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 811-21494
---------------------
Nuveen Floating Rate Income Fund
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: July 31
------------------
Date of reporting period: July 31, 2005
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT July 31, 2005
Nuveen Investments
Closed-End
Exchange-Traded
Funds
NUVEEN SENIOR
INCOME FUND
NSL
NUVEEN FLOATING
RATE INCOME FUND
JFR
NUVEEN FLOATING
RATE INCOME
OPPORTUNITY FUND
JRO
Photo of: Man, woman and child at the beach.
Photo of: A child.
HIGH CURRENT INCOME FROM PORTFOLIOS OF SENIOR CORPORATE LOANS
Logo: NUVEEN Investments
Photo of: Woman
Photo of: Man and child
Photo of: Woman
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Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Chairman's
LETTER TO SHAREHOLDERS
I am pleased to report that for the period ended July 31, 2005, your Fund
continued to provide you with attractive monthly income from a portfolio
primarily composed of senior corporate loans. For more details about the
management strategy and performance of your Fund, please see the Portfolio
Managers' Comments and Performance Overview sections of this report.
For more than 100 years, Nuveen has specialized in offering quality investments
such as your Fund to those seeking to accumulate and preserve wealth. Our
mission continues to be to assist you and your financial advisor by offering the
investment solutions and services that can help you secure your long-term
financial goals. We thank you for choosing us as a partner as you work toward
that objective.
Portfolio diversification is a recognized way to try to reduce some of the risk
that comes with investing. Since one part of your portfolio may increase in
value when another decreases, portfolio diversification may help smooth your
investment returns over time. In addition to providing regular monthly income, a
senior loan investment like your Fund may help you achieve and benefit from
greater portfolio diversification.
"OUR MISSION CONTINUES TO BE TO ASSIST YOU AND YOUR FINANCIAL ADVISOR BY
OFFERING THE INVESTMENT SOLUTIONS AND SERVICES THAT CAN HELP YOU SECURE YOUR
LONG-TERM FINANCIAL GOALS."
I urge you to consider receiving future Fund reports and other Fund information
faster by using e-mail and the internet. Sign up is quick and easy - see the
inside front cover of this report for step-by-step instructions.
Earlier in 2005, The St. Paul Travelers Companies, Inc., which owned 79% of
Nuveen Investments, Inc. (the parent of your Fund's investment adviser), sold a
substantial portion of its stake in Nuveen. More recently, St. Paul sold the
balance of its Nuveen shares to Nuveen Investments and to others. Please be
assured that these transactions only affect Nuveen's corporate structure, and
they do not have any impact on the investment objectives or management of your
Fund.
Again, thank you for the confidence you have shown in Nuveen Investments through
your investment in a senior corporate loan fund.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
September 15, 2005
Nuveen Closed-End Exchange-Traded Funds (NSL, JFR, JRO)
Portfolio Managers'
COMMENTS
The Funds' investment portfolios are managed by Gunther Stein and Lenny Mason of
Symphony Asset Management, LLC, an affiliate of Nuveen Investments. Gunther and
Lenny have more than 25 years of combined investment management experience, much
of it in evaluating and purchasing senior corporate loans and other high-yield
debt. Here Gunther and Lenny talk about their management strategies and the
performances of the Funds for the period ended July 31, 2005.
WHAT WERE THE GENERAL ECONOMIC AND MARKET CONDITIONS YOU FACED DURING THIS
ANNUAL REPORTING PERIOD ENDED JULY 31, 2005?
Over the last twelve months the loan market continued its strong performance.
Low corporate default rates, a slowly improving economy and a benign interest
rate environment all led to strength in the loan market. Leveraged loans
registered positive returns each month, bringing the number of consecutive
monthly gains to 32. The credit markets did experience volatility in April and
May 2005, which was caused by weakness in the automotive sector and the
downgrades of General Motors and Ford. As fears abated in June, both the high
yield and leveraged loan markets improved from the May lows. Rising short-term
interest rates and low default rates continue to drive inflows into the
leveraged loan asset class, as the Federal Reserve boosted the benchmark
interest rate by 200 basis points (bps) over the last year. Macroeconomic trends
remained positive as analysts expect Gross Domestic Product (GDP) real growth to
be in the 3.5% range in 2005 and job creation to continue growing steadily.
Volatile oil prices and commodity costs continue to raise concerns regarding
earnings growth in the coming quarters.
Increased institutional issuance significantly buoyed secondary trading and
demand during the last year. By the end of July 2005, the average price for all
par term loans rose to 100.94 - in other words, a slight premium to par
(100.00). Loans that trade above par made up 80% of trading volume, while loans
above 102 made up 6% of the trading volume at July 31. Senior corporate loans
are typically quoted at interest rate spreads, in basis points (bps), over the
London Interbank Offered Rate (LIBOR), a high quality short-term interest rate
benchmark. B rated loan rate spreads over LIBOR tightened 41 bps from the year
ago period, and higher quality BB rated credit spreads tightened 32 bps. B and
BB rated spreads ended the period at 252 bps and 194 bps, respectively. These
levels, which are somewhat low by historical standards, underscore strong demand
for the leveraged loan asset class over this reporting period.
4
WHAT WAS YOUR MANAGEMENT STRATEGY DURING THIS PERIOD? DID IT VARY
BY FUND?
We focused on executing a conservative portfolio management strategy which
emphasized carefully selecting both industry sectors and individual companies.
This was our approach for all Funds, whether we were evaluating more traditional
senior corporate loans, or credits from middle market companies for the JRO
portfolio. We analyzed opportunities to upgrade each portfolio by selling loans
in sectors that we believed would have problems over the coming months, and by
rotating into less cyclical sectors that we felt would provide stronger asset
protection. This strategy led us to sell most of our automotive exposure
(excluding aftermarket auto suppliers) before the sector experienced significant
volatility in May. This volatility was due to fears surrounding General Motors
and Ford. Given the robust volume of new deals, we were able to rotate into
loans that we felt provided more asset protection and less earnings volatility.
When evaluating loans, we continued to look at the fundamentals of the issuer.
At the same time, we also closely monitored the relative value of the loans we
held or were considering as compared with other closely related loans or
securities in the high yield market.
HOW DID THE FUNDS PERFORM?
The performance of each Fund over the twelve-month period ended July 31, 2005,
as well as the performance of a comparative index, is shown in the accompanying
chart.
TOTAL RETURN ON NET ASSET VALUE*
For the periods ended July 31, 2005
1-YEAR 3-YEAR 5-YEAR
-------------------------------------------------------------------
NSL 7.53% 12.08% 6.23%
-------------------------------------------------------------------
JFR 6.56% -- --
-------------------------------------------------------------------
JRO 4.47% -- --
-------------------------------------------------------------------
CSFB Leveraged
Loan Index1 5.40% 7.23% 5.05%
-------------------------------------------------------------------
* Returns for one, three, and five years are annualized.
The data shown represents past performance which is no guarantee of future
results. Current performance may be higher or lower than the data shown. Returns
do not reflect the deduction of taxes that a shareholder may have to pay on Fund
distributions or upon the sale of Fund shares. For more information, please see
the individual Fund Performance Overview pages in this report.
Over the 12-month reporting period, the returns of NSL and JFR outperformed the
CSFB Leveraged Loan Index. The total return of JRO underperformed this index
over the same period, which included the invest-up period for JRO's assets
raised through common and
1 The CSFB Leveraged Loan Index is an unmanaged, unleveraged index consisting
of approximately $150 billion of tradable term loans with at least one year
to maturity, and rated BBB or lower.
5
preferred share offerings, and in which that Fund incurred the costs of issuing
and underwriting its FundPreferred(R) shares.
One of the primary factors benefiting the performance of NSL and JFR over this
reporting period relative to that of the CSFB index was the Funds' use of
financial leverage. While leveraging can add volatility to a Fund's NAV and
share price, this strategy can also provide opportunities for additional income
and total returns for common shareholders when high quality short-term interest
rates paid by the Funds on their FundPreferred(R) shares are lower than the
amount the Funds are earning from the lower quality adjustable-rate corporate
loans in their portfolios.
Other factors that benefited NSL during the 12 months ended July 31, 2005, were
the appreciation of credits from Aladdin Gaming and Anthony Crane Rental, as
well as positive contributions from investments in Western Industries and
Mirant. Conversely, the Fund's investment in MetalForming Technologies had a
negative impact on performance during the period.
JFR's performance also benefited from its investments in Aladdin and Anthony
Crane during the period. Meridian Automotive negatively affected the portfolio's
overall performance during the period.
As noted, the twelve-month period ended July 31, 2005, included the initial
invest-up of JRO's portfolio. Thus, it did not benefit from being fully invested
during the entire twelve months. In addition, the initial costs of issuing
FundPreferred(R) shares had a significantly negative effect on common share
returns during this period. JRO's portfolio also included Anthony Crane Rental,
which had a positive impact on the Fund's performance. There were no loans that
had a material negative impact on JRO's performance during the period.
6
Dividend and Share Price
INFORMATION
As noted, each of these Funds uses financial leverage in an effort to enhance
its dividend-paying capabilities. While this strategy adds volatility to a
Fund's net asset value (NAV) and share price, it generally works to enhance the
amount of income a Fund has to distribute to its common shareholders, as long as
the dividend rates the Fund pays to its preferred shareholders are less than the
interest rates the Fund receives from its portfolio of loans.
Since each of these Funds invests in adjustable rate loans, their income streams
typically can be expected to rise or fall over time to reflect the movement of
shorter-term interest rates. These rates generally were rising over this
twelve-month reporting period ended July 31, 2005, and this led to three monthly
dividend increases in NSL and two monthly dividend increases in JFR. JRO made
its initial monthly dividend declaration during this period, at an assertive
level which has been maintained since that time.
All of these Funds 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), which is 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 July 31, 2005, NSL had a
positive UNII balance for both financial reporting and tax purposes, while JFR
and JRO had negative UNII balances for financial reporting purposes and positive
UNII balances for tax purposes.
As of July 31, 2005, NSL traded at a premium to its net asset value, while JFR
and JRO traded at discounts to their NAVs, as shown below.
