 11%
A 9%
BBB 7%
NR 2%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share2
Sep 0.0595
Oct 0.0595
Nov 0.0595
Dec 0.0595
Jan 0.0595
Feb 0.0595
Mar 0.0595
Apr 0.0595
May 0.0595
Jun 0.0595
Jul 0.0595
Aug 0.0595
Line Chart:
Share Price Performance -- Weekly Closing Price
9/01/06 14.42
14.38
14.37
14.49
14.38
14.55
14.34
14.36
14.51
14.46
14.66
14.5
14.54
14.67
14.69
14.537
14.71
14.77
14.71
14.81
14.77
14.82
14.72
14.75
14.76
14.76
14.76
14.76
14.74
14.7
14.9
15.07
14.97
14.94
15.02
15.05
14.93
15
14.93
15.05
14.6
14.44
14.26
14.3901
14.77
14.45
14.13
14.18
14.02
13.81
13.68
13.78
8/31/07 14.07
FUND SNAPSHOT
------------------------------------
Common Share Price $14.07
------------------------------------
Common Share
Net Asset Value $14.77
------------------------------------
Premium/(Discount) to NAV -4.74%
------------------------------------
Market Yield 5.07%
------------------------------------
Taxable-Equivalent Yield1 7.76%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $191,466
------------------------------------
Average Effective Maturity
on Securities (Years) 15.62
------------------------------------
Leverage-Adjusted Duration 10.19
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/15/89)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 3.21% 0.49%
------------------------------------
5-Year 5.05% 5.24%
------------------------------------
10-Year 4.27% 5.78%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 19.8%
------------------------------------
U.S. Guaranteed 16.9%
------------------------------------
Transportation 16.7%
------------------------------------
Tax Obligation/General 12.8%
------------------------------------
Water and Sewer 10.3%
------------------------------------
Utilities 6.4%
------------------------------------
Health Care 6.3%
------------------------------------
Other 10.8%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully
taxable investment in order to equal the yield of the Fund on an after-tax
basis. It is based on a combined federal and state income tax rate of 34.7%.
When comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income distributions
in December 2006 of $0.0529 per share.
13
NCO
Performance
OVERVIEW
Nuveen California Municipal Market Opportunity Fund, Inc.
as of August 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S.
Guaranteed 73%
AA 11%
A 9%
BBB 5%
N/R 2%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share2
Sep 0.0665
Oct 0.0665
Nov 0.0665
Dec 0.0665
Jan 0.0665
Feb 0.0665
Mar 0.064
Apr 0.064
May 0.064
Jun 0.0605
Jul 0.0605
Aug 0.0605
Line Chart:
Share Price Performance -- Weekly Closing Price
9/01/06 15.36
15.54
15.4
15.55
15.52
15.45
15.35
15.37
15.4
15.58
15.6
15.8
15.7
16.21
16.07
15.77
15.75
15.84
15.87
15.78
15.78
15.8
16.09
15.82
15.85
15.66
15.75
15.79
15.87
15.76
15.85
15.92
15.79
15.7501
16.02
15.95
16.23
16.2
15.78
15.91
15.07
14.55
14.49
14.65
14.67
14.47
14.6
14.43
14.52
14.46
14.43
14.55
8/31/07 14.36
FUND SNAPSHOT
------------------------------------
Common Share Price $14.36
------------------------------------
Common Share
Net Asset Value $14.90
------------------------------------
Premium/(Discount) to NAV -3.62%
------------------------------------
Market Yield 5.06%
------------------------------------
Taxable-Equivalent Yield1 7.75%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $121,728
------------------------------------
Average Effective Maturity
on Securities (Years) 16.13
------------------------------------
Leverage-Adjusted Duration 10.54
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/17/90)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -1.62% 0.07%
------------------------------------
5-Year 4.89% 5.36%
------------------------------------
10-Year 4.76% 5.61%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 20.6%
------------------------------------
Tax Obligation/Limited 17.1%
------------------------------------
Water and Sewer 16.4%
------------------------------------
Transportation 14.5%
------------------------------------
Tax Obligation/General 13.1%
------------------------------------
Health Care 10.7%
------------------------------------
Other 7.6%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully
taxable investment in order to equal the yield of the Fund on an after-tax
basis. It is based on a combined federal and state income tax rate of 34.7%.
When comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders a net ordinary income distribution in December 2006
of $0.0226 per share.
14
NQC
Performance
OVERVIEW
Nuveen California Investment Quality Municipal Fund, Inc.
as of August 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S.
Guaranteed 70%
AA 12%
A 9%
BBB 8%
N/R 1%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share2
Sep 0.0585
Oct 0.0585
Nov 0.0585
Dec 0.0585
Jan 0.0585
Feb 0.0585
Mar 0.0585
Apr 0.0585
May 0.0585
Jun 0.0585
Jul 0.0585
Aug 0.0585
Line Chart:
Share Price Performance -- Weekly Closing Price
9/01/06 14.58
14.35
14.36
14.45
14.46
14.42
14.27
14.35
14.4
14.51
14.66
14.6
14.65
14.64
14.77
14.51
14.63
14.59
14.6
14.88
14.81
14.81
14.94
14.93
14.875
14.892
14.88
14.9
14.85
14.94
15.04
15.12
15.01
14.9
15.02
14.98
14.92
14.95
14.9
14.95
14.69
14.26
14.11
14.13
14
14.05
13.92
13.64
13.84
13.6
13.53
13.9
8/31/07 13.74
FUND SNAPSHOT
------------------------------------
Common Share Price $13.74
------------------------------------
Common Share
Net Asset Value $14.81
------------------------------------
Premium/(Discount) to NAV -7.22%
------------------------------------
Market Yield 5.11%
------------------------------------
Taxable-Equivalent Yield1 7.83%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $201,067
------------------------------------
Average Effective Maturity
on Securities (Years) 15.48
------------------------------------
Leverage-Adjusted Duration 9.62
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/20/90)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -1.03% 0.57%
------------------------------------
5-Year 3.96% 4.86%
------------------------------------
10-Year 4.42% 5.69%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 22.6%
------------------------------------
Tax Obligation/Limited 21.5%
------------------------------------
Transportation 17.9%
------------------------------------
Education and Civic
Organizations 8.0%
------------------------------------
Health Care 7.6%
------------------------------------
Tax Obligation/General 7.5%
------------------------------------
Other 14.9%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully
taxable investment in order to equal the yield of the Fund on an after-tax
basis. It is based on a combined federal and state income tax rate of 34.7%.
When comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income distributions
in December 2006 of $0.0658 per share.
15
NVC
Performance
OVERVIEW
Nuveen California Select Quality Municipal Fund, Inc.
as of August 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S.
Guaranteed 72%
AA 7%
A 12%
BBB 7%
N/R 2%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share2
Sep 0.0635
Oct 0.0635
Nov 0.0635
Dec 0.0635
Jan 0.0635
Feb 0.0635
Mar 0.061
Apr 0.061
May 0.061
Jun 0.061
Jul 0.061
Aug 0.061
Line Chart:
Share Price Performance -- Weekly Closing Price
9/01/06 15.25
15.08
14.98
15.12
15.07
15.11
15.07
15.01
15.14
15.14
15.13
15.21
15.08
15.1601
15.25
15.29
15.43
15.52
15.4
15.36
15.31
15.28
15.22
15.1901
15.3
15.277
15.21
15.16
15.03
15.04
15.04
15.14
15.12
15.113
15.2
15.18
15.22
15.1699
15.2
15.19
14.67
14.44
14.3
14.29
14.18
14.09
14.09
13.78
14.05
13.85
13.51
14.05
8/31/07 13.97
FUND SNAPSHOT
------------------------------------
Common Share Price $13.97
------------------------------------
Common Share
Net Asset Value $14.75
------------------------------------
Premium/(Discount) to NAV -5.29%
------------------------------------
Market Yield 5.24%
------------------------------------
Taxable-Equivalent Yield1 8.02%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $341,102
------------------------------------
Average Effective Maturity
on Securities (Years) 15.73
------------------------------------
Leverage-Adjusted Duration 10.63
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/22/91)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -3.40% 0.29%
------------------------------------
5-Year 4.45% 5.31%
------------------------------------
10-Year 4.87% 5.94%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 27.4%
------------------------------------
Tax Obligation/Limited 18.7%
------------------------------------
Tax Obligation/General 11.8%
------------------------------------
Transportation 10.9%
------------------------------------
Health Care 10.6%
------------------------------------
Utilities 8.6%
------------------------------------
Other 12.0%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully
taxable investment in order to equal the yield of the Fund on an after-tax
basis. It is based on a combined federal and state income tax rate of 34.7%.
When comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income distributions
in December 2006 of $0.0500 per share.
16
NUC
Performance
OVERVIEW
Nuveen California Quality Income Municipal Fund, Inc.
as of August 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S.
Guaranteed 74%
AA 6%
A 9%
BBB 8%
N/R 3%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share2
Sep 0.065
Oct 0.065
Nov 0.065
Dec 0.065
Jan 0.065
Feb 0.065
Mar 0.0625
Apr 0.0625
May 0.0625
Jun 0.0625
Jul 0.0625
Aug 0.0625
Line Chart:
Share Price Performance -- Weekly Closing Price
9/01/06 15.29
15.33
15.11
15.19
15.22
15.17
15.11
15.19
15.41
15.34
15.62
15.58
15.48
15.78
15.75
15.45
15.27
15.34
15.53
15.66
15.52
15.54
15.55
15.69
15.61
15.59
15.51
15.57
15.26
15.24
15.31
15.52
15.22
15.18
15.31
15.44
15.51
15.349
15.31
15.27
15.24
15.0099
14.91
14.85
14.75
14.58
14.574
14.39
14.31
14.41
14.05
13.97
8/31/07 14.08
FUND SNAPSHOT
------------------------------------
Common Share Price $14.08
------------------------------------
Common Share
Net Asset Value $14.93
------------------------------------
Premium/(Discount) to NAV -5.69%
------------------------------------
Market Yield 5.33%
------------------------------------
Taxable-Equivalent Yield1 8.16%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $328,756
------------------------------------
Average Effective Maturity
on Securities (Years) 15.19
------------------------------------
Leverage-Adjusted Duration 10.00
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/20/91)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -2.92% 0.74%
------------------------------------
5-Year 3.73% 5.24%
------------------------------------
10-Year 4.93% 5.85%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 31.0%
------------------------------------
Tax Obligation/Limited 21.4%
------------------------------------
Tax Obligation/General 11.6%
------------------------------------
Transportation 8.8%
------------------------------------
Health Care 7.2%
------------------------------------
Water and Sewer 4.4%
------------------------------------
Consumer Staples 4.2%
------------------------------------
Other 11.4%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully
taxable investment in order to equal the yield of the Fund on an after-tax
basis. It is based on a combined federal and state income tax rate of 34.7%.
When comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income distributions
in December 2006 of $0.0296 per share.
17
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARDS OF DIRECTORS AND SHAREHOLDERS
NUVEEN CALIFORNIA MUNICIPAL VALUE FUND, INC.
NUVEEN CALIFORNIA PERFORMANCE PLUS MUNICIPAL FUND, INC.
NUVEEN CALIFORNIA MUNICIPAL MARKET OPPORTUNITY FUND, INC.
NUVEEN CALIFORNIA INVESTMENT QUALITY MUNICIPAL FUND, INC.
NUVEEN CALIFORNIA SELECT QUALITY MUNICIPAL FUND, INC.
NUVEEN CALIFORNIA QUALITY INCOME MUNICIPAL FUND, INC.
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen California Municipal Value Fund, Inc.,
Nuveen California Performance Plus Municipal Fund, Inc., Nuveen California
Municipal Market Opportunity Fund, Inc., Nuveen California Investment Quality
Municipal Fund, Inc., Nuveen California Select Quality Municipal Fund, Inc. and
Nuveen California Quality Income Municipal Fund, Inc. (the "Funds"), as of
August 31, 2007, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of August 31, 2007, by correspondence with the custodian and
brokers or by other applicable auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen California Municipal Value Fund, Inc., Nuveen California Performance Plus
Municipal Fund, Inc., Nuveen California Municipal Market Opportunity Fund, Inc.,
Nuveen California Investment Quality Municipal Fund, Inc., Nuveen California
Select Quality Municipal Fund, Inc. and Nuveen California Quality Income
Municipal Fund, Inc. at August 31, 2007, 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 U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Chicago, Illinois
October 18, 2007
18
NCA
Nuveen California Municipal Value Fund, Inc.
Portfolio of INVESTMENTS
August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.9% (2.9% OF TOTAL INVESTMENTS)
$ 590 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB $ 547,007
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
10,110 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 6,651,571
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
10,700 Total Consumer Staples 7,198,578
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 0.8% (0.8% OF TOTAL INVESTMENTS)
140 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 137,505
University of Redlands, Series 2005A, 5.000%, 10/01/35
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
95 5.000%, 11/01/21 11/15 at 100.00 A2 97,785
125 5.000%, 11/01/25 11/15 at 100.00 A2 127,129
1,500 California Statewide Community Development Authority, 12/07 at 104.00 N/R 1,566,525
Certificates of Participation, San Diego Space and Science
Foundation, Series 1996, 7.500%, 12/01/26
------------------------------------------------------------------------------------------------------------------------------------
1,860 Total Education and Civic Organizations 1,928,944
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.2% (9.2% OF TOTAL INVESTMENTS)
730 Arcadia, California, Hospital Revenue Bonds, Methodist Hospital 11/07 at 100.00 BBB+ 731,139
of Southern California, Series 1992, 6.500%, 11/15/12
1,870 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 1,860,220
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
5,365 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 5,460,980
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
4,690 California Statewide Community Development Authority, Revenue 3/16 at 100.00 A+ 4,531,103
Bonds, Kaiser Permanante System, Series 2006, 5.000%, 3/01/41
1,460 California Statewide Community Development Authority, Revenue 8/16 at 100.00 A+ 1,473,899
Bonds, Kaiser Permanente System, Series 2001C, 5.250%, 8/01/31
2,710 California Statewide Community Development Authority, Revenue No Opt. Call AAA 2,854,145
Bonds, Sherman Oaks Health System, Series 1998A,
5.000%, 8/01/22 - AMBAC Insured
1,845 Rancho Mirage Joint Powers Financing Authority, California, 7/17 at 100.00 A3 1,794,004
Revenue Bonds, Eisenhower Medical Center, Series 2007A,
5.000%, 7/01/38
1,000 Sierra View Local Health Care District, California, Revenue 9/17 at 100.00 N/R 978,540
Bonds, Series 2007, 5.250%, 7/01/37 (WI/DD, Settling 9/18/07)
1,440 Stockton, California, Health Facility Revenue Bonds, Dameron 12/07 at 102.00 BBB+ 1,457,683
Hospital Association, Series 1997A, 5.300%, 12/01/08
1,730 West Contra Costa Healthcare District, California, Certificates 7/14 at 100.00 AAA 1,825,894
of Participation, Series 2004, 5.375%, 7/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
22,840 Total Health Care 22,967,607
------------------------------------------------------------------------------------------------------------------------------------
19
NCA
Nuveen California Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 3.2% (3.2% OF TOTAL INVESTMENTS)
$ 3,350 ABAG Finance Authority for Non-Profit Corporations, California, No Opt. Call BBB $ 3,413,985
Multifamily Housing Revenue Refunding Bonds, United
Dominion/The Highlands of Marin Apartments, Series 2000A,
6.400%, 8/15/30 (Mandatory put 8/15/08) (Alternative Minimum Tax)
2,520 California Statewide Community Development Authority, Multifamily 7/09 at 102.00 N/R 2,597,213
Housing Revenue Bonds, Harbor City Lights, Series 1999Y,
6.650%, 7/01/39 (Alternative Minimum Tax)
465 Riverside County, California, Subordinate Lien Mobile Home Park 11/07 at 100.00 N/R 465,000
Revenue Bonds, Bravo Mobile Home Park Project, Series 1999B,
6.500%, 3/20/29
1,440 San Dimas Housing Authority, California, Mobile Home Park 7/08 at 102.00 N/R 1,448,050
Revenue Bonds, Charter Oak Mobile Home Estates Acquisition
Project, Series 1998A, 5.700%, 7/01/28
------------------------------------------------------------------------------------------------------------------------------------
7,775 Total Housing/Multifamily 7,924,248
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.2% (0.2% OF TOTAL INVESTMENTS)
395 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AAA 413,198
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
5 California Rural Home Mortgage Finance Authority, GNMA No Opt. Call Aaa 5,188
Collateralized Single Family Mortgage Revenue Bonds,
Series 1993A-2, 7.950%, 12/01/24 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
400 Total Housing/Single Family 418,386
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.4% (0.4% OF TOTAL INVESTMENTS)
1,000 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 956,040
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.4% (4.4% OF TOTAL INVESTMENTS)
ABAG Finance Authority for Non-Profit Corporations, California,
Cal-Mortgage Revenue Bonds, Elder Care Alliance of Union City,
Series 2004:
1,850 5.400%, 8/15/24 8/14 at 100.00 A+ 1,899,210
2,130 5.600%, 8/15/34 8/14 at 100.00 A+ 2,190,513
2,720 ABAG Finance Authority for Non-Profit Corporations, California, 11/07 at 102.00 BBB- 2,736,238
Certificates of Participation, American Baptist Homes of
the West, Series 1997A, 5.750%, 10/01/17
2,640 California Statewide Community Development Authority, 4/09 at 101.00 BBB 2,668,538
Certificates of Participation, Internext Group, Series 1999,
5.375%, 4/01/17
1,500 Riverside County Public Financing Authority, California, 5/09 at 101.00 BBB- 1,520,550
Certificates of Participation, Air Force Village West,
Series 1999, 5.750%, 5/15/19
------------------------------------------------------------------------------------------------------------------------------------
10,840 Total Long-Term Care 11,015,049
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 5.6% (5.6% OF TOTAL INVESTMENTS)
5 California State, General Obligation Bonds, Series 2004, 4/14 at 100.00 A+ 5,149
5.250%, 4/01/34
California, General Obligation Bonds, Series 2004:
500 5.000%, 2/01/20 2/14 at 100.00 A+ 516,170
5,200 5.000%, 2/01/21 2/14 at 100.00 A+ 5,353,556
1,000 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 AAA 1,036,880
General Obligation Bonds, Series 2002A, 5.000%, 8/01/21 -
FGIC Insured
1,500 Los Angeles Unified School District, California, General Obligation 7/16 at 100.00 AAA 1,560,180
Bonds, Series 2006F, 5.000%, 7/01/24 - FGIC Insured
2,000 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call AAA 2,237,840
Series 2001A, 5.500%, 7/01/20 - MBIA Insured
270 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AAA 278,443
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
1,500 San Ramon Valley Unified School District, Contra Costa County, 8/13 at 100.00 AAA 1,541,655
California, General Obligation Bonds, Series 2003,
5.000%, 8/01/23 - FSA Insured
20
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,460 West Contra Costa Unified School District, Contra Costa County, 8/11 at 101.00 AAA $ 1,517,991
California, General Obligation Bonds, Series 2003B,
5.000%, 8/01/20 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
13,435 Total Tax Obligation/General 14,047,864
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 27.1% (26.7% OF TOTAL INVESTMENTS)
Bell Community Redevelopment Agency, California, Tax Allocation
Bonds, Bell Project Area, Series 2003:
3,000 5.500%, 10/01/23 - RAAI Insured 10/13 at 100.00 AA 3,033,810
1,000 5.625%, 10/01/33 - RAAI Insured 10/13 at 100.00 AA 1,008,910
Burbank Redevelopment Agency, California, Tax Allocation Bonds,
Golden State Redevelopment Project, Series 2003:
1,700 5.625%, 12/01/28 - FGIC Insured 12/13 at 100.00 AAA 1,824,100
5,010 5.750%, 12/01/33 - FGIC Insured 12/13 at 100.00 AAA 5,404,087
2,400 Calexico Community Redevelopment Agency, California, Tax 8/13 at 102.00 AAA 2,451,024
Allocation Bonds, Merged Central Business and Residential
District Project, Series 2003C, 5.000%, 8/01/28 - AMBAC Insured
1,790 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA+ 1,907,567
5.000%, 7/01/15
340 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 AAA 350,741
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
1,005 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 1,033,281
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
2,800 Commerce Community Development Commission, California, 2/08 at 102.00 N/R 2,849,140
Subordinate Lien Tax Allocation Refunding Bonds,
Redevelopment Project 1, Series 1997B, 6.000%, 8/01/21
1,530 Duarte Redevelopment Agency, California, Tax Allocation 9/07 at 102.00 N/R 1,574,339
Refunding Bonds, Amended Davis Addition Project Area,
Series 1997A, 6.700%, 9/01/14
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
160 5.000%, 9/01/26 9/16 at 100.00 N/R 153,832
375 5.125%, 9/01/36 9/16 at 100.00 N/R 354,994
2,500 Kern County Board of Education, California, Certificates of 6/16 at 100.00 AAA 2,539,675
Participation, Series 2006A, 5.000%, 6/01/31 - MBIA Insured
615 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 618,825
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
2,750 Los Angeles County Schools, California, Certificates of 9/13 at 100.00 AAA 2,789,105
Participation, Pooled Financing Program, Regionalized Business
Services Corporation, Series 2003A, 5.000%, 9/01/28 -
FSA Insured
3,665 Milpitas, California, Local Improvement District 20 Limited 3/08 at 103.00 N/R 3,791,736
Obligation Bonds, Series 1998A, 5.650%, 9/02/13
Modesto Schools Infrastructure Financing Agency, Stanislaus
County, California, Special Tax Revenue Bonds, Series 2004:
1,045 5.250%, 9/01/22 - AMBAC Insured 9/14 at 100.00 AAA 1,090,656
1,145 5.250%, 9/01/23 - AMBAC Insured 9/14 at 100.00 AAA 1,192,941
1,255 5.250%, 9/01/24 - AMBAC Insured 9/14 at 100.00 AAA 1,305,250
2,000 Monterey County, California, Certificates of Participation, 8/17 at 100.00 Aaa 1,849,940
Series 2007, 4.500%, 8/01/37 - AMBAC Insured
420 Oakland Redevelopment Agency, California, Subordinate Lien 3/13 at 100.00 AAA 451,366
Tax Allocation Bonds, Central District Redevelopment Project,
Series 2003, 5.500%, 9/01/18 - FGIC Insured
8,000 Palmdale Elementary School District, Los Angeles County, 8/09 at 101.00 AAA 8,344,560
California, Special Tax Bonds, Community Facilities District 90-1,
Series 1999, 5.800%, 8/01/29 - FSA Insured
290 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 293,721
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
21
NCA
Nuveen California Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 5,000 Riverside County Redevelopment Agency, California, Tax Allocation 10/14 at 100.00 AAA $ 5,051,750
Housing Bonds, Series 2004A, 5.000%, 10/01/37 - XLCA Insured
360 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 365,972
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
3,130 San Francisco Redevelopment Agency, California, Lease Revenue 7/11 at 102.00 AAA 3,263,244
Bonds, Moscone Convention Center, Series 2004,
5.250%, 7/01/23 - AMBAC Insured
2,750 San Jose Financing Authority, California, Lease Revenue Refunding 9/11 at 100.00 AAA 2,848,368
Bonds, Convention Center Project, Series 2001F,
5.000%, 9/01/20 - MBIA Insured
1,400 Shafter Joint Powers Financing Authority, California, Lease 1/08 at 100.50 A 1,416,100
Revenue Bonds, Community Correctional Facility Acquisition
Project, Series 1997A, 5.950%, 1/01/11
1,000 Simi Valley, California, Certificates of Participation, Series 2004, 9/14 at 100.00 AAA 1,021,610
5.000%, 9/01/24 - AMBAC Insured
1,925 Travis Unified School District, Solano County, California, 9/16 at 100.00 Aaa 1,966,272
Certificates of Participation, Series 2006, 5.000%, 9/01/26 -
FGIC Insured
3,845 Ventura County Superintendent of Schools, California, Certificates 12/11 at 100.00 AAA 3,896,100
Participation, Series 2003, 5.000%, 12/01/27 - AMBAC Insured
1,185 Vista Joint Powers Financing Authority, California, Special Tax 9/07 at 100.00 N/R 1,185,581
Lease Revenue Refunding Bonds, Community Facilities
District 90-2, Series 1997A, 5.875%, 9/01/20
------------------------------------------------------------------------------------------------------------------------------------
65,390 Total Tax Obligation/Limited 67,228,597
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.7% (3.7% OF TOTAL INVESTMENTS)
2,500 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 2,571,050
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
5,500 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 5,118,850
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/27
1,250 Fresno, California, Airport Revenue Bonds, Series 2000A, 7/10 at 101.00 AAA 1,306,400
5.500%, 7/01/30 - FSA Insured
240 Palm Springs Financing Authority, California, Palm Springs 7/14 at 102.00 N/R 232,805
International Airport Revenue Bonds, Series 2006,
5.550%, 7/01/28 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,490 Total Transportation 9,229,105
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 36.6% (36.3% OF TOTAL INVESTMENTS) (4)
2,400 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 N/R (4) 2,541,936
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Funding Corporation, Series 2002B, 5.500%, 6/01/30
(Pre-refunded 6/01/12)
4,500 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 4,827,825
Bonds, Series 2002A, 5.125%, 5/01/18 (Pre-refunded 5/01/12)
3,115 California Educational Facilities Authority, Revenue Bonds, 6/10 at 101.00 Baa3 (4) 3,368,748
Pooled College and University Projects, Series 2000C,
6.750%, 6/01/30 (ETM)
12,000 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (4) 12,763,198
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
2,845 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A1 (4) 3,089,215
5.250%, 4/01/34 (Pre-refunded 4/01/14)
6,260 California, Various Purpose General Obligation Bonds, 3/10 at 101.00 AAA 6,639,669
Series 2000, 5.750%, 3/01/27 (Pre-refunded 3/01/10) -
MBIA Insured
5,000 Central California Joint Powers Health Finance Authority, 2/10 at 101.00 AAA 5,323,200
Certificates of Participation, Community Hospitals of Central
California Obligated Group, Series 2000, 6.000%, 2/01/30
(Pre-refunded 2/01/10)
2,065 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 2,702,507
Securities Program Home Mortgage Revenue Bonds,
Series 1988, 8.250%, 6/01/21 (Alternative Minimum Tax) (ETM)
22
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B:
$ 3,800 5.500%, 6/01/33 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA $ 4,103,544
3,000 5.625%, 6/01/38 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 3,258,750
2,500 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 2,739,425
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33 (Pre-refunded 6/01/13)
1,935 Los Angeles Community Redevelopment Agency, California, 1/08 at 100.00 BBB (4) 1,939,741
Tax Allocation Refunding Bonds, Central Business District
Redevelopment Project, Series 1987G, 6.750%, 7/01/10 (ETM)
3,200 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 3,415,456
Obligation Bonds, Series 2003A, 5.000%, 7/01/22
(Pre-refunded 7/01/13) - FSA Insured
1,845 Oakland Unified School District, Alameda County, California, 8/08 at 101.00 AAA 1,889,096
General Obligation Bonds, Series 2001, 5.125%, 8/01/21
(Pre-refunded 8/01/08) - FSA Insured
5,000 Orange County Sanitation District, California, Certificates of 8/13 at 100.00 AAA 5,406,350
Participation, Series 2003, 5.250%, 2/01/27 (Pre-refunded
8/01/13) - FGIC Insured
8,565 Palmdale, California, GNMA Mortgage-Backed Securities Program No Opt. Call AAA 5,679,280
Single Family Mortgage Revenue Bonds, Series 1988A,
0.000%, 3/01/17 (ETM)
3,300 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 3,541,659
Revenue Bonds, Series 2002D, 5.375%, 7/01/36
(Pre-refunded 7/01/12)
20,415 San Bernardino County, California, GNMA Mortgage-Backed No Opt. Call AAA 9,275,555
Securities Program Single Family Home Mortgage Revenue
Bonds, Series 1988A, 0.000%, 9/01/21 (Alternative
Minimum Tax) (ETM)
5,000 San Diego Unified School District, California, General Obligation 7/14 at 100.00 AAA 5,368,750
Bonds, Series 2004F, 5.000%, 7/01/29 (Pre-refunded 7/01/14) -
FSA Insured
3,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (4) 3,274,380
Loan Note, Series 1999A, 6.500%, 10/01/24
(Pre-refunded 10/01/10)
------------------------------------------------------------------------------------------------------------------------------------
99,745 Total U.S. Guaranteed 91,148,284
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.7% (2.7% OF TOTAL INVESTMENTS)
2,600 California Statewide Community Development Authority, 11/07 at 101.00 N/R 2,502,526
Certificates of Participation Refunding, Rio Bravo Fresno
Project, Series 1999A, 6.300%, 12/01/18
605 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 AAA 619,750
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
3,470 Puerto Rico Industrial, Tourist, Educational, Medical and 6/10 at 101.00 Baa3 3,690,900
Environmental Control Facilities Financing Authority,
Co-Generation Facility Revenue Bonds, Series 2000A,
6.625%, 6/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,675 Total Utilities 6,813,176
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 3.9% (3.9% OF TOTAL INVESTMENTS)
1,500 California Department of Water Resources, Water System 6/15 at 100.00 AAA 1,556,460
Revenue Bonds, Central Valley Project, Series 2005AD,
5.000%, 12/01/22 - FSA Insured
1,500 Castaic Lake Water Agency, California, Revenue Certificates of 8/16 at 100.00 AAA 1,519,860
Participation, Series 2006C, 5.000%, 8/01/36 - MBIA Insured
410 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 418,733
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
500 Los Angeles County Sanitation Districts Financing Authority, 10/13 at 100.00 AAA 514,230
California, Senior Revenue Bonds, Capital Projects,
Series 2003A, 5.000%, 10/01/23 - FSA Insured
625 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AAA 645,300
California, Revenue Bonds, Series 2006, 5.000%, 12/01/31 -
FGIC Insured
1,580 San Diego County Water Authority, California, Water Revenue 5/12 at 101.00 AAA 1,609,530
Refunding Certificates of Participation, Series 2002A,
5.000%, 5/01/26 - MBIA Insured
23
NCA
Nuveen California Municipal Value Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 3,500 Woodbridge Irrigation District, California, Certificates of 7/13 at 100.00 BBB+ $ 3,556,140
Participation, Water Systems Project, Series 2003,
5.625%, 7/01/43
------------------------------------------------------------------------------------------------------------------------------------
9,615 Total Water and Sewer 9,820,253
------------------------------------------------------------------------------------------------------------------------------------
$ 259,765 Total Investments (cost $240,358,725) - 100.7% 250,696,131
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (1.4)% (3,576,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 1,901,539
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 249,021,670
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (5) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Citigroup $ 7,500,000 Pay 3-Month USD-LIBOR 5.808% Semi-Annually 7/1/08 7/1/33 $344,190
JPMorgan 11,000,000 Pay SIFM 4.376 Quarterly 8/6/08 8/6/37 298,473
------------------------------------------------------------------------------------------------------------------------------------
$642,663
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM - The daily arithmetic average of the weekly SIFM (the Securities Industry
and Financial Markets) Municipal Swap Index.