7/31/2005 PERIOD AVERAGE
FUND PREMIUM/DISCOUNT PREMIUM/DISCOUNT
--------------------------------------------------------------------------------
NSL 5.78% 9.88%
--------------------------------------------------------------------------------
JFR -2.98% 1.25%
--------------------------------------------------------------------------------
JRO -4.76% 0.38%
--------------------------------------------------------------------------------
7
Nuveen Senior Income Fund
NSL
Performance
OVERVIEW As of July 31, 2005
Pie Chart:
PORTFOLIO ALLOCATION
(as a % of total investments)
Variable Rate Senior Loan Interests 82.2%
Corporate Bonds 9.9%
High-Grade Short-Term Investments 7.9%
Bar Chart:
2004-2005 MONTHLY DIVIDENDS PER SHARE
Aug 0.043
Sep 0.046
Oct 0.046
Nov 0.046
Dec 0.048
Jan 0.048
Feb 0.048
Mar 0.051
Apr 0.051
May 0.051
Jun 0.051
Jul 0.051
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/04 9.92
9.92
9.92
9.9
9.97
9.88
9.87
9.86
9.79
9.9
9.85
9.86
9.8
9.8
9.83
10
10.04
9.92
9.95
9.94
9.92
9.94
9.95
9.91
9.94
9.95
9.95
9.94
10.04
9.92
9.99
9.95
9.94
9.94
9.92
9.92
9.91
9.93
9.9
9.94
9.94
9.94
9.95
9.91
9.91
9.9
9.9
9.9
9.9
9.87
9.88
9.77
9.74
9.65
9.6
9.55
9.39
9.37
9.32
9.28
9.2
9.29
9.25
9.29
9.29
9.26
9.36
9.37
9.35
9.33
9.33
9.33
9.32
9.37
9.36
9.35
9.3
9.32
9.36
9.35
9.28
9.25
9.28
9.2
9.04
8.85
8.73
8.82
8.87
8.9
9.13
9.23
9.37
9.33
9.36
9.34
9.34
9.42
9.26
9.22
9.24
9.25
9.22
9.37
9.32
9.4
9.43
9.38
9.34
9.39
9.38
9.34
9.42
9.55
9.55
9.5
9.5
9.45
9.49
9.63
9.66
9.75
9.75
9.8
9.77
9.76
9.77
9.79
9.79
9.76
9.75
9.74
9.79
9.79
9.77
9.72
9.74
9.69
9.69
9.59
9.54
9.49
9.48
9.55
9.51
9.57
9.65
9.66
9.64
9.65
9.71
9.72
9.79
9.74
9.62
9.6
9.53
9.53
9.59
9.53
9.51
9.18
9.23
9.28
9.14
9.13
9.1
9.16
9.17
9.19
9.26
9.26
9.26
9.24
9.22
9.24
9.26
9.21
9.04
9.09
9.16
8.96
9.01
9.07
9.06
9.2
9.08
9.01
9.16
9.16
9.2
9.27
9.29
9.15
9.04
9.09
9.1
9.05
9
8.97
8.9
8.87
8.85
8.8
8.82
8.8
8.74
8.64
8.67
8.7
8.79
8.86
8.8
8.81
8.78
8.82
8.81
8.8
8.8
8.76
8.67
8.61
8.63
8.69
8.62
8.66
8.65
8.58
8.57
8.55
8.67
8.64
8.71
8.83
8.8
8.79
8.84
8.81
8.84
8.87
8.74
8.83
8.84
8.78
8.83
8.9
8.87
8.92
8.95
8.93
8.92
8.94
8.97
7/31/05 8.97
FUND SNAPSHOT
------------------------------------
Common Share Price $8.97
------------------------------------
Common Share
Net Asset Value $8.48
------------------------------------
Premium/(Discount) to NAV 5.78%
------------------------------------
Latest Dividend $.0510
------------------------------------
Market Yield 6.82%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $252,598
------------------------------------
ANNUALIZED TOTAL RETURN
(Inception 10/26/99)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -3.40% 7.53%
------------------------------------
5-Year 6.61% 6.23%
------------------------------------
Since
Inception 6.30% 6.49%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Media 17.7%
------------------------------------
Hotels, Restaurants & Leisure 15.0%
------------------------------------
Healthcare Providers & Services 6.0%
------------------------------------
Auto Components 5.2%
------------------------------------
Chemicals 3.9%
------------------------------------
Real Estate 3.5%
------------------------------------
Containers & Packaging 3.3%
------------------------------------
Specialty Retail 3.1%
------------------------------------
Commercial Services & Supplies 2.7%
------------------------------------
Diversified Telecommunication
Services 2.6%
------------------------------------
Insurance 2.3%
------------------------------------
IT Services 2.3%
------------------------------------
Textiles & Apparel 2.2%
------------------------------------
Beverages 2.0%
------------------------------------
Building Products 1.9%
------------------------------------
Household Durables 1.7%
------------------------------------
Oil, Gas & Consumable Fuels 1.6%
------------------------------------
Aerospace & Defense 1.4%
------------------------------------
Airlines 1.4%
------------------------------------
High-Grade Short-Term
Investments 7.9%
------------------------------------
Other 12.3%
------------------------------------
TOP FIVE ISSUERS (EXCLUDING
HIGH-GRADE SHORT-TERM INVESTMENTS)
(as a % of total investments)
------------------------------------
Conseco, Inc. 2.3%
------------------------------------
Century Cable Holdings, LLC 2.3%
------------------------------------
Graham Packaging Company, L.P. 2.2%
------------------------------------
Federal-Mogul Corporation 2.1%
------------------------------------
OpBiz, LLC 1.9%
------------------------------------
8
Nuveen Floating Rate Income Fund
JFR
Performance
OVERVIEW As of July 31, 2005
Pie Chart:
PORTFOLIO ALLOCATION
(as a % of total investments)
Variable Rate Senior Loan Interests 77.7%
Corporate Bonds 13.9%
SAMI/Collateral Securities(1) 0.3%
High-Grade Short-Term Investments 8.1%
Bar Chart:
2004-2005 MONTHLY DIVIDENDS PER SHARE
Aug 0.0675
Sep 0.0675
Oct 0.0675
Nov 0.0675
Dec 0.07
Jan 0.07
Feb 0.07
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/04 14.79
14.88
14.86
14.9
14.85
14.77
14.79
14.75
14.8
14.83
14.82
14.83
14.68
14.69
14.8
14.93
14.85
14.79
14.78
14.81
14.75
14.68
14.68
14.68
14.74
14.8
14.79
14.89
14.88
14.71
14.75
14.73
14.75
14.75
14.7
14.7
14.65
14.68
14.65
14.7
14.66
14.75
14.73
14.7
14.66
14.62
14.66
14.64
14.74
14.71
14.66
14.63
14.69
14.64
14.64
14.65
14.6
14.61
14.55
14.52
14.42
14.52
14.5
14.5
14.47
14.49
14.49
14.25
14.34
14.5
14.46
14.58
14.59
14.63
14.58
14.66
14.65
14.55
14.4
14.49
14.48
14.49
14.48
14.56
14.59
14.52
14.4
14.24
14.05
14.08
13.95
13.89
13.89
13.87
13.9
13.86
13.87
13.83
13.79
13.74
13.71
13.72
13.75
13.73
13.92
13.9
14
14.04
13.99
14.11
14.05
14.15
14.19
14.2
14.22
14.25
14.19
14.14
14.2
14.18
14.16
14.2
14.16
14.17
14.39
14.42
14.41
14.44
14.48
14.46
14.54
14.6
14.64
14.63
14.61
14.5
14.32
14.34
14.31
14.21
14.3
14.2
14.26
14.35
14.3
14.49
14.56
14.58
14.65
14.7
14.76
14.83
14.88
14.85
14.76
14.88
14.72
14.66
14.64
14.69
14.68
14.63
14.65
14.52
14.45
14.48
14.67
14.71
14.78
14.78
14.71
14.8
14.8
14.79
14.79
14.77
14.59
14.35
14.1
14.14
14.2
14.16
14.29
14.3
14.19
14.13
14.34
14.5
14.46
14.46
14.47
14.32
14.48
14.49
14.26
14.28
14.44
14.31
14.39
13.95
14
13.98
13.85
13.65
13.72
13.78
13.54
13.47
13.58
13.67
13.98
14
13.88
13.9
13.91
13.87
13.78
13.72
13.73
13.71
13.55
13.45
13.48
13.44
13.4
13.35
13.32
13.33
13.33
13.33
13.4
13.35
13.48
13.57
13.55
13.52
13.51
13.6
13.5
13.51
13.38
13.45
13.48
13.45
13.58
13.62
13.65
13.64
13.65
13.61
13.64
13.65
13.69
7/31/05 13.69
FUND SNAPSHOT
------------------------------------
Common Share Price $13.69
------------------------------------
Common Share
Net Asset Value $14.11
------------------------------------
Premium/(Discount) to NAV -2.98%
------------------------------------
Latest Dividend $.0760
------------------------------------
Market Yield 6.66%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $667,194
------------------------------------
ANNUALIZED TOTAL RETURN
(Inception 3/25/04)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -1.99% 6.56%
------------------------------------
Since
Inception -1.16% 4.50%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Media 19.7%
------------------------------------
Hotels, Restaurants & Leisure 12.7%
------------------------------------
Real Estate 5.8%
------------------------------------
Chemicals 4.9%
------------------------------------
Healthcare Providers & Services 4.5%
------------------------------------
Containers & Packaging 4.1%
------------------------------------
Household Durables 3.8%
------------------------------------
Building Products 3.1%
------------------------------------
IT Services 3.1%
------------------------------------
Auto Components 2.8%
------------------------------------
Commercial Services & Supplies 2.8%
------------------------------------
Insurance 2.4%
------------------------------------
Diversified Telecommunication
Services 2.2%
------------------------------------
Paper & Forest Products 2.0%
------------------------------------
Metals & Mining 1.9%
------------------------------------
Electric Utilities 1.7%
------------------------------------
Machinery 1.6%
------------------------------------
High-Grade Short-Term
Investments 8.4%
------------------------------------
Other 12.5%
------------------------------------
TOP FIVE ISSUERS (EXCLUDING
HIGH-GRADE SHORT-TERM INVESTMENTS)
(as a % of total investments)
------------------------------------
Conseco, Inc. 2.4%
------------------------------------
Park Place Entertainment 2.4%
------------------------------------
Century Cable Holdings, LLC 2.3%
------------------------------------
Metro-Goldwyn-Mayer
Studios, Inc. 2.3%
------------------------------------
LNR Property Corp 2.1%
------------------------------------
(1) The Fund earns a fixed rate for its investment in the Select Aggregate
Market Index ("SAMI"), a basket of credit default swaps on high-grade
Senior Loans. The Fund is required to designate assets as collateral for a
portion of the SAMI investments.
9
Nuveen Floating Rate Income Opportunity Fund
JRO
Performance
OVERVIEW As of July 31, 2005
Pie Chart:
PORTFOLIO ALLOCATION
(as a % of total investments)
Variable Rate Senior Loan Interests 80.5%
Corporate Bonds 15.7%
High-Grade Short-Term Investments 3.8%
Bar Chart:
2004-2005 MONTHLY DIVIDENDS PER SHARE
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/04 15
15
15
15.01
15
15
15
15
15
15
15
15.01
15.01
15
15
15.01
15.01
15
15
14.71
14.8
14.7
14.74
14.75
14.75
14.73
14.71
14.85
14.75
14.75
14.75
14.75
14.85
14.76
14.75
14.74
14.8
14.75
14.78
14.86
14.75
14.74
14.75
14.72
14.6
14.65
14.67
14.6
14.65
14.6
14.63
14.6
14.55
14.56
14.64
14.65
14.55
14.59
14.51
14.54
14.54
14.43
14.28
14.4
14.31
14.33
14.35
14.5
14.72
14.7
14.74
14.85
14.88
14.62
14.64
14.75
14.78
14.75
14.74
14.72
14.74
14.64
14.67
14.7
14.68
14.65
14.66
14.74
14.73
14.66
14.46
14.45
14.48
14.43
14.34
14.2
14.04
14.05
13.93
13.81
13.89
14
13.98
13.9
14.17
14.31
14.37
14.25
14.35
14.46
14.37
14.42
14.42
14.42
14.48
14.49
14.44
14.46
14.5
14.5
14.45
14.41
14.54
14.55
14.44
14.41
14.52
14.6
14.7
14.73
14.77
14.68
14.7
14.72
14.67
14.65
14.63
14.59
14.48
14.38
14.35
14.31
14.38
14.29
14.21
14.28
14.31
14.4
14.4
14.48
14.49
14.56
14.59
14.56
14.54
14.57
14.41
14.39
14.32
14.36
14.39
14.23
14.16
14.12
13.95
13.97
13.63
13.97
14.16
14.24
14.2
14.2
14.22
14.24
14.17
13.93
13.88
14
13.89
13.7
13.64
13.59
13.67
13.75
13.67
13.47
13.53
13.5
13.78
13.91
13.9
13.9
13.88
13.65
13.72
13.66
13.69
13.68
13.77
13.65
13.62
13.48
13.47
13.3
13.23
13.2
13.21
13.18
12.98
12.91
13.06
13.13
13.18
13.19
13.25
13.26
13.35
13.37
13.31
13.3
13.41
13.28
13.14
13.15
13.21
13.22
13.11
13.18
13.3
13.25
13.16
13.11
13.2
13.22
13.27
13.3
13.34
13.34
13.34
13.35
13.36
13.27
13.13
13.15
13.17
13.22
13.29
13.22
13.24
13.21
13.2
13.24
13.34
13.41
13.41
7/31/05 13.41
FUND SNAPSHOT
------------------------------------
Common Share Price $13.41
------------------------------------
Common Share
Net Asset Value $14.08
------------------------------------
Premium/(Discount) to NAV -4.76%
------------------------------------
Latest Dividend $.0760
------------------------------------
Market Yield 6.80%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $399,792
------------------------------------
ANNUALIZED TOTAL RETURN
(Inception 7/27/04)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -5.13% 4.47%
------------------------------------
Since
Inception -5.00% 4.19%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Media 17.5%
------------------------------------
Hotels, Restaurants & Leisure 9.0%
------------------------------------
Healthcare Providers & Services 5.5%
------------------------------------
Real Estate 5.3%
------------------------------------
Diversified Telecommunication
Services 4.9%
------------------------------------
IT Services 4.0%
------------------------------------
Electric Utilities 3.9%
------------------------------------
Containers & Packaging 3.4%
------------------------------------
Chemicals 3.2%
------------------------------------
Machinery 3.0%
------------------------------------
Gas Utilities 2.9%
------------------------------------
Commercial Services & Supplies 2.7%
------------------------------------
Food & Staples Retailing 2.6%
------------------------------------
Oil, Gas, & Consumable Fuels 2.6%
------------------------------------
Building Products 2.4%
------------------------------------
Household Durables 2.4%
------------------------------------
Textiles & Apparel 2.1%
------------------------------------
Auto Components 2.0%
------------------------------------
Aerospace and Defense 1.5%
------------------------------------
Household Products 1.5%
------------------------------------
Metals & Mining 1.5%
------------------------------------
High-Grade Short-Term
Investments 3.8%
------------------------------------
Other 12.3%
------------------------------------
TOP FIVE ISSUERS (EXCLUDING
HIGH-GRADE SHORT-TERM INVESTMENTS)
(as a % of total investments)
------------------------------------
Cablevision Systems Corp. 2.8%
------------------------------------
LNR Property Corp. 2.7%
------------------------------------
Century Cable Holdings, LLC 2.5%
------------------------------------
Fidelity National 2.4%
------------------------------------
General Growth Properties, Inc. 2.3%
------------------------------------
10
Special Shareholder
MEETING REPORT
The Special Shareholder Meeting was held at The Northern Trust Bank, 50 S.
LaSalle St., Chicago, IL on July 26, 2005.
NSL JFR JRO
------------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Preferred Preferred Preferred
shares shares shares
voting together voting together voting together
as a class as a class as a class
====================================================================================================================================
APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENT WAS REACHED AS FOLLOWS:
For 27,116,330 44,078,801 27,323,375
Against 189,821 754,077 121,999
Abstain 189,052 388,842 199,565
------------------------------------------------------------------------------------------------------------------------------------
Total 27,495,203 45,221,720 27,644,939
====================================================================================================================================
APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT BETWEEN NUVEEN ASSET MANAGEMENT
AND SYMPHONY ASSET MANAGEMENT, LLC WAS REACHED AS FOLLOWS:
For 27,110,228 44,108,159 27,310,211
Against 210,789 745,954 123,942
Abstain 174,186 367,607 210,786
------------------------------------------------------------------------------------------------------------------------------------
Total 27,495,203 45,221,720 27,644,939
====================================================================================================================================
11
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
NUVEEN SENIOR INCOME FUND
NUVEEN FLOATING RATE INCOME FUND
NUVEEN FLOATING RATE INCOME OPPORTUNITY FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolio of investments, of Nuveen Senior Income Fund, Nuveen Floating Rate
Income Fund and Nuveen Floating Rate Income Opportunity Fund as of July 31,
2005, and the related statements of operations for the year then ended, the
statements of changes in net assets for the periods indicated therein, cash
flows for the year then ended, and the financial highlights for each of the
periods after July 31, 2003. 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. The financial highlights of the Nuveen Senior Income Fund for
each of the three years in the period ended July 31, 2003 were audited by other
auditors whose report dated September 18, 2003, expressed an unqualified opinion
on those financial highlights.
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 July 31, 2005, by correspondence with the custodian,
selling or agent banks and brokers or by other appropriate auditing procedures
where replies from selling or agent banks or 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 position of Nuveen
Senior Income Fund, Nuveen Floating Rate Income Fund and Nuveen Floating Rate
Income Opportunity Fund at July 31, 2005, the results of their operations for
the year then ended, changes in their net assets for the periods indicated
herein, cash flows for the year then ended, and their financial highlights for
each of the periods indicated herein, in conformity with U.S. generally accepted
accounting principles.
Ernst & Young LLP
September 14, 2005
12
Nuveen Senior Income Fund (NSL)
Portfolio of
INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
VARIABLE RATE SENIOR LOAN INTERESTS(2) - 136.9% (81.3% OF TOTAL ASSETS)
AEROSPACE & DEFENSE - 2.4% (1.4% OF TOTAL ASSETS)
$ 3,000 Mid-Western Aircraft Systems Inc., Term Loan B (c) TBD TBD B1 BB- $ 3,054,375
2,443 Vought Aircraft Industries, Inc., Term Loan 5.990% 12/22/11 Ba3 B+ 2,484,526
545 Vought Aircraft Industries, Inc., Tranche B, 5.840% 12/22/10 Ba3 B+ 553,636
Letter of Credit
------------------------------------------------------------------------------------------------------------------------------------
6,092,537
------------------------------------------------------------------------------------------------------------------------------------
AIRLINES - 2.4% (1.4% OF TOTAL ASSETS)
5,943 United Air Lines, Inc., DIP Term Loan (Tranche B) (b) 9.500% 3/31/06 N/R N/R 6,013,194
------------------------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS - 8.7% (5.2% OF TOTAL ASSETS)
2,425 Accuride Corporation, Term Loan 5.645% 1/31/10 B2 B- 2,448,723
4,224 Federal-Mogul Corporation, Term Loan A (b) 5.740% 2/24/04 N/R N/R 3,882,570
5,551 Federal-Mogul Corporation, Term Loan B (b) 5.990% 2/24/05 N/R N/R 5,104,685
2,000 Goodyear Tire & Rubber Company, Second Lien Term Loan 6.320% 4/30/10 B2 B+ 2,018,438
1,000 Goodyear Tire & Rubber Company, Term Loan 4.840% 4/30/10 B2 BB 1,007,857
3,046 MetalForming Technologies, Inc., Term Loan A (a)(b) 9.250% 9/30/07 N/R N/R 1,675,173
1,187 MetalForming Technologies, Inc., Term Loan B 9.250% 9/30/07 N/R N/R 652,942
(PIK) (a)(b)
3,042 Tenneco Automotive Inc., Term Loan B 5.540% 12/12/10 B1 B+ 3,084,887
1,336 Tenneco Automotive Inc., Term Loan B-1 5.590% 12/12/10 B1 B+ 1,355,136
723 United Components, Inc., Term Loan C 5.750% 6/30/10 B1 BB- 735,314
------------------------------------------------------------------------------------------------------------------------------------
21,965,725
------------------------------------------------------------------------------------------------------------------------------------
BEVERAGES - 3.3% (2.0% OF TOTAL ASSETS)
2,077 Constellation Brands, Inc., Term Loan 5.299% 11/30/11 Ba2 BB 2,111,844
6,109 Dr. Pepper/Seven UP Bottling Group, Inc., Term Loan B 5.534% 12/19/10 B1 N/R 6,202,051
------------------------------------------------------------------------------------------------------------------------------------
8,313,895
------------------------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS - 3.2% (1.9% OF TOTAL ASSETS)
1,000 Euramax Holdings Inc., Term Loan B 5.875% 6/21/12 B1 B+ 1,016,875
1,985 Nortek, Inc., Term Loan B 5.916% 8/27/11 B2 B 2,004,850
2,492 Stile Acquisition Corporation, Canadian Term Loan 5.902% 4/05/13 B2 BB- 2,500,971
2,496 Stile Acquisition Corporation, Term Loan B 5.657% 4/05/13 B2 BB- 2,505,232
------------------------------------------------------------------------------------------------------------------------------------
8,027,928
------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS - 6.4% (3.8% OF TOTAL ASSETS)
2,421 Celanese Holdings LLC, Term Loan C 5.740% 4/06/11 B1 B+ 2,465,875
1,995 GenTek Inc, Term Loan B 6.091% 2/28/11 B2 B+ 2,002,730