The Fund may invest in "zero coupon" securities. A zero
coupon security does not pay a regular interest coupon to
its holders during the life of the security. Tax-exempt
income to the holder of the security comes from accretion of
the difference between the original purchase price of the
security at issuance and the par value of the security at
maturity and is effectively paid at maturity. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common Shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating. Ratings below BBB by Standard &
Poor's Group or Baa by Moody's Investor Service, Inc. are
considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
24
NCP
Nuveen California Performance Plus Municipal Fund, Inc.
Portfolio of INVESTMENTS
August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.5% (2.9% OF TOTAL INVESTMENTS)
$ 705 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB $ 653,627
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
12,135 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 7,983,859
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
12,840 Total Consumer Staples 8,637,486
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.5% (4.2% OF TOTAL INVESTMENTS)
160 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 157,149
University of Redlands, Series 2005A, 5.000%, 10/01/35
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
110 5.000%, 11/01/21 11/15 at 100.00 A2 113,225
150 5.000%, 11/01/25 11/15 at 100.00 A2 152,555
4,730 California Infrastructure Economic Development Bank, 10/11 at 101.00 A- 4,909,977
Revenue Bonds, J. David Gladstone Institutes, Series 2001,
5.500%, 10/01/21
4,730 California State University, Systemwide Revenue Bonds, 11/12 at 100.00 AAA 4,927,951
Series 2002A, 5.000%, 11/01/19 - AMBAC Insured
2,000 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 2,133,200
Series 2003A, 5.125%, 5/15/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
11,880 Total Education and Civic Organizations 12,394,057
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.8% (6.3% OF TOTAL INVESTMENTS)
2,205 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 2,193,468
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
6,385 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 6,499,228
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
5,595 California Statewide Community Development Authority, Revenue 3/16 at 100.00 A+ 5,405,441
Bonds, Kaiser Permanante System, Series 2006,
5.000%, 3/01/41
1,755 California Statewide Community Development Authority, Revenue 8/16 at 100.00 A+ 1,771,708
Bonds, Kaiser Permanente System, Series 2001C,
5.250%, 8/01/31
1,355 California Statewide Community Development Authority, Revenue No Opt. Call AAA 1,427,072
Bonds, Sherman Oaks Health System, Series 1998A,
5.000%, 8/01/22 - AMBAC Insured
1,600 The Regents of the University of California, Medical Center 5/15 at 101.00 AAA 1,480,288
Pooled Revenue Bonds, Series 2007A, 4.500%, 5/15/37 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
18,895 Total Health Care 18,777,205
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.9% (3.1% OF TOTAL INVESTMENTS)
3,750 California Statewide Community Development Authority, Revenue No Opt. Call BBB 3,771,263
Refunding Bonds, Irvine Apartment Communities Development,
Series 1998A, 4.900%, 5/15/25 (Mandatory put 5/15/08)
1,500 California Statewide Community Development Authority, Student 8/12 at 100.00 A 1,517,610
Housing Revenue Bonds, EAH - Irvine East Campus Apartments,
LLC Project, Series 2002A, 5.500%, 8/01/22 - ACA Insured
25
NCP
Nuveen California Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 3,915 Los Angeles, California, GNMA Collateralized Multifamily Housing 11/07 at 102.00 AAA $ 3,961,745
Revenue Bonds, Ridgecroft Apartments, Series 1997E,
6.250%, 9/20/39 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,165 Total Housing/Multifamily 9,250,618
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.3% (0.2% OF TOTAL INVESTMENTS)
475 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AAA 496,883
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,250 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 1,195,050
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 19.9% (12.8% OF TOTAL INVESTMENTS)
5 California State, General Obligation Bonds, Series 2004, 4/14 at 100.00 A+ 5,149
5.250%, 4/01/34
2,000 California, General Obligation Bonds, Series 2003, 8/13 at 100.00 AAA 2,092,840
5.250%, 2/01/22 - CIFG Insured
California, General Obligation Bonds, Series 2004:
500 5.000%, 2/01/23 2/14 at 100.00 A+ 512,520
3,950 5.200%, 4/01/26 4/14 at 100.00 A+ 4,086,986
3,550 Centinela Valley Union High School District, Los Angeles No Opt. Call AAA 3,839,467
County, California, General Obligation Bonds, Series 2002A,
5.250%, 2/01/26 - MBIA Insured
1,400 Los Rios Community College District, Sacramento, El Dorado 8/14 at 102.00 AAA 1,451,940
and Yolo Counties, California, General Obligation Bonds,
Series 2006C, 5.000%, 8/01/24 - FSA Insured
3,200 Murrieta Valley Unified School District, Riverside County, 9/17 at 100.00 AAA 3,056,448
California, General Obligation Bonds, Series 2007,
4.500%, 9/01/30 - FSA Insured
4,765 North Orange County Community College District, California, No Opt. Call AAA 1,792,355
General Obligation Bonds, Series 2003B, 0.000%, 8/01/27 -
FGIC Insured
2,575 Oxnard School District, Ventura County, California, General 2/22 at 103.00 AAA 2,926,050
Obligation Refunding Bonds, Series 2001A, 5.750%, 8/01/30 -
MBIA Insured
6,000 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call AAA 6,535,140
Series 1993, 7.000%, 7/01/10 - MBIA Insured
Riverside Community College District, California, General Obligation
Bonds, Series 2004A:
15 5.250%, 8/01/25 - MBIA Insured 8/14 at 100.00 AAA 15,767
20 5.250%, 8/01/26 - MBIA Insured 8/14 at 100.00 AAA 20,956
325 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AAA 335,163
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
4,000 San Diego Unified School District, San Diego County, California, 7/13 at 101.00 AAA 4,323,000
General Obligation Bonds, Series 2003E, 5.250%, 7/01/22 -
FSA Insured
3,000 San Jose-Evergreen Community College District, Santa Clara 9/10 at 100.00 AAA 3,153,930
County, California, General Obligation Bonds, Series 2000B,
5.600%, 9/01/24 - FGIC Insured
2,200 Santa Maria Joint Union High School District, Santa Barbara No Opt. Call Aaa 2,506,328
and San Luis Obispo Counties, California, General Obligation
Bonds, Series 2003B, 5.625%, 8/01/24 - FSA Insured
1,440 Southwestern Community College District, San Diego County, 8/15 at 102.00 AAA 1,513,123
California, General Obligation Bonds, Series 2005,
5.000%, 8/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
38,945 Total Tax Obligation/General 38,167,162
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 30.9% (19.8% OF TOTAL INVESTMENTS)
5,045 California State Public Works Board, Lease Revenue Bonds, 3/12 at 100.00 AAA 5,236,256
Department of Corrections, Series 2002A, 5.250%, 3/01/22 -
AMBAC Insured
1,575 California State Public Works Board, Lease Revenue Bonds, 12/13 at 100.00 A 1,676,178
Department of General Services, Series 2003D, 5.500%, 6/01/20
3,010 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A 3,225,095
Department of Mental Health, Coalinga State Hospital,
Series 2004A, 5.500%, 6/01/19
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,195 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA+ $ 2,339,168
5.000%, 7/01/15
400 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 AAA 412,636
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
1,210 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 1,244,049
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
2,000 Coachella Valley Unified School District, Riverside County, 9/16 at 100.00 Aaa 2,032,620
California, Certificates of Participation, Series 2007,
5.000%, 9/01/31 - AMBAC Insured
2,500 Corona Public Financing Authority, California, Superior Lien 9/09 at 102.00 AAA 2,595,775
Revenue Bonds, Series 1999A, 5.000%, 9/01/20 - FSA Insured
1,660 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 1,699,442
Enhanced Asset Backed Settlement Revenue Bonds,
Series 2005A, Residual Series 1500, 6.390%, 6/01/45 -
AMBAC Insured (IF)
1,045 Hawthorne Community Redevelopment Agency, California, 9/16 at 100.00 AAA 1,082,516
Project Area 2 Tax Allocation Bonds, Series 2006,
5.250%, 9/01/36 - XLCA Insured
1,750 Hesperia Community Redevelopment Agency, California, Tax 9/15 at 100.00 AAA 1,787,608
Allocation Bonds, Series 2005A, 5.000%, 9/01/25 - XLCA Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
195 5.000%, 9/01/26 9/16 at 100.00 N/R 187,483
450 5.125%, 9/01/36 9/16 at 100.00 N/R 425,993
730 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 734,541
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
3,335 Los Angeles County Public Works Financing Authority, California, No Opt. Call AAA 3,534,800
Lease Revenue Bonds, Series 2006B, Residuals 1940,
6.450%, 9/01/31 - FGIC Insured (IF)
4,000 Los Angeles, California, Municipal Improvement Corporation, 1/17 at 100.00 AAA 3,925,040
Lease Revenue Bonds, Police Headquarters, Series 2006A,
4.750%, 1/01/31 - FGIC Insured
1,065 Monterey County, California, Certificates of Participation, 8/17 at 100.00 Aaa 985,093
Series 2007, 4.500%, 8/01/37 - AMBAC Insured
1,395 Moreno Valley Unified School District, Riverside County, 3/14 at 100.00 AAA 1,427,225
California, Certificates of Participation, Series 2005,
5.000%, 3/01/22 - FSA Insured
3,500 Murrieta Redevelopment Agency, California, Tax Allocation Bonds, 8/17 at 100.00 AAA 3,567,025
Series 2007A, 5.000%, 8/01/37 - MBIA Insured
1,000 Paramount Redevelopment Agency, California, Tax Allocation 8/13 at 100.00 AAA 1,026,730
Bonds, Redevelopment Project Area 1, Series 2003,
5.000%, 8/01/23 - MBIA Insured
350 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 354,491
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
1,500 Riverside County Public Financing Authority, California, Tax 10/15 at 100.00 AAA 1,517,340
Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/37 - XLCA Insured
1,000 Rohnert Park Community Development Commission, California, 8/17 at 100.00 AAA 1,017,570
Redevelopment Project Tax Allocation Bonds, Series 2007R,
5.000%, 8/01/37 - FGIC Insured
435 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 442,217
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
1,000 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AAA 1,103,290
Refunding Bonds, Series 1993A, 5.400%, 11/01/20 -
MBIA Insured
5,000 San Marcos Public Facilities Authority, California, Tax Allocation 8/15 at 100.00 AAA 5,079,850
Bonds, Project Areas 2 and 3, Series 2005C, 5.000%, 8/01/35 -
AMBAC Insured
Santa Clara Redevelopment Agency, California, Tax Allocation
Bonds, Bayshore North Project, Series 2003:
2,695 5.000%, 6/01/20 - MBIA Insured 6/13 at 100.00 AAA 2,801,426
1,500 5.000%, 6/01/21 - MBIA Insured 6/13 at 100.00 AAA 1,554,750
27
NCP
Nuveen California Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
Sweetwater Union High School District, San Diego County,
California, Certificates of Participation, Series 2002:
$ 2,000 5.000%, 9/01/23 - FSA Insured 9/12 at 102.00 AAA $ 2,045,620
4,015 5.000%, 9/01/24 - FSA Insured 9/12 at 102.00 AAA 4,129,548
------------------------------------------------------------------------------------------------------------------------------------
57,555 Total Tax Obligation/Limited 59,191,375
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 26.0% (16.7% OF TOTAL INVESTMENTS)
1,430 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 1,470,641
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
6,500 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 6,036,485
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/29
Long Beach, California, Harbor Revenue Bonds, Series 2000A:
2,740 5.750%, 5/15/14 (Alternative Minimum Tax) 5/10 at 101.00 AA 2,886,672
11,885 5.750%, 5/15/15 (Alternative Minimum Tax) (5) 5/10 at 101.00 AA 12,521,202
8,550 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 8,883,790
5.750%, 11/01/29 - FGIC Insured (Alternative Minimum Tax)
1,400 Port of Oakland, California, Revenue Bonds, Series 2002M, 11/12 at 100.00 AAA 1,480,542
5.250%, 11/01/20 - FGIC Insured
14,000 San Francisco Airports Commission, California, Revenue Bonds, 5/10 at 101.00 AAA 14,559,298
San Francisco International Airport, Second Series 2000,
Issue 25, 5.500%, 5/01/24 - FSA Insured (Alternative
Minimum Tax)
2,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 2,034,680
Refunding Bonds, San Francisco International Airport,
Second Series 2001, Issue 27B, 5.000%, 5/01/23 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
48,505 Total Transportation 49,873,310
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 26.3% (16.9% OF TOTAL INVESTMENTS) (4)
2,000 California County Tobacco Securitization Agency, Tobacco 6/10 at 100.00 N/R (4) 2,035,160
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Funding Corporation, Series 2002B, 5.125%, 6/01/20
(Pre-refunded 6/01/10)
5,250 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 5,632,463
Bonds, Series 2002A, 5.125%, 5/01/18 (Pre-refunded 5/01/12)
3,000 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (4) 3,190,800
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
5,360 California Infrastructure Economic Development Bank, First Lien No Opt. Call AAA 5,701,593
Revenue Bonds, San Francisco Bay Area Toll Bridge,
Series 2003A, 5.000%, 7/01/23 - FSA Insured (ETM)
3,395 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A1 (4) 3,686,427
5.250%, 4/01/34 (Pre-refunded 4/01/14)
4,000 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 5,234,880
Securities Program Home Mortgage Revenue Bonds,
Series 1988, 8.250%, 6/01/21 (Alternative Minimum Tax) (ETM)
3,750 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 4,049,550
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2003B, 5.500%, 6/01/33 (Pre-refunded 6/01/13)
3,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 3,447,540
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39 (Pre-refunded 6/01/13)
2,500 Hawthorne School District, Los Angeles County, California, 11/08 at 102.00 AAA 2,603,225
General Obligation Bonds, Series 1997A, 5.500%, 5/01/22
(Pre-refunded 11/01/08) - FGIC Insured
8,000 Los Angeles Unified School District, California, General Obligation 7/10 at 100.00 AAA 8,390,958
Bonds, Series 2000D, 5.375%, 7/01/25 (Pre-refunded
7/01/10) - FGIC Insured
4,000 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 4,292,920
Revenue Bonds, Series 2002D, 5.375%, 7/01/36
(Pre-refunded 7/01/12)
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 1,960 Riverside Community College District, California, General 8/14 at 100.00 AAA $ 2,135,479
Obligation Bonds, Series 2004A, 5.250%, 8/01/26
(Pre-refunded 8/01/14) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
46,215 Total U.S. Guaranteed 50,400,995
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.0% (6.4% OF TOTAL INVESTMENTS)
4,470 California Statewide Community Development Authority, 11/07 at 101.00 N/R 4,302,420
Certificates of Participation Refunding, Rio Bravo Fresno
Project, Series 1999A, 6.300%, 12/01/18
725 Los Angeles Department of Water and Power, California, Power 7/13 at 100.00 AAA 751,579
System Revenue Bonds, Series 2003A-2, 5.000%, 7/01/21 -
MBIA Insured
500 Los Angeles Department of Water and Power, California, 7/15 at 100.00 AAA 513,165
Power System Revenue Bonds, Series 2005A-1,
5.000%, 7/01/31 - FSA Insured
715 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 AAA 732,432
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
10,450 Orange County Public Financing Authority, California, Waste No Opt. Call Aaa 11,177,318
Management System Revenue Refunding Bonds, Series 1997,
5.250%, 12/01/13 - AMBAC Insured (Alternative Minimum Tax)
1,000 Sacramento Municipal Utility District, California, Electric No Opt. Call AAA 1,054,890
Revenue Bonds, Series 2004T, 5.250%, 5/15/23 - FGIC Insured
500 Sacramento Municipal Utility District, California, Electric 8/12 at 100.00 AAA 521,530
Revenue Refunding Bonds, Series 2002Q, 5.250%, 8/15/22 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
18,360 Total Utilities 19,053,334
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 16.1% (10.3% OF TOTAL INVESTMENTS)
1,000 California Statewide Community Development Authority, Water 10/13 at 100.00 AAA 1,041,920
and Wastewater Revenue Bonds, Pooled Financing Program,
Series 2003A, 5.250%, 10/01/23 - FSA Insured
2,500 El Centro Financing Authority, California, Water Revenue Bonds, 10/16 at 100.00 AAA 2,445,500
Series 2006A, 4.750%, 10/01/31 - FSA Insured
490 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 500,437
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
4,770 Los Angeles Department of Water and Power, California, 7/14 at 100.00 AAA 5,121,406
Waterworks Revenue Bonds, Series 2004C, 5.250%, 7/01/20 -
MBIA Insured
2,500 Pajaro Valley Water Management Agency, California, Revenue 3/09 at 101.00 AAA 2,584,800
Certificates of Participation, Series 1999A, 5.750%, 3/01/29 -
AMBAC Insured
5,985 Sacramento County Sanitation District Financing Authority, 12/10 at 101.00 AA 6,325,247
California, Revenue Bonds, Series 2000A, 5.250%, 12/01/12
750 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AAA 772,178
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC Insured
4,000 Sacramento County Sanitation District Financing Authority, No Opt. Call AAA 4,487,200
California, Revenue Refunding Bonds, Series 2001,
5.500%, 12/01/20 - AMBAC Insured
4,585 Santa Maria, California, Subordinate Water and Wastewater 8/12 at 101.00 AAA 4,874,222
Revenue Certificates of Participation, Series 1997A,
5.550%, 8/01/27 - AMBAC Insured
1,700 South Gate Utility Authority, California, Subordinate Revenue 10/11 at 102.00 AAA 1,739,729
Bonds, Water and Sewer System Projects, Series 2001,
5.000%, 10/01/22 - FGIC Insured
29
NCP
Nuveen California Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 945 Woodbridge Irrigation District, California, Certificates of 7/13 at 100.00 BBB+ $ 960,158
Participation, Water Systems Project, Series 2003,
5.625%, 7/01/43
------------------------------------------------------------------------------------------------------------------------------------
29,225 Total Water and Sewer 30,852,797
------------------------------------------------------------------------------------------------------------------------------------
$ 293,310 Total Investments (cost $289,405,379) - 155.8% 298,290,272
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (2.2)% (4,258,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 3,433,507
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.4)% (106,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 191,465,779
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Citigroup $2,000,000 Pay 3-Month USD-LIBOR 5.808% Semi-Annually 7/1/08 7/1/33 $ 91,784
JPMorgan 2,000,000 Pay SIFM 4.376 Quarterly 8/6/08 8/6/37 54,268
------------------------------------------------------------------------------------------------------------------------------------
$146,052
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM - The daily arithmetic average of the weekly SIFM (the Securities Industry
and Financial Markets) Municipal Swap Index.
The Fund may invest in "zero coupon" securities. A zero
coupon security does not pay a regular interest coupon to
its holders during the life of the security. Tax-exempt
income to the holder of the security comes from accretion of
the difference between the original purchase price of the
security at issuance and the par value of the security at
maturity and is effectively paid at maturity. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating. Ratings below BBB by Standard &
Poor's Group or Baa by Moody's Investor Service, Inc. are
considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment, with an aggregate market value of
$263,382, has been pledged to collateralize the net payment
obligations under forward swap contracts.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
30
NCO
Nuveen California Municipal Market Opportunity Fund, Inc.
Portfolio of INVESTMENTS
August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.7% (3.0% OF TOTAL INVESTMENTS)
$ 450 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB $ 417,209
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
8,090 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 5,322,573
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
8,540 Total Consumer Staples 5,739,782
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 1.1% (0.7% OF TOTAL INVESTMENTS)
100 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 98,218
University of Redlands, Series 2005A, 5.000%, 10/01/35
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
70 5.000%, 11/01/21 11/15 at 100.00 A2 72,052
95 5.000%, 11/01/25 11/15 at 100.00 A2 96,618
1,000 California Infrastructure Economic Development Bond Bank, 7/15 at 100.00 Aa3 1,019,730
Revenue Bonds, Scripps Research Institute, Series 2005A,
5.000%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
1,265 Total Education and Civic Organizations 1,286,618
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 17.1% (10.7% OF TOTAL INVESTMENTS)
1,415 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 1,407,600
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
5,305 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 5,399,907
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
3,200 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 3,274,720
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
1,000 California Statewide Community Development Authority, Insured 10/17 at 100.00 A+ 974,900
Health Facility Revenue Bonds, Henry Mayo Newhall Memorial
Hospital, Series 2007A, 5.000%, 10/01/37
3,580 California Statewide Community Development Authority, Revenue 3/16 at 100.00 A+ 3,458,710
Bonds, Kaiser Permanante System, Series 2006, 5.000%, 3/01/41
1,135 California Statewide Community Development Authority, Revenue 8/16 at 100.00 A+ 1,145,805
Bonds, Kaiser Permanente System, Series 2001C, 5.250%, 8/01/31
675 California Statewide Community Development Authority, Revenue No Opt. Call AAA 710,903
Bonds, Sherman Oaks Health System, Series 1998A,
5.000%, 8/01/22 - AMBAC Insured
3,690 Rancho Mirage Joint Powers Financing Authority, California, 7/17 at 100.00 A3 3,588,008
Revenue Bonds, Eisenhower Medical Center, Series 2007A,
5.000%, 7/01/38
1,000 The Regents of the University of California, Medical Center 5/15 at 101.00 AAA 925,180
Pooled Revenue Bonds, Series 2007A, 4.500%, 5/15/37 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
21,000 Total Health Care 20,885,733
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.3% (0.8% OF TOTAL INVESTMENTS)
1,550 San Bernardino County Housing Authority, California, Multifamily No Opt. Call A- 1,580,520
Housing Revenue Refunding Bonds, Equity Residential
Properties/Redlands Lawn and Tennis Apartments,
Series 1999A, 5.200%, 6/15/29 (Mandatory put 6/15/09)
------------------------------------------------------------------------------------------------------------------------------------
31
NCO
Nuveen California Municipal Market Opportunity Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.3% (0.2% OF TOTAL INVESTMENTS)
$ 305 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AAA $ 319,051
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.6% (0.4% OF TOTAL INVESTMENTS)
750 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 717,030
Disposal Revenue Bonds, Waste Management Inc., Series 2002A,
5.000%, 1/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.7% (13.1% OF TOTAL INVESTMENTS)
4,125 Alameda Unified School District, Alameda County, California, No Opt. Call AAA 1,735,800
General Obligation Bonds, Series 2004A, 0.000%, 8/01/25 -
FSA Insured
California, General Obligation Bonds, Series 2003:
1,000 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 1,056,300
1,000 5.250%, 2/01/22 - CIFG Insured 8/13 at 100.00 AAA 1,046,420
1,350 Coachella Valley Unified School District, Riverside County, 8/15 at 100.00 AAA 1,390,406
California, General Obligation Bonds, Series 2005A,
5.000%, 8/01/30 - FGIC Insured
3,230 Fullerton Joint Union High School District, Orange County, 8/15 at 100.00 Aaa 3,331,002
California, General Obligation Bonds, Series 2005B,
5.000%, 8/01/27 - FGIC Insured
2,150 Los Rios Community College District, Sacramento, El Dorado 8/14 at 102.00 AAA 2,229,765
and Yolo Counties, California, General Obligation Bonds,
Series 2006C, 5.000%, 8/01/24 - FSA Insured
4,100 Monrovia Unified School District, Los Angeles County, California, No Opt. Call AAA 1,542,215
General Obligation Bonds, Series 2001B, 0.000%, 8/01/27 -
FGIC Insured
2,500 Oakland Unified School District, Alameda County, California, 8/12 at 100.00 AAA 2,642,150
General Obligation Bonds, Series 2002, 5.250%, 8/01/21 -
FGIC Insured
1,000 Pomona Unified School District, Los Angeles County, California, 8/11 at 103.00 AAA 1,114,440
General Obligation Refunding Bonds, Series 1997A,
6.150%, 8/01/15 - MBIA Insured
25 Riverside Community College District, California, General 8/14 at 100.00 AAA 26,412
Obligation Bonds, Series 2004A, 5.250%, 8/01/24 -
MBIA Insured
210 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AAA 216,567
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
5,000 San Diego Unified School District, California, General Obligation 7/10 at 100.00 AAA 5,182,250
Bonds, Election of 1998, Series 2000B, 5.125%, 7/01/21 -
MBIA Insured
4,970 San Rafael City High School District, Marin County, California, No Opt. Call AAA 1,869,466
General Obligation Bonds, Series 2004B, 0.000%, 8/01/27 -
FGIC Insured
4,175 Southwestern Community College District, San Diego County, No Opt. Call AAA 1,756,840
California, General Obligation Bonds, Series 2004,
0.000%, 8/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
34,835 Total Tax Obligation/General 25,140,033
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 26.9% (17.1% OF TOTAL INVESTMENTS)
2,000 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A 2,142,920
Department of Mental Health, Coalinga State Hospital,
Series 2004A, 5.500%, 6/01/19
1,420 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA+ 1,513,266
5.000%, 7/01/15
260 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 AAA 268,213
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
770 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 791,668
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
1,035 Hawthorne Community Redevelopment Agency, California, 9/16 at 100.00 AAA 1,072,157
Project Area 2 Tax Allocation Bonds, Series 2006,
5.250%, 9/01/36 - XLCA Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
125 5.000%, 9/01/26 9/16 at 100.00 N/R 120,181
290 5.125%, 9/01/36 9/16 at 100.00 N/R 274,529
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 470 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa $ 472,923
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
Modesto Schools Infrastructure Financing Agency, Stanislaus
County, California, Special Tax Revenue Bonds, Series 2004:
1,375 5.250%, 9/01/25 - AMBAC Insured 9/14 at 100.00 AAA 1,426,728
1,500 5.250%, 9/01/26 - AMBAC Insured 9/14 at 100.00 AAA 1,553,700
10,900 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 14,279,543
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured
1,000 Ontario, California, Special Tax Bonds, Community Facilities 3/08 at 101.00 N/R 1,013,490
District 5, Freeway Interchange Project, Series 1997,
6.375%, 9/01/17
1,065 Panama-Buena Vista Union School District, California, 9/16 at 100.00 AAA 1,097,291
Certificates of Participation, School Construction Project,
Series 2006, 5.000%, 9/01/22 - MBIA Insured
225 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 227,887
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
280 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 284,645
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
2,500 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AAA 2,758,225
Refunding Bonds, Series 1993A, 5.400%, 11/01/20 -
AMBAC Insured
2,255 San Bernardino County, California, Certificates of Participation, 2/08 at 100.00 AAA 2,257,977
Medical Center Financing Project, Series 1995,
5.500%, 8/01/22 - MBIA Insured
1,200 San Jose Financing Authority, California, Lease Revenue 9/11 at 100.00 AAA 1,242,924
Refunding Bonds, Convention Center Project, Series 2001F,
5.000%, 9/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
28,670 Total Tax Obligation/Limited 32,798,267
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 22.8% (14.5% OF TOTAL INVESTMENTS)
4,000 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 3,714,760
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/29
8,500 Long Beach, California, Harbor Revenue Bonds, Series 2000A, 5/10 at 101.00 AA 8,955,004
5.750%, 5/15/14 (Alternative Minimum Tax)
5,250 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 5,454,960
5.750%, 11/01/29 - FGIC Insured (Alternative Minimum Tax)
San Francisco Airports Commission, California, Revenue Bonds,
San Francisco International Airport, Second Series 2000, Issue
25:
2,515 5.500%, 5/01/24 - FSA Insured (Alternative Minimum Tax) 5/10 at 101.00 AAA 2,615,474
3,100 5.750%, 5/01/30 - FSA Insured (Alternative Minimum Tax) 5/10 at 101.00 AAA 3,250,381
1,250 San Francisco Airports Commission, California, Revenue Bonds, 5/10 at 101.00 AAA 1,279,100
San Francisco International Airport, Second Series 2000,
Issue 26B, 5.000%, 5/01/21 - FGIC Insured
2,465 San Francisco Airports Commission, California, Special Facilities 1/08 at 102.00 AAA 2,530,002
Lease Revenue Bonds, San Francisco International Airport,
SFO Fuel Company LLC, Series 2000A, 6.125%, 1/01/27 - FSA
Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
27,080 Total Transportation 27,799,681
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 32.6% (20.6% OF TOTAL INVESTMENTS) (4)
1,260 California County Tobacco Securitization Agency, Tobacco 6/10 at 100.00 N/R (4) 1,282,151
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Funding Corporation, Series 2002B, 5.125%, 6/01/20
(Pre-refunded 6/01/10)
3,000 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 3,218,550
Bonds, Series 2002A, 5.125%, 5/01/18 (Pre-refunded 5/01/12)
400 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (4) 425,440
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
33
NCO
Nuveen California Municipal Market Opportunity Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
California, General Obligation Bonds, Series 2004:
$ 1,000 5.125%, 2/01/27 (Pre-refunded 2/01/14) 2/14 at 100.00 A+ (4) $ 1,076,850
2,100 5.250%, 4/01/34 (Pre-refunded 4/01/14) 4/14 at 100.00 A1 (4) 2,280,264
2,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 2,191,540
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33 (Pre-refunded 6/01/13)
5,000 Los Angeles Unified School District, California, General Obligation 7/10 at 100.00 AAA 5,244,350
Bonds, Series 2000D, 5.375%, 7/01/25 (Pre-refunded 7/01/10) -
FGIC Insured
2,000 Monterey County, California, Certificates of Participation, Master 8/11 at 100.00 Aaa 2,103,460
Plan Financing, Series 2001, 5.000%, 8/01/21 (Pre-refunded
8/01/11) - MBIA Insured
4,000 Pomona, California, GNMA/FHLMC Collateralized Single Family No Opt. Call AAA 5,072,120
Mortgage Revenue Refunding Bonds, Series 1990B,
7.500%, 8/01/23 (ETM)
1,875 Riverside Community College District, California, General 8/14 at 100.00 AAA 2,042,869
Obligation Bonds, Series 2004A, 5.250%, 8/01/24
(Pre-refunded 8/01/14) - MBIA Insured
7,000 Union City Community Redevelopment Agency, California, Tax 10/09 at 101.00 AAA 7,372,189
Allocation Revenue Bonds, Redevelopment Project, Series 1999,
5.750%, 10/01/32 (Pre-refunded 10/01/09) - AMBAC Insured
1,530 University of California, Certificates of Participation, San Diego 1/10 at 101.00 Aa2 (4) 1,601,589
and Sacramento Campus Projects, Series 2002A,
5.250%, 1/01/20 (Pre-refunded 1/01/10)
5,580 University of California, Revenue Bonds, Multiple Purpose 9/08 at 101.00 AA (4) 5,713,361
Projects, Series 2000K, 5.000%, 9/01/13 (Pre-refunded 9/01/08)
------------------------------------------------------------------------------------------------------------------------------------
36,745 Total U.S. Guaranteed 39,624,733
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 4.0% (2.5% OF TOTAL INVESTMENTS)
1,500 California Pollution Control Financing Authority, Revenue Refunding 9/09 at 101.00 AAA 1,551,045
Bonds, Southern California Edison Company, Series 1999A,
5.450%, 9/01/29 - MBIA Insured
2,990 California Statewide Community Development Authority, 11/07 at 101.00 N/R 2,877,905
Certificates of Participation Refunding, Rio Bravo Fresno Project,
Series 1999A, 6.300%, 12/01/18
455 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 AAA 466,093
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,945 Total Utilities 4,895,043
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 25.9% (16.4% OF TOTAL INVESTMENTS)
3,330 California Department of Water Resources, Water System Revenue 12/11 at 100.00 AA 3,554,209
Bonds, Central Valley Project, Series 2001W, 5.500%, 12/01/15
1,030 California Department of Water Resources, Water System Revenue No Opt. Call AAA 1,153,837
Bonds, Central Valley Project, Series 2002X, 5.500%, 12/01/17 -
FGIC Insured
1,390 California Department of Water Resources, Water System Revenue 6/15 at 100.00 AAA 1,442,320
Bonds, Central Valley Project, Series 2005AD,
5.000%, 12/01/22 - FSA Insured
2,500 El Centro Financing Authority, California, Water Revenue Bonds, 10/16 at 100.00 AAA 2,445,500
Series 2006A, 4.750%, 10/01/31 - FSA Insured
750 Fortuna Public Finance Authority, California, Water Revenue Bonds, 10/16 at 100.00 AAA 771,758
Series 2006, 5.000%, 10/01/36 - FSA Insured
315 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 321,710
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
5,000 Orange County Water District, California, Revenue Certificates 8/13 at 100.00 AAA 5,051,900
of Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured
3,500 Placerville Public Financing Authority, California, Wastewater 9/16 at 100.00 AAA 3,551,170
System Refinancing and Improvement Project Revenue Bonds,
Series 2006, 5.000%, 9/01/34 - XLCA Insured
500 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AAA 516,240
California, Revenue Bonds, Series 2006, 5.000%, 12/01/31 -
FGIC Insured
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 2,000 San Francisco City and County Public Utilities Commission, 4/13 at 100.00 AAA $ 2,118,280
California, Clean Water Revenue Refunding Bonds, Series 2003A,
5.250%, 10/01/20 - MBIA Insured
10,000 Santa Maria, California, Subordinate Water and Wastewater 8/12 at 101.00 AAA 10,630,799
Revenue Certificates of Participation, Series 1997A,
5.550%, 8/01/27 - AMBAC Insured (5)
------------------------------------------------------------------------------------------------------------------------------------
30,315 Total Water and Sewer 31,557,723
------------------------------------------------------------------------------------------------------------------------------------
$ 196,000 Total Investments (cost $185,334,133) - 158.0% 192,344,214
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (2.9)% (3,536,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.8% 919,334
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.9)% (68,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 121,727,548
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs $2,000,000 Pay 3-Month USD-LIBOR 5.215% Semi-Annually 3/12/08 3/12/30 $(55,626)
JPMorgan 2,000,000 Pay SIFM 4.376 Quarterly 8/6/08 8/6/37 54,268
------------------------------------------------------------------------------------------------------------------------------------
$ (1,358)
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM - The daily arithmetic average of the weekly SIFM (the Securities Industry
and Financial Markets) Municipal Swap Index.