667 Headwaters Incorporated, Second Lien Term Loan 9.020% 9/01/12 B3 B- 686,389
930 Huntsman International LLC, Term Loan 6.400% 3/31/10 Ba3 BB- 933,558
3,990 Mosaic Company, Term Loan 5.130% 2/21/12 Ba2 BB+ 4,045,487
2,494 PQ Corporation, Term Loan 5.500% 2/10/12 B1 B+ 2,524,143
1,990 Rockwood Specialties Group, Inc., Tranche D 5.930% 12/10/12 B1 B+ 2,025,655
1,500 Wellman, Inc., First Lien Term Loan 7.210% 2/10/09 B1 B+ 1,530,000
------------------------------------------------------------------------------------------------------------------------------------
16,213,837
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 4.6% (2.7% OF TOTAL ASSETS)
1,486 Allied Waste North America, Inc., Letter of Credit 3.100% 3/21/12 B1 BB 1,497,356
3,895 Allied Waste North America, Inc., Term Loan B 5.538% 3/12/21 B1 BB 3,925,738
3,960 National Equipment Services, Inc., Term Loan 8.969% 8/17/10 B3 B 4,061,475
2,000 Williams Scotsman, Inc., Term Loan 5.981% 6/28/10 B2 B+ 2,026,250
------------------------------------------------------------------------------------------------------------------------------------
11,510,819
------------------------------------------------------------------------------------------------------------------------------------
13
Nuveen Senior Income Fund (NSL) (continued)
Portfolio of INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING - 0.8% (0.5% OF TOTAL ASSETS)
$ 2,000 Maxim Crane Works, Term Loan C 8.938% 1/28/12 N/R N/R $ 2,085,000
------------------------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING - 5.4% (3.2% OF TOTAL ASSETS)
4,975 Graham Packaging Company, L.P., Term Loan B 6.028% 10/07/11 B2 B 5,058,433
4,000 Graham Packaging Company, L.P., Term Loan C 7.750% 4/07/12 B2 CCC+ 4,125,834
437 Smurfit-Stone Container Corporation, 2.100% 11/01/11 Ba3 BB- 444,018
Deposit-Funded Commitment
2,004 Smurfit-Stone Container Corporation, Term Loan B 5.465% 11/01/11 Ba3 BB- 2,037,357
541 Smurfit-Stone Container Corporation, Term Loan C 5.375% 11/01/11 Ba3 BB- 550,030
1,470 United States Can Company, Term Loan B 7.648% 1/15/10 B3 B 1,477,407
------------------------------------------------------------------------------------------------------------------------------------
13,693,079
------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.3% (2.6% OF TOTAL ASSETS)
3,000 Fairpoint Communications, Inc., Term Loan 5.563% 2/15/12 B1 BB- 3,043,125
1,990 Intelsat, Ltd., Term Loan B 5.250% 7/28/11 B1 B 2,010,645
800 Qwest Corporation, Term Loan A 8.100% 6/30/07 Ba3 BB- 827,438
5,000 Qwest Corporation, Term Loan B 6.950% 6/30/10 Ba3 BB- 4,993,750
5,000 WCI Capital Corp., Term Loan B (a)(b) N/A 9/30/07 N/R N/R 75,000
------------------------------------------------------------------------------------------------------------------------------------
10,949,958
------------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 1.8% (1.1% OF TOTAL ASSETS)
1,500 Allegheny Energy Supply Company, LLC, Term Loan C (c) TBD TBD Ba2 BB 1,521,563
2,985 Calpine Construction Finance Company, L.P., 9.510% 8/31/09 B1 B 3,126,629
Term Loan B
------------------------------------------------------------------------------------------------------------------------------------
4,648,192
------------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.8% (0.5% OF TOTAL ASSETS)
1,696 Sensus Metering Systems Inc., Term Loan B-1 6.019% 12/17/10 B2 B+ 1,716,142
254 Sensus Metering Systems Inc., Term Loan B-2 6.165% 12/17/10 B2 B+ 257,421
------------------------------------------------------------------------------------------------------------------------------------
1,973,563
------------------------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 0.3% (0.1% OF TOTAL ASSETS)
628 Pride Offshore, Inc., Term Loan 5.090% 7/07/11 Ba1 BB+ 636,711
------------------------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS - 2.4% (1.4% OF TOTAL ASSETS)
5,000 Dole Holding Company, LLC, Term Loan 8.688% 7/22/10 Ba3 B 5,156,250
913 Michael Foods, Inc., Term Loan B 5.286% 11/20/10 B1 B+ 928,725
------------------------------------------------------------------------------------------------------------------------------------
6,084,975
------------------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES - 2.0% (1.2% OF TOTAL ASSETS)
800 Coffeyville Resources LLC, Letter of Credit 6.063% 6/24/12 B1 BB- 814,667
1,200 Coffeyville Resources LLC, Term Loan B 6.063% 6/24/12 B1 BB- 1,222,000
1,125 El Paso Corporation, Deposit-Funded Commitment 2.850% 11/23/09 B3 B 1,136,338
1,853 El Paso Corporation, Term Loan 6.240% 11/23/09 B3 B 1,877,248
------------------------------------------------------------------------------------------------------------------------------------
5,050,253
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE EQUIPMENT & SUPPLIES - 0.7% (0.4% OF TOTAL ASSETS)
1,849 Kinetic Concepts, Inc., Term Loan B-2 5.240% 8/11/10 Ba3 BB 1,871,179
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE PROVIDERS & SERVICES - 10.0% (5.9% OF TOTAL ASSETS)
5,389 Community Health Systems, Inc., Term Loan 5.070% 8/19/11 N/R BB- 5,468,430
5,000 Davita Inc., Term Loan B (c) TBD TBD B1 BB- 5,084,028
1,980 IASIS Healthcare LLC, Term Loan B 5.766% 6/22/11 B1 B+ 2,008,640
14
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE PROVIDERS & SERVICES (continued)
$ 3,500 Psychiatric Solutions, Term Loan B 5.338% 7/10/12 B1 B+ $ 3,555,780
996 Quintiles Transnational Corp., Term Loan B 5.240% 6/26/08 B1 BB- 1,002,868
2,993 Select Medical Corporation, Term Loan 5.042% 2/24/12 B1 BB- 3,008,398
2,985 Vanguard Health Holding Company I, LLC, 6.350% 9/23/11 B2 B 3,037,238
Initial Sub Tranche 2 Term Loan
1,985 Vanguard Health Holding Company I, LLC, Term Loan B 6.340% 9/23/11 B2 B 2,019,738
------------------------------------------------------------------------------------------------------------------------------------
25,185,120
------------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 17.6% (10.4% OF TOTAL ASSETS)
5,000 24 Hour Fitness Worldwide, Inc., Term Loan B 6.780% 6/06/05 B2 B 5,082,813
602 Ameristar Casinos, Inc., Incremental Term Loan 5.500% 12/20/06 Ba3 BB 610,453
1,773 Ameristar Casinos, Inc., Term Loan B-1 5.500% 12/20/06 Ba3 BB 1,796,220
1,985 Argosy Gaming Company, Term Loan B 6.750% 7/31/08 Ba1 BB 1,991,617
5,000 Burger King Corporation, Term Loan B 5.188% 7/17/12 Ba2 B+ 5,083,853
4,000 CCM Merger, Inc., Term Loan B (c) TBD TBD N/R N/R 4,056,250
1,990 Isle of Capri Casinos, Inc., Term Loan 5.189% 4/26/08 Ba2 BB- 2,013,943
4,429 Jack in the Box Inc., Term Loan 5.164% 1/09/10 Ba2 BB 4,485,532
7,990 OpBiz, LLC, Term Loan A 6.504% 8/31/10 B3 B- 8,014,656
20 OpBiz, LLC, Term Loan B (PIK) 7.504% 8/31/10 B3 B- 19,570
4,000 Penn National Gaming Inc., Term Loan B (c) TBD TBD Ba3 BB- 4,067,814
1,964 Resorts International, Term Loan B 5.990% 4/26/12 B2 B+ 1,989,355
427 Venetian Casino Resort, LLC, Delayed Draw Term Loan (e) 0.750% 6/15/11 B1 B+ 4,808
2,073 Venetian Casino Resort, LLC, Term Loan 5.240% 6/15/11 B1 B+ 2,100,779
259 Wyndham International, Inc., Letter of Credit 3.250% 5/10/11 B3 B 259,914
1,000 Wyndham International, Inc., Revolver (e) 6.625% 4/15/11 B3 B 111,389
2,735 Wyndham International, Inc., Term Loan B 6.625% 4/15/11 B3 B 2,753,668
------------------------------------------------------------------------------------------------------------------------------------
44,442,634
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES - 1.6% (1.0% OF TOTAL ASSETS)
3,931 Sealy Mattress Company, Term Loan D 5.129% 4/06/12 B1 B+ 3,970,650
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 0.8% (0.5% OF TOTAL ASSETS)
1,975 Prestige Brands, Inc., Term Loan B 5.380% 4/06/11 B1 B+ 1,996,395
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 0.4% (0.3% OF TOTAL ASSETS)
553 Covanta Energy Corporation, Letter of Credit 3.360% 1/22/07 B1 B+ 561,484
447 Covanta Energy Corporation, Term Loan B 6.460% 5/23/12 B1 B+ 454,980
------------------------------------------------------------------------------------------------------------------------------------
1,016,464
------------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 3.8% (2.3% OF TOTAL ASSETS)
9,589 Conseco, Inc., Term Loan 6.990% 6/22/10 B2 BB- 9,682,897
------------------------------------------------------------------------------------------------------------------------------------
IT SERVICES - 3.8% (2.2% OF TOTAL ASSETS)
4,425 Fidelity National, Term Loan B 5.100% 3/09/13 Ba3 BB 4,439,224
5,000 SunGard Data Systems Inc., Term Loan B (c) TBD TBD N/R N/R 5,070,313
------------------------------------------------------------------------------------------------------------------------------------
9,509,537
------------------------------------------------------------------------------------------------------------------------------------
MACHINERY - 1.3% (0.8% OF TOTAL ASSETS)
1,371 Dresser-Rand Group Inc., Term Loan 5.438% 10/10/10 B1 B+ 1,392,201
1,910 Rexnord Corporation, Replacement Term Loan 7.187% 11/25/09 B1 B+ 1,936,493
------------------------------------------------------------------------------------------------------------------------------------
3,328,694
------------------------------------------------------------------------------------------------------------------------------------
MEDIA - 25.1% (14.9% OF TOTAL ASSETS)
6,226 American Media Operations, Inc., Term Loan C 6.254% 4/01/07 B1 B 6,309,824
952 CanWest Media Inc., Term Loan E 5.638% 6/18/09 Ba2 B+ 965,880
6,000 Century Cable Holdings, LLC, Discretionary 8.250% 12/31/09 N/R N/R 5,941,500
Term Loan (b)
3,640 Century Cable Holdings, LLC, Revolver (b)(f) 7.250% 10/25/10 N/R N/R 3,570,613
4,944 Charter Communications Operating, LLC, Term Loan B 6.930% 4/07/11 B2 B 4,930,611
2,364 Dex Media East, LLC, Term Loan B 5.073% 11/10/08 Ba2 BB 2,398,207
15
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED ---------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
MEDIA (continued)
$ 4,585 Dex Media West, LLC, Term Loan B 5.130% 3/09/10 Ba2 BB $ 4,653,698
1,990 Emmis Operating Company, Term Loan 5.130% 11/10/11 Ba2 B+ 2,013,383
1,047 Gray Television, Inc., Term Loan C 5.010% 12/31/10 Ba1 B+ 1,054,454
2,432 Lamar Media Corp., Tranche D 5.063% 6/30/10 Ba2 BB- 2,462,321
5,000 Metro-Goldwyn-Mayer Studios, Inc., Term Loan B 5.740% 4/08/12 N/R N/R 5,060,000
2,038 PRIMEDIA Inc., Term Loan B 6.313% 6/30/09 N/R B 2,044,061
1,980 PRIMEDIA Inc., Term Loan C 7.813% 12/31/09 N/R B 1,990,210
4,348 R.H. Donnelley Inc., Tranche D 5.203% 6/30/11 Ba3 N/R 4,412,492
2,993 Rainbow Media Holdings LLC, Term Loan 6.130% 3/31/12 B1 BB+ 3,023,921
4,668 Regal Cinemas Corporation, Term Loan 5.240% 11/10/10 Ba3 BB- 4,723,012
1,733 Sun Media Corporation, Term Loan B 5.680% 2/07/09 Ba2 BB 1,756,432
3,000 UPC Financing Partnership, Term Loan H2 6.254% 9/30/12 B1 B 3,025,001
2,960 WMG Acquisition Corp., Term Loan 5.449% 2/27/11 B1 B+ 2,993,540
------------------------------------------------------------------------------------------------------------------------------------
63,329,160
------------------------------------------------------------------------------------------------------------------------------------
METALS & MINING - 2.0% (1.2% OF TOTAL ASSETS)
4,964 Amsted Industries Incorporated, Term Loan B 6.120% 10/15/10 B1 BB- 5,030,484
------------------------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES - 1.6% (0.9% OF TOTAL ASSETS)
875 NRG Energy, Inc., Credit-Linked Deposit 3.390% 12/24/11 Ba3 BB 886,016
1,119 NRG Energy, Inc., Term Loan 5.365% 12/20/11 Ba3 BB 1,133,467
1,990 Reliant Energy, Inc., Term Loan 6.070% 4/30/10 B1 B+ 2,015,031
------------------------------------------------------------------------------------------------------------------------------------
4,034,514
------------------------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 2.2% (1.3% OF TOTAL ASSETS)
1,575 Boise Cascade Holdings, LLC, Term Loan D 5.250% 3/29/11 Ba3 BB 1,600,692
3,000 NewPage Corporation, Term Loan B 6.379% 5/02/11 B1 B 3,060,000
1,000 White Birch Paper Company, Second Lien Term Loan 10.909% 4/08/13 B3 B- 1,004,167
------------------------------------------------------------------------------------------------------------------------------------
5,664,859
------------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 1.7% (1.0% OF TOTAL ASSETS)
2,246 Alpharma Operating Corporation, Term Loan A 5.210% 10/05/07 B1 B+ 2,244,511
1,995 Talecris Biotherapeutics Inc., Term Loan B 6.536% 3/31/10 N/R N/R 1,999,988
------------------------------------------------------------------------------------------------------------------------------------
4,244,499
------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 5.9% (3.5% OF TOTAL ASSETS)
1,906 General Growth Properties, Inc., Term Loan A 5.590% 10/28/04 Ba2 BB+ 1,925,682
4,976 General Growth Properties, Inc., Term Loan B 5.490% 11/12/08 Ba2 BB+ 5,047,018
4,900 LNR Property Corp., Term Loan 6.210% 2/03/08 B2 B+ 4,951,036
3,000 LNR Property Corp., Term Loan B 8.460% 2/03/08 B2 B+ 2,993,438
------------------------------------------------------------------------------------------------------------------------------------
14,917,174
------------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 5.1% (3.0% OF TOTAL ASSETS)
1,362 Micro Warehouse, Inc., Term Loan B (a)(b)(h) N/A 1/30/07 N/R N/R 27,260
3,000 Movie Gallery Inc., Term Loan B 6.490% 4/01/11 B1 B+ 3,030,938
6,090 Norwood Promotional Products, Inc., Term Loan A 9.750% 8/16/09 N/R N/R 6,028,811
5,362 Norwood Promotional Products, Inc., Term Loan B 1.000% 8/12/11 N/R N/R 1,836,614
2,000 TravelCenters of America Inc., Term Loan 5.090% 6/30/11 B1 BB 2,025,313
------------------------------------------------------------------------------------------------------------------------------------
12,948,936
------------------------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL - 3.7% (2.2% OF TOTAL ASSETS)
5,225 Jostens IH Corp., Term Loan C 5.938% 7/29/10 B1 B+ 5,309,906
4,000 William Carter Company, Term Loan B (d) 5.445% 7/17/12 B1 BB- 4,061,250
------------------------------------------------------------------------------------------------------------------------------------
9,371,156
------------------------------------------------------------------------------------------------------------------------------------
16
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS - 0.8% (0.5% OF TOTAL ASSETS)
$ 2,000 Ashtead Group Public Limited Company, Term Loan 5.563% 11/12/09 N/R BB- $ 2,030,000
------------------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Senior Loan Interests (cost $352,452,517) 345,834,018
------------------------------------------------------------------------------------------------------------------------------------
RATINGS**
PRINCIPAL STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS - 16.6% (9.8% OF TOTAL ASSETS)
HOTELS, RESTAURANTS & LEISURE - 7.5% (4.4% OF TOTAL ASSETS)
5,350 Mandalay Resort Group 6.450% 2/01/06 Ba2 BB+ 5,430,250
1,500 MGM Grand 7.250% 10/15/06 Ba1 BB+ 1,548,750
7,000 MGM Mirage 9.750% 6/01/07 Ba2 BB- 7,586,250
1,443 Park Place Entertainment 7.875% 12/15/05 Ba2 BB- 1,464,645
2,400 Park Place Entertainment 8.875% 9/15/08 Ba2 BB- 2,676,000
------------------------------------------------------------------------------------------------------------------------------------
18,705,895
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES - 1.2% (0.7% OF TOTAL ASSETS)
3,000 Standard Pacific Corporation 6.500% 10/01/08 Ba2 BB 3,075,000
------------------------------------------------------------------------------------------------------------------------------------
MACHINERY - 0.8% (0.5% OF TOTAL ASSETS)
2,000 Navistar International, Series B 9.375% 6/01/06 Ba3 BB- 2,075,000
------------------------------------------------------------------------------------------------------------------------------------
MEDIA - 4.4% (2.6% OF TOTAL ASSETS)
1,930 AMC Entertainment 9.875% 2/01/12 B3 CCC+ 1,958,950
2,000 Cablevision Systems Corp, Floating Rate Note, 7.880% 4/01/09 B3 B+ 2,072,500
4.500% plus six-month LIBOR
4,500 Emmis Operating Company, Floating Rate Note, 9.314% 6/15/12 B3 B- 4,528,125
5.875% plus three-month LIBOR, 144A
2,500 PRIMEDIA Inc., Floating Rate Note, 5.375% 8.164% 5/15/10 B3 B 2,650,000
plus three-month LIBOR
------------------------------------------------------------------------------------------------------------------------------------
11,209,575
------------------------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 2.7% (1.6% OF TOTAL ASSETS)
6,417 Tesoro Petroleum Corporation 8.000% 4/15/08 Ba2 BBB- 6,810,041
------------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds (cost $41,872,177) 41,875,511
--------------------------------------------------------------------------------------------------------------------
MARKET
SHARES (000) DESCRIPTION(1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EQUITIES - 0.0% (0.0% OF TOTAL ASSETS)
AUTO COMPONENTS - 0.0% (0.0% OF TOTAL ASSETS)
280 MetalForming Technologies, Inc. (b)(h) --
------------------------------------------------------------------------------------------------------------------------------------
Total Equities (cost $0) --
--------------------------------------------------------------------------------------------------------------------
WARRANTS - 0.0% (0.0% OF TOTAL ASSETS)
MULTI-UTILITIES - 0.0% (0.0% OF TOTAL ASSETS)
6 Reliant Energy, Inc. 49,970
------------------------------------------------------------------------------------------------------------------------------------
Total Warrants (cost $40,254) 49,970
--------------------------------------------------------------------------------------------------------------------
17
Nuveen Senior Income Fund (NSL) (continued)
Portfolio of INVESTMENTS July 31, 2005
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HIGH-GRADE SHORT-TERM INVESTMENTS - 13.2% (7.8% OF TOTAL ASSETS)
$ 33,314 State Street Bank Euro Dollar Time Deposit, 3.000%, 8/01/05 $33,314,445
============------------------------------------------------------------------------------------------------------------------------
Total High-Grade Short-Term Investments (cost $33,314,445) 33,314,445
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $427,679,393) - 166.7% (98.9% of total assets) 421,073,944
--------------------------------------------------------------------------------------------------------------------
Borrowings Payable - (40.8)%+ (103,000,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (7.7)% (19,476,061)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (18.2)% (46,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 252,597,883
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Senior Loans in which the Fund invests generally pay interest at rates
which are periodically adjusted by reference to a base short-term,
floating lending rate plus an assigned fixed rate. These floating
lending rates are generally (i) the lending rate referenced by the
London Inter-Bank Offered Rate ("LIBOR"), or (ii) the prime rate
offered by one or more major United States banks.
Senior Loans may be considered restricted in that the Fund ordinarily
is contractually obligated to receive approval from the Agent Bank
and/or Borrower prior to the disposition of a Senior Loan.
* Senior Loans in the Fund's portfolio generally are subject to
mandatory and/or optional prepayment. Because of these mandatory
prepayment conditions and because there may be significant economic
incentives for a Borrower to prepay, prepayments of Senior Loans in
the Fund's portfolio may occur. As a result, theactual remaining
maturity of Senior Loans held in the Fund's portfolio may be
substantially less than the stated maturities shown.
** Ratings (not covered by the report of independent registered public
accounting firm) below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered to be below investment grade.
(a) At or subsequent to July 31, 2005, this issue was non-income
producing.
(b) At or subsequent to July 31, 2005, this issue was under the protection
of the Federal Bankruptcy Court.
(c) Purchased on a when-issued or delayed delivery basis.
(d) Portion purchased on a when-issued or delayed delivery basis.
(e) Position represents an unfunded loan commitment outstanding at July
31, 2005.
(f) Position represents a participation commitment outstanding at July 31,
2005.
(h) Investment valued at fair value using methods determined in good faith
by, or at the discretion of, the Board of Trustees.
144A 144A securities are those which are exempt from registration under
Rule 144A of the Securities Act of 1933, as amended. These securities
may only be resold in transactions exempt from registration which are
normally those transactions with qualified institutional buyers.
TBD Senior Loan purchased on a when-issued or delayed delivery basis.
Certain details associated with this purchase are not known prior to
the settlement date of the transaction. In addition, Senior Loans
typically trade without accrued interest and therefore a weighted
average coupon rate is not available prior to settlement. At
settlement, if still unknown, the borrower or counterparty will
provide the Fund with the final weighted average coupon rate and
maturity date.
(PIK) In lieu of cash payment, interest accrued on "Payment in Kind"
investment increases principal outstanding.
N/R Investment is not rated.
+ Borrowings payable as a percentage of total assets is (24.2%).
See accompanying notes to financial statements.