The Fund may invest in "zero coupon" securities. A zero
coupon security does not pay a regular interest coupon to
its holders during the life of the security. Tax-exempt
income to the holder of the security comes from accretion of
the difference between the original purchase price of the
security at issuance and the par value of the security at
maturity and is effectively paid at maturity. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating. Ratings below BBB by Standard &
Poor's Group or Baa by Moody's Investor Service, Inc. are
considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment, with an aggregate market value of
$308,293, has been pledged to collateralize the net payment
obligations under forward swap contracts.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
35
NQC
Nuveen California Investment Quality Municipal Fund, Inc.
Portfolio of INVESTMENTS
August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.8% (3.6% OF TOTAL INVESTMENTS)
California County Tobacco Securitization Agency, Tobacco
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005:
$ 740 4.250%, 6/01/21 6/15 at 100.00 BBB $ 686,076
3,500 5.250%, 6/01/45 6/15 at 100.00 BBB 3,174,045
6,740 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 4,434,381
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
3,500 Tobacco Securitization Authority of Northern California, Tobacco 6/15 at 100.00 BBB 3,294,550
Settlement Asset-Backed Bonds, Series 2005A-1,
5.375%, 6/01/38
------------------------------------------------------------------------------------------------------------------------------------
14,480 Total Consumer Staples 11,589,052
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 12.6% (8.0% OF TOTAL INVESTMENTS)
575 California Educational Facilities Authority, Revenue Bonds, 11/07 at 101.00 AAA 582,975
Chapman University, Series 1996, 5.125%, 10/01/26 -
CONNIE LEE/AMBA Insured
2,000 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 Aaa 2,059,540
Occidental College, Series 2005A, 5.000%, 10/01/27 -
MBIA Insured
170 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 166,971
University of Redlands, Series 2005A, 5.000%, 10/01/35
930 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 978,183
University of the Pacific, Series 2000, 5.750%, 11/01/30 -
MBIA Insured
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
120 5.000%, 11/01/21 11/15 at 100.00 A2 123,518
160 5.000%, 11/01/25 11/15 at 100.00 A2 162,725
6,000 California State Public Works Board, Lease Revenue Bonds, 10/07 at 102.00 A1 6,124,800
California State University Projects, Series 1997C,
5.400%, 10/01/22
2,500 Long Beach Bond Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 2,576,700
Refunding Bonds, Long Beach Aquarium of the South Pacific,
Series 2001, 5.250%, 11/01/30 - AMBAC Insured
4,000 University of California System, General Revenue Bonds, 5/15 at 101.00 AAA 3,755,720
Series 2006J, 4.500%, 5/15/35 - FSA Insured
University of California, Revenue Bonds, Multi-Purpose Projects,
Series 2003A:
4,270 5.125%, 5/15/16 - AMBAC Insured 5/13 at 100.00 AAA 4,554,382
3,000 5.125%, 5/15/17 - AMBAC Insured 5/13 at 100.00 AAA 3,199,800
1,060 5.000%, 5/15/24 - AMBAC Insured 5/13 at 100.00 AAA 1,086,341
------------------------------------------------------------------------------------------------------------------------------------
24,785 Total Education and Civic Organizations 25,371,655
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 12.0% (7.6% OF TOTAL INVESTMENTS)
3,000 California Health Facilities Financing Authority, Revenue Bonds, 7/14 at 100.00 A 3,053,160
Catholic Healthcare West, Series 2004G, 5.250%, 7/01/23
2,355 California Health Facilities Financing Authority, Revenue Bonds, 3/16 at 100.00 A+ 2,359,004
Kaiser Permanante System, Series 2006, 5.250%, 3/01/45
7,765 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 7,903,916
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 5,905 California Statewide Community Development Authority, Revenue 3/16 at 100.00 A+ $ 5,704,939
Bonds, Kaiser Permanante System, Series 2006, 5.000%, 3/01/41
1,840 California Statewide Community Development Authority, Revenue 8/16 at 100.00 A+ 1,857,517
Bonds, Kaiser Permanente System, Series 2001C,
5.250%, 8/01/31
2,145 California Statewide Community Development Authority, Revenue No Opt. Call A+ 2,176,424
Bonds, Kaiser Permanente System, Series 2002E,
4.700%, 11/01/36 (Mandatory put 6/01/09)
1,000 Stockton, California, Health Facility Revenue Bonds, Dameron 12/07 at 102.00 BBB+ 1,020,760
Hospital Association, Series 1997A, 5.700%, 12/01/14
------------------------------------------------------------------------------------------------------------------------------------
24,010 Total Health Care 24,075,720
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.5% (1.6% OF TOTAL INVESTMENTS)
3,000 California Statewide Community Development Authority, Revenue No Opt. Call BBB 3,017,010
Refunding Bonds, Irvine Apartment Communities Development,
Series 1998A, 4.900%, 5/15/25 (Mandatory put 5/15/08)
2,000 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- 2,035,920
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.850%, 12/15/32
------------------------------------------------------------------------------------------------------------------------------------
5,000 Total Housing/Multifamily 5,052,930
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.5% (1.0% OF TOTAL INVESTMENTS)
495 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AAA 517,805
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
2,485 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 2,577,517
Bonds, Series 2006K, 5.500%, 2/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,980 Total Housing/Single Family 3,095,322
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,250 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 1,195,050
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.3% (0.8% OF TOTAL INVESTMENTS)
2,595 California Statewide Community Development Authority, 4/09 at 101.00 BBB 2,623,052
Certificates of Participation, Internext Group, Series 1999,
5.375%, 4/01/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.9% (7.5% OF TOTAL INVESTMENTS)
5 California State, General Obligation Bonds, Series 2004, 4/14 at 100.00 A+ 5,149
5.250%, 4/01/34
2,000 California, General Obligation Bonds, Series 2003, 5.250%, 2/01/20 8/13 at 100.00 A+ 2,085,000
1,000 California, General Obligation Bonds, Series 2004, 5.000%, 2/01/21 2/14 at 100.00 A+ 1,029,530
2,395 Fontana Unified School District, San Bernardino County, California, 5/09 at 102.00 AAA 2,522,486
General Obligation Refunding Bonds, Series 1997D,
5.800%, 5/01/17 - FGIC Insured
10,060 Los Angeles, California, General Obligation Bonds, Series 2001A, 9/11 at 100.00 AA 10,428,799
5.000%, 9/01/21
3,250 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call AAA 3,636,490
Series 2001A, 5.500%, 7/01/20 - MBIA Insured
20 Riverside Community College District, California, General 8/14 at 100.00 AAA 21,377
Obligation Bonds, Series 2004A, 5.250%, 8/01/21 -
MBIA Insured
345 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AAA 355,788
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
3,500 San Diego Unified School District, San Diego County, California, 7/13 at 101.00 AAA 3,782,625
General Obligation Bonds, Series 2003E, 5.250%, 7/01/24 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
22,575 Total Tax Obligation/General 23,867,244
------------------------------------------------------------------------------------------------------------------------------------
37
NQC
Nuveen California Investment Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 34.0% (21.5% OF TOTAL INVESTMENTS)
$ 3,000 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A $ 3,206,040
Department of Mental Health, Coalinga State Hospital,
Series 2004A, 5.500%, 6/01/20
3,000 California State Public Works Board, Lease Revenue Bonds, 12/11 at 102.00 AAA 3,104,670
Department of Mental Health, Hospital Addition, Series 2001A,
5.000%, 12/01/21 - AMBAC Insured
2,350 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA+ 2,504,348
5.000%, 7/01/15
425 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 AAA 438,426
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
1,595 Fontana Public Financing Authority, California, Tax Allocation 9/11 at 101.00 AAA 1,674,814
Revenue Bonds, North Fontana Redevelopment Project,
Series 2003A, 5.375%, 9/01/25 - AMBAC Insured
840 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 859,958
Enhanced Asset Backed Settlement Revenue Bonds,
Series 2005A, Residual Series 1500, 6.390%, 6/01/45 -
AMBAC Insured (IF)
1,770 Hawthorne Community Redevelopment Agency, California, 9/16 at 100.00 AAA 1,807,949
Project Area 2 Tax Allocation Bonds, Series 2006,
5.000%, 9/01/26 - XLCA Insured
3,840 Hesperia Community Redevelopment Agency, California, Tax 9/15 at 100.00 AAA 3,889,267
Allocation Bonds, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
205 5.000%, 9/01/26 9/16 at 100.00 N/R 197,097
470 5.125%, 9/01/36 9/16 at 100.00 N/R 444,926
770 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 774,789
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
3,335 Los Angeles County Public Works Financing Authority, California, No Opt. Call AAA 3,534,800
Lease Revenue Bonds, Series 2006B, Residuals 1940,
6.450%, 9/01/31 - FGIC Insured (IF)
4,130 Manteca Unified School District, San Joaquin County, California, 9/11 at 101.00 AAA 4,228,955
Special Tax Bonds, Community Facilities District 89-2,
Series 2001C, 5.000%, 9/01/23 - MBIA Insured
3,890 Ontario Redevelopment Financing Authority, California, Lease 8/11 at 101.00 AAA 4,031,791
Revenue Bonds, Capital Projects, Series 2001, 5.000%, 8/01/21 -
AMBAC Insured
3,600 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 4,716,180
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured
1,685 Ontario, California, Special Tax Bonds, Community Facilities 9/07 at 101.00 N/R 1,707,731
District 5, Freeway Interchange Project, Series 1997,
6.375%, 9/01/17
1,500 Orange County, California, Special Tax Bonds, Community 8/12 at 101.00 N/R 1,508,235
Facilities District 03-1 of Ladera Ranch, Series 2004A,
5.625%, 8/15/34
1,000 Paramount Redevelopment Agency, California, Tax Allocation 8/13 at 100.00 AAA 1,026,730
Bonds, Redevelopment Project Area 1, Series 2003,
5.000%, 8/01/23 - MBIA Insured
370 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 374,747
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
2,000 Rohnert Park Community Development Commission, California, 8/17 at 100.00 AAA 2,035,140
Redevelopment Project Tax Allocation Bonds, Series 2007R,
5.000%, 8/01/37 - FGIC Insured
460 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 467,631
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
4,000 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AAA 4,413,160
Refunding Bonds, Series 1993A, 5.400%, 11/01/20 -
AMBAC Insured
2,000 San Jose Financing Authority, California, Lease Revenue 6/12 at 100.00 AAA 2,108,380
Refunding Bonds, Civic Center Project, Series 2002B,
5.250%, 6/01/19 - AMBAC Insured
3,535 San Jose Financing Authority, California, Lease Revenue 9/11 at 100.00 AAA 3,661,447
Refunding Bonds, Convention Center Project, Series 2001F,
5.000%, 9/01/20 - MBIA Insured
6,000 San Ramon Public Financing Authority, California, Tax Allocation 2/16 at 100.00 AAA 6,092,460
Revenue Bonds, Series 2006A, 5.000%, 2/01/38 -
AMBAC Insured (UB)
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,840 Santa Clara Redevelopment Agency, California, Tax Allocation 6/13 at 100.00 AAA $ 2,913,925
Bonds, Bayshore North Project, Series 2003, 5.000%, 6/01/23 -
MBIA Insured
5,250 Santa Cruz County Redevelopment Agency, California, Subordinate 9/10 at 102.00 AAA 5,484,255
Lien Tax Allocation Bonds, Live Oak and Soquel Community
Improvement Projects, Series 2000, 5.250%, 9/01/25 -
AMBAC Insured
1,265 Washington Unified School District, Yolo County, California, 8/17 at 100.00 AAA 1,294,576
Certificates of Participation, Series 2007, 5.125%, 8/01/37 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
65,125 Total Tax Obligation/Limited 68,502,427
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 28.3% (17.9% OF TOTAL INVESTMENTS)
13,000 Alameda Corridor Transportation Authority, California, Senior 10/09 at 101.00 AAA 13,183,819
Lien Revenue Bonds, Series 1999A, 5.000%, 10/01/29 -
MBIA Insured
2,080 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 2,139,114
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
6,500 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 6,036,485
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/29
9,980 Long Beach, California, Harbor Revenue Bonds, Series 2000A, 5/10 at 101.00 AA 10,398,361
5.500%, 5/15/25 (Alternative Minimum Tax)
9,000 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 9,351,360
5.750%, 11/01/29 - FGIC Insured (Alternative Minimum Tax)
15,000 San Francisco Airports Commission, California, Revenue Bonds, 5/10 at 101.00 AAA 15,727,649
San Francisco International Airport, Second Series 2000,
Issue 24A, 5.750%, 5/01/30 - FSA Insured
(Alternative Minimum Tax) (5)
------------------------------------------------------------------------------------------------------------------------------------
55,560 Total Transportation 56,836,788
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 35.8% (22.6% OF TOTAL INVESTMENTS) (4)
Bay Area Toll Authority, California, Revenue Bonds, San Francisco
Bay Area Toll Bridge, Series 2001D:
3,875 5.000%, 4/01/12 (Pre-refunded 4/01/11) 4/11 at 100.00 AA (4) 4,060,380
2,605 5.000%, 4/01/16 (Pre-refunded 4/01/11) 4/11 at 100.00 AA (4) 2,729,623
California Department of Water Resources, Power Supply Revenue
Bonds, Series 2002A:
3,600 5.375%, 5/01/17 (Pre-refunded 5/01/12) - XLCA Insured 5/12 at 101.00 AAA 3,900,600
6,000 5.125%, 5/01/18 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 6,437,100
2,070 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 2,204,840
University of the Pacific, Series 2000, 5.750%, 11/01/30
(Pre-refunded 11/01/10) - MBIA Insured
1,000 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (4) 1,063,600
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
2,110 California Health Facilities Financing Authority, Revenue Bonds, 10/08 at 101.00 AAA 2,166,443
Kaiser Permanente System, Series 1998B,
5.250%, 10/01/12 (ETM)
3,145 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A1 (4) 3,414,967
5.250%, 4/01/34 (Pre-refunded 4/01/14)
11,300 California, Various Purpose General Obligation Bonds, 3/10 at 101.00 AAA 11,985,344
Series 2000, 5.750%, 3/01/27 (Pre-refunded 3/01/10) -
MBIA Insured
2,250 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 2,444,063
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2003B, 5.625%, 6/01/33 (Pre-refunded 6/01/13)
1,935 Los Angeles Community Redevelopment Agency, California, 1/08 at 100.00 BBB (4) 1,939,741
Tax Allocation Refunding Bonds, Central Business District
Redevelopment Project, Series 1987G, 6.750%, 7/01/10 (ETM)
Los Angeles County Metropolitan Transportation Authority,
California, Proposition C Second Senior Lien Sales Tax Revenue
Bonds, Series 2000A:
8,005 5.250%, 7/01/25 (Pre-refunded 7/01/10) - FGIC Insured 7/10 at 101.00 AAA 8,441,913
6,500 5.250%, 7/01/30 (Pre-refunded 7/01/10) - FGIC Insured 7/10 at 101.00 AAA 6,854,770
2,285 Moreno Valley Unified School District, Riverside County, California, 8/14 at 100.00 AAA 2,489,576
General Obligation Bonds, Series 2004A, 5.250%, 8/01/24
(Pre-refunded 8/01/14) - FSA Insured
39
NQC
Nuveen California Investment Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 2,745 Northridge Water District, California, Revenue Certificates 2/11 at 101.00 AAA $ 2,916,782
of Participation, Series 2001, 5.250%, 2/01/21
(Pre-refunded 2/01/11) - AMBAC Insured
4,000 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 4,292,920
Revenue Bonds, Series 2002D, 5.375%, 7/01/36
(Pre-refunded 7/01/12)
815 Riverside Community College District, California, General 8/14 at 100.00 AAA 887,967
Obligation Bonds, Series 2004A, 5.250%, 8/01/21
(Pre-refunded 8/01/14) - MBIA Insured
1,000 Tobacco Securitization Authority of Southern California, Tobacco 6/12 at 100.00 AAA 1,081,630
Settlement Asset-Backed Bonds, San Diego County Tobacco
Asset Securitization Corporation, Senior Series 2001A,
5.500%, 6/01/36 (Pre-refunded 6/01/12)
2,540 University of California, Revenue Bonds, Research Facilities, 9/09 at 101.00 AAA 2,634,437
Series 2001E, 5.000%, 9/01/25 (Pre-refunded 9/01/09) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
67,780 Total U.S. Guaranteed 71,946,696
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 4.7% (2.9% OF TOTAL INVESTMENTS)
5,000 Los Angeles Department of Water and Power, California, Power 7/11 at 100.00 AAA 5,227,950
System Revenue Bonds, Series 2001A-1, 5.250%, 7/01/20 -
FSA Insured
740 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 AAA 758,041
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
3,210 Turlock Irrigation District, California, Electric Revenue Bonds, 1/13 at 100.00 AAA 3,392,617
Series 2003A, 5.000%, 1/01/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
8,950 Total Utilities 9,378,608
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 7.3% (4.6% OF TOTAL INVESTMENTS)
3,330 California Department of Water Resources, Water System Revenue 12/11 at 100.00 AA 3,563,666
Bonds, Central Valley Project, Series 2001W, 5.500%, 12/01/16
520 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 531,076
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
1,500 Los Angeles Department of Water and Power, California, 7/14 at 100.00 AAA 1,614,765
Waterworks Revenue Bonds, Series 2004C, 5.250%, 7/01/19 -
MBIA Insured
3,015 Oxnard Financing Authority, California, Wastewater Revenue 6/13 at 100.00 AAA 3,197,890
Bonds, Series 2003, 5.000%, 6/01/17 - FGIC Insured
870 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AAA 895,726
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC Insured
1,310 San Elijo Joint Powers Authority, San Diego County, California, 3/12 at 101.00 AAA 1,379,679
Revenue Refunding Bonds, San Elijo Wastewater Facilities,
Series 2003, 5.000%, 3/01/17 - FSA Insured
3,430 Westlands Water District, California, Revenue Certificates 9/12 at 101.00 AAA 3,586,134
of Participation, Series 2002, 5.250%, 9/01/22 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
13,975 Total Water and Sewer 14,768,936
------------------------------------------------------------------------------------------------------------------------------------
$ 309,065 Total Investments (cost $307,858,192) - 158.3% 318,303,480
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (4.6)% (9,170,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 3,933,226
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.7)% (112,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 201,066,706
====================================================================================================================
40
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Citigroup $7,000,000 Pay 3-Month USD-LIBOR 5.808% Semi-Annually 7/1/08 7/1/33 $321,244
JPMorgan 9,500,000 Pay SIFM 4.376 Quarterly 8/6/08 8/6/37 257,772
------------------------------------------------------------------------------------------------------------------------------------
$579,016
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM - The daily arithmetic average of the weekly SIFM (the Securities Industry
and Financial Markets) Municipal Swap Index.
The Fund may invest in "zero coupon" securities. A zero
coupon security does not pay a regular interest coupon to
its holders during the life of the security. Tax-exempt
income to the holder of the security comes from accretion of
the difference between the original purchase price of the
security at issuance and the par value of the security at
maturity and is effectively paid at maturity. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating. Ratings below BBB by Standard &
Poor's Group or Baa by Moody's Investor Service, Inc. are
considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment, with an aggregate market value of
$723,472, has been pledged to collateralize the net payment
obligations under forward swap contracts.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
41
NVC
Nuveen California Select Quality Municipal Fund, Inc.