18
Nuveen Floating Rate Income Fund (JFR)
Portfolio of
INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
VARIABLE RATE SENIOR LOAN INTERESTS(2) - 129.0% (76.6% OF TOTAL ASSETS)
AEROSPACE & DEFENSE - 1.4% (0.8% OF TOTAL ASSETS)
$ 6,000 Mid-Western Aircraft Systems Inc., Term Loan TBD TBD B1 BB- $ 6,108,750
B (b)
2,443 Vought Aircraft Industries, Inc., Term Loan 5.990% 12/22/11 Ba3 B+ 2,484,526
545 Vought Aircraft Industries, Inc., Tranche B, 5.840% 12/22/10 Ba3 B+ 553,636
Letter of Credit
------------------------------------------------------------------------------------------------------------------------------------
9,146,912
------------------------------------------------------------------------------------------------------------------------------------
AIRLINES - 1.8% (1.1% OF TOTAL ASSETS)
11,885 United Air Lines, Inc., DIP Term Loan (Tranche B) (a) 9.500% 3/31/06 N/R N/R 12,026,387
------------------------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS - 4.6% (2.7% OF TOTAL ASSETS)
5,659 Accuride Corporation, Term Loan 5.645% 1/31/10 B2 B- 5,713,687
17,662 Federal-Mogul Corporation, Term Loan A (a) 5.740% 2/24/04 N/R N/R 16,232,482
2,000 Federal-Mogul Corporation, Term Loan B (a) 5.990% 2/24/05 N/R N/R 1,839,286
6,000 Goodyear Tire & Rubber Company, Second 6.320% 4/30/10 B2 B+ 6,055,314
Lien Term Loan
1,000 Goodyear Tire & Rubber Company, Term Loan 4.840% 4/30/10 B2 BB 1,007,856
------------------------------------------------------------------------------------------------------------------------------------
30,848,625
------------------------------------------------------------------------------------------------------------------------------------
BEVERAGES - 1.8% (1.1% OF TOTAL ASSETS)
2,493 Constellation Brands, Inc., Term Loan 5.299% 11/30/11 Ba2 BB 2,534,214
9,144 Dr. Pepper/Seven UP Bottling Group, Inc., Term 5.534% 12/19/10 B1 N/R 9,283,365
Loan B
------------------------------------------------------------------------------------------------------------------------------------
11,817,579
------------------------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS - 5.2% (3.1% OF TOTAL ASSETS)
14,888 Nortek, Inc., Term Loan B 5.916% 8/27/11 B2 B 15,036,375
4,675 PP Holding Corporation, Term Loan 5.740% 11/12/11 B1 B 4,708,115
7,475 Stile Acquisition Corporation, Canadian Term Loan 5.902% 4/05/13 B2 BB- 7,502,914
7,488 Stile Acquisition Corporation, Term Loan B 5.657% 4/05/13 B2 BB- 7,515,696
------------------------------------------------------------------------------------------------------------------------------------
34,763,100
------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS - 8.2% (4.9% OF TOTAL ASSETS)
7,667 Celanese Holdings LLC, Term Loan C 5.740% 4/06/11 B1 B+ 7,808,604
667 Headwaters Incorporated, Second Lien Term Loan 9.020% 9/01/12 B3 B- 686,389
1,383 Headwaters Incorporated, Term Loan B 5.907% 4/30/11 B1 B+ 1,399,203
12,840 Hercules Incorporated, Term Loan 5.306% 10/08/10 Ba1 BB 13,011,710
10,368 Huntsman International LLC, Term Loan B-1 5.750% 12/31/10 Ba3 B 10,400,792
7,920 Lyondell-Citgo Refining LP, Term Loan 5.509% 5/21/07 B1 N/R 8,043,750
12,935 Rockwood Specialties Group, Inc., Tranche D 5.930% 12/10/12 B1 B+ 13,166,756
------------------------------------------------------------------------------------------------------------------------------------
54,517,204
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 4.6% (2.7% OF TOTAL ASSETS)
4,365 Allied Waste North America, Inc., Letter of Credit 3.100% 3/21/12 B1 BB 4,396,783
11,436 Allied Waste North America, Inc., Term Loan B 5.538% 3/12/21 B1 BB 11,527,394
6,930 National Equipment Services, Inc., Term Loan 8.969% 8/17/10 B3 B 7,107,581
5,500 Williams Scotsman, Inc., Term Loan B 5.981% 6/28/10 B2 B+ 5,572,188
2,000 Xerium Technologies Inc., Term Loan B 5.099% 5/18/12 B1 BB- 2,030,625
------------------------------------------------------------------------------------------------------------------------------------
30,634,571
------------------------------------------------------------------------------------------------------------------------------------
19
Nuveen Floating Rate Income Fund (JFR) (continued)
Portfolio of INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING - 6.3% (3.7% OF TOTAL ASSETS)
$ 5,816 BWAY Corporation, Term Loan B 5.750% 6/30/11 B1 B+ $ 5,905,562
17,910 Graham Packaging Company, L.P., Term Loan B 6.028% 10/07/11 B2 B 18,210,360
5,000 Graham Packaging Company, L.P., Term Loan C 7.750% 4/07/12 B2 CCC+ 5,157,293
2,176 Owens-Illinois Group, Inc., Term Loan B 5.190% 4/01/08 B1 N/R 2,198,730
699 Smurfit-Stone Container Corporation, 2.100% 11/01/11 Ba3 BB- 710,429
Deposit-Funded Commitment
5,555 Smurfit-Stone Container Corporation, Term Loan B 5.465% 11/01/11 Ba3 BB- 5,647,489
1,709 Smurfit-Stone Container Corporation, Term Loan C 5.375% 11/01/11 Ba3 BB- 1,737,689
2,453 United States Can Company, Term Loan B 7.648% 1/15/10 B3 B 2,464,845
------------------------------------------------------------------------------------------------------------------------------------
42,032,397
------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 2.8% (1.7% OF TOTAL ASSETS)
5,500 Fairpoint Communications, Inc., Term Loan 5.563% 2/15/12 B1 BB- 5,579,063
3,980 Intelsat, Ltd., Term Loan B 5.250% 7/28/11 B1 B 4,021,293
2,000 Madison River Capital LLC, Term Loan (b) TBD TBD N/R N/R 2,035,417
5,500 Qwest Corporation, Term Loan B 6.950% 6/30/10 Ba3 BB- 5,493,125
1,450 Valor Telecommunications Enterprises, LLC, Term 5.490% 2/14/12 Ba3 BB- 1,469,291
Loan
------------------------------------------------------------------------------------------------------------------------------------
18,598,189
------------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 2.8% (1.7% OF TOTAL ASSETS)
8,500 Allegheny Energy Supply Company, LLC, Term Loan (b) TBD TBD Ba2 BB 8,622,188
9,899 Calpine Construction Finance Company, L.P., Term Loan B 9.510% 8/31/09 B1 B 10,369,724
------------------------------------------------------------------------------------------------------------------------------------
18,991,912
------------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.7% (0.4% OF TOTAL ASSETS)
4,729 Mueller Group, Inc., Term Loan 6.240% 4/25/11 B2 B+ 4,770,442
------------------------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 0.7% (0.4% OF TOTAL ASSETS)
4,712 Pride Offshore, Inc., Term Loan 5.090% 7/07/11 Ba1 BB+ 4,775,332
------------------------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 1.7% (1.0% OF TOTAL ASSETS)
10,878 The Jean Coutu Group, Inc., Term Loan B 5.937% 7/30/11 B1 BB 11,064,559
------------------------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS - 0.8% (0.5% OF TOTAL ASSETS)
5,000 Dole Holding Company, LLC, Term Loan 8.688% 7/22/10 Ba3 B 5,156,250
------------------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES - 1.9% (1.2% OF TOTAL ASSETS)
800 Coffeyville Resources LLC, Letter of Credit 6.063% 6/24/12 B1 BB- 814,667
1,200 Coffeyville Resources LLC, Term Loan B 6.063% 6/24/12 B1 BB- 1,222,000
1,875 El Paso Corporation, Deposit-Funded Commitment 2.850% 11/23/09 B3 B 1,893,897
9,016 El Paso Corporation, Term Loan 6.240% 11/23/09 B3 B 9,135,943
------------------------------------------------------------------------------------------------------------------------------------
13,066,507
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE EQUIPMENT & SUPPLIES - 0.8% (0.5% OF TOTAL ASSETS)
5,447 Kinetic Concepts, Inc., Term Loan B-2 5.240% 8/11/10 Ba3 BB 5,511,728
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE PROVIDERS & SERVICES - 7.4% (4.4% OF TOTAL ASSETS)
4,925 Beverly Enterprises, Inc., Term Loan B 6.184% 10/22/08 Ba3 BB 4,954,084
15,000 Davita Inc., Term Loan B (b) TBD TBD B1 BB- 15,252,083
13,859 IASIS Healthcare LLC, Term Loan B 5.766% 6/22/11 B1 B+ 14,059,048
990 Lifepoint Hospitals Holdings, Inc., Term Loan B 5.013% 9/30/11 Ba3 BB 1,000,077
2,993 Select Medical Corporation, Term Loan 5.042% 2/24/12 B1 BB- 3,008,398
5,970 Vanguard Health Holding Company I, LLC, Initial 6.350% 9/23/11 B2 B 6,074,475
Sub Tranche 2 Term Loan
2,000 Vanguard Health Holding Company I, LLC, Delayed 2.255% 9/23/11 B2 B 30,000
Draw Term Loan
4,963 Vanguard Health Holding Company I, LLC, Term Loan B 6.340% 9/23/11 B2 B 5,049,344
------------------------------------------------------------------------------------------------------------------------------------
49,427,509
------------------------------------------------------------------------------------------------------------------------------------
20
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 11.2% (6.7% OF TOTAL ASSETS)
$ 8,000 24 Hour Fitness Worldwide, Inc., Term Loan B 6.780% 6/06/05 B2 B $ 8,132,500
1,084 Ameristar Casinos, Inc., Incremental Term Loan 5.500% 12/20/06 Ba3 BB 1,098,815
3,099 Ameristar Casinos, Inc., Term Loan B-1 5.500% 12/20/06 Ba3 BB 3,139,885
5,940 Boyd Gaming Corporation, Term Loan B 4.635% 6/30/11 Ba2 BB 6,006,207
2,970 Jack in the Box Inc., Term Loan 5.164% 1/09/10 Ba2 BB 3,007,977
14,481 OpBiz, LLC, Term Loan A 6.504% 8/31/10 B3 B- 14,526,564
35 OpBiz, LLC, Term Loan B (PIK) 7.504% 8/31/10 B3 B- 35,470
10,000 Penn National Gaming Inc., Term Loan B (b) TBD TBD Ba3 BB- 10,169,535
Loan
9,950 Universal City Development Partners, LTD, Term Loan 5.460% 6/09/11 Ba3 BB- 10,082,668
1,709 Venetian Casino Resort, LLC, Delayed Draw Term 0.750% 6/15/11 B1 B+ 19,231
Loan (c)
8,290 Venetian Casino Resort, LLC, Term Loan 5.240% 6/15/11 B1 B+ 8,403,114
862 Wyndham International, Inc., Letter of Credit 3.250% 5/10/11 B3 B 866,379
2,000 Wyndham International, Inc., Revolver (c) 6.625% 4/15/11 B3 B 222,778
9,115 Wyndham International, Inc., Term Loan B 6.625% 4/15/11 B3 B 9,178,889
------------------------------------------------------------------------------------------------------------------------------------
74,890,012
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES - 2.6% (1.5% OF TOTAL ASSETS)
17,130 Sealy Mattress Company, Term Loan D 5.129% 4/06/12 B1 B+ 17,301,289
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 1.5% (0.9% OF TOTAL ASSETS)
10,001 Prestige Brands, Inc., Term Loan B 5.359% 4/06/11 B1 B+ 10,108,932
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 0.5% (0.3% OF TOTAL ASSETS)
1,659 Covanta Energy Corporation, Letter of Credit 3.360% 1/22/07 B1 B+ 1,684,451