Portfolio of INVESTMENTS
August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.1% (3.9% OF TOTAL INVESTMENTS)
$ 1,270 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB $ 1,177,455
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
4,625 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 4,596,233
Settlement Asset-Backed Bonds, Stanislaus County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
22,915 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 15,076,236
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
28,810 Total Consumer Staples 20,849,924
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 2.9% (1.8% OF TOTAL INVESTMENTS)
290 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 284,832
University of Redlands, Series 2005A, 5.000%, 10/01/35
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
200 5.000%, 11/01/21 11/15 at 100.00 A2 205,864
270 5.000%, 11/01/25 11/15 at 100.00 A2 274,598
1,595 California Infrastructure Economic Development Bank, Revenue 10/12 at 100.00 Aa3 1,629,978
Bonds, Claremont University Consortium, Series 2003,
5.125%, 10/01/24
1,740 California Infrastructure Economic Development Bond Bank, 7/15 at 100.00 Aa3 1,774,330
Revenue Bonds, Scripps Research Institute, Series 2005A,
5.000%, 7/01/24
6,000 University of California System, General Revenue Bonds, 5/15 at 101.00 AAA 5,633,580
Series 2006J, 4.500%, 5/15/35 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
10,095 Total Education and Civic Organizations 9,803,182
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 16.5% (10.6% OF TOTAL INVESTMENTS)
1,750 ABAG Finance Authority for Non-Profit Corporations, California, 4/12 at 100.00 A+ 1,814,715
Cal-Mortgage Insured Revenue Bonds, Sansum-Santa Barbara
Medical Foundation Clinic, Series 2002A, 5.500%, 4/01/21
545 California Health Facilities Financing Authority, Insured Health 1/08 at 100.00 AAA 545,125
Facility Revenue Refunding Bonds, Catholic Healthcare West,
Series 1994A, 4.750%, 7/01/19 - MBIA Insured
4,040 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 4,018,871
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
15,145 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 15,415,944
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
10,110 California Statewide Community Development Authority, 3/16 at 100.00 A+ 9,767,473
Revenue Bonds, Kaiser Permanante System, Series 2006,
5.000%, 3/01/41
3,140 California Statewide Community Development Authority, 8/16 at 100.00 A+ 3,169,893
Revenue Bonds, Kaiser Permanente System, Series 2001C,
5.250%, 8/01/31
1,355 California Statewide Community Development Authority, Revenue No Opt. Call AAA 1,427,072
Bonds, Sherman Oaks Health System, Series 1998A,
5.000%, 8/01/22 - AMBAC Insured
6,000 Madera County, California, Certificates of Participation, 9/07 at 100.00 AAA 6,053,220
Valley Children's Hospital Project, Series 1995,
5.750%, 3/15/28 - MBIA Insured
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 13,855 Rancho Mirage Joint Powers Financing Authority, California, 7/17 at 100.00 A3 $ 13,472,048
Revenue Bonds, Eisenhower Medical Center, Series 2007A,
5.000%, 7/01/38
1,050 Stockton, California, Health Facility Revenue Bonds, Dameron 12/07 at 102.00 BBB+ 1,073,405
Hospital Association, Series 1997A, 5.450%, 12/01/10
------------------------------------------------------------------------------------------------------------------------------------
56,990 Total Health Care 56,757,766
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.8% (1.1% OF TOTAL INVESTMENTS)
1,000 Independent Cities Lease Finance Authority, California, Revenue 11/14 at 100.00 N/R 1,008,220
Bonds, Morgan Hill, Hacienda Valley Mobile Home Park,
Series 2004A, 5.950%, 11/15/39
4,750 Montclair Redevelopment Agency, California, Revenue Bonds, 12/10 at 102.00 N/R 4,999,328
Monterey Manor Mobile Home Estates Project, Series 2000,
6.400%, 12/15/30
------------------------------------------------------------------------------------------------------------------------------------
5,750 Total Housing/Multifamily 6,007,548
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.4% (0.3% OF TOTAL INVESTMENTS)
855 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AAA 894,390
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
85 California Housing Finance Agency, Single Family Mortgage 10/07 at 100.00 AAA 85,793
Bonds, Mezzanine Series 1995B-2, 6.250%, 8/01/14 - AMBAC
Insured (Alternative Minimum Tax)
535 California Housing Finance Agency, Single Family Mortgage 10/07 at 100.00 AAA 539,992
Bonds, Senior Series 1995B-2, 6.250%, 2/01/18 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,475 Total Housing/Single Family 1,520,175
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.1% (1.3% OF TOTAL INVESTMENTS)
5,000 California Pollution Control Financing Authority, Solid Waste No Opt. Call BBB+ 5,103,300
Disposal Revenue Bonds, Republic Services Inc., Series 2002C,
5.250%, 6/01/23 (Mandatory put 12/01/17) (Alternative
Minimum Tax)
2,000 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 1,912,080
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,000 Total Industrials 7,015,380
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.6% (11.8% OF TOTAL INVESTMENTS)
California, General Obligation Bonds, Series 2003:
3,750 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 3,961,125
5,000 5.250%, 2/01/22 8/13 at 100.00 A+ 5,178,250
1,000 5.250%, 2/01/22 - CIFG Insured 8/13 at 100.00 AAA 1,046,420
California, General Obligation Bonds, Series 2004:
3,800 5.000%, 2/01/21 2/14 at 100.00 A+ 3,912,214
1,850 5.200%, 4/01/26 4/14 at 100.00 A+ 1,914,158
4,700 California, Various Purpose General Obligation Bonds, 5/10 at 101.00 Aaa 4,941,909
Series 2000, 5.625%, 5/01/22 - FGIC Insured
3,850 Coachella Valley Unified School District, Riverside County, 8/15 at 100.00 AAA 3,965,231
California, General Obligation Bonds, Series 2005A,
5.000%, 8/01/30 - FGIC Insured
Fontana Unified School District, San Bernardino County, California,
General Obligation Bonds, Series 2004:
1,470 5.250%, 5/01/19 - MBIA Insured 5/14 at 100.00 AAA 1,580,074
1,040 5.250%, 5/01/20 - MBIA Insured 5/14 at 100.00 AAA 1,115,358
4,000 Long Beach Community College District, California, General 5/15 at 100.00 AAA 4,116,480
Obligation Bonds, Series 2005B, 5.000%, 5/01/30 -
FGIC Insured
10,060 Los Angeles, California, General Obligation Bonds, Series 2001A, 9/11 at 100.00 AA 10,445,399
5.000%, 9/01/20
Los Rios Community College District, Sacramento, El Dorado and
Yolo Counties, California, General Obligation Bonds, Series
2006C:
2,710 5.000%, 8/01/25 - FSA Insured 8/14 at 102.00 AAA 2,802,492
3,875 5.000%, 8/01/26 - FSA Insured 8/14 at 102.00 AAA 3,998,613
43
NVC
Nuveen California Select Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 6,000 North Orange County Community College District, California, No Opt. Call AAA $ 2,256,900
General Obligation Bonds, Series 2003B, 0.000%, 8/01/27 -
FGIC Insured
5,000 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call AAA 5,594,600
Series 2001A, 5.500%, 7/01/20 - MBIA Insured
585 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AAA 603,293
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
3,760 West Contra Costa Unified School District, Contra Costa County, 8/11 at 101.00 AAA 3,855,278
California, General Obligation Bonds, Series 2003B,
5.000%, 8/01/22 - FSA Insured
2,000 West Contra Costa Unified School District, Contra Costa County, 8/11 at 101.00 AAA 2,050,680
California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
64,450 Total Tax Obligation/General 63,338,474
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 29.5% (18.7% OF TOTAL INVESTMENTS)
2,870 Bell Community Redevelopment Agency, California, Tax Allocation 10/13 at 100.00 AA 2,902,345
Bonds, Bell Project Area, Series 2003, 5.500%, 10/01/23 -
RAAI Insured
California State Public Works Board, Lease Revenue Bonds,
Department of Mental Health, Coalinga State Hospital, Series
2004A:
4,000 5.500%, 6/01/21 6/14 at 100.00 A 4,262,680
2,000 5.500%, 6/01/23 6/14 at 100.00 A 2,127,740
730 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 AAA 753,061
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
1,000 Coachella Valley Unified School District, Riverside County, 9/16 at 100.00 Aaa 1,016,310
California, Certificates of Participation, Series 2007,
5.000%, 9/01/31 - AMBAC Insured
3,000 Coronado Community Development Agency, California, Tax 9/15 at 100.00 AAA 3,058,440
Allocation Bonds, Community Development Project, Series 2005,
5.000%, 9/01/30 - AMBAC Insured
1,030 Folsom Cordova Unified School District, Sacramento County, 10/14 at 100.00 AAA 1,059,015
California, General Obligation Bonds, School Facilities
Improvement District 2, Series 2004B, 5.000%, 10/01/25 -
FSA Insured
1,785 Hawthorne Community Redevelopment Agency, California, 9/16 at 100.00 AAA 1,849,082
Project Area 2 Tax Allocation Bonds, Series 2006,
5.250%, 9/01/36 - XLCA Insured
1,500 Hesperia Unified School District, San Bernardino County, 2/17 at 100.00 AAA 1,509,450
California, Certificates of Participation, Capital Improvement,
Series 2007, 5.000%, 2/01/41 - AMBAC Insured
435 Indian Wells Redevelopment Agency, California, Tax Allocation 9/13 at 100.00 AAA 450,743
Bonds, Consolidated Whitewater Project Area, Series 2003A,
5.000%, 9/01/20 - AMBAC Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
350 5.000%, 9/01/26 9/16 at 100.00 N/R 336,508
805 5.125%, 9/01/36 9/16 at 100.00 N/R 762,053
3,000 La Quinta Redevelopment Agency, California, Tax Allocation 9/11 at 102.00 AAA 3,104,880
Bonds, Redevelopment Project Area 1, Series 2001,
5.000%, 9/01/21 - AMBAC Insured
3,510 Long Beach Bond Financing Authority, California, Lease 10/07 at 102.00 AAA 3,536,746
Revenue and Refunding Bonds, Civic Center Project,
Series 1997A, 5.000%, 10/01/27 - MBIA Insured
4,315 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 4,341,839
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
16,500 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 16,739,579
California, Proposition C Second Senior Lien Sales Tax Revenue
Refunding Bonds, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
Los Angeles, California, Municipal Improvement Corporation,
Lease Revenue Bonds, Police Headquarters, Series 2006A:
1,000 5.000%, 1/01/25 - FGIC Insured 1/17 at 100.00 AAA 1,032,700
8,175 4.750%, 1/01/31 - FGIC Insured 1/17 at 100.00 AAA 8,021,801
6,000 4.500%, 1/01/37 - FGIC Insured 1/17 at 100.00 AAA 5,553,600
44
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,580 Oakland Redevelopment Agency, California, Subordinate Lien Tax 3/13 at 100.00 AAA $ 2,772,674
Allocation Bonds, Central District Redevelopment Project,
Series 2003, 5.500%, 9/01/18 - FGIC Insured
3,605 Oakland State Building Authority, California, Lease Revenue 4/08 at 101.00 AAA 3,646,602
Bonds, Elihu M. Harris State Office Building, Series 1998A,
5.000%, 4/01/23 - AMBAC Insured
2,280 Ontario Redevelopment Financing Authority, California, Lease 8/11 at 101.00 AAA 2,409,048
Revenue Bonds, Capital Projects, Series 2001, 5.250%, 8/01/18 -
AMBAC Insured
1,000 Orange County, California, Special Tax Bonds, Community 8/12 at 101.00 N/R 1,010,830
Facilities District 03-1 of Ladera Ranch, Series 2004A,
5.500%, 8/15/24
1,120 Panama-Buena Vista Union School District, California, 9/16 at 100.00 AAA 1,151,461
Certificates of Participation, School Construction Project,
Series 2006, 5.000%, 9/01/23 - MBIA Insured
8,750 Pittsburg Redevelopment Agency, California, Tax Allocation No Opt. Call AAA 4,068,225
Bonds, Los Medanos Community Development Project,
Series 1999, 0.000%, 8/01/23 - AMBAC Insured
635 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 643,147
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
115 Riverside Public Financing Authority, California, Revenue Bonds, 2/08 at 100.00 N/R 116,433
Multiple Project Loans, Series 1991A, 8.000%, 2/01/18
820 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 833,604
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
2,200 San Jose Financing Authority, California, Lease Revenue Refunding 9/11 at 100.00 AAA 2,278,694
Bonds, Convention Center Project, Series 2001F, 5.000%, 9/01/20 -
MBIA Insured
4,625 Santa Clara Redevelopment Agency, California, Tax Allocation 6/13 at 100.00 AAA 4,905,553
Bonds, Bayshore North Project, Series 2003, 5.000%, 6/01/17 -
MBIA Insured
6,870 Vernon Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 6,980,951
Industrial Redevelopment Project, Series 2005,
5.000%, 9/01/35 - MBIA Insured
2,175 Washington Unified School District, Yolo County, California, 8/17 at 100.00 AAA 2,225,852
Certificates of Participation, Series 2007, 5.125%, 8/01/37 -
AMBAC Insured
5,000 West Hollywood, California, Refunding Certificates of Participation, 2/08 at 102.00 AAA 5,050,750
Series 1998, 5.000%, 2/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
103,780 Total Tax Obligation/Limited 100,512,396
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 17.2% (10.9% OF TOTAL INVESTMENTS)
2,210 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 2,272,808
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
8,300 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 100.00 AAA 8,339,342
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35 -
MBIA Insured
10,500 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 9,751,245
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/29
8,000 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 8,312,320
5.750%, 11/01/29 - FGIC Insured (Alternative Minimum Tax)
20,000 San Francisco Airports Commission, California, Revenue Bonds, 5/10 at 101.00 AAA 20,970,196
San Francisco International Airport, Second Series 2000,
Issue 25, 5.750%, 5/01/30 - FSA Insured (Alternative
Minimum Tax)
5,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 5,211,800
Refunding Bonds, San Francisco International Airport, Second
Series 2001, Issue 27B, 5.250%, 5/01/18 - FGIC Insured
3,665 San Francisco Airports Commission, California, Revenue 5/12 at 100.00 AAA 3,779,311
Refunding Bonds, San Francisco International Airport, Second
Series 2002, Issue 28A, 5.250%, 5/01/18 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
57,675 Total Transportation 58,637,022
------------------------------------------------------------------------------------------------------------------------------------
45
NVC
Nuveen California Select Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 43.2% (27.4% OF TOTAL INVESTMENTS) (4)
California Department of Water Resources, Power Supply Revenue
Bonds, Series 2002A:
$ 2,500 5.375%, 5/01/17 (Pre-refunded 5/01/12) - XLCA Insured 5/12 at 101.00 AAA $ 2,708,750
9,750 5.125%, 5/01/18 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 10,460,288
13,000 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (4) 13,826,799
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
3,000 California Pollution Control Financing Authority, Solid Waste 11/07 at 100.00 Aaa 3,351,960
Disposal Revenue Bonds, North County Recycling Center,
Series 1991A, 6.750%, 7/01/17 (ETM)
California Statewide Community Development Authority, Certificates
of Participation, Catholic Healthcare West, Series 1999:
4,495 6.500%, 7/01/20 (Pre-refunded 7/01/10) 7/10 at 101.00 A (4) 4,884,132
1,845 6.500%, 7/01/20 (Pre-refunded 7/01/10) 7/10 at 101.00 A (4) 2,000,552
10,000 California, Various Purpose General Obligation Bonds, 3/10 at 101.00 AAA 10,606,500
Series 2000, 5.750%, 3/01/27 (Pre-refunded 3/01/10) -
MBIA Insured
1,165 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 1,215,433
Securities Program Home Mortgage Revenue Bonds,
Series 1989, 7.700%, 11/01/09 (Alternative Minimum Tax) (ETM)
5,515 Fresno Unified School District, Fresno County, California, 8/09 at 102.00 AAA 5,643,610
General Obligation Bonds, Series 2001E, 5.000%, 8/01/25 -
FGIC Insured (ETM) (5)
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B:
2,000 5.625%, 6/01/33 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 2,172,500
2,500 5.625%, 6/01/38 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 2,715,625
3,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 3,447,540
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39 (Pre-refunded 6/01/13)
3,000 Los Angeles County Metropolitan Transportation Authority, 7/10 at 101.00 AAA 3,163,740
California, Proposition C Second Senior Lien Sales Tax Revenue
Bonds, Series 2000A, 5.250%, 7/01/25 (Pre-refunded 7/01/10) -
FGIC Insured
4,220 Los Angeles Unified School District, California, General 7/08 at 101.00 AAA 4,311,447
Obligation Bonds, Series 1998B, 5.000%, 7/01/23
(Pre-refunded 7/01/08) - FGIC Insured
6,030 Los Angeles Unified School District, California, General 7/10 at 100.00 AAA 6,324,686
Obligation Bonds, Series 2000D, 5.375%, 7/01/25
(Pre-refunded 7/01/10) - FGIC Insured
2,650 Los Angeles, California, Wastewater System Revenue Bonds, 6/08 at 101.00 AAA 2,704,352
Series 1998A, 5.000%, 6/01/28 (Pre-refunded 6/01/08) -
FGIC Insured
Monterey County, California, Certificates of Participation,
Master Plan Financing, Series 2001:
2,075 5.000%, 8/01/19 (Pre-refunded 8/01/11) - MBIA Insured 8/11 at 100.00 Aaa 2,182,340
3,000 5.000%, 8/01/26 (Pre-refunded 8/01/11) - MBIA Insured 8/11 at 100.00 Aaa 3,155,190
2,200 Oakland Unified School District, Alameda County, California, 8/08 at 101.00 AAA 2,252,580
General Obligation Bonds, Series 2001, 5.125%, 8/01/21
(Pre-refunded 8/01/08) - FSA Insured
2,270 Pajaro Valley Unified School District, Santa Cruz County, 8/13 at 100.00 AAA 2,424,587
California, General Obligation Bonds, Series 2003A,
5.000%, 8/01/20 (Pre-refunded 8/01/13) - FSA Insured
10,000 Puerto Rico Highway and Transportation Authority, Highway 7/10 at 101.00 BBB+ (4) 10,721,000
Revenue Bonds, Series 2000B, 6.000%, 7/01/31
(Pre-refunded 7/01/10)
4,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 4,202,320
Obligation Bonds, Series 2000A, 5.500%, 10/01/32
2,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 2,380,700
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26 -
AGC Insured
17,670 San Francisco City and County Public Utilities Commission, 11/11 at 100.00 AAA 18,640,789
California, Water Revenue Bonds, Series 2001A,
5.000%, 11/01/24 (Pre-refunded 11/01/11) - FSA Insured
3,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/08 at 102.00 AAA 3,104,100
Merged Area Redevelopment Project, Series 1998,
5.250%, 8/01/29 (Pre-refunded 8/01/08) - AMBAC Insured
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
Solano County, California, Certificates of Participation, Series 2002:
$ 2,415 5.250%, 11/01/22 (Pre-refunded 11/01/12) - MBIA Insured 11/12 at 100.00 AAA $ 2,604,167
1,625 5.250%, 11/01/23 (Pre-refunded 11/01/12) - MBIA Insured 11/12 at 100.00 AAA 1,752,286
6,555 Sweetwater Authority, California, Water Revenue Bonds, 4/10 at 101.00 AAA 6,848,140
Series 2002, 5.000%, 4/01/22 (Pre-refunded 4/01/10) -
FSA Insured
5,125 University of California, Revenue Bonds, Research Facilities, 9/09 at 101.00 AAA 5,315,548
Series 2001E, 5.000%, 9/01/22 (Pre-refunded 9/01/09) -
AMBAC Insured
2,000 Vista, California, Mobile Home Park Revenue Bonds, Vista Manor 3/24 at 100.00 N/R (4) 2,094,560
Mobile Home Park Project, Series 1999A, 5.750%, 3/15/29
(Pre-refunded 3/15/24)
------------------------------------------------------------------------------------------------------------------------------------
138,605 Total U.S. Guaranteed 147,216,221
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.6% (8.6% OF TOTAL INVESTMENTS)
2,000 Anaheim Public Finance Authority, California, Revenue Refunding 10/12 at 100.00 AAA 2,115,320
Bonds, Electric Generating System, Series 2002B,
5.250%, 10/01/18 - FSA Insured
1,810 Anaheim Public Finance Authority, California, Second Lien 10/14 at 100.00 AAA 1,908,880
Electric Distribution Revenue Bonds, Series 2004,
5.250%, 10/01/21 - MBIA Insured
10,350 California Pollution Control Financing Authority, Revenue Bonds, No Opt. Call A+ 11,828,084
San Diego Gas and Electric Company, Series 1991A,
6.800%, 6/01/15 (Alternative Minimum Tax)
4,000 Imperial Irrigation District, California, Certificates of 11/13 at 100.00 AAA 4,149,920
Participation, Electric System Revenue Bonds, Series 2003,
5.250%, 11/01/23 - FSA Insured
5,000 Los Angeles Department of Water and Power, California, Power 7/11 at 100.00 AAA 5,266,350
System Revenue Bonds, Series 2001A-2, 5.375%, 7/01/20 -
MBIA Insured
5,000 Los Angeles Department of Water and Power, California, Power 7/15 at 100.00 AAA 5,131,650
System Revenue Bonds, Series 2005A-1, 5.000%, 7/01/31 -
FSA Insured
5,225 Los Angeles, California, Sanitation Equipment Charge Revenue 2/11 at 100.00 AAA 5,449,257
Bonds, Series 2001A, 5.250%, 2/01/18 - FSA Insured
1,025 Los Angeles, California, Sanitation Equipment Charge Revenue 2/14 at 100.00 AAA 1,060,240
Bonds, Series 2004A, 5.000%, 2/01/22 - AMBAC Insured
1,260 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 AAA 1,290,719
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
4,360 Sacramento Municipal Utility District, California, Electric 8/12 at 100.00 AAA 4,609,741
Revenue Refunding Bonds, Series 2002Q, 5.250%, 8/15/19 -
FSA Insured
3,460 Southern California Public Power Authority, Revenue Bonds, 7/13 at 100.00 AAA 3,597,327
Magnolia Power Project, Series 2003-1A, 5.000%, 7/01/20 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
43,490 Total Utilities 46,407,488
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.6% (3.6% OF TOTAL INVESTMENTS)
1,185 Burbank, California, Wastewater System Revenue Bonds, 6/14 at 100.00 AAA 1,215,265
Series 2004A, 5.000%, 6/01/24 - AMBAC Insured
890 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 908,957
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
1,250 Indio Water Authority, California, Water Revenue Bonds, 4/16 at 100.00 AAA 1,288,213
Series 2006, 5.000%, 4/01/31 - AMBAC Insured
3,750 Metropolitan Water District of Southern California, Water 10/14 at 100.00 AAA 3,854,475
Revenue Bonds, Series 2004B-3, 5.000%, 10/01/29 -
MBIA Insured
2,000 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 2,083,040
Series 2001A, 6.250%, 12/01/32
1,510 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AAA 1,554,651
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC Insured
47
NVC
Nuveen California Select Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 2,525 Sacramento County Sanitation District Financing Authority, No Opt. Call AAA $ 2,832,545
California, Revenue Refunding Bonds, Series 2001,
5.500%, 12/01/20 - AMBAC Insured
San Francisco City and County Public Utilities Commission,
California, Clean Water Revenue Refunding Bonds, Series 2003A:
2,120 5.250%, 10/01/19 - MBIA Insured 4/13 at 100.00 AAA 2,245,377
2,960 5.250%, 10/01/20 - MBIA Insured 4/13 at 100.00 AAA 3,135,054
------------------------------------------------------------------------------------------------------------------------------------
18,190 Total Water and Sewer 19,117,577
------------------------------------------------------------------------------------------------------------------------------------
$ 536,310 Total Investments (cost $520,638,060) - 157.5% 537,183,153
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.0)% (10,096,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 6,014,807
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (56.3)% (192,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 341,101,960
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (5) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Citigroup $12,500,000 Pay 3-Month USD-LIBOR 5.808% Semi-Annually 7/1/08 7/1/33 $ 573,650
JPMorgan 18,500,000 Pay SIFM 4.376 Quarterly 8/6/08 8/6/37 501,977
------------------------------------------------------------------------------------------------------------------------------------
$1,075,627
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM - The daily arithmetic average of the weekly SIFM (the Securities Industry
and Financial Markets) Municipal Swap Index.
The Fund may invest in "zero coupon" securities. A zero
coupon security does not pay a regular interest coupon to
its holders during the life of the security. Tax-exempt
income to the holder of the security comes from accretion of
the difference between the original purchase price of the
security at issuance and the par value of the security at
maturity and is effectively paid at maturity. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating. Ratings below BBB by Standard &
Poor's Group or Baa by Moody's Investor Service, Inc. are
considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment, with an aggregate market value of
$633,914, has been pledged to collateralize the net payment
obligations under forward swap contracts.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
48
NUC
Nuveen California Quality Income Municipal Fund, Inc.
Portfolio of INVESTMENTS
August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.6% (4.2% OF TOTAL INVESTMENTS)
$ 5,000 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 $ 4,984,100
Settlement Asset-Backed Bonds, Alameda County Tobacco
Asset Securitization Corporation, Series 2002,
5.750%, 6/01/29
1,220 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB 1,131,099
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
4,620 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 4,591,264
Settlement Asset-Backed Bonds, Stanislaus County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
8,645 California Statewide Financing Authority, Tobacco Settlement 5/12 at 100.00 Baa3 8,672,318
Asset-Backed Bonds, Pooled Tobacco Securitization Program,
Series 2002A, 5.625%, 5/01/29
3,370 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 2,217,190
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
22,855 Total Consumer Staples 21,595,971
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.8% (3.7% OF TOTAL INVESTMENTS)
280 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 275,010
University of Redlands, Series 2005A, 5.000%, 10/01/35
2,785 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 2,929,291
University of the Pacific, Series 2000, 5.750%, 11/01/30 -
MBIA Insured
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
195 5.000%, 11/01/21 11/15 at 100.00 A2 200,717
260 5.000%, 11/01/25 11/15 at 100.00 A2 264,428
4,000 California State Public Works Board, Lease Revenue Refunding 9/07 at 101.00 AAA 4,039,240
Bonds, Community Colleges Projects, Series 1996B,
5.625%, 3/01/19 - AMBAC Insured
6,400 California State University, Systemwide Revenue Bonds, 11/12 at 100.00 AAA 6,645,184
Series 2002A, 5.000%, 11/01/20 - AMBAC Insured
435 California Statewide Community Development Authority, 10/07 at 100.50 AAA 437,862
Auxiliary Organization Revenue Certificates of Participation,
University Corporation - California State University -
Northridge, Series 1996, 6.000%, 4/01/26 -
AMBAC Insured
4,500 University of California System, General Revenue Bonds, 5/15 at 101.00 AAA 4,225,185
Series 2006J, 4.500%, 5/15/35 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
18,855 Total Education and Civic Organizations 19,016,917
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 11.4% (7.2% OF TOTAL INVESTMENTS)
1,750 ABAG Finance Authority for Non-Profit Corporations, California, 4/12 at 100.00 A+ 1,814,715
Cal-Mortgage Insured Revenue Bonds, Sansum-Santa Barbara
Medical Foundation Clinic, Series 2002A, 5.500%, 4/01/21
3,640 California Health Facilities Financing Authority, Revenue Bonds, 3/16 at 100.00 A+ 3,646,188
Kaiser Permanante System, Series 2006, 5.250%, 3/01/45
14,550 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 14,810,299
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
49
NUC
Nuveen California Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,225 California State Public Works Board, Revenue Bonds, 11/14 at 100.00 AAA $ 1,253,420
University of California - Davis Medical Center, Series 2004II-A,
5.000%, 11/01/23 - MBIA Insured
820 California Statewide Community Development Authority, No Opt. Call A2 866,519
Certificates of Participation, Cedars-Sinai Medical Center,
Series 1992, 6.500%, 8/01/12
9,670 California Statewide Community Development Authority, 3/16 at 100.00 A+ 9,342,380
Revenue Bonds, Kaiser Permanante System, Series 2006,
5.000%, 3/01/41
3,015 California Statewide Community Development Authority, 8/16 at 100.00 A+ 3,043,703
Revenue Bonds, Kaiser Permanente System, Series 2001C,
5.250%, 8/01/31
3,000 California Statewide Community Development Authority, No Opt. Call A+ 3,043,950
Revenue Bonds, Kaiser Permanente System, Series 2002E,
4.700%, 11/01/36 (Mandatory put 6/01/09)
------------------------------------------------------------------------------------------------------------------------------------
37,670 Total Health Care 37,821,174
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.8% (3.1% OF TOTAL INVESTMENTS)
1,000 California Statewide Community Development Authority, 7/08 at 101.00 BBB 1,017,100
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 5.100%, 5/15/25 (Mandatory
put 5/17/10)
3,000 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- 3,053,880
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.850%, 12/15/32
1,000 Independent Cities Lease Finance Authority, California, 11/14 at 100.00 N/R 1,008,220
Revenue Bonds, Morgan Hill, Hacienda Valley Mobile Home
Park, Series 2004A, 5.950%, 11/15/39
2,285 Irvine, California, Mobile Home Park Revenue Bonds, Meadows 3/08 at 102.00 N/R 2,310,661
Mobile Home Park, Series 1998A, 5.700%, 3/01/18
2,310 Oceanside, California, Mobile Home Park Revenue Bonds, 3/08 at 102.00 N/R 2,327,325
Laguna Vista Mobile Estates Acquisition Project, Series 1998,
5.800%, 3/01/28
3,040 Riverside County, California, Mobile Home Park Revenue Bonds, 3/09 at 102.00 N/R 3,045,168
Bravo Mobile Home Park Project, Series 1999A, 5.900%, 3/20/29
1,640 Stanton, California, Multifamily Housing Revenue Bonds, 11/07 at 102.00 AAA 1,674,161
Continental Gardens Apartments, Series 1997, 5.625%, 8/01/29
(Mandatory put 8/01/09) (Alternative Minimum Tax)
Yolo County Housing Authority, California, Revenue Refunding
Bonds, Russell Park Apartments, Series 1992A:
390 6.900%, 11/01/08 11/07 at 100.00 Aa2 390,729
1,030 7.000%, 11/01/14 11/07 at 100.00 Aa2 1,064,793
------------------------------------------------------------------------------------------------------------------------------------
15,695 Total Housing/Multifamily 15,892,037
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.3% (0.2% OF TOTAL INVESTMENTS)
820 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AAA 857,777
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,000 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 1,912,080
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.3% (11.6% OF TOTAL INVESTMENTS)
1,900 Azusa Unified School District, Los Angeles County, California, 7/12 at 100.00 AAA 2,020,118
General Obligation Bonds, Series 2002, 5.375%, 7/01/20 -
FSA Insured
35 California State, General Obligation Bonds, Series 2002, 4/12 at 100.00 A+ 36,562
5.250%, 4/01/32
50
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 80 California, General Obligation Bonds, Series 2000, 5.500%, 6/01/25 6/10 at 100.00 A+ $ 82,964
California, General Obligation Bonds, Series 2003:
3,750 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 3,961,125
500 5.250%, 2/01/33 2/13 at 100.00 A+ 512,635
6,300 California, General Obligation Bonds, Series 2004, 5.200%, 4/01/26 4/14 at 100.00 A+ 6,518,484
6,085 California, General Obligation Veterans Welfare Bonds, 12/07 at 101.00 AA- 6,147,006
Series 1997BJ, 5.700%, 12/01/32 (Alternative Minimum Tax)
1,370 Fremont-Newark Community College District, Alameda County, 8/11 at 101.00 AAA 1,456,269
California, General Obligation Bonds, Series 2002A,
5.375%, 8/01/20 - MBIA Insured
3,610 Hartnell Community College District, California, General 6/16 at 100.00 AAA 3,729,888
Obligation Bonds, Series 2006B, 5.000%, 6/01/29 -
FSA Insured
2,500 Hemet Unified School District, Riverside County, California, 8/15 at 100.00 AAA 2,223,050
General Obligation Bonds, Series 2007, 4.250%, 8/01/32 -
FSA Insured
5,255 Livermore Valley Joint Unified School District, Alameda County, 8/11 at 100.00 AAA 5,403,244
California, General Obligation Bonds, Election of 1999,
Series 2001, 5.125%, 8/01/26 - FSA Insured
2,645 Long Beach Community College District, California, General 5/15 at 100.00 AAA 2,722,022
Obligation Bonds, Series 2005B, 5.000%, 5/01/30 -
FGIC Insured
1,170 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 1,241,838
Obligation Bonds, Series 2003F, 5.000%, 7/01/17 -
FSA Insured
565 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AAA 582,668
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
1,500 Sacramento City Unified School District, Sacramento County, 7/15 at 100.00 Aaa 1,546,470
California, General Obligation Bonds, Series 2005,
5.000%, 7/01/27 - MBIA Insured
6,760 San Diego Unified School District, San Diego County, 7/13 at 101.00 AAA 7,305,870
California, General Obligation Bonds, Series 2003E,
5.250%, 7/01/21 - FSA Insured
515 San Joaquin Delta Community College District, California, 8/15 at 100.00 AAA 530,759
General Obligation Bonds, Series 2005A, 5.000%, 8/01/29 -
FSA Insured
1,500 San Jose Unified School District, Santa Clara County, California, 8/15 at 100.00 AAA 1,550,940
General Obligation Bonds, Series 2005B, 5.000%, 8/01/25 -
FGIC Insured
6,865 San Ramon Valley Unified School District, Contra Costa County, 8/13 at 100.00 AAA 7,055,641
California, General Obligation Bonds, Series 2003,
5.000%, 8/01/23 - FSA Insured
1,390 South Pasadena Unified School District, Los Angeles County, 8/13 at 100.00 AAA 1,431,519
California, General Obligation Bonds, Series 2003A,
5.000%, 8/01/22 - FGIC Insured
3,925 West Contra Costa Unified School District, Contra Costa County, 8/11 at 101.00 AAA 4,017,512
California, General Obligation Bonds, Series 2003B,
5.000%, 8/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
58,220 Total Tax Obligation/General 60,076,584
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 33.7% (21.4% OF TOTAL INVESTMENTS)
1,655 Bell Community Housing Authority, California, Lease Revenue 10/15 at 100.00 AAA 1,675,241
Bonds, Series 2005, 5.000%, 10/01/36 - AMBAC Insured
1,200 Burbank Public Financing Authority, California, Revenue Bonds, 12/12 at 100.00 AAA 1,240,248
West Olive Redevelopment Project, Series 2002,
5.125%, 12/01/22 - AMBAC Insured
3,070 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 3,289,075
Department of General Services, Capital East End Project,
Series 2002A, 5.250%, 12/01/16 - AMBAC Insured
2,030 California State Public Works Board, Lease Revenue Bonds, 3/12 at 100.00 AAA 2,111,423
Department of General Services, Series 2002C,
5.250%, 3/01/21 - AMBAC Insured
51
NUC
Nuveen California Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 5,115 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A $ 5,466,298
Department of Mental Health, Coalinga State Hospital,
Series 2004A, 5.500%, 6/01/20
2,715 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA+ 2,893,321
5.000%, 7/01/15
690 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 AAA 711,797
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
3,000 Coachella Valley Unified School District, Riverside County, 9/16 at 100.00 Aaa 3,048,930
California, Certificates of Participation, Series 2007,
5.000%, 9/01/31 - AMBAC Insured
Commerce Community Development Commission, California, Tax
Allocation Refunding Bonds, Merged Area Development Projects 2
and 3, Series 1998A:
1,000 5.650%, 8/01/18 8/08 at 102.00 N/R 1,021,880
2,765 5.700%, 8/01/28 8/08 at 102.00 N/R 2,783,332
1,250 Coronado Community Development Agency, California, Tax 9/15 at 100.00 AAA 1,274,350
Allocation Bonds, Community Development Project,
Series 2005, 5.000%, 9/01/30 - AMBAC Insured
3,065 Corona-Norco Unified School District, Riverside County, 9/13 at 100.00 AAA 3,234,648
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2003, 5.500%, 9/01/33 - MBIA Insured
2,335 Fresno, California, Certificates of Participation, Street 12/07 at 100.00 A+ 2,348,777
Improvement Project, Series 1991, 6.625%, 12/01/11
9,500 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 9,630,245
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2005A, 5.000%, 6/01/35 - FGIC Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
335 5.000%, 9/01/26 9/16 at 100.00 N/R 322,086
775 5.125%, 9/01/36 9/16 at 100.00 N/R 733,654
3,245 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 3,265,184
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
1,350 Los Angeles Community Redevelopment Agency, California, 3/13 at 100.00 BBB- 1,360,611
Subordinate Lien Tax Allocation Bonds, Bunker Hill
Redevelopment Project, Series 2004L, 5.100%, 3/01/19
4,850 Los Angeles County Metropolitan Transportation Authority, 7/13 at 100.00 AAA 5,147,790
California, Proposition A First Tier Senior Sales Tax Revenue
Bonds, Series 2003A, 5.000%, 7/01/16 - FSA Insured
4,000 Los Angeles County Public Works Financing Authority, California, 12/15 at 100.00 AAA 4,101,640
Lease Revenue Bonds, Master Refunding Project,
Series 2005A, 5.000%, 12/01/26 - MBIA Insured
6,230 Los Angeles, California, Municipal Improvement Corporation, 1/17 at 100.00 AAA 6,433,721
Lease Revenue Bonds, Police Headquarters, Series 2006A,
5.000%, 1/01/25 - FGIC Insured
15,300 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 20,043,765
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured
1,170 Panama-Buena Vista Union School District, California, 9/16 at 100.00 AAA 1,201,134
Certificates of Participation, School Construction Project,
Series 2006, 5.000%, 9/01/24 - MBIA Insured
Redding Redevelopment Agency, California, Tax Allocation
Bonds, Canby-Hilltop-Cypress Area Project, Series 2003A:
1,500 5.000%, 9/01/17 - MBIA Insured 9/13 at 100.00 AAA 1,594,365
1,500 5.000%, 9/01/20 - MBIA Insured 9/13 at 100.00 AAA 1,560,240
600 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 607,698
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
4,320 Richmond Joint Powers Financing Authority, California, Tax 9/13 at 100.00 AAA 4,503,686
Allocation Bonds, Series 2003A, 5.250%, 9/01/22 -
MBIA Insured
52
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,000 Rohnert Park Community Development Commission, California, 8/17 at 100.00 AAA $ 2,035,140
Redevelopment Project Tax Allocation Bonds, Series 2007R,
5.000%, 8/01/37 - FGIC Insured
745 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 757,360
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
8,625 Sacramento City Financing Authority, California, Capital 12/16 at 100.00 AAA 8,755,238
Improvement Revenue Bonds, 300 Richards Boulevard,
Series 2006C, 5.000%, 12/01/36 - AMBAC Insured
2,500 San Jose Financing Authority, California, Lease Revenue 9/11 at 100.00 AAA 2,589,425
Refunding Bonds, Convention Center Project, Series 2001F,
5.000%, 9/01/20 - MBIA Insured
2,770 Santa Ana Community Redevelopment Agency, Orange County, 9/13 at 100.00 AAA 2,869,803
California, Tax Allocation Refunding Bonds, South Main Street
Redevelopment, Series 2003B, 5.000%, 9/01/19 - FGIC Insured
2,090 Washington Unified School District, Yolo County, California, 8/17 at 100.00 AAA 2,138,864
Certificates of Participation, Series 2007, 5.125%, 8/01/37 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
103,295 Total Tax Obligation/Limited 110,750,969
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 13.9% (8.8% OF TOTAL INVESTMENTS)
3,950 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 4,062,259
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
11,000 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 10,215,590
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/29
2,000 Orange County Transportation Authority, California, Toll Road 8/13 at 100.00 AAA 2,080,080
Revenue Bonds, 91 Express Lanes Project, Series 2003A,
5.000%, 8/15/20 - AMBAC Insured
2,685 Sacramento County, California, Airport System Revenue Bonds, 7/12 at 100.00 AAA 2,811,061
Series 2002A, 5.250%, 7/01/21 - FSA Insured
20,000 San Francisco Airports Commission, California, Revenue Bonds, 5/10 at 101.00 AAA 20,970,198
San Francisco International Airport, Second Series 2000,
Issue 25, 5.750%, 5/01/30 - FSA Insured (Alternative
Minimum Tax)
San Francisco Airports Commission, California, Revenue
Refunding Bonds, San Francisco International Airport, Second
Series 2002, Issue 28A:
1,480 5.250%, 5/01/17 - MBIA Insured (Alternative Minimum Tax) 5/12 at 100.00 AAA 1,536,062
3,865 5.250%, 5/01/19 - MBIA Insured (Alternative Minimum Tax) 5/12 at 100.00 AAA 3,974,070
------------------------------------------------------------------------------------------------------------------------------------
44,980 Total Transportation 45,649,320
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 48.7% (31.0% OF TOTAL INVESTMENTS) (4)
7,325 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 N/R (4) 7,758,201
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Funding Corporation, Series 2002B, 5.500%, 6/01/30
(Pre-refunded 6/01/12)
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
2,500 5.375%, 5/01/17 (Pre-refunded 5/01/12) - XLCA Insured 5/12 at 101.00 AAA 2,708,750
9,000 5.125%, 5/01/18 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 9,655,650
6,190 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 6,593,217
University of the Pacific, Series 2000, 5.750%, 11/01/30
(Pre-refunded 11/01/10) - MBIA Insured
California Health Facilities Financing Authority, Revenue Bonds,
Cedars-Sinai Medical Center, Series 1999A:
10,400 6.125%, 12/01/30 (Pre-refunded 12/01/09) 12/09 at 101.00 N/R (4) 11,061,440
7,700 6.250%, 12/01/34 (Pre-refunded 12/01/09) 12/09 at 101.00 N/R (4) 8,210,356
8,000 California Pollution Control Financing Authority, Solid Waste 11/07 at 100.00 Aaa 8,938,560
Disposal Revenue Bonds, North County Recycling Center,
Series 1991A, 6.750%, 7/01/17 (ETM)
1,965 California State, General Obligation Bonds, Series 2002, 4/12 at 100.00 A1 (4) 2,103,375
5.250%, 4/01/32 (Pre-refunded 4/01/12)
53
NUC
Nuveen California Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 1,515 California Statewide Community Development Authority, Water 10/13 at 101.00 Aaa $ 1,653,077
and Wastewater Revenue Bonds, Pooled Financing Program,
Series 2004A, 5.250%, 10/01/24 (Pre-refunded 10/01/13) -
FSA Insured
California, General Obligation Bonds, Series 2000:
1,105 5.500%, 6/01/25 (Pre-refunded 6/01/10) 6/10 at 100.00 Aaa 1,161,068
315 5.500%, 6/01/25 (Pre-refunded 6/01/10) 6/10 at 100.00 Aaa 330,983
2,500 California, General Obligation Bonds, Series 2004, 2/14 at 100.00 A+ (4) 2,692,125
5.125%, 2/01/27 (Pre-refunded 2/01/14)
4,440 Coast Community College District, Orange County, California, 8/13 at 100.00 AAA 4,727,801
General Obligation Refunding Bonds, Series 2003A,
5.000%, 8/01/22 (Pre-refunded 8/01/13) - MBIA Insured
1,615 Compton Unified School District, Los Angeles County, California, 9/13 at 100.00 AAA 1,758,638
General Obligation Bonds, Series 2003A, 5.375%, 9/01/19
(Pre-refunded 9/01/13) - MBIA Insured
12,805 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 16,758,160
Securities Program Home Mortgage Revenue Bonds,
Series 1988, 8.250%, 6/01/21 (Alternative Minimum Tax) (ETM)
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B:
5,000 5.625%, 6/01/33 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 5,431,250
2,500 5.625%, 6/01/38 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 2,715,625
8,000 Los Angeles County Metropolitan Transportation Authority, 7/10 at 101.00 AAA 8,436,640
California, Proposition C Second Senior Lien Sales Tax
Revenue Bonds, Series 2000A, 5.250%, 7/01/25
(Pre-refunded 7/01/10) - FGIC Insured
2,000 Los Angeles Unified School District, California, General 7/10 at 100.00 AAA 2,097,740
Obligation Bonds, Series 2000D, 5.375%, 7/01/25
(Pre-refunded 7/01/10) - FGIC Insured
3,005 Monterey County, California, Certificates of Participation, 8/11 at 100.00 Aaa 3,160,449
Master Plan Financing, Series 2001, 5.000%, 8/01/20
(Pre-refunded 8/01/11) - MBIA Insured
2,375 Moreno Valley Unified School District, Riverside County, 8/14 at 100.00 AAA 2,587,634
California, General Obligation Bonds, Series 2004A,
5.250%, 8/01/24 (Pre-refunded 8/01/14) - FSA Insured
5,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 5,252,900
Bonds, Series 2000A, 5.500%, 10/01/32
13,525 San Bernardino County, California, GNMA Mortgage-Backed No Opt. Call AAA 15,537,250
Securities Program Single Family Home Mortgage Revenue
Bonds, Series 1989A, 7.750%, 11/01/14 (Alternative
Minimum Tax) (ETM)
3,000 San Francisco Airports Commission, California, Revenue 5/12 at 100.00 AAA 3,214,470
Refunding Bonds, San Francisco International Airport,
Second Series 2002, Issue 28B, 5.250%, 5/01/22
(Pre-refunded 5/01/12) - MBIA Insured
1,615 University of California, Certificates of Participation, 1/10 at 101.00 Aa2 (4) 1,690,566
San Diego and Sacramento Campus Projects, Series 2002A,
5.250%, 1/01/21 (Pre-refunded 1/01/10)
University of California, Revenue Bonds, Multi-Purpose
Projects, Series 2002O:
5,265 5.000%, 9/01/18 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 101.00 AAA 5,527,513
10,255 5.000%, 9/01/19 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 101.00 AAA 10,766,314
University of California, Revenue Bonds, Research Facilities,
Series 2001E:
2,305 5.000%, 9/01/23 (Pre-refunded 9/01/09) - AMBAC Insured 9/09 at 101.00 AAA 2,390,700
5,150 5.000%, 9/01/24 (Pre-refunded 9/01/09) - AMBAC Insured 9/09 at 101.00 AAA 5,341,477
------------------------------------------------------------------------------------------------------------------------------------
146,370 Total U.S. Guaranteed 160,261,929
------------------------------------------------------------------------------------------------------------------------------------
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.4% (4.0% OF TOTAL INVESTMENTS)
$ 500 Los Angeles Department of Water and Power, California, 7/15 at 100.00 AAA $ 513,165
Power System Revenue Bonds, Series 2005A-1,
5.000%, 7/01/31 - FSA Insured
1,235 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 AAA 1,265,109
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
5,000 Merced Irrigation District, California, Revenue Certificates of 9/13 at 102.00 Baa3 5,127,050
Participation, Electric System Project, Series 2003,
5.700%, 9/01/36
1,200 Sacramento Municipal Utility District, California, Electric No Opt. Call AAA 1,265,868
Revenue Bonds, Series 2004T, 5.250%, 5/15/23 - FGIC Insured
2,410 Sacramento Municipal Utility District, California, Electric 8/12 at 100.00 AAA 2,529,030
Revenue Refunding Bonds, Series 2002Q, 5.250%, 8/15/21 -
FSA Insured
4,000 Southern California Public Power Authority, Revenue Bonds, 7/13 at 100.00 AAA 4,158,760
Magnolia Power Project, Series 2003-1A, 5.000%, 7/01/20 -
AMBAC Insured
5,500 Southern California Public Power Authority, Revenue Bonds, No Opt. Call A+ 6,057,865
Multiple Projects, Series 1989, 6.750%, 7/01/11
------------------------------------------------------------------------------------------------------------------------------------
19,845 Total Utilities 20,916,847
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 6.9% (4.4% OF TOTAL INVESTMENTS)
5,525 California Statewide Community Development Authority, 10/13 at 101.00 AAA 5,780,587
Water and Wastewater Revenue Bonds, Pooled Financing
Program, Series 2004A, 5.250%, 10/01/24 - FSA Insured
Goleta Water District, California, Certificates of Participation
Revenue Bonds, Series 2003:
1,000 5.250%, 12/01/20 - MBIA Insured 12/13 at 100.00 AAA 1,065,330
1,440 5.250%, 12/01/21 - MBIA Insured 12/13 at 100.00 AAA 1,534,075
1,205 5.250%, 12/01/22 - MBIA Insured 12/13 at 100.00 AAA 1,265,732
850 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 868,105
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
1,250 Indio Water Authority, California, Water Revenue Bonds, 4/16 at 100.00 AAA 1,288,213
Series 2006, 5.000%, 4/01/31 - AMBAC Insured
500 Norco, California, Certificates of Participation Refunding, 10/08 at 102.00 AAA 506,015
Water and Sewerage System Improvement Project,
Series 1998, 5.125%, 10/01/28 - AMBAC Insured
1,380 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AAA 1,420,807
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC Insured
5,375 San Francisco City and County Public Utilities Commission, 11/12 at 100.00 AAA 5,610,371
California, Water Revenue Bonds, Series 2002A,
5.000%, 11/01/19 - MBIA Insured (5)
Turlock Public Finance Authority, California, Sewerage
Revenue Bonds, Series 2003A:
1,565 5.000%, 9/15/19 - FGIC Insured 9/13 at 100.00 AAA 1,633,265
1,650 5.000%, 9/15/20 - FGIC Insured 9/13 at 100.00 AAA 1,716,347
------------------------------------------------------------------------------------------------------------------------------------
21,740 Total Water and Sewer 22,688,847
------------------------------------------------------------------------------------------------------------------------------------
$ 492,345 Total Investments (cost $496,139,469) - 157.4% 517,440,452
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (2.9)% (9,698,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 6,013,736
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (56.3)% (185,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 328,756,188
====================================================================================================================
55
NUC
Nuveen California Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS August 31, 2007
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Citigroup $13,500,000 Pay 3-Month USD-LIBOR 5.808% Semi-Annually 7/1/08 7/1/33 $ 619,542
JPMorgan 20,000,000 Pay SIFM 4.376 Quarterly 8/6/08 8/6/37 542,678
------------------------------------------------------------------------------------------------------------------------------------
$1,162,220
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM - The daily arithmetic average of the weekly SIFM (the Securities Industry
and Financial Markets) Municipal Swap Index.
The Fund may invest in "zero coupon" securities. A zero
coupon security does not pay a regular interest coupon to
its holders during the life of the security. Tax-exempt
income to the holder of the security comes from accretion of
the difference between the original purchase price of the
security at issuance and the par value of the security at
maturity and is effectively paid at maturity. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating. Ratings below BBB by Standard &
Poor's Group or Baa by Moody's Investor Service, Inc. are
considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment, with an aggregate market value of
$1,868,384, has been pledged to collateralize the net
payment obligations under forward swap contracts.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
56
Statement of
ASSETS & LIABILITIES
August 31, 2007
CALIFORNIA
CALIFORNIA CALIFORNIA CALIFORNIA INVESTMENT CALIFORNIA CALIFORNIA
VALUE PERFORMANCE PLUS OPPORTUNITY QUALITY SELECT QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value
(cost $240,358,725,
$289,405,379,
$185,334,133,
$307,858,192,
$520,638,060 and
$496,139,469,
respectively) $250,696,131 $298,290,272 $192,344,214 $318,303,480 $537,183,153 $517,440,452
Cash 67,350 -- -- -- -- --
Receivables:
Interest 2,980,110 4,325,972 2,150,379 5,049,529 6,899,834 7,505,827
Investments sold 165,000 -- -- -- -- --
Unrealized appreciation
on forward swaps 642,663 146,052 54,268 579,016 1,075,627 1,162,220
Other assets 16,097 44,478 16,528 42,563 56,725 66,590
------------------------------------------------------------------------------------------------------------------------------------
Total assets 254,567,351 302,806,774 194,565,389 323,974,588 545,215,339 526,175,089
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- 156,257 654,622 752,782 343,506 1,059,704
Payable for investments
purchased 974,920 -- -- -- -- --
Floating rate obligations 3,576,000 4,258,000 3,536,000 9,170,000 10,096,000 9,698,000
Unrealized depreciation
on forward swaps -- -- 55,626 -- -- --
Accrued expenses:
Management fees 114,854 157,578 101,307 165,369 278,736 268,858
Other 69,578 75,871 34,291 80,240 126,035 106,976
Common share
dividends payable 810,329 656,797 441,010 697,741 1,229,554 1,215,469
Preferred share
dividends payable N/A 36,492 14,985 41,750 39,548 69,894
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,545,681 5,340,995 4,837,841 10,907,882 12,113,379 12,418,901
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares,
at liquidation value N/A 106,000,000 68,000,000 112,000,000 192,000,000 185,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares $249,021,670 $191,465,779 $121,727,548 $201,066,706 $341,101,960 $328,756,188
====================================================================================================================================
Common shares
outstanding 25,241,808 12,965,742 8,168,248 13,580,232 23,129,870 22,020,090
====================================================================================================================================
Net asset value per Common share
outstanding (net assets
applicable to Common
shares, divided by Common
shares outstanding) $ 9.87 $ 14.77 $ 14.90 $ 14.81 $ 14.75 $ 14.93
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares,
$.01 par value
per share $ 252,418 $ 129,657 $ 81,682 $ 135,802 $ 231,299 $ 220,201
Paid-in surplus 237,577,056 181,322,684 113,901,601 189,659,207 322,552,272 306,793,653
Undistributed
(Over-distribution of)
net investment income (189,797) (42,624) (57,947) 204,202 (697,633) (525,730)
Accumulated net realized
gain (loss) from
investments and
derivative transactions 401,924 1,025,117 793,489 43,191 1,395,302 (195,139)
Net unrealized appreciation
(depreciation) of
investments and
derivative transactions 10,980,069 9,030,945 7,008,723 11,024,304 17,620,720 22,463,203
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares $249,021,670 $191,465,779 $121,727,548 $201,066,706 $341,101,960 $328,756,188
====================================================================================================================================
Authorized shares:
Common 250,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000
Preferred N/A 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
====================================================================================================================================
N/A - Fund is not authorized to issue Preferred shares.
See accompanying notes to financial statements.
57
Statement of
OPERATIONS
Year Ended August 31, 2007
CALIFORNIA
CALIFORNIA CALIFORNIA CALIFORNIA INVESTMENT CALIFORNIA CALIFORNIA
VALUE PERFORMANCE PLUS OPPORTUNITY QUALITY SELECT QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $13,085,755 $15,041,630 $ 9,729,818 $15,903,250 $ 27,025,272 $ 26,474,561
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,386,078 1,902,431 1,225,097 1,994,793 3,366,998 3,239,278
Preferred shares - auction fees N/A 265,001 169,999 279,999 480,001 462,499
Preferred shares -
dividend disbursing
agent fees N/A 30,000 20,000 20,000 30,000 30,000
Shareholders' servicing agent fees
and expenses 34,534 18,428 11,740 17,021 25,486 23,325
Interest expense on floating rate
obligations 72,387 152,306 62,166 243,536 319,292 299,078
Custodian's fees and expenses 49,902 73,190 73,236 88,172 117,908 121,802
Directors' fees and expenses 6,670 7,463 4,843 8,122 13,268 12,643
Professional fees 16,644 23,346 18,792 23,135 25,192 31,413
Shareholders' reports - printing
and mailing expenses 36,989 28,726 20,066 30,115 43,085 42,102
Stock exchange listing fees 9,697 9,697 9,702 9,697 9,697 9,697
Investor relations expense 30,651 31,949 20,516 33,575 53,352 53,480
Other expenses 10,674 30,548 24,531 31,079 35,735 34,872
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian
fee credit 1,654,226 2,573,085 1,660,688 2,779,244 4,520,014 4,360,189
Custodian fee credit (27,277) (38,179) (24,020) (38,178) (48,372) (52,605)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,626,949 2,534,906 1,636,668 2,741,066 4,471,642 4,307,584
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 11,458,806 12,506,724 8,093,150 13,162,184 22,553,630 22,166,977
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments 285,881 707,835 1,377,217 14,246 607,991 (86,120)
Forward swaps 116,800 731,300 (85,714) 55,300 802,400 (35,100)
Change in net unrealized appreciation
(depreciation) of:
Investments (6,426,708) (8,786,247) (6,864,917) (8,137,893) (15,805,336) (12,873,328)
Forward swaps (56,964) (556,393) (1,358) (117,109) (424,362) (28,727)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) (6,080,991) (7,903,505) (5,574,772) (8,185,456) (14,819,307) (13,023,275)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income N/A (3,344,706) (2,275,505) (3,463,790) (6,274,053) (6,134,827)
From accumulated
net realized gains N/A (208,558) -- (261,799) (290,571) (175,677)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to Common shares
from distributions
to Preferred shareholders N/A (3,553,264) $(2,275,505) (3,725,589) (6,564,624) (6,310,504)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable
to Common shares
from operations $ 5,377,815 $ 1,049,955 $ 242,873 $ 1,251,139 $ 1,169,699 $ 2,833,198
====================================================================================================================================
N/A - Fund is not authorized to issue Preferred shares.
See accompanying notes to financial statements.
58
Statement of
CHANGES in NET ASSETS
CALIFORNIA
CALIFORNIA VALUE (NCA) PERFORMANCE PLUS (NCP) CALIFORNIA OPPORTUNITY (NCO)
------------------------------ ----------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/07 8/31/06 8/31/07 8/31/06 8/31/07 8/31/06
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 11,458,806 $ 11,509,918 $ 12,506,724 $ 12,478,945 $ 8,093,150 $ 8,195,548
Net realized gain
(loss) from:
Investments 285,881 1,153,412 707,835 636,401 1,377,217 1,867,329
Forward swaps 116,800 -- 731,300 -- (85,714) --
Change in net unrealized
appreciation (depreciation) of:
Investments (6,426,708) (5,153,097) (8,786,247) (5,068,042) (6,864,917) (5,200,076)
Forward swaps (56,964) 699,627 (556,393) 702,445 (1,358) --
Distributions to
Preferred Shareholders:
From net
investment income N/A N/A (3,344,706) (2,949,820) (2,275,505) (1,827,655)
From accumulated
net realized gains N/A N/A (208,558) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 5,377,815 8,209,860 1,049,955 5,799,929 242,873 3,035,146
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (11,512,039) (11,664,242) (9,259,482) (10,132,729) (6,489,586) (6,862,589)
From accumulated
net realized gains (712,571) (1,458,977) (683,961) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable
to Common shares from
distributions to Common
shareholders (12,224,610) (13,123,219) (9,943,443) (10,132,729) (6,489,586) (6,862,589)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due
to reinvestment of distributions -- -- -- -- 182,321 32,720
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable to
Common shares from capital
share transactions -- -- -- -- 182,321 32,720
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable to
Common shares (6,846,795) (4,913,359) (8,893,488) (4,332,800) (6,064,392) (3,794,723)
Net assets applicable
to Common shares
at the beginning
of year 255,868,465 260,781,824 200,359,267 204,692,067 127,791,940 131,586,663
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares
at the end of year $249,021,670 $255,868,465 $191,465,779 $200,359,267 $121,727,548 $127,791,940
====================================================================================================================================
Undistributed
(Over-distribution of)
net investment income
at the end of year $ (189,797) $ (136,562) $ (42,624) $ 134,327 $ (57,947) $ 614,093
====================================================================================================================================
N/A - Fund is not authorized to issue Preferred shares.
See accompanying notes to financial statements.