1,341 Covanta Energy Corporation, Term Loan B 6.460% 5/23/12 B1 B+ 1,364,939
------------------------------------------------------------------------------------------------------------------------------------
3,049,390
------------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 4.1% (2.4% OF TOTAL ASSETS)
26,849 Conseco, Inc., Term Loan 6.990% 6/22/10 B2 BB- 27,112,111
------------------------------------------------------------------------------------------------------------------------------------
IT SERVICES - 5.0% (3.1% OF TOTAL ASSETS)
19,614 Fidelity National, Term Loan B 5.100% 3/09/13 Ba3 BB 19,676,561
14,000 SunGard Data Systems Inc., Term Loan B (b) TBD TBD N/R N/R 14,196,875
------------------------------------------------------------------------------------------------------------------------------------
33,873,436
------------------------------------------------------------------------------------------------------------------------------------
MACHINERY - 0.7% (0.4% OF TOTAL ASSETS)
2,056 Dresser-Rand Group Inc., Term Loan 5.438% 10/10/10 B1 B+ 2,088,301
2,238 Terex Corporation, Term Loan B 5.680% 7/03/09 B1 BB- 2,270,060
------------------------------------------------------------------------------------------------------------------------------------
4,358,361
------------------------------------------------------------------------------------------------------------------------------------
MARINE - 0.8% (0.4% OF TOTAL ASSETS)
4,950 Horizon Lines, LLC, Term Loan 5.990% 7/07/11 B2 B 5,022,186
------------------------------------------------------------------------------------------------------------------------------------
MEDIA - 29.2% (17.4% OF TOTAL ASSETS)
1,929 American Media Operations, Inc., Term Loan C 6.254% 4/01/07 B1 B 1,955,154
17,000 Century Cable Holdings, LLC, Discretionary Term 8.250% 12/31/09 N/R N/R 16,834,250
Loan (a)
7,000 Century Cable Holdings, LLC, Revolver (a) 7.250% 10/25/10 N/R N/R 6,866,563
2,000 Century Cable Holdings, LLC, Term Loan (a) 8.250% 6/30/09 N/R N/R 1,982,321
11,985 Charter Communications Operating, LLC, Term Loan A 6.680% 4/27/10 B2 B 11,900,029
9,888 Charter Communications Operating, LLC, Term Loan B 6.930% 4/07/11 B2 B 9,861,223
2,311 Dex Media East, LLC, Term Loan B 5.083% 11/10/08 Ba2 BB 2,344,533
9,257 Dex Media West, LLC, Term Loan B 5.130% 3/09/10 Ba2 BB 9,396,218
4,667 DirecTV Group, Term Loan B 4.909% 4/08/13 Ba1 BB 4,720,415
15,913 Emmis Operating Company, Term Loan 5.130% 11/10/11 Ba2 B+ 16,099,491
11,620 Loews Cineplex Entertainment Corporation, Term 5.640% 6/30/11 B1 B 11,715,359
Loan B
25,000 Metro-Goldwyn-Mayer Studios, Inc., Term Loan B 5.740% 4/08/12 N/R N/R 25,300,000
16,849 Panamsat Corporation, Term Loan B-1 5.650% 8/20/11 Ba3 BB+ 17,132,333
4,348 R.H. Donnelley Inc., Tranche D 5.203% 6/30/11 Ba3 N/R 4,412,492
21
Nuveen Floating Rate Income Fund (JFR) (continued)
Portfolio of INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
MEDIA (continued)
$ 4,988 Rainbow Media Holdings LLC, Term Loan 6.130% 3/31/12 B1 BB+ $ 5,039,869
16,562 Regal Cinemas Corporation, Term Loan 5.240% 11/10/10 Ba3 BB- 16,759,794
998 Spanish Broadcasting System Inc., Term Loan B 5.490% 6/10/10 B1 B+ 1,012,463
11,000 UPC Financing Partnership, Term Loan H2 6.254% 9/30/12 B1 B 11,091,669
20,734 WMG Acquisition Corp., Term Loan 5.449% 2/27/11 B1 B+ 20,959,788
------------------------------------------------------------------------------------------------------------------------------------
195,383,964
------------------------------------------------------------------------------------------------------------------------------------
METALS & MINING - 3.2% (1.9% OF TOTAL ASSETS)
7,343 Amsted Industries Incorporated, Term Loan B 6.120% 10/15/10 B1 BB- 7,440,408
13,515 Foundation PA Coal Company, Term Loan B 5.544% 7/30/11 Ba3 BB- 13,761,873
------------------------------------------------------------------------------------------------------------------------------------
21,202,281
------------------------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES - 2.4% (1.4% OF TOTAL ASSETS)
2,188 NRG Energy, Inc., Credit-Linked Deposit 3.390% 12/24/11 Ba3 BB 2,215,040
2,798 NRG Energy, Inc., Term Loan 5.365% 12/20/11 Ba3 BB 2,833,668
10,945 Reliant Energy, Inc., Term Loan 6.070% 4/30/10 B1 B+ 11,082,671
------------------------------------------------------------------------------------------------------------------------------------
16,131,379
------------------------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 0.2% (0.1% OF TOTAL ASSETS)
1,000 Kerr McGee, Term Loan B-2 5.790% 5/24/11 Ba3 BB+ 1,018,466
------------------------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 1.9% (1.1% OF TOTAL ASSETS)
6,215 Boise Cascade Holdings, L.L.C., Term Loan D 5.250% 3/29/11 Ba3 BB 6,316,309
3,000 NewPage Corporation, Term Loan B 6.379% 5/02/11 B1 B 3,060,000
3,000 White Birch Paper Company, Second Lien Term Loan 10.909% 4/08/13 B3 B- 3,012,500
------------------------------------------------------------------------------------------------------------------------------------
12,388,809
------------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 0.7% (0.4% OF TOTAL ASSETS)
4,988 Talecris Biotherapeutics Inc., Term Loan B 6.536% 3/31/10 N/R N/R 4,999,968
------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 9.7% (5.8% OF TOTAL ASSETS)
20,685 General Growth Properties, Inc., Term Loan B 5.490% 11/12/08 Ba2 BB+ 20,979,261
21,557 LNR Property Corp., Term Loan 6.210% 2/03/08 B2 B+ 21,784,560
2,000 LNR Property Corp., Term Loan B 8.460% 2/03/08 B2 B+ 1,995,625
12,000 Macerich Company, Incremental Term 4.890% 4/25/06 N/R N/R 12,015,000
8,000 Macerich Company, Term Loan 6.750% 4/25/10 N/R N/R 8,030,000
------------------------------------------------------------------------------------------------------------------------------------
64,804,446
------------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 0.6% (0.3% OF TOTAL ASSETS)
3,000 Movie Gallery Inc., Term Loan B 6.490% 4/01/11 B1 B+ 3,030,938
1,000 TravelCenters of America Inc., Term Loan 5.090% 6/30/11 B1 BB 1,012,656
------------------------------------------------------------------------------------------------------------------------------------
4,043,594
------------------------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL - 0.7% (0.4% OF TOTAL ASSETS)
4,750 Jostens IH Corp., Term Loan C 5.938% 7/29/10 B1 B+ 4,827,187
------------------------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS - 0.5% (0.2% OF TOTAL ASSETS)
3,000 Ashtead Group Public Limited Company, Term Loan 5.563% 11/12/09 N/R BB- 3,045,000
------------------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Senior Loan Interests (cost $853,716,819) 860,710,014
------------------------------------------------------------------------------------------------------------------------------------
RATINGS**
PRINCIPAL STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS - 23.1% (13.7% OF TOTAL ASSETS)
CONTAINERS & PACKAGING - 0.6% (0.4% OF TOTAL ASSETS)
3,795 Smurfit Capital Funding Corporation 6.750% 11/20/05 B1 BB- 3,813,975
------------------------------------------------------------------------------------------------------------------------------------
22
RATINGS**
PRINCIPAL STATED -------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.8% (0.5% OF TOTAL ASSETS)
$ 5,000 Qwest Corporation, 3.250% plus three-month 6.671% 6/15/13 Ba3 BB- $ 5,250,000
LIBOR, 144A
------------------------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS - 0.5% (0.3% OF TOTAL ASSETS)
1,528 Dole Foods Co 8.625% 5/01/09 B2 B+ 1,650,240
1,780 Dole Foods Co 8.875% 3/15/11 B2 B+ 1,917,950
------------------------------------------------------------------------------------------------------------------------------------
3,568,190
------------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 9.9% (5.8% OF TOTAL ASSETS)
9,505 Aztar Corporation 9.000% 8/15/11 Ba3 B+ 10,312,925
12,330 Harrahs Entertainment 7.875% 12/15/05 Ba1 BB+ 12,484,125
2,000 MGM Grand 7.250% 10/15/06 Ba1 BB+ 2,065,000
5,425 MGM Mirage 9.750% 6/01/07 Ba2 BB- 5,879,344
7,900 Mohegan Tribal Gaming 8.000% 4/01/12 Ba1 BB 8,482,625
11,197 Park Place Entertainment 7.875% 12/15/05 Ba2 BB- 11,364,955
2,000 Park Place Entertainment 8.500% 11/15/06 Ba1 BB+ 2,099,330
12,076 Park Place Entertainment 9.375% 2/15/07 Ba2 BB- 12,860,940
------------------------------------------------------------------------------------------------------------------------------------
65,549,244
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES - 3.7% (2.2% OF TOTAL ASSETS)
5,000 Beazer Homes USA 8.375% 4/15/12 Ba1 BB 5,393,750
2,000 K. Hovnanian Enterprises 10.500% 10/01/07 Ba2 BB 2,220,000
8,000 K. Hovnanian Enterprises 8.000% 4/01/12 Ba2 BB 8,580,000
5,000 KB Home 7.750% 2/01/10 Ba2 BB- 5,319,745
3,000 Standard Pacific Corporation 9.500% 9/15/10 Ba2 BB 3,172,500
------------------------------------------------------------------------------------------------------------------------------------
24,685,995
------------------------------------------------------------------------------------------------------------------------------------
MACHINERY - 2.1% (1.2% OF TOTAL ASSETS)
13,400 Navistar International, Series B 9.375% 6/01/06 Ba3 BB- 13,902,500
------------------------------------------------------------------------------------------------------------------------------------
MEDIA - 3.4% (2.0% OF TOTAL ASSETS)
10,000 Cablevision Systems Corp, Floating Rate Note, 7.880% 4/01/09 B3 B+ 10,362,500
4.500% plus six-month LIBOR
7,500 Emmis Operating Company, Floating Rate Note, 9.314% 6/15/12 B3 B- 7,546,875
5.875% plus three-month LIBOR, 144A
5,000 Loews Cineplex Entertainment Corporation 9.000% 8/01/14 B3 CCC+ 4,900,000
------------------------------------------------------------------------------------------------------------------------------------
22,809,375
------------------------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 0.6% (0.4% OF TOTAL ASSETS)
4,000 Tesoro Petroleum Corporation 8.000% 4/15/08 Ba2 BBB- 4,245,000
------------------------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 1.5% (0.9% OF TOTAL ASSETS)
5,000 Georgia Pacific 8.125% 5/15/11 Ba3 BB+ 5,637,500
4,000 Georgia Pacific 9.375% 2/01/13 Ba2 BB+ 4,540,000