59
Statement of
CHANGES in NET ASSETS (continued)
CALIFORNIA CALIFORNIA CALIFORNIA
INVESTMENT QUALITY (NQC) SELECT QUALITY (NVC) QUALITY INCOME (NUC)
------------------------------ ----------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/07 8/31/06 8/31/07 8/31/06 8/31/07 8/31/06
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 13,162,184 $ 13,104,675 $ 22,553,630 $ 22,764,430 $ 22,166,977 $ 22,335,523
Net realized gain (loss) from:
Investments 14,246 1,109,302 607,991 3,503,725 (86,120) 760,463
Forward swaps 55,300 -- 802,400 -- (35,100) --
Change in net unrealized
appreciation (depreciation) of:
Investments (8,137,893) (5,269,926) (15,805,336) (11,039,966) (12,873,328) (9,421,002)
Forward swaps (117,109) 696,124 (424,362) 1,499,989 (28,727) 1,190,947
Distributions to
Preferred Shareholders:
From net investment income (3,463,790) (3,059,941) (6,274,053) (5,098,860) (6,134,827) (5,165,819)
From accumulated
net realized gains (261,799) (110,537) (290,571) (435,734) (175,677) (102,178)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable to
Common shares from operations 1,251,139 6,469,697 1,169,699 11,193,584 2,833,198 9,597,934
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net
investment income (9,533,321) (10,857,398) (17,364,648) (19,733,775) (16,895,802) (18,578,772)
From accumulated
net realized gains (893,572) (816,172) (1,062,552) (2,695,380) (592,043) (675,393)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable
to Common shares
from distributions
to Common shareholders (10,426,893) (11,673,570) (18,427,200) (22,429,155) (17,487,845) (19,254,165)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from
Common shares issued to
shareholders due to
reinvestment of distributions -- -- 228,521 279,153 315,124 --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable to
Common shares from
capital share transactions -- -- 228,521 279,153 315,124 --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable
to Common shares (9,175,754) (5,203,873) (17,028,980) (10,956,418) (14,339,523) (9,656,231)
Net assets applicable to
Common shares at
the beginning of year 210,242,460 215,446,333 358,130,940 369,087,358 343,095,711 352,751,942
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares
at the end of year $201,066,706 $210,242,460 $341,101,960 $358,130,940 $328,756,188 $343,095,711
====================================================================================================================================
Undistributed
(Over-distribution of)
net investment income
at the end of year $ 204,202 $ 142,252 $ (697,633) $ 428,636 $ (525,730) $ 406,199
====================================================================================================================================
See accompanying notes to financial statements.
60
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The California funds (the "Funds") covered in this report and their
corresponding Common share New York Stock Exchange symbols are Nuveen California
Municipal Value Fund, Inc. (NCA), Nuveen California Performance Plus Municipal
Fund, Inc. (NCP), Nuveen California Municipal Market Opportunity Fund, Inc.
(NCO), Nuveen California Investment Quality Municipal Fund, Inc. (NQC), Nuveen
California Select Quality Municipal Fund, Inc. (NVC) and Nuveen California
Quality Income Municipal Fund, Inc. (NUC). The Funds are registered under the
Investment Company Act of 1940, as amended, as closed-end, diversified
management investment companies.
Each Fund seeks to provide current income exempt from both regular federal and
California state income taxes by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities within
the state of California or certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors. When market
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service may establish fair value based on yields or
prices of municipal bonds of comparable quality, type of issue, coupon, maturity
and rating, indications of value from securities dealers, evaluations of
anticipated cash flows or collateral and general market conditions. Prices of
forward swap contracts are also provided by an independent pricing service
approved by each Fund's Board of Directors. If the pricing service is unable to
supply a price for a municipal bond or forward swap contract, each Fund may use
a market price or fair market value quote provided by a major broker/dealer in
such investments. If it is determined that the market price or fair market value
for an investment or derivative transaction is unavailable or inappropriate, the
Board of Directors of the Funds, or its designee, may establish a fair value for
the investment. Temporary investments in securities that have variable rate and
demand features qualifying them as short-term investments are valued at
amortized cost, which approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At August 31, 2007,
California Value (NCA) had outstanding when-issued/delayed delivery purchase
commitments of $974,920. There were no such outstanding purchase commitments in
any of the other Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
61
Notes to
FINANCIAL STATEMENTS (continued)
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and California state
income taxes, to retain such tax-exempt status when distributed to shareholders
of the Funds. Net realized capital gains and ordinary income distributions paid
by the Funds are subject to federal taxation.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
California Value (NCA) is not authorized to issue Preferred shares. The Funds
below have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in more than one Series. The dividend rate paid by the Funds on each
Series is determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and is payable at the end of each rate period.
The number of Preferred shares outstanding, by Series and in total, for each
Fund is as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
PLUS OPPORTUNITY QUALITY QUALITY INCOME
(NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- -- 3,600 -- 1,400
Series T 1,800 -- -- 2,400 --
Series W 640 2,200 880 1,680 3,000
Series TH -- -- -- 3,600 --
Series F 1,800 520 -- -- 3,000
------------------------------------------------------------------------------------------------------------------
Total 4,240 2,720 4,480 7,680 7,400
==================================================================================================================
62
Inverse Floating Rate Securities
Each Fund may invest in inverse floating rate securities. An inverse floating
rate security is created by depositing a municipal bond, typically with a fixed
interest rate, into a special purpose trust created by a broker-dealer. In turn,
this trust (a) issues floating rate certificates, in face amounts equal to some
fraction of the deposited bond's par amount or market value, that typically pay
short-term tax-exempt interest rates to third parties, and (b) issues to a
long-term investor (such as one of the Funds) an inverse floating rate
certificate (sometimes referred to as an "inverse floater") that represents all
remaining or residual interest in the trust. The income received by the inverse
floater holder varies inversely with the short-term rate paid to the floating
rate certificates' holders, and in most circumstances the inverse floater holder
bears substantially all of the underlying bond's downside investment risk and
also benefits disproportionately from any potential appreciation of the
underlying bond's value. The price of an inverse floating rate security will be
more volatile than that of the underlying bond because the interest rate is
dependent on not only the fixed coupon rate of the underlying bond but also on
the short-term interest paid on the floating rate certificates, and because the
inverse floating rate security essentially bears the risk of loss of the greater
face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). An investment in an externally-deposited
inverse floater is identified in the Portfolio of Investments as an "Inverse
floating rate investment". An investment in a self-deposited inverse floater is
accounted for as a financing transaction in accordance with Statement of
Financial Accounting Standards (SFAS) No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities". In such
instances, a fixed-rate bond deposited into a special purpose trust is
identified in the Portfolio of Investments as an "Underlying bond of an inverse
floating rate trust", with the Fund accounting for the short-term floating rate
certificates issued by the trust as "Floating rate obligations" on the Statement
of Assets and Liabilities. In addition, the Fund reflects in Investment Income
the entire earnings of the underlying bond and accounts for the related interest
paid to the holders of the short-term floating rate certificates as "Interest
expense on floating rate obligations" in the Statement of Operations.
During the fiscal year ended August 31, 2007, each Fund invested in externally
deposited inverse floaters and/or self-deposited inverse floaters.
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended August 31, 2007, were as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Average floating rate obligations $1,862,499 $3,924,452 $1,599,622 $6,267,967 $8,225,112 $7,698,222
Average annual interest
rate and fees 3.89% 3.88% 3.89% 3.89% 3.88% 3.89%
==================================================================================================================
Forward Swap Transactions
The Funds are authorized to invest in forward interest rate swap transactions.
Each Fund's use of forward interest rate swap transactions is intended to help
the Fund manage its overall interest rate sensitivity, either shorter or longer,
generally to more closely align the Fund's interest rate sensitivity with that
of the broader municipal market. Forward interest rate swap transactions involve
each Fund's agreement with a counterparty to pay, in the future, a fixed or
variable rate payment in exchange for the counterparty paying the Fund a
variable or fixed rate payment, the accruals for which would begin at a
specified date in the future (the "effective date"). The amount of the payment
obligation is based on the notional amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity). The value of
the Fund's swap commitment would increase or decrease based primarily on the
extent to which long-term interest rates for bonds having a maturity of the
swap's termination date increases or decreases. The Funds may terminate a swap
contract prior to the effective date, at which point a realized gain or loss is
recognized. When a forward swap is terminated, it ordinarily does not involve
the delivery of securities or other underlying assets or principal, but rather
is settled in cash on a net basis. Each Fund intends, but is not obligated, to
terminate its forward swaps before the effective date. Accordingly, the risk of
loss with respect to the swap counterparty on such transactions is limited to
the credit risk associated with a counterparty failing to honor its commitment
to pay any realized gain to the Fund upon termination. To reduce such credit
risk, all counterparties are required to pledge collateral daily (based on the
daily valuation of each swap) on behalf of each Fund with a value approximately
equal to the amount of any unrealized gain above a pre-determined threshold.
Reciprocally, when any of the Funds have an unrealized loss on a swap contract,
the Funds have instructed the custodian to pledge assets of the Funds as
collateral with a value approximately equal to the amount of the unrealized loss
above a pre-determined threshold. Collateral pledges are monitored and
subsequently adjusted if and when the swap valuations fluctuate, either up or
down, by at least the predetermined threshold amount.
63
Notes to
FINANCIAL STATEMENTS (continued)
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which the Fund overdraws its account at the custodian bank.
Indemnifications
Under the Funds' organizational documents, their Officers and Directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common shares were as follows:
CALIFORNIA CALIFORNIA CALIFORNIA
VALUE (NCA) PERFORMANCE PLUS (NCP) OPPORTUNITY (NCO)
------------------------ ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/07 8/31/06 8/31/07 8/31/06 8/31/07 8/31/06
------------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of distributions -- -- -- -- 11,448 2,119
==================================================================================================================
CALIFORNIA CALIFORNIA CALIFORNIA
INVESTMENT QUALITY (NQC) SELECT QUALITY (NVC) QUALITY INCOME (NUC)
------------------------ ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/07 8/31/06 8/31/07 8/31/06 8/31/07 8/31/06
------------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of distributions -- -- 15,014 18,202 20,362 --
==================================================================================================================
64
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended August 31, 2007, were
as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Purchases $25,075,159 $58,904,131 $22,789,795 $49,458,208 $99,044,343 $96,176,868
Sales and maturities 21,436,521 54,637,782 19,068,495 40,140,734 89,939,360 86,209,598
==================================================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount, timing differences in recognizing
certain gains and losses on investment transactions and the treatment of
investments in inverse floating rate transactions subject to SFAS No. 140. To
the extent that differences arise that are permanent in nature, such amounts are
reclassified within the capital accounts on the Statement of Assets and
Liabilities presented in the annual report, based on their federal tax basis
treatment; temporary differences do not require reclassification. Temporary and
permanent differences do not impact the net asset values of the Funds.
At August 31, 2007, the cost of investments was as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Cost of investments $236,729,476 $285,171,980 $181,776,636 $298,737,121 $510,703,387 $486,544,823
==================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 2007, were as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
--------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $12,108,926 $11,273,807 $ 8,499,143 $12,371,635 $20,915,916 $23,046,389
Depreciation (1,712,278) (2,406,504) (1,461,639) (1,966,351) (4,515,301) (1,832,495)
--------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments $10,396,648 $ 8,867,303 $ 7,037,504 $10,405,284 $16,400,615 $21,213,894
====================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at August 31, 2007, the Funds' tax year end,
were as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $669,390 $ 503,111 $267,304 $656,393 $ 648,990 $804,231
Undistributed net ordinary income ** 2,895 120,842 156,498 258,241 -- 44,293
Undistributed net long-term
capital gains 401,924 1,184,099 793,489 208,950 1,643,621 729
==================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on August 1, 2007, paid on September 4, 2007.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
65
Notes to
FINANCIAL STATEMENTS (continued)
The tax character of distributions paid during the Funds' tax years ended August
31, 2007 and August 31, 2006, was designated for purposes of the dividends paid
deduction as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
2007 (NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income *** $11,560,751 $12,586,202 $8,568,752 $13,020,096 $23,676,926 $22,977,178
Distributions from net
ordinary income ** 1,772 81,182 237,458 82,870 118,707 76,734
Distributions from net
long-term capital gains **** 712,571 813,872 -- 1,072,501 1,353,123 767,720
==================================================================================================================
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
2006 (NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income $11,661,718 $13,221,167 $8,779,357 $14,049,482 $25,049,126 $23,992,654
Distributions from net
ordinary income ** 123,685 -- -- 102,358 15,963 --
Distributions from net
long-term capital gains 1,337,816 -- -- 837,876 3,131,114 777,570
==================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds hereby designate these amounts paid during the fiscal year ended
August 31, 2007, as Exempt Interest Dividends.
**** The Funds hereby designate these amounts paid during the fiscal year ended
August 31, 2007, as long-term capital gain dividends pursuant to Internal
Revenue Code Section 852(b)(3).
California Quality Income (NUC) elected to defer net realized losses from
investments incurred from November 1, 2006, through August 31, 2007
("post-October losses") in accordance with federal income tax regulations.
Post-October losses of $36,885 were treated as having arisen on the first day of
the following taxable year.
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc., ("Nuveenand a specific fund-level component, based only on
the amount of assets within each individual Fund, and for California Value (NCA)
a gross interest income component. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each individual fund as
well as from growth in the amount of complex-wide assets managed by the Adviser.
California Value (NCA) pays an annual fund-level fee, payable monthly, of .15%
of the average daily net assets of the Fund, as well as 4.125% of the gross
interest income of the Fund.
66
The annual fund-level fee, payable monthly, for each Fund (excluding California
Value (NCA)) is based upon the average daily net assets (including net assets
attributable to Preferred shares) of each Fund as follows:
AVERAGE DAILY NET ASSETS
(INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the table below. As
of August 31, 2007, the complex level fee rate was .1841%.
Effective August 20, 2007, the complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
Prior to August 20, 2007, the complex-level fee schedule was as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1698
$125 billion .1617
$200 billion .1536
$250 billion .1509
$300 billion .1490
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
67
Notes to
FINANCIAL STATEMENTS (continued)
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors who are affiliated with the
Adviser or to its Officers, all of whom receive remuneration for their services
to the Funds from the Adviser or its affiliates. The Board of Directors has
adopted a deferred compensation plan for independent Directors that enables
Directors to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.
Agreement and Plan of Merger
On June 20, 2007, Nuveen Investments announced that it had entered into a
definitive Agreement and Plan of Merger ("Merger Agreement") with Windy City
Investments, Inc. ("Windy City"), a corporation formed by investors led by
Madison Dearborn Partners, LLC, pursuant to which Windy City would acquire
Nuveen Investments. Madison Dearborn Partners, LLC is a private equity
investment firm based in Chicago, Illinois. The investors include an affiliate
of Merrill Lynch. It is anticipated that Merrill Lynch and its affiliates will
be indirect "affiliated persons" (as that term is defined in the Investment
Company Act of 1940) of the Funds upon and after the acquisition. One important
implication of this is that the Funds will not be able to buy securities from or
sell securities to Merrill Lynch; however, the portfolio management teams and
Fund management do not expect that this will significantly impact the ability of
the Funds to pursue their investment objectives and policies. Under the terms of
the merger, each outstanding share of Nuveen Investments' common stock (other
than dissenting shares) will be converted into the right to receive a specified
amount of cash, without interest. The merger is expected to be completed by the
end of the year, subject to customary conditions. The obligations of Windy City
to consummate the merger are not conditioned on its obtaining financing.
The consummation of the merger will be deemed to be an "assignment" (as defined
in the 1940 Act) of the investment management agreement between each Fund and
the Adviser, and will result in the automatic termination of each Fund's
agreement. The Board of Directors of each Fund has approved a new investment
management agreement with the Adviser. On October 12, 2007, at a meeting of the
respective Funds' shareholders, California Value (NCA), California Performance
Plus (NCP), California Opportunity (NCO), California Investment Quality (NQC),
California Select Quality (NVC) and California Quality Income (NUC) received the
required number of shareholder votes to approve the new investment management
agreements. The new agreements will take effect upon consummation of the merger
of Nuveen Investments and Windy City.
6. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Interpretation No. 48
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006, and is to be
applied to all open tax years as of the effective date. Recent SEC guidance
allows funds to delay implementing FIN 48 into NAV calculations until the fund's
last NAV calculation in the first required financial statement reporting period.
As a result, the Funds must begin to incorporate FIN 48 into their NAV
calculations by February 29, 2008. At this time, management is continuing to
evaluate the implications of FIN 48 and does not expect the adoption of FIN 48
will have a significant impact on the net assets or results of operations of the
Funds.
68
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of August 31, 2007, management does not believe the adoption of
SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
7. SUBSEQUENT EVENTS
Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on October 1, 2007, to shareholders of record
on September 15, 2007, as follows:
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PERFORMANCE CALIFORNIA INVESTMENT SELECT QUALITY
VALUE PLUS OPPORTUNITY QUALITY QUALITY INCOME
(NCA) (NCP) (NCO) (NQC) (NVC) (NUC)
------------------------------------------------------------------------------------------------------------------
Dividend per share $.0365 $.0595 $.0605 $.0585 $.0580 $.0625
==================================================================================================================
69
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ----------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
CALIFORNIA VALUE (NCA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 $10.14 $ .45 $(.23) N/A N/A $ .22 $(.46) $(.03) $(.49)
2006 10.33 .46 (.13) N/A N/A .33 (.46) (.06) (.52)
2005 10.20 .47 .21 N/A N/A .68 (.47) (.08) (.55)
2004 9.93 .48 .34 N/A N/A .82 (.48) (.07) (.55)
2003 10.27 .50 (.32) N/A N/A .18 (.51) (.01) (.52)
CALIFORNIA PERFORMANCE PLUS (NCP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 15.45 .96 (.60) (.26) (.02) .08 (.71) (.05) (.76)
2006 15.79 .96 (.29) (.23) -- .44 (.78) -- (.78)
2005 15.53 .97 .49 (.12) (.01) 1.33 (.90) (.17) (1.07)
2004 14.76 .99 .80 (.06) -- 1.73 (.96) -- (.96)
2003 15.32 1.02 (.58) (.08) -- .36 (.92) -- (.92)
====================================================================================================================================
Total Returns
---------------------
Based
Ending on
Common Based Common
Share Ending on Share Net
Net Asset Market Market Asset
Value Value Value* Value*
===========================================================================
CALIFORNIA VALUE (NCA)
---------------------------------------------------------------------------
Year Ended 8/31:
2007 $ 9.87 $ 9.65 4.74% 2.11%
2006 10.14 9.67 2.85 3.34
2005 10.33 9.92 13.33 6.82
2004 10.20 9.27 8.02 8.40
2003 9.93 9.10 (3.55) 1.73
CALIFORNIA PERFORMANCE PLUS (NCP)
---------------------------------------------------------------------------
Year Ended 8/31:
2007 14.77 14.07 3.21 .49
2006 15.45 14.36 4.42 2.97
2005 15.79 14.52 9.66 8.89
2004 15.53 14.26 9.65 12.00
2003 14.76 13.90 (1.30) 2.30
===========================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit After Credit**
-------------------------------------------- --------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
CALIFORNIA VALUE (NCA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 $249,022 .65% .62% 4.49% .64% .61% 4.51% 8%
2006 255,868 .64 .64 4.51 .63 .63 4.52 20
2005 260,782 .63 .63 4.54 .63 .63 4.54 4
2004 257,550 .65 .65 4.70 .65 .65 4.70 28
2003 250,749 .66 .66 4.84 .66 .66 4.85 24
CALIFORNIA PERFORMANCE PLUS (NCP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 191,466 1.30 1.22 6.28 1.28 1.20 6.30 18
2006 200,359 1.23 1.23 6.28 1.22 1.22 6.29 11
2005 204,692 1.23 1.23 6.22 1.22 1.22 6.23 5
2004 201,307 1.26 1.26 6.48 1.25 1.25 6.49 16
2003 191,409 1.26 1.26 6.65 1.25 1.25 6.66 30
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
CALIFORNIA VALUE (NCA)
--------------------------------------------------------------------------------
Year Ended 8/31:
2007 $ N/A $ N/A $ N/A $3,576 $70,637
2006 N/A N/A N/A -- --
2005 N/A N/A N/A -- --
2004 N/A N/A N/A -- --
2003 N/A N/A N/A -- --
CALIFORNIA PERFORMANCE PLUS (NCP)
--------------------------------------------------------------------------------
Year Ended 8/31:
2007 106,000 25,000 70,157 4,258 70,860
2006 106,000 25,000 72,255 -- --
2005 106,000 25,000 73,276 -- --
2004 106,000 25,000 72,478 -- --
2003 106,000 25,000 70,144 -- --
================================================================================
N/A Fund is not authorized to issue Preferred shares.
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in the calculation. Total returns are not annualized.
** After custodian fee credit, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
70-71 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ----------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
CALIFORNIA OPPORTUNITY (NCO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 $15.67 $ .99 $(.68) $(.28) $ -- $ .03 $(.80) $ -- $ (.80)
2006 16.14 1.00 (.41) (.22) -- .37 (.84) -- (.84)
2005 15.67 1.02 .50 (.12) -- 1.40 (.93) -- (.93)
2004 14.77 1.03 .88 (.06) -- 1.85 (.95) -- (.95)
2003 15.26 1.04 (.55) (.07) -- .42 (.91) -- (.91)
CALIFORNIA INVESTMENT QUALITY (NQC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 15.48 .97 (.59) (.26) (.02) .10 (.70) (.07) (.77)
2006 15.86 .96 (.24) (.23) (.01) .48 (.80) (.06) (.86)
2005 15.65 .98 .40 (.13) (.01) 1.24 (.92) (.11) (1.03)
2004 15.09 1.00 .70 (.06) (.01) 1.63 (.97) (.10) (1.07)
2003 15.78 1.06 (.71) (.08) -- .27 (.94) (.02) (.96)
====================================================================================================================================
Total Returns
---------------------
Based
Ending on
Common Based Common
Share Ending on Share Net
Net Asset Market Market Asset
Value Value Value* Value*
======================================================================
CALIFORNIA OPPORTUNITY (NCO)
----------------------------------------------------------------------
Year Ended 8/31:
2007 $14.90 $14.36 (1.62)% .07%
2006 15.67 15.36 4.02 2.47
2005 16.14 15.61 15.00 9.19
2004 15.67 14.45 10.63 12.86
2003 14.77 13.95 (2.45) 2.73
CALIFORNIA INVESTMENT QUALITY (NQC)
----------------------------------------------------------------------
Year Ended 8/31:
2007 14.81 13.74 (1.03) .57
2006 15.48 14.63 2.73 3.21
2005 15.86 15.10 9.33 8.18
2004 15.65 14.80 8.94 11.11
2003 15.09 14.61 .29 1.60
======================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit After Credit**
-------------------------------------------- --------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
CALIFORNIA OPPORTUNITY (NCO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 $121,728 1.31% 1.26% 6.37% 1.29% 1.24% 6.39% 10%
2006 127,792 1.26 1.26 6.43 1.24 1.24 6.45 18
2005 131,587 1.25 1.25 6.42 1.25 1.25 6.43 7
2004 127,743 1.28 1.28 6.72 1.28 1.28 6.73 13
2003 120,437 1.27 1.27 6.74 1.26 1.26 6.75 16
CALIFORNIA INVESTMENT QUALITY (NQC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 201,067 1.34 1.22 6.32 1.32 1.20 6.33 12
2006 210,242 1.22 1.22 6.28 1.21 1.21 6.29 11
2005 215,446 1.21 1.21 6.24 1.20 1.20 6.25 5
2004 212,509 1.22 1.22 6.48 1.22 1.22 6.49 20
2003 204,974 1.21 1.21 6.73 1.21 1.21 6.73 26
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
CALIFORNIA OPPORTUNITY (NCO)
--------------------------------------------------------------------------------
Year Ended 8/31:
2007 $ 68,000 $25,000 $69,753 $3,536 $54,656
2006 68,000 25,000 71,982 -- --
2005 68,000 25,000 73,377 -- --
2004 68,000 25,000 71,964 -- --
2003 68,000 25,000 69,278 -- --
CALIFORNIA INVESTMENT QUALITY (NQC)
--------------------------------------------------------------------------------
Year Ended 8/31:
2007 112,000 25,000 69,881 9,170 35,140
2006 112,000 25,000 71,929 -- --
2005 112,000 25,000 73,091 -- --
2004 112,000 25,000 72,435 -- --
2003 112,000 25,000 70,753 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in the calculation. Total returns are not annualized.
** After custodian fee credit, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
72-73 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ----------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
CALIFORNIA SELECT QUALITY (NVC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 $15.49 $ .98 $(.64) $(.27) $(.01) $ .06 $ (.75) $(.05) $ (.80)
2006 15.98 .99 (.27) (.22) (.02) .48 (.85) (.12) (.97)
2005 15.63 1.02 .53 (.13) (.01) 1.41 (.96) (.10) (1.06)
2004 14.93 1.04 .77 (.06) (.01) 1.74 (.97) (.07) (1.04)
2003 15.53 1.05 (.63) (.07) -- .35 (.94) (.01) (.95)
CALIFORNIA QUALITY INCOME (NUC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 15.60 1.01 (.59) (.28) (.01) .13 (.77) (.03) (.80)
2006 16.03 1.02 (.35) (.23) -- .44 (.84) (.03) (.87)
2005 15.49 1.04 .69 (.13) (.01) 1.59 (.97) (.08) (1.05)
2004 14.85 1.05 .73 (.07) -- 1.71 (1.02) (.05) (1.07)
2003 15.84 1.08 (.87) (.07) (.01) .13 (1.00) (.12) (1.12)
====================================================================================================================================
Total Returns
---------------------
Based
Ending on
Common Based Common
Share Ending on Share Net
Net Asset Market Market Asset
Value Value Value* Value*
=========================================================================
CALIFORNIA SELECT
QUALITY (NVC)
-------------------------------------------------------------------------
Year Ended 8/31:
2007 $14.75 $13.97 (3.40)% .29%
2006 15.49 15.25 3.63 3.21
2005 15.98 15.69 13.70 9.33
2004 15.63 14.81 12.38 11.97
2003 14.93 14.14 (2.78) 2.24
CALIFORNIA QUALITY
INCOME (NUC)
-------------------------------------------------------------------------
Year Ended 8/31:
2007 14.93 14.08 (2.92) .74
2006 15.60 15.28 2.90 2.96
2005 16.03 15.73 12.30 10.57
2004 15.49 15.00 9.67 11.76
2003 14.85 14.67 (2.38) .71
=========================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit After Credit**
-------------------------------------------- --------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
CALIFORNIA SELECT QUALITY (NVC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 $341,102 1.28% 1.19% 6.36% 1.26% 1.17% 6.37% 16%
2006 358,131 1.20 1.20 6.38 1.19 1.19 6.39 16
2005 369,087 1.19 1.19 6.44 1.18 1.18 6.44 8
2004 360,938 1.21 1.21 6.78 1.20 1.20 6.78 14
2003 344,892 1.20 1.20 6.78 1.20 1.20 6.78 20
CALIFORNIA QUALITY INCOME (NUC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2007 328,756 1.28 1.20 6.51 1.27 1.18 6.53 16
2006 343,096 1.21 1.21 6.54 1.20 1.20 6.55 12
2005 352,752 1.20 1.20 6.62 1.20 1.20 6.63 6
2004 340,873 1.22 1.22 6.89 1.21 1.21 6.89 16
2003 326,280 1.22 1.22 6.90 1.21 1.21 6.91 46
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
CALIFORNIA SELECT QUALITY (NVC)
--------------------------------------------------------------------------------
Year Ended 8/31:
2007 $192,000 $25,000 $69,414 $10,096 $53,803
2006 192,000 25,000 71,632 -- --
2005 192,000 25,000 73,058 -- --
2004 192,000 25,000 71,997 -- --
2003 192,000 25,000 69,908 -- --
CALIFORNIA QUALITY INCOME (NUC)
--------------------------------------------------------------------------------
Year Ended 8/31:
2007 185,000 25,000 69,427 9,698 53,975
2006 185,000 25,000 71,364 -- --
2005 185,000 25,000 72,669 -- --
2004 185,000 25,000 71,064 -- --
2003 185,000 25,000 69,092 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in the calculation. Total returns are not annualized.
** After custodian fee credit, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
74-75 spread
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at eight. None of the board members who are not "interested" persons of the
Funds has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(2) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
[] TIMOTHY R. SCHWERTFEGER(1) Director (since 1994) and Chairman (since
3/28/49 Chairman of 1994 1996) and Non-Executive Chairman (since July
333 W. Wacker Drive the Board ANNUAL 177 1, 2007) formerly, Chief Executive Officer
Chicago, IL 60606 and Board Member (1996-June 30, 2007) of Nuveen Investments,
Inc. and Nuveen Asset Management and certain
other subsidiaries of Nuveen Investments,
Inc.; formerly, Director (1992-2006) of
Institutional Capital Corporation.
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
[] ROBERT P. BREMNER Private Investor and Management Consultant.
8/22/40 Lead 1997
333 W. Wacker Drive Independent CLASS III 177
Chicago, IL 60606 Board member
[] JACK B. EVANS President, The Hall-Perrine Foundation, a
10/22/48 1999 private philanthropic corporation (since
333 W. Wacker Drive Board member CLASS III 177 1996); Director and Vice Chairman, United
Chicago, IL 60606 Fire Group, a publicly held company; Member
of the Board of Regents for the State of
Iowa University System; Director, Gazette
Companies; Life Trustee of Coe College and
Iowa College Foundation; Member of the
Advisory Council of the Department of
Finance in the Tippie College of Business,
University of Iowa; formerly, Director,
Alliant Energy; formerly, Director, Federal
Reserve Bank of Chicago; formerly, President
and Chief Operating Officer, SCI Financial
Group, Inc., a regional financial services
firm.
[] WILLIAM C. HUNTER Dean, Tippie College of Business, University
3/6/48 2004 of Iowa (since July 2006); formerly, Dean
333 W. Wacker Drive Board member CLASS II 177 and Distinguished Professor of Finance,
Chicago, IL 60606 School of Business at the University of
Connecticut (2003-2006); previously, Senior
Vice President and Director of Research at
the Federal Reserve Bank of Chicago
(1995-2003); Director (since 1997), Credit
Research Center at Georgetown University;
Director (since 2004) of Xerox Corporation;
Director, SS&C Technologies, Inc. (May
2005-October 2005).
76
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(2) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
[] DAVID J. KUNDERT Director, Northwestern Mutual Wealth
10/28/42 2005 Management Company; Retired (since 2004) as
333 W. Wacker Drive Board member CLASS II 177 Chairman, JPMorgan Fleming Asset Management,
Chicago, IL 60606 President and CEO, Banc One Investment
Advisors Corporation, and President, One
Group Mutual Funds; prior thereto, Executive
Vice President, Banc One Corporation and
Chairman and CEO, Banc One Investment
Management Group; Board of Regents, Luther
College; member of the Wisconsin Bar
Association; member of Board of Directors,
Friends of Boerner Botanical Gardens; member
of Board of Directors, Milwaukee Repertory
Theater.
[] WILLIAM J. SCHNEIDER Chairman of Miller-Valentine Partners Ltd.,
9/24/44 1997 a real estate investment company; formerly,
333 W. Wacker Drive Board member ANNUAL 177 Senior Partner and Chief Operating Officer
Chicago, IL 60606 (retired, 2004) of Miller-Valentine Group;
formerly, Vice President, Miller-Valentine
Realty; Board Member, Chair of the Finance
Committee and member of the Audit Committee
of Premier Health Partners, the
not-for-profit company of Miami Valley
Hospital; Vice President, Dayton
Philharmonic Orchestra Association; Board
Member, Regional Leaders Forum, which
promotes cooperation on economic development
issues; Director, Dayton Development
Coalition; formerly, Member, Community
Advisory Board, National City Bank, Dayton,
Ohio and Business Advisory Council,
Cleveland Federal Reserve Bank.
[] JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy
12/29/47 1997 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board member CLASS I 177 thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
[] CAROLE E. STONE Director, Chicago Board Options Exchange
6/28/47 2007 (since 2006); Chair New York Racing
333 West Wacker Drive Board member CLASS I 177 Association Oversight Board (since 2005);
Chicago, IL 60606 Commissioner, New York State Commission on
Public Authority Reform (since 2005);
formerly Director, New York State Division
of the Budget (2000-2004), Chair, Public
Authorities Control Board (2000-2004) and
Director, Local Government Assistance
Corporation (2000-2004).
77
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant
9/9/56 Chief Secretary and Associate General Counsel,
333 W. Wacker Drive Administrative 1988 177 formerly, Vice President and Assistant
Chicago, IL 60606 Officer General Counsel, of Nuveen Investments, LLC;
Managing Director (since 2002), Associate
General Counsel and Assistant Secretary, of
Nuveen Asset Management; Vice President and
Assistant Secretary of NWQ Investment
Management Company, LLC. (since 2002),
Nuveen Investments Advisers Inc. (since
2002), Symphony Asset Management LLC, and
NWQ Investment Management Company, LLC
(since 2003), Tradewinds Global Investors,
LLC, and Santa Barbara Asset Management, LLC
(since 2006); Nuveen HydePark Group LLC and
Richards & Tierney, Inc. (since 2007);
Managing Director, Associate General Counsel
and Assistant Secretary of Rittenhouse Asset
Management, Inc. (since 2003); Managing
Director (since 2004) and Assistant
Secretary (since 1994) of Nuveen
Investments, Inc., Assistant Secretary
(since 2003) of Symphony Asset Management
LLC.
[] WILLIAMS ADAMS IV Executive Vice President, U.S. Structured
6/9/55 Products of Nuveen Investments, LLC, (since
333 West Wacker Drive Vice President 2007 119 1999), prior thereto, Managing Director of
Chicago, IL 60606 Structured Investments.
[] JULIA L. ANTONATOS Managing Director (since 2005), formerly
9/22/63 Vice President (since 2002) of Nuveen
333 W. Wacker Drive Vice President 2004 177 Investments, LLC; Chartered Financial
Chicago, IL 60606 Analyst.
[] CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004) previously,
1/11/62 Vice President (1993-2004) of Nuveen
333 W. Wacker Drive Vice President 2007 119 Investments, LLC.
Chicago, IL 60606
[] MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen
2/3/66 Vice President Investments, LLC.
333 W. Wacker Drive and Assistant 2000 177
Chicago, IL 60606 Secretary
[] PETER H. D'ARRIGO Vice President and Treasurer of Nuveen
11/28/67 Investments, LLC and Nuveen Investments,
333 W. Wacker Drive Vice President 1999 177 Inc.; Vice President and Treasurer of Nuveen
Chicago, IL 60606 Asset Management (since 2002), Nuveen
Investments Advisers Inc. (since 2002); NWQ
Investment Management Company, LLC. (since
2002); Rittenhouse Asset Management, Inc.
(since 2003), Tradewinds NWQ Global
Investors, LLC (since 2006), Santa Barbara
Asset Management, LLC (since 2006) and
Nuveen HydePark Group, LLC and Richards
&Tierney, Inc. (since 2007); Treasurer of
Symphony Asset Management LLC (since 2003);
formerly, Vice President and Treasurer
(1999-2004) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3),
Chartered Financial Analyst.
[] LORNA C. FERGUSON Managing Director (since 2004), formerly,
10/24/45 Vice President of Nuveen Investments, LLC,
333 W. Wacker Drive Vice President 1998 177 Managing Director (2004) formerly, Vice
Chicago, IL 60606 President (1998-2004) of Nuveen Advisory
Corp. and Nuveen Institutional Advisory
Corp.(3); Managing Director (since 2005) of
Nuveen Asset Management.
[] WILLIAM M. FITZGERALD Managing Director (since 2002), formerly,
3/2/64 Vice President of Nuveen Investments, LLC;
333 W. Wacker Drive Vice President 1995 177 Managing Director (1997-2004) of Nuveen
Chicago, IL 60606 Advisory Corp. and Nuveen Institutional
Advisory Corp.(3); Managing Director (since
2001) of Nuveen Asset Management; Vice
President (since 2002) of Nuveen Investments
Advisers Inc.; Chartered Financial Analyst.
78
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] STEPHEN D. FOY Vice President (since 1993) and Funds
5/31/54 Vice President Controller (since 1998) of Nuveen
333 W. Wacker Drive and Controller 1998 177 Investments, LLC; formerly, Vice President
Chicago, IL 60606 and Funds Controller (1998-2004) of Nuveen
Investments, Inc.; Certified Public
Accountant.
[] WALTER M. KELLY Vice President (since 2006) formerly,
2/24/70 Chief Compliance Assistant Vice President and Assistant
333 West Wacker Drive Officer and 2003 177 General Counsel (2003-2006) of Nuveen
Chicago, IL 60606 Vice President Investments, LLC; Assistant Vice President
and Assistant Secretary of the Nuveen Funds
(2003-2006); previously, Associate
(2001-2003) at the law firm of Vedder,
Price, Kaufman & Kammholz.
[] DAVID J. LAMB Vice President (since 2000) of Nuveen
3/22/63 Investments, LLC; Certified Public
333 W. Wacker Drive Vice President 2000 177 Accountant.
Chicago, IL 60606
[] TINA M. LAZAR Vice President of Nuveen Investments, LLC
(since 1999).
8/27/61
333 W. Wacker Drive Vice President 2002 177
Chicago, IL 60606
[] LARRY W. MARTIN Vice President, Assistant Secretary and
7/27/51 Vice President Assistant General Counsel of Nuveen
333 W. Wacker Drive and Assistant 1988 177 Investments, LLC; formerly, Vice President
Chicago, IL 60606 Secretary and Assistant Secretary of Nuveen Advisory
Corp. and Nuveen Institutional Advisory
Corp.(3); Vice President (since 2005) and
Assistant Secretary of Nuveen Investments,
Inc.; Vice President (since 2005) and
Assistant Secretary (since 1997) of Nuveen
Asset Management; Vice President (since
2000), Assistant Secretary and Assistant
General Counsel (since 1998) of Rittenhouse
Asset Management, Inc.; Vice President and
Assistant Secretary of Nuveen Investments
Advisers Inc. (since 2002); NWQ Investment
Management Company, LLC (since 2002),
Symphony Asset Management LLC (since 2003),
Tradewinds NWQ Global Investors, LLC, Santa
Barbara Asset Management LLC (since 2006)
and of Nuveen HydePark Group, LLC and
Richards &Tierney, Inc. (since 2007).
[] KEVIN J. MCCARTHY Vice President, Nuveen Investments, LLC
3/26/66 Vice President (since 2007); Vice President, and Assistant
333 W. Wacker Drive and Secretary 2007 177 Secretary, Nuveen Asset Management,
Chicago, IL 60606 Rittenhouse Asset Management, Inc., Nuveen
Investment Advisers Inc., Nuveen Investment
Institutional Services Group LLC, NWQ
Investment Management Company, LLC,
Tradewinds Global Investors LLC,
NWQHoldings, LLC, Symphony Asset Management
LLC, Santa Barbara Asset Management LLC,
Nuveen HydePark Group, LLC and Richards
&Tierney, Inc. (since 2007); Vice President
and Assistant General Counsel, Nuveen
Investments, Inc. (since 2007). prior
thereto, Partner, Bell, Boyd & Lloyd LLP
(1997-2007)
[] JOHN V. MILLER Managing Director (since 2007), formerly,
4/10/67 Vice President (2002-2007) of Nuveen
333 W. Wacker Drive Vice President 2007 177 Investments, LLC; Chartered Financial
Chicago, IL 60606 Analyst.
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, by reason of being Non-Executive Chairman
of Nuveen Investments, Inc. and having previously served in various other
capacities with Nuveen Investments, Inc. and its subsidiaries.
(2) Board Members serve three year terms, except for two board members who are
elected by the holders of Preferred Shares. The Board of Trustees is
divided into three classes, Class I, Class II, and Class III, with each
being elected to serve until the third succeeding annual shareholders'
meeting subsequent to its election or thereafter in each case when its
respective successors are duly elected or appointed, except two board
members are elected by the holders of Preferred Shares to serve until the
next annual shareholders' meeting subsequent to its election or thereafter
in each case when its respective successors are duly elected or appointed.
The first year elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
79
Annual Investment
Management Agreement
APPROVAL PROCESS
The Board Members are responsible for overseeing the performance of the
investment adviser to the Funds and determining whether to continue the advisory
arrangements. At the annual review meeting held on May 21, 2007 (the "May
Meeting"), the Board Members of the Funds, including the Independent Board
Members, unanimously approved the continuance of the Investment Management
Agreement between each Fund (each, a "Fund") and Nuveen Asset Management
("NAM"). The foregoing Investment Management Agreements with NAM are hereafter
referred to as "Original Investment Management Agreements."
Subsequent to the May Meeting, Nuveen Investments, Inc. ("Nuveen"), the parent
company of NAM, entered into a merger agreement providing for the acquisition of
Nuveen by Windy City Investments, Inc., a corporation formed by investors led by
Madison Dearborn Partners, LLC ("MDP"), a private equity investment firm (the
"Transaction"). Each Original Investment Management Agreement, as required by
Section 15 of the Investment Company Act of 1940 (the "1940 Act"), provides for
its automatic termination in the event of its "assignment" (as defined in the
1940 Act). Any change in control of the adviser is deemed to be an assignment.
The consummation of the Transaction will result in a change of control of NAM as
well as its affiliated sub-advisers and therefore cause the automatic
termination of each Original Investment Management Agreement, as required by the
1940 Act. Accordingly, in anticipation of the Transaction, at a meeting held on
July 31, 2007 (the "July Meeting"), the Board Members, including the Independent
Board Members, unanimously approved new Investment Management Agreements (the
"New Investment Management Agreements") with NAM on behalf of each Fund to take
effect immediately after the Transaction or shareholder approval of the new
advisory contracts, whichever is later. The 1940 Act also requires that each New
Investment Management Agreement be approved by the respective Fund's
shareholders in order for it to become effective. Accordingly, to ensure
continuity of advisory services, the Board Members, including the Independent
Board Members, unanimously approved Interim Investment Management Agreements to
take effect upon the closing of the Transaction if shareholders have not yet
approved the New Investment Management Agreements.
Because the information provided and considerations made at the annual review
continue to be relevant with respect to the evaluation of the New Investment
Management Agreements, the Board considered the foregoing as part of its
deliberations of the New Investment Management Agreements. Accordingly, as
indicated, the discussions immediately below outline the materials and
information presented to the Board in connection with the Board's prior annual
review and the analysis undertaken and the conclusions reached by Board Members
when determining to continue the Original Investment Management Agreements.
I. APPROVAL OF THE ORIGINAL INVESTMENT MANAGEMENT AGREEMENTS
During the course of the year, the Board received a wide variety of materials
relating to the services provided by NAM and the performance of the Funds. At
each of its quarterly meetings, the Board reviewed investment performance and
various matters relating to the operations of the Funds and other Nuveen funds,
including the compliance program, shareholder services, valuation, custody,
distribution and other information relating to the nature, extent and quality of
services provided by NAM. Between the regularly scheduled quarterly meetings,
the Board Members received information on particular matters as the need arose.
In preparation for their considerations at the May Meeting, the Independent
Board Members received extensive materials, well in advance of the meeting,
which outlined or are related to, among other things:
[] the nature, extent and quality of services provided by NAM;
[] the organization and business operations of NAM, including the
responsibilities of various departments and key personnel;
80
[] each Fund's past performance as well as the Fund's performance compared to
funds with similar investment objectives based on data and information
provided by an independent third party and to customized benchmarks;
[] the profitability of Nuveen and certain industry profitability analyses for
unaffiliated advisers;
[] the expenses of Nuveen in providing the various services;
[] the advisory fees and total expense ratios of each Fund, including
comparisons of such fees and expenses with those of comparable,
unaffiliated funds based on information and data provided by an independent
third party (the "Peer Universe") as well as compared to a subset of funds
within the Peer Universe (the "Peer Group") of the respective Fund (as
applicable);
[] the advisory fees NAM assesses to other types of investment products or
clients;
[] the soft dollar practices of NAM, if any; and
[] from independent legal counsel, a legal memorandum describing among other
things, applicable laws, regulations and duties in reviewing and approving
advisory contracts.
At the May Meeting, NAM made a presentation to, and responded to questions from,
the Board. Prior to and after the presentations and reviewing the written
materials, the Independent Board Members met privately with their legal counsel
to review the Boardduties in reviewing advisory contracts and considering the
renewal of the advisory contracts. The Independent Board Members, in
consultation with independent counsel, reviewed the factors set out in judicial
decisions and Securities and Exchange Commission ("SEC") directives relating to
the renewal of advisory contracts. As outlined in more detail below, the Board
Members considered all factors they believed relevant with respect to each Fund,
including, but not limited to, the following: (a) the nature, extent and quality
of the services to be provided by NAM; (b) the investment performance of the
Fund and NAM; (c) the costs of the services to be provided and profits to be
realized by Nuveen and its affiliates; (d) the extent to which economies of
scale would be realized; and (e) whether fee levels reflect those economies of
scale for the benefit of the Fund's investors. In addition, as noted, the Board
Members met regularly throughout the year to oversee the Funds. In evaluating
the Original Investment Management Agreements, the Board Members also relied
upon their knowledge of NAM, its services and the Funds resulting from their
meetings and other interactions throughout the year. It is with this background
that the Board Members considered each Original Investment Management Agreement.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering the renewal of the Original Investment Management Agreements, the
Board Members considered the nature, extent and quality of NAM's services. The
Board Members reviewed materials outlining, among other things, Nuveen's
organization and business; the types of services that NAM or its affiliates
provide and are expected to provide to the Funds; the performance record of the
applicable Fund (as described in further detail below); and, any initiatives
Nuveen had taken for the municipal fund product line. As noted, at the annual
review, the Board Members were already familiar with the organization,
operations and personnel of NAM due to the Board Members' experience in
governing the respective Funds and working with NAM on matters relating to the
Funds. With respect to personnel, the Board Members recognized NAM's investment
in additional qualified personnel throughout the various groups in the
organization and recommended to NAM that it continue to review staffing needs as
necessary. In addition, the Board Members reviewed materials describing the
current status and, in particular, the developments in 2006 with respect to
NAM's investment process, investment strategies (including additional tools used
in executing such strategies), personnel (including portfolio management and
research teams), trading process, hedging activities, risk management operations
(e.g., reviewing credit quality, duration limits, and derivatives use, as
applicable), and investment operations (such as enhancements to trading
procedures, pricing procedures, and client services). The Board Members
recognized NAM's investment of resources and efforts to continue to enhance and
refine its investment process.
In addition to advisory services, the Independent Board Members considered the
quality of administrative and non-advisory services provided by NAM and noted
that NAM and its affiliates provide the Funds with a wide variety of services
and officers and other personnel as are necessary for the operations of the
Funds, including:
81
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
[] product management;
[] fund administration;
[] oversight by shareholder services and other fund service providers;
[] administration of Board relations;
[] regulatory and portfolio compliance; and
[] legal support.
As the Funds operate in a highly regulated industry and given the importance of
compliance, the Board Members considered, in particular, Nuveen's compliance
activities for the Funds and enhancements thereto. In this regard, the Board
Members recognized the quality of Nuveen's compliance team. The Board Members
further noted Nuveen's negotiations with other service providers and the
corresponding reduction in certain service providers' fees at the May Meeting.
In addition to the foregoing services, the Board Members also noted the
additional services that NAM or its affiliates provide to Nuveen's closed-end
funds, including, in particular, its secondary market support activities. The
Board Members recognized Nuveen's continued commitment to supporting the
secondary market for the common shares of its closed-end funds through a variety
of programs designed to raise investor and analyst awareness and understanding
of closed-end funds. These efforts include:
[] maintaining shareholder communications;
[] providing advertising for the Nuveen closed-end funds;
[] maintaining its closed-end fund website;
[] maintaining continual contact with financial advisers;
[] providing educational symposia;
[] conducting research with investors and financial analysis regarding
closed-end funds; and
[] evaluating secondary market performance.
With respect to the Nuveen closed-end funds that utilize leverage through the
issuance of preferred shares ("Preferred Shares"), the Board Members noted
Nuveen's continued support for the holders of Preferred Shares by, among other
things:
[] maintaining an in-house trading desk;
[] maintaining a product manager for the Preferred Shares;
[] developing distribution for Preferred Shares with new market participants;
[] maintaining an orderly auction process;
[] managing leverage and risk management of leverage; and
[] maintaining systems necessary to test compliance with rating agency
criteria.
Based on their review, the Board Members found that, overall, the nature, extent
and quality of services provided (and expected to be provided) to the respective
Funds under the Original Investment Management Agreements were satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
At the May Meeting, the Board considered the investment performance for each
Fund, including the Fund's historic performance as well as its performance
compared to funds with similar investment objectives (the "Performance Peer
Group") based on data provided by an independent third party (as described
below). The Board Members also reviewed the respective Fund's portfolio level
performance (which does not reflect fund level fees and expenses, and leverage)
against customized benchmarks, described in further detail below.
82
In evaluating the performance information during the annual review at the May
Meeting, in certain instances, the Board Members noted that the closest
Performance Peer Group for a fund may not adequately reflect such fund's
investment objectives and strategies, thereby limiting the usefulness of the
comparisons of such fund's performance with that of the Performance Peer Group.
With respect to state-specific municipal funds, the Board Members also
recognized that certain funds do not have a corresponding state-specific
Performance Peer Group in which case their performance is measured against a
more general municipal category for various states. With respect to municipal
closed-end funds, funds that do not have corresponding state-specific
Performance Peer Groups are from states other than New York, California,
Florida, New Jersey, Michigan and Pennsylvania. However, with respect to funds
based in Florida, New Jersey, Michigan and Pennsylvania, the peer group may be
so small or the Nuveen funds may dominate the category to such an extent that
performance information for such funds was also compared to the more general
category for all states (other than New York and California).
The Board Members reviewed performance information including, among other
things, total return information compared with the Fund's Performance Peer Group
for the one-, three- and five-year periods (as applicable) ending December 31,
2006. The Board Members also reviewed the Fund's portfolio level performance
(which does not reflect fund level fees and expenses, and leverage) compared to
customized portfolio level benchmarks for the one- and three-year periods ending
December 31, 2006 (as applicable). The analysis was used to assess the efficacy
of investment decisions against appropriate measures of risk and total return,
within specific market segments. This information supplemented the Fund
performance information provided to the Board at each of its quarterly meetings.
Based on their review, the Board Members determined that each Fund's investment
performance over time had been satisfactory, subject to the following. With
respect to various municipal closed-end funds, the Board Members noted relative
total return underperformance in recent years compared to peers. The Board
Members reviewed materials and discussed with NAM the factors contributing to
the shift in performance including, among other things, the degree of risk
undertaken by peers compared to the municipal closed-end funds (such as through
the increased use of leverage or taking concentrated positions in high risk
credits). In addition, the Board Members also considered a fund's dividend
performance and the extent of any secondary market discounts. The Board Members
noted NAM's efforts to evaluate the factors affecting performance and determine
whether modification to a fund's investment strategy is necessary or
appropriate, and concluded that they were satisfied with the steps being taken.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
During the annual review, in evaluating the management fees and expenses of
a Fund, the Board reviewed, among other things, the Fund's advisory fees
(net and gross management fees) and total expense ratios (before and after
expense reimbursements and/or waivers) in absolute terms as well as
comparisons to the gross management fees (before waivers), net management
fees (after waivers) and total expense ratios (before and after waivers) of
comparable funds in the Peer Universe and the Peer Group. In reviewing the
fee schedule for a Fund, the Board Members considered the fund-level and
complex-wide breakpoint schedules (described in further detail below) and
any fee waivers and reimbursements provided by Nuveen (applicable, in
particular, for certain funds launched since 1999). The Board Members
further reviewed data regarding the construction of Peer Groups as well as
the methods of measurement for the fee and expense analysis and the
performance analysis. In certain cases, due to the small number of peers in
the Peer Universe, the Peer Universe and Peer Group had significant overlap
or even consisted entirely of the same unaffiliated funds. In reviewing the
comparisons of fee and expense information, the Board Members recognized
that in certain cases, the fund size relative to peers, the small size and
odd composition of the Peer Group (including differences in objectives and
strategies), expense anomalies, timing of information used or other factors
impacting the comparisons thereby limited some of the usefulness of the
comparative data. The Board Members also considered the differences in the
use of leverage. Based on their review of the fee and expense information
provided, the Board Members determined that each Fund's net total expense
ratio was within an acceptable range compared to peers.
83
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
At the annual review, the Board Members further reviewed data comparing the
advisory fees of NAM with fees NAM charges to other clients. With respect
to municipal funds, such clients include NAM's municipal separately managed
accounts. In general, the advisory fees charged for separate accounts are
somewhat lower than the advisory fees assessed to the Funds. The Board
Members considered the differences in the product types, including, but not
limited to, the services provided, the structure and operations, product
distribution and costs thereof, portfolio investment policies, investor
profiles, account sizes and regulatory requirements. The Board Members
noted, in particular, that the range of services provided to the Funds (as
discussed above) is much more extensive than that provided to separately
managed accounts. As described in further detail above, such additional
services include, but are not limited to: product management, fund
administration, oversight of third party service providers, administration
of Board relations, and legal support. The Board Members noted that the
Funds operate in a highly regulated industry requiring extensive compliance
functions compared to other investment products. Given the inherent
differences in the products, particularly the extensive services provided
to the Funds, the Board Members believe such facts justify the different
levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the Board Members also considered
the profitability of Nuveen for its advisory activities (which incorporated
Nuveen's wholly-owned affiliated sub-advisers) and its financial condition.
At the annual review, the Board Members reviewed the revenues and expenses
of Nuveen's advisory activities for the last three years, the allocation
methodology used in preparing the profitability data as well as the 2006
Annual Report for Nuveen. The Board Members noted this information
supplemented the profitability information requested and received during
the year to help keep them apprised of developments affecting profitability
(such as changes in fee waivers and expense reimbursement commitments). In
this regard, the Board Members noted the enhanced dialogue and information
regarding profitability with NAM during the year, including more frequent
meetings and updates from Nuveen's corporate finance group. The Board
Members also reviewed data comparing Nuveen's profitability with other fund
sponsors prepared by three independent third party service providers as
well as comparisons of the revenues, expenses and profit margins of various
unaffiliated management firms with similar amounts of assets under
management prepared by Nuveen.
In reviewing profitability, the Board Members recognized the subjective
nature of determining profitability which may be affected by numerous
factors, including the allocation of expenses. Further, the Board Members
recognized the difficulties in making comparisons as the profitability of
other advisers generally is not publicly available and the profitability
information that is available for certain advisers or management firms may
not be representative of the industry and may be affected by, among other
things, the adviser's particular business mix, capital costs, types of
funds managed and expense allocations.
Notwithstanding the foregoing, the Board Members reviewed Nuveen's methodology
and assumptions for allocating expenses across product lines to determine
profitability. Last year, the Board Members also designated an Independent Board
Member as a point person for the Board to review the methodology determinations
during the year and any refinements thereto, which relevant information produced
from such process was reported to the full Board. In reviewing profitability,
the Board Members recognized Nuveen's increased investment in its fund business.
Based on its review, the Board Members concluded that Nuveen's level of
profitability for its advisory activities was reasonable in light of the
services provided.
In evaluating the reasonableness of the compensation, the Board Members also
considered other amounts paid to NAM by the Funds as well as any indirect
benefits (such as soft dollar arrangements, if any) NAM and its affiliates
receive, or are expected to receive, that are directly attributable to the
management of the Funds, if any. See Section E below for additional information
on indirect benefits NAM may receive as a result of its relationship with the
Funds. Based on their review of the overall fee arrangements of each Fund, the
Board Members determined that the advisory fees and expenses of the Funds were
reasonable.
84
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Board Members recognized the potential
benefits resulting from the costs of a Fund being spread over a larger asset
base. To help ensure the shareholders share in these benefits, the Board Members
reviewed and considered the breakpoints in the advisory fee schedules that
reduce advisory fees. In addition to advisory fee breakpoints, the Board also
approved a complex-wide fee arrangement in 2004. Pursuant to the complex-wide
fee arrangement, the fees of the funds in the Nuveen complex, including the
Funds, are reduced as the assets in the fund complex reach certain levels. In
evaluating the complex-wide fee arrangement, the Board Members noted that the
last complex-wide asset level breakpoint for the complex-wide fee schedule was
at $91 billion and that the Board Members anticipated further review and/or
negotiations prior to the assets of the Nuveen complex reaching such threshold.
Based on their review, the Board Members concluded that the breakpoint schedule
and complex-wide fee arrangement were acceptable and desirable in providing
benefits from economies of scale to shareholders, subject to further evaluation
of the complex-wide fee schedule as assets in the complex increase. See Section
II, Paragraph D - "Approval of the New Investment Management Agreements -
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale" for
information regarding subsequent modifications to the complex-wide fee.
E. INDIRECT BENEFITS
In evaluating fees, the Board Members also considered any indirect benefits or
profits NAM or its affiliates may receive as a result of its relationship with
each Fund. With respect to closed-end funds, the Board Members considered the
revenues received by affiliates of NAM for serving as agent at Nuveen's
preferred trading desk and for serving as a co-manager in the initial public
offering of new closed-end exchange traded funds.
In addition to the above, the Board Members considered whether NAM received any
benefits from soft dollar arrangements whereby a portion of the commissions paid
by a Fund for brokerage may be used to acquire research that may be useful to
NAM in managing the assets of the Funds and other clients. With respect to NAM,
the Board Members noted that NAM does not currently have any soft dollar
arrangements; however, to the extent certain bona fide agency transactions that
occur on markets that traditionally trade on a principal basis and riskless
principal transactions are considered as generating "commissions," NAM intends
to comply with the applicable safe harbor provisions.
Based on their review, the Board Members concluded that any indirect benefits
received by NAM as a result of its relationship with the Funds were reasonable
and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Board Members did not identify any single factor discussed previously as
all-important or controlling in their considerations to continue an advisory
contract. The Board Members, including the Independent Board Members,
unanimously concluded that the terms of the Original Investment Management
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the renewal of the Original
Investment Management Agreements be approved.
II. APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENTS
Following the May Meeting, the Board Members were advised of the potential
Transaction. As noted above, the completion of the Transaction would terminate
each of the Original Investment Management Agreements. Accordingly, at the July
Meeting, the Board of each Fund, including the Independent Board Members,
unanimously approved the New Investment Management Agreements on behalf of the
respective Funds. Leading up to the July Meeting, the Board Members had several
meetings and deliberations with and without Nuveen management present, and with
the advice of legal counsel, regarding the proposed Transaction as outlined
below.
On June 8, 2007, the Board Members held a special telephonic meeting to discuss
the proposed Transaction. At that meeting, the Board Members established a
special ad hoc committee comprised solely of Independent Board Members to focus
on the Transaction and to keep the Independent Board Members updated with
developments regarding the Transaction. On June 15, 2007, the ad hoc committee
discussed
85
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
with representatives of NAM the Transaction and modifications to the
complex-wide fee schedule that would generate additional fee savings at
specified levels of complex-wide asset growth. Following the foregoing meetings
and several subsequent telephonic conferences among Independent Board Members
and independent counsel, and between Independent Board Members and
representatives of Nuveen, the Board met on June 18, 2007 to further discuss the
proposed Transaction. Immediately prior to and then again during the June 18,
2007 meeting, the Independent Board Members met privately with their independent
legal counsel. At that meeting, the Board met with representatives of MDP, of
Goldman Sachs, Nuveen's financial adviser in the Transaction, and of the Nuveen
Board to discuss, among other things, the history and structure of MDP, the
terms of the proposed Transaction (including the financing terms), and MDP's
general plans and intentions with respect to Nuveen (including with respect to
management, employees, and future growth prospects). On July 9, 2007, the Board
also met to be updated on the Transaction as part of a special telephonic Board
meeting. The Board Members were further updated at a special in-person Board
meeting held on July 19, 2007 (one Independent Board Member participated
telephonically). Subsequently, on July 27, 2007, the ad hoc committee held a
telephonic conference with representatives of Nuveen and MDP to further discuss,
among other things, the Transaction, the financing of the Transaction, retention
and incentive plans for key employees, the effect of regulatory restrictions on
transactions with affiliates after the Transaction, and current volatile market
conditions and their impact on the Transaction.
In connection with their review of the New Investment Management Agreements, the
Independent Board Members, through their independent legal counsel, also
requested in writing and received additional information regarding the proposed
Transaction and its impact on the provision of services by NAM and its
affiliates.
The Independent Board Members received, well in advance of the July Meeting,
materials which outlined, among other things:
[] the structure and terms of the Transaction, including MDP's co-investor
entities and their expected ownership interests, and the financing
arrangements that will exist for Nuveen following the closing of the
Transaction;
[] the strategic plan for Nuveen following the Transaction;
[] the governance structure for Nuveen following the Transaction;
[] any anticipated changes in the operations of the Nuveen funds following the
Transaction, including changes to NAM's and Nuveen's day-to-day management,
infrastructure and ability to provide advisory, distribution or other
applicable services to the Funds;
[] any changes to senior management or key personnel who work on Fund related
matters (including portfolio management, investment oversight, and
legal/compliance) and any retention or incentive arrangements for such
persons;
[] any anticipated effect on each Fund's expense ratio (including advisory
fees) following the Transaction;
[] any benefits or undue burdens imposed on the Funds as a result of the
Transaction;
[] any legal issues for the Funds as a result of the Transaction;
[] the nature, quality and extent of services expected to be provided to the
Funds following the Transaction, changes to any existing services and
policies affecting the Funds, and cost-cutting efforts, if any, that may
impact such services or policies;
[] any conflicts of interest that may arise for Nuveen or MDP with respect to
the Funds;
[] the costs associated with obtaining necessary shareholder approvals and who
would bear those costs; and
[] from legal counsel, a memorandum describing the applicable laws,
regulations and duties in approving advisory contracts, including, in
particular, with respect to a change of control.
86
Immediately preceding the July Meeting, representatives of MDP met with the
Board to further respond to questions regarding the Transaction. After the
meeting with MDP, the Independent Board Members met with independent legal
counsel in executive session. At the July Meeting, Nuveen also made a
presentation and responded to questions. Following the presentations and
discussions of the materials presented to the Board, the Independent Board
Members met again in executive session with their counsel. As outlined in more
detail below, the Independent Board Members considered all factors they believed
relevant with respect to each Fund, including the impact that the Transaction
could be expected to have on the following: (a) the nature, extent and quality
of services to be provided; (b) the investment performance of the Funds; (c) the
costs of the services and profits to be realized by Nuveen and its affiliates;
(d) the extent to which economies of scale would be realized; and (e) whether
fee levels reflect those economies of scale for the benefit of investors. As
noted above, the Board Members had completed their annual review of the
respective Original Investment Management Agreements at the May Meeting and many
of the factors considered at the annual review were applicable to their
evaluation of the New Investment Management Agreements. Accordingly, in
evaluating the New Investment Management Agreements, the Board Members relied
upon their knowledge and experience with NAM and considered the information
received and their evaluations and conclusions drawn at the annual review. While
the Board reviewed many Nuveen funds at the July Meeting, the Independent Board
Members evaluated all information available to them on a fund-by-fund basis, and
their determinations were made separately in respect of each Fund.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, quality and extent of the services expected to be
provided by NAM under the New Investment Management Agreements, the Independent
Board Members considered, among other things, the expected impact, if any, of
the Transaction on the operations, facilities, organization and personnel of
NAM; the potential implications of regulatory restrictions on the Funds
following the Transaction; the ability of NAM and its affiliates to perform
their duties after the Transaction; and any anticipated changes to the current
investment and other practices of the Funds.
The Board noted that the terms of each New Investment Management Agreement,
including the fees payable thereunder, are substantially identical to those of
the Original Investment Management Agreement relating to the same Fund (with
both reflecting reductions to fee levels in the complex-wide fee schedule for
complex-wide assets in excess of $80 billion that have an effective date of
August 20, 2007). The Board considered that the services to be provided and the
standard of care under the New Investment Management Agreements are the same as
the Original Investment Management Agreements. The Board Members further noted
that key personnel who have responsibility for the Funds in each area, including
portfolio management, investment oversight, fund management, fund operations,
product management, legal/compliance and board support functions, are expected
to be the same following the Transaction. The Board Members considered and are
familiar with the qualifications, skills and experience of such personnel. The
Board also considered certain information regarding anticipated retention or
incentive plans designed to retain key personnel. Further, the Board Members
noted that no changes to Nuveen's infrastructure or operations as a result of
the Transaction were anticipated other than potential enhancements as a result
of an expected increase in the level of investment in such infrastructure and
personnel. The Board noted MDP's representations that it does not plan to have a
direct role in the management of Nuveen, appointing new management personnel, or
directly impacting individual staffing decisions. The Board Members also noted
that there were not any planned "cost cutting" measures that could be expected
to reduce the nature, extent or quality of services. After consideration of the
foregoing, the Board Members concluded that no diminution in the nature, quality
and extent of services provided to the Funds and their shareholders is expected.
In addition to the above, the Board Members considered potential changes in the
operations of each Fund. In this regard, the Board Members considered the
potential effect of regulatory restrictions on the Funds' transactions with
future affiliated persons. During their deliberations, it was noted that, after
the Transaction, a subsidiary of Merrill Lynch is expected to have an ownership
interest in Nuveen at a level that will make Merrill Lynch an affiliated person
of Nuveen. The Board Members recognized that applicable law would generally
prohibit the Funds from engaging in securities transactions with Merrill Lynch
as principal, and would also impose restrictions on using Merrill Lynch for
agency transactions. They recognized that having MDP and Merrill Lynch as
affiliates may restrict the Nuveen funds' ability to invest in securities of
issuers controlled by MDP or issued by Merrill Lynch and its affiliates even if
not bought directly from MDP or Merrill
87
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
Lynch as principal. They also recognized that various regulations may require
the Nuveen funds to apply investment limitations on a combined basis with
affiliates of Merrill Lynch. The Board Members considered information provided
by NAM regarding the potential impact on the Nuveen funds' operations as a
result of these regulatory restrictions. The Board Members considered, in
particular, the Nuveen funds that may be impacted most by the restricted access
to Merrill Lynch, including: municipal funds (particularly certain
state-specific funds), senior loan funds, taxable fixed income funds, preferred
security funds and funds that heavily use derivatives. The Board Members
considered such funds' historic use of Merrill Lynch as principal in their
transactions and information provided by NAM regarding the expected impact
resulting from Merrill Lynch's affiliation with Nuveen and available measures
that could be taken to minimize such impact. NAM informed the Board Members
that, although difficult to determine with certainty, its management did not
believe that MDP's or Merrill Lynch's status as an affiliate of Nuveen would
have a material adverse effect on any Nuveen fund's ability to pursue its
investment objectives and policies.
In addition to the regulatory restrictions considered by the Board, the Board
Members also considered potential conflicts of interest that could arise between
the Nuveen funds and various parties to the Transaction and discussed possible
ways of addressing such conflicts.
Based on its review along with its considerations regarding services at the
annual review, the Board concluded that the Transaction was not expected to
adversely affect the nature, quality or extent of services provided by NAM and
that the expected nature, quality and extent of such services supported approval
of the New Investment Management Agreements.
B. PERFORMANCE OF THE FUNDS
With respect to the performance of the Funds, the Board considered that the
portfolio management personnel responsible for the management of the Funds'
portfolios were expected to continue to manage the portfolios following the
completion of the Transaction.
In addition, the Board Members recently reviewed Fund performance at the May
Meeting, as described above, and determined that Fund performance was
satisfactory or better, subject to the following. With respect to certain
municipal closed-end funds with relative short-term underperformance, the Board
Members concluded NAM was taking steps to evaluate the factors affecting
performance and those steps would continue following the Transaction. Further,
the investment policies and strategies were not expected to change as a result
of the Transaction.
In light of the foregoing factors, along with the prior findings regarding
performance at the annual review, the Board concluded that its findings with
respect to performance supported approval of the New Investment Management
Agreements.
C. FEES, EXPENSES AND PROFITABILITY
As described in more detail above, during the annual review, the Board Members
considered, among other things, the management fees and expenses of the Funds,
the breakpoint schedules, and comparisons of such fees and expenses with peers.
At the annual review, the Board Members determined that the respective Fund's
advisory fees and expenses were reasonable. In evaluating the costs of services
to be provided by NAM under the New Investment Management Agreements and the
profitability of Nuveen for its advisory activities, the Board Members
considered their prior conclusions at the annual review and whether the
management fees or other expenses would change as a result of the Transaction.
As described above, the investment management fee is composed of two
components--a fund-level component and complex-wide level component. The fee
schedule under the New Investment Management Agreements to be paid to NAM is
identical to that under the Original Investment Management Agreements, including
the modified complex-wide fee schedule. As noted above, the Board recently
approved a modified complex-wide fee schedule that would generate additional fee
savings on complex-wide assets above $80 billion. The modifications have an
effective date of August 20, 2007 and are part of the Original Investment
Management Agreements. Accordingly, the terms of the complex-wide component
under the New Investment Management Agreements are the same as under the
Original Investment Management Agreements. The Board Members also noted that
Nuveen has committed for a period of two years from the
88
date of closing of the Transaction that it will not increase gross management
fees for any Nuveen fund and will not reduce voluntary expense reimbursement
levels for any Nuveen fund from their currently scheduled prospective levels.
Based on the information provided, the Board Members did not expect that overall
Fund expenses would increase as a result of the Transaction.
In addition, the Board Members considered that additional fund launches were
anticipated after the Transaction which would result in an increase in total
assets under management in the complex and a corresponding decrease in overall
management fees under the complex-wide fee schedule. Taking into consideration
the Board's prior evaluation of fees and expenses at the annual renewal, and the
modification to the complex-wide fee schedule, the Board determined that the
management fees and expenses were reasonable.
While it is difficult to predict with any degree of certainty the impact of the
Transaction on Nuveen's profitability, at the recent annual review, the Board
Members were satisfied that Nuveen's level of profitability for its advisory
activities was reasonable. During the year, the Board Members had noted the
enhanced dialogue regarding profitability and the appointment of an Independent
Board Member as a point person to review methodology determinations and
refinements in calculating profitability. Given their considerations at the
annual review and the modifications to the complex-wide fee schedule, the Board
Members were satisfied that Nuveen's level of profitability for its advisory
activities continues to be reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
The Board Members have been cognizant of economies of scale and the potential
benefits resulting from the costs of a Fund being spread over a larger asset
base. To help ensure that shareholders share in the benefits derived from
economies of scale, the Board adopted the complex-wide fee arrangement in 2004.
At the May Meeting, the Board Members reviewed the complex-wide fee arrangements
and noted that additional negotiations may be necessary or appropriate as the
assets in the complex approached the $91 billion threshold. In light of this
assessment coupled with the upcoming Transaction, at the June 15, 2007 meeting,
the ad hoc committee met with representatives of Nuveen to further discuss
modifications to the complex-wide fee schedule that would generate additional
savings for shareholders as the assets of the complex grow. The proposed terms
for the complex-wide fee schedule are expressed in terms of targeted cumulative
savings at specified levels of complex-wide assets, rather than in terms of
targeted marginal complex-wide fee rates. Under the modified schedule, the
schedule would generate additional fee savings beginning at complex-wide assets
of $80 billion in order to achieve targeted cumulative annual savings at $91
billion of $28 million on a complex-wide level (approximately $0.6 million
higher than those generated under the then current schedule) and generate
additional fee savings for asset growth above complex-wide assets of $91 billion
in order to achieve targeted annual savings at $125 billion of assets of
approximately $50 million on a complex-wide level (approximately $2.2 million
higher annually than that generated under the then current schedule). At the
July Meeting, the Board approved the modified complex-wide fee schedule for the
Original Investment Management Agreements and these same terms will apply to the
New Investment Management Agreements. Accordingly, the Board Members believe
that the breakpoint schedules and revised complex-wide fee schedule are
appropriate and desirable in ensuring that shareholders participate in the
benefits derived from economies of scale.
E. INDIRECT BENEFITS
During their recent annual review, the Board Members considered any indirect
benefits that NAM may receive as a result of its relationship with the Funds, as
described above. As the policies and operations of Nuveen are not anticipated to
change significantly after the Transaction, such indirect benefits should remain
after the Transaction. The Board Members further considered any additional
indirect benefits to be received by NAM or its affiliates after the Transaction.
The Board Members noted that other than benefits from its ownership interest in
Nuveen and indirect benefits from fee revenues paid by the Funds under the
management agreements and other Board-approved relationships, it was currently
not expected that MDP or its affiliates would derive any benefit from the Funds
as a result of the Transaction or transact any business with or on behalf of the
Funds (other than perhaps potential Fund acquisitions, in secondary market
transactions, of securities issued by MDP portfolio companies); or that Merrill
Lynch or its affiliates would derive any benefits from the Funds as a result of
the Transaction (noting that, indeed, Merrill Lynch would stand to experience
the discontinuation of principal transaction activity with the Nuveen funds and
likely would experience a noticeable reduction in the volume of agency
transactions with the Nuveen funds).
89
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
F. OTHER CONSIDERATIONS
In addition to the factors above, the Board Members also considered the
following with respect to the Funds:
[] Nuveen would rely on the provisions of Section 15(f) of the 1940 Act.
Section 15(f) provides, in substance, that when a sale of a controlling
interest in an investment adviser occurs, the investment adviser or any of
its affiliated persons may receive any amount or benefit in connection with
the sale so long as (i) during the three-year period following the
consummation of a transaction, at least 75% of the investment company's
board of directors must not be "interested persons" (as defined in the 1940
Act) of the investment adviser or predecessor adviser and (ii) an "unfair
burden" (as defined in the 1940 Act, including any interpretations or
no-action letters of the SEC) must not be imposed on the investment company
as a result of the transaction relating to the sale of such interest, or
any express or implied terms, conditions or understanding applicable
thereto. In this regard, to help ensure that an unfair burden is not
imposed on the Nuveen funds, Nuveen has committed for a period of two years
from the date of the closing of the Transaction (i) not to increase gross
management fees for any Nuveen fund; (ii) not to reduce voluntary expense
reimbursement levels for any Nuveen fund from their currently scheduled
prospective levels during that period; (iii) that no Nuveen fund whose
portfolio is managed by a Nuveen affiliate shall use Merrill Lynch as a
broker with respect to portfolio transactions done on an agency basis,
except as may be approved in the future by the Compliance Committee of the
Board; and (iv) that NAM shall not cause the Funds and other municipal
funds that NAM manages, as a whole, to enter into portfolio transactions
with or through the other minority owners of Nuveen, on either a principal
or an agency basis, to a significantly greater extent than both what one
would expect an investment team to use such firm in the normal course of
business, and what NAM has historically done, without prior Board or
Compliance Committee approval (excluding the impact of proportionally
increasing the use of such other "minority owners" to fill the void
necessitated by not being able to use Merrill Lynch).
[] The Funds would not incur any costs in seeking the necessary shareholder
approvals for the New Investment Management Agreements (except for any
costs attributed to seeking shareholder approvals of Fund specific matters
unrelated to the Transaction, such as approval of Board Members, in which
case a portion of such costs will be borne by the applicable Funds).
[] The reputation, financial strength and resources of MDP.
[] The long-term investment philosophy of MDP and anticipated plans to grow
Nuveen's business to the benefit of the Nuveen funds.
[] The benefits to the Nuveen funds as a result of the Transaction including:
(i) as a private company, Nuveen may have more flexibility in making
additional investments in its business; (ii) as a private company, Nuveen
may be better able to structure compensation packages to attract and retain
talented personnel; (iii) as certain of Nuveen's distribution partners are
expected to be equity or debt investors in Nuveen, Nuveen may be able to
take advantage of new or enhanced distribution arrangements with such
partners; and (iv) MDP's experience, capabilities and resources that may
help Nuveen identify and acquire investment teams or firms and finance such
acquisitions.
[] The historic premium and discount levels at which the shares of the Nuveen
funds have traded at specified dates with particular focus on the premiums
and discounts after the announcement of the Transaction, taking into
consideration recent volatile market conditions and steps or initiatives
considered or undertaken by NAM to address discount levels.
90
G. CONCLUSION
The Board Members did not identify any single factor discussed previously as
all-important or controlling. The Board Members, including the Independent Board
Members, unanimously concluded that the terms of the New Investment Management
Agreements are fair and reasonable, that the fees therein are reasonable in
light of the services to be provided to each Fund and that the New Investment
Management Agreements should be approved and recommended to shareholders.
III. APPROVAL OF INTERIM CONTRACTS
As noted above, at the July Meeting, the Board Members, including the
Independent Board Members, unanimously approved the Interim Investment
Management Agreements. If necessary to assure continuity of advisory services,
the Interim Investment Management Agreements will take effect upon the closing
of the Transaction if shareholders have not yet approved the New Investment
Management Agreements. The terms of each Interim Investment Management Agreement
are substantially identical to those of the corresponding Original Investment
Management Agreement and New Investment Management Agreement, respectively,
except for certain term and escrow provisions. In light of the foregoing, the
Board Members, including the Independent Board Members, unanimously determined
that the scope and quality of services to be provided to the Funds under the
respective Interim Investment Management Agreement are at least equivalent to
the scope and quality of services provided under the applicable Original
Investment Management Agreement.
91
Reinvest Automatically
EASILY and CONVENIENTLY
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End
Fund allows you to conveniently reinvest dividends and/or capital gains
distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be
times when income or capital gains taxes may be payable on dividends or
distributions that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure
a profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a
statement showing your total dividends and distributions, the date of
investment, the shares acquired and the price per share, and the total
number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above
net asset value at the time of valuation, the Fund will issue new shares at
the greater of the net asset value or 95% of the then-current market price.
If the shares are trading at less than net asset value, shares for your
account will be purchased on the open market. If the Plan Agent begins
purchasing Fund shares on the open market while shares are trading below
net asset value, but the Fund's shares subsequently trade at or above their
net asset value before the Plan Agent is able to complete its purchases,
the Plan Agent may cease open-market purchases and may invest the
uninvested portion of the distribution in newly-issued Fund shares at a
price equal to the greater of the shares' net asset value or 95% of the
shares' market value on the last business day immediately prior to the
purchase date. Dividends and distributions received to purchase shares in
the open market will normally be invested shortly after the dividend
payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price per share may
exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
92
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any
time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment
account and cash payment for fractional shares, or cash payment for all
reinvestment account shares, less brokerage commissions and a $2.50 service
fee.
You can reinvest whether your shares are registered in your name, or in the
name of a brokerage firm, bank, or other nominee. Ask your investment
advisor if his or her firm will participate on your behalf. Participants
whose shares are registered in the name of one firm may not be able to
transfer the shares to another firm and continue to participate in the
Plan.
The Fund reserves the right to amend or terminate the Plan at any time.
Although the Fund reserves the right to amend the Plan to include a service
charge payable by the participants, there is no direct service charge to
participants in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll
in or withdraw from the Plan, speak with your financial advisor or call us
at (800) 257-8787.
93
Glossary of
TERMS USED in this REPORT
[] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period.
It expresses the return that would have been necessary each year to equal
the investment's actual cumulative performance (including change in NAV or
market price and reinvested dividends and capital gains distributions, if
any) over the time period being considered.
[] AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments or
the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. The market value weighting
for an investment in an inverse floating rate security is the value of the
portfolio's residual interest in the inverse floating rate trust, and does
not include the value of the floating rate securities issued by the trust.
[] INVERSE FLOATERS: Inverse floating rate securities are created by
depositing a municipal bond, typically with a fixed interest rate, into a
special purpose trust created by a broker-dealer. This trust, in turn, (a)
issues floating rate certificates typically paying short-term tax-exempt
interest rates to third parties in amounts equal to some fraction of the
deposited bond's par amount or market value, and (b) issues an inverse
floating rate certificate (sometimes referred to as an "inverse floater")
to an investor (such as a Fund) interested in gaining investment exposure
to a long-term municipal bond. The income received by the holder of the
inverse floater varies inversely with the short-term rate paid to the
floating rate certificates' holders, and in most circumstances the holder
of the inverse floater bears substantially all of the underlying bond's
downside investment risk. The holder of the inverse floater typically also
benefits disproportionately from any potential appreciation of the
underlying bond's value. Hence, an inverse floater essentially represents
an investment in the underlying bond on a leveraged basis.
[] LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period
over which a bond's principal and interest will be paid, and consequently
is a measure of the sensitivity of a bond's or bond Fund's value to changes
when market interest rates change. Generally, the longer a bond's or Fund's
duration, the more the price of the bond or Fund will change as interest
rates change. Leverage-adjusted duration takes into account the leveraging
process for a Fund and therefore is longer than the duration of the Fund's
portfolio of bonds.
[] MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
[] NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of shares outstanding. Fund NAVs are
calculated at the end of each business day.
[] TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
[] ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon
to its holders during the life of the bond. Tax-exempt income to the holder
of the bond comes from accretion of the difference between the original
purchase price of the bond at issuance and the par value of the bond at
maturity and is effectively paid at maturity. The market prices of zero
coupon bonds generally are more volatile than the market prices of bonds
that pay interest periodically.
94
Other Useful INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2007, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the Exchange the annual CEO
certification as required by Section 303A.12(a) of the NYSE Listed Company
Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
INVESTMENT POLICY CHANGES
In February 2007, the Board of Directors voted to remove investment policy
restrictions that limited the territorial bond holdings of these Funds to a
maximum of 10 percent of net assets. This change will give the Funds' portfolio
manager greater flexibility to achieve its investment objectives.
In May 2007, the Funds' Board of Directors voted to permit the Funds' to make
loans from Fund assets to certain bond issuers. The amounts of these loans are
subject to strict limits. This policy is designed to enhance the Funds' ability
to meet their Funds' investment objectives by providing for increased portfolio
management flexibility, greater diversification potential, and opportunities for
increased capital appreciation over time.
BOARD OF DIRECTORS
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Carole E. Stone
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the period covered by this report. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
95
Nuveen Investments:
-------------------
SERVING INVESTORS FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
We offer many different investing solutions for our clients' different needs.
Managing $170 billion in assets, as of September 30, 2007, 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
six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader
in value-style equities; Rittenhouse, a leader in growth-style equities;
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios; Santa Barbara, a leader in growth equities; and
Tradewinds, a leader in global equities.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/etf
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
EAN-A-0807D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen California Municipal Value Fund, Inc.
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND
--------------------------------------------------------------------------------------------------------------------
August 31, 2007 $ 13,057 $ 0 $ 500 $ 0
--------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------------
August 31, 2006 $ 12,412 $ 0 $ 400 $ 0
--------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS (1) SERVICE PROVIDERS
--------------------------------------------------------------------------------------------------------
August 31, 2007 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------
August 31, 2006 $ 0 $ 2,400 $ 0
--------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------
(1) The amounts reported for the Fund under the column heading "Tax Fees"
represents amounts billed to the Adviser exclusively for the preparation
for the Fund's tax return, the cost of which is borne by the Adviser. In
the aggregate, for all Nuveen funds for which Ernst & Young LLP serves as
independent registered public accounting firm, these fees amounted to
$161,400 in 2006. Beginning with fund fiscal years ending August 31, 2006,
Ernst & Young LLP will no longer prepare the fund tax returns.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------
August 31, 2007 $ 500 $ 0 $ 0 $ 500
August 31, 2006 $ 400 $ 2,400 $ 0 $ 2,800
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Jack B. Evans, William J.
Schneider and David J. Kundert. Mr. Eugene S. Sunshine, who also served as a
member of the Committee during this reporting period, resigned from the Board of
Directors effective July 31, 2007.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board of Trustees on its
control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board of Trustees or its representative. A member of NAM's
legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed
with the SEC on Form N-PX, and the results provided to the registrant's Board of
Trustees and made available to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Portfolio Manager
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
Name Fund
Scott R. Romans Nuveen California Municipal Value Fund, Inc.
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
Type of Account Number of
Portfolio Manager Managed Accounts Assets
-------------------- ----------------------------------------------------------
Scott R. Romans Registered Investment Company 28 $5.607 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 3 $.52 million
o Assets are as of August 31, 2007. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation, including
these three elements, to the market in order to create a compensation structure
that is competitive and consistent with similar financial services companies. As
discussed below, several factors are considered in determining each portfolio
manager's total compensation. In any year these factors may include, among
others, the effectiveness of the investment strategies recommended by the
portfolio manager's investment team, the investment performance of the accounts
managed by the portfolio manager, and the overall performance of Nuveen
Investments, Inc. (the parent company of NAM). Although investment performance
is a factor in determining the portfolio manager's compensation, it is not
necessarily a decisive factor. The portfolio manager's performance is evaluated
in part by comparing manager's performance against a specified investment
benchmark. This fund-specific benchmark is a customized subset (limited to bonds
in each Fund's specific state and with certain maturity parameters) of the
S&P/Investortools Municipal Bond index, an index comprised of bonds held by
managed municipal bond fund customers of Standard & Poor's Securities Pricing,
Inc. that are priced daily and whose fund holdings aggregate at least $2
million. As of September 30, 2007, the S&P/Investortools Municipal Bond index
was comprised of 51,709 securities with an aggregate current market value of
$999 billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. Each portfolio manager is eligible to receive
bonus compensation in the form of equity-based awards issued in securities
issued by Nuveen Investments, Inc. The amount of such compensation is dependent
upon the same factors articulated for cash bonus awards but also factors in his
long-term potential with the firm.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager. In addition,
NAM has adopted a Code of Conduct that sets forth policies regarding conflicts
of interest.
Beneficial Ownership of Securities. As of the August 31, 2007, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
DOLLAR RANGE OF
DOLLAR EQUITY SECURITIES
RANGE OF BENEFICIALLY OWNED
EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS
BENEFICIALLY MANAGED BY NAM'S
NAME OF PORTFOLIO OWNED IN MUNICIPAL
MANAGER FUND FUND INVESTMENT TEAM
--------------------------------------------------------------------------------------------------
Scott R. Romans Nuveen California Municipal Value Fund, Inc. $0 $10,000-$50,000
------------------- ----------------------------------------------------- ------------ -------------
PORTFOLIO MANAGER BIO:
Scott R. Romans, PhD, joined Nuveen Investments in 2000 as a senior analyst in
the education sector. In 2003, he was assigned management responsibility for
several closed- and open-ended municipal bond funds most of which are state
funds covering California and other western states. He has been Vice President
of NAM since 2004, Portfolio Manager since 2003, and was, formerly, Assistant
Vice President (2003-2004) and Senior Analyst (2000-2003). Currently, he manages
investments for 29 Nuveen-sponsored investment companies. He holds an
undergraduate degree from the University of Pennsylvania and an MA and PhD from
the University of Chicago.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrants Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen California Municipal Value Fund, Inc.
-----------------------------------------------------------
By (Signature and Title)* /s/ Kevin J. McCarthy
----------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: November 9, 2007
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: November 9, 2007
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: November 9, 2007
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.