------------------------------------------------------------------------------------------------------------------------------------
10,177,500
------------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds (cost $154,683,643) 154,001,779
--------------------------------------------------------------------------------------------------------------------
MARKET
SHARES (000) DESCRIPTION(1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WARRANTS - 0.0% (0.0% OF TOTAL ASSETS)
MULTI-UTILITIES - 0.0% (0.0% OF TOTAL ASSETS)
36 Reliant Energy, Inc. 320,163
------------------------------------------------------------------------------------------------------------------------------------
Total Warrants (cost $257,911) 320,163
--------------------------------------------------------------------------------------------------------------------
23
Nuveen Floating Rate Income Fund (JFR) (continued)
Portfolio of INVESTMENTS July 31, 2005
RATINGS**
PRINCIPAL STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) MATURITY MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
HIGH-GRADE SHORT-TERM INVESTMENTS - 14.0% (8.3% OF TOTAL ASSETS)
U.S. TREASURY BILLS - 0.4% (0.3% OF TOTAL ASSETS)
$ 3,000 U.S. Treasury Bill, 3.290% (DES) 10/27/05 Aaa AAA $ 2,977,743
------------------------------------------------------------------------------------------------------------------------------------
EURO DOLLAR TIME DEPOSITS - 13.6% (8.0% OF TOTAL ASSETS)
$ 90,274 State Street Bank Euro Dollar Time Deposit, 3.000%, 8/01/05 90,273,609
=============-----------------------------------------------------------------------------------------------------------------------
Total High-Grade Short-Term Investments (cost $93,251,352) 93,251,352
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,101,909,725) - 166.1% (98.6% of total assets) 1,108,283,308
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (6.1)% (41,089,419)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value (60.0)% (400,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $667,193,889
====================================================================================================================
SELECT AGGREGATE MARKET INDEX ("SAMI")
The Fund held the following SAMIs at July 31, 2005:
NOTIONAL TERMINATION UNREALIZED
DESCRIPTION COUNTERPARTY AMOUNT FIXED RATE DATE APPRECIATION
------------------------------------------------------------------------------------------------------------------------------------
SAMI Index II Credit Suisse First Boston $ 950,000 2.300% 3/20/09 $ 5,003
SAMI Index III Credit Suisse First Boston 7,000,000 2.150% 12/20/09 41,783
------------------------------------------------------------------------------------------------------------------------------------
$ 46,786
====================================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Senior Loans in which the Fund invests generally pay interest at rates
which are periodically adjusted by reference to a base short-term,
floating lending rate plus an assigned fixed rate. These floating
lending rates are generally (i) the lending rate referenced by the
London Inter-Bank Offered Rate ("LIBOR"), or (ii) the prime rate
offered by one or more major United States banks.
Senior Loans may be considered restricted in that the Fund ordinarily
is contractually obligated to receive approval from the Agent Bank
and/or Borrower prior to the disposition of a Senior Loan.
* Senior Loans in the Fund's portfolio generally are subject to
mandatory and/or optional prepayment. Because of these mandatory
prepayment conditions and because there may be significant economic
incentives for a Borrower to prepay, prepayments of Senior Loans in
the Fund's portfolio may occur. As a result, the actual remaining
maturity of Senior Loans held in the Fund's portfolio may be
substantially less than the stated maturities shown.
** Ratings (not covered by the report of independent registered public
accounting firm) below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered to be below investment grade.
(a) At or subsequent to July 31, 2005, this issue was under the protection
of the Federal Bankruptcy Court.
(b) Purchased on a when-issued or delayed delivery basis.
(c) Position represents an unfunded loan commitment outstanding at July
31, 2005.
144A 144A securities are those which are exempt from registration under
Rule 144A of the Securities Act of 1933, as amended. These securities
may only be resold in transactions exempt from registration which are
normally those transactions with qualified institutional buyers.
TBD Senior Loan purchased on a when-issued or delayed delivery basis.
Certain details associated with this purchase are not known prior to
the settlement date of the transaction. In addition, Senior Loans
typically trade without accrued interest and therefore a weighted
average coupon rate is not available prior to settlement. At
settlement, if still unknown, the borrower or counterparty will
provide the Fund with the final weighted average coupon rate and
maturity date.
(DES) Investment has been designated as collateral for a portion of the
SAMI investments.
(PIK) In lieu of cash payment, interest accrued on "Payment in Kind"
investment increases principal outstanding.
N/R Investment is not rated.
See accompanying notes to financial statements.
24
Nuveen Floating Rate Income Opportunity Fund (JRO)
Portfolio of
INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
VARIABLE RATE SENIOR LOAN INTERESTS(2) - 132.6% (79.2% OF TOTAL ASSETS)
AEROSPACE & DEFENSE - 2.4% (1.4% OF TOTAL ASSETS)
$ 9,500 K & F Industries, Inc., Term Loan B 6.036% 11/18/12 B2 B+ $ 9,643,688
------------------------------------------------------------------------------------------------------------------------------------
AIRLINES - 2.4% (1.4% OF TOTAL ASSETS)
9,316 United Air Lines, Inc., DIP Term Loan (Tranche B) (a) 9.500% 3/31/06 N/R N/R 9,426,981
------------------------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS - 3.3% (2.0% OF TOTAL ASSETS)
3,234 Accuride Corporation, Term Loan 5.645% 1/31/10 B2 B- 3,264,964
5,499 Federal-Mogul Corporation, Revolver (a)(d) 5.237% 2/05/05 N/R N/R 4,743,928
4,000 Goodyear Tire & Rubber Company, Second Lien Term 6.320% 4/30/10 B2 B+ 4,036,876
Loan
1,000 Goodyear Tire & Rubber Company, Term Loan 4.840% 4/30/10 B2 BB 1,007,857
------------------------------------------------------------------------------------------------------------------------------------
13,053,625
------------------------------------------------------------------------------------------------------------------------------------
BEVERAGES - 1.4% (0.8% OF TOTAL ASSETS)
5,489 Dr. Pepper/Seven UP Bottling Group, Inc., Term Loan B 5.534% 12/19/10 B1 N/R 5,572,933
------------------------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS - 4.0% (2.4% OF TOTAL ASSETS)
9,925 Nortek, Inc., Term Loan B 5.916% 8/27/11 B2 B 10,024,250
2,990 Stile Acquisition Corporation, Canadian Term Loan 5.902% 4/05/13 B2 BB- 3,001,166
2,995 Stile Acquisition Corporation, Term Loan B 5.657% 4/05/13 B2 BB- 3,006,278
------------------------------------------------------------------------------------------------------------------------------------
16,031,694
------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS - 5.2% (3.1% OF TOTAL ASSETS)
4,439 Celanese Holdings LLC, Term Loan C 5.740% 4/06/11 B1 B+ 4,520,771
1,383 Headwaters Incorporated, Term Loan B 5.907% 4/30/11 B1 B+ 1,399,203
4,650 Huntsman International LLC, Term Loan 6.400% 3/31/10 Ba3 BB- 4,667,788
2,219 Huntsman International LLC, Term Loan B-1 5.750% 12/31/10 Ba3 BB- 2,225,808
7,960 Rockwood Specialties Group, Inc., Tranche D 5.930% 12/10/12 B1 B+ 8,102,619
------------------------------------------------------------------------------------------------------------------------------------
20,916,189
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 4.4% (2.6% OF TOTAL ASSETS)
3,405 Allied Waste North America, Inc., Letter of 3.100% 3/21/12 B1 BB 3,430,307
Credit
8,922 Allied Waste North America, Inc., Term Loan B 5.538% 3/12/21 B1 BB 8,993,509
4,957 National Equipment Services, Inc., Term Loan 8.969% 8/17/10 B3 B 5,084,478
------------------------------------------------------------------------------------------------------------------------------------
17,508,294
------------------------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENTS - 0.8% (0.4% OF TOTAL ASSETS)
1,000 IPC Acquisition Corporation, First Lien Term Loan (b) TBD TBD B2 B+ 1,016,250
2,000 IPC Acquisition Corporation, Second Lien Term Loan (b) TBD TBD B3 B+ 2,037,500
------------------------------------------------------------------------------------------------------------------------------------
3,053,750
------------------------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING - 5.6% (3.3% OF TOTAL ASSETS)
12,935 Graham Packaging Company, L.P., Term Loan B 6.028% 10/07/11 B2 B 13,151,926
2,000 Graham Packaging Company, L.P., Term Loan C 7.750% 4/07/12 B2 CCC+ 2,062,917
611 Smurfit-Stone Container Corporation, Deposit- 2.100% 11/01/11 Ba3 BB- 621,626
Funded Commitment
25
Nuveen Floating Rate Income Opportunity Fund (JRO) (continued)
Portfolio of INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (continued)
$ 4,861 Smurfit-Stone Container Corporation, Term Loan B 5.465% 11/01/11 Ba3 BB- $ 4,941,553
1,496 Smurfit-Stone Container Corporation, Term Loan C 5.375% 11/01/11 Ba3 BB- 1,520,478
------------------------------------------------------------------------------------------------------------------------------------
22,298,500
------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES - 1.2% (0.7% OF TOTAL ASSETS)
4,896 Alderwoods Group, Inc., Term Loan B-2 5.348% 9/29/09 B1 BB- 4,961,545
------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.1% (2.5% OF TOTAL ASSETS)
1,500 Fairpoint Communications, Inc., Term Loan 5.563% 2/15/12 B1 BB- 1,521,563
1,990 Intelsat, Ltd., Term Loan B 5.250% 7/28/11 B1 B 2,010,646
8,500 Iowa Telecommunications Services, Inc., Term Loan B 5.496% 11/23/11 Ba3 BB- 8,628,830
3,200 Qwest Corporation, Term Loan A 8.100% 6/30/07 Ba3 BB- 3,309,750
967 Valor Telecommunications Enterprises, LLC, Term 5.490% 2/14/12 Ba3 BB- 979,527
Loan
------------------------------------------------------------------------------------------------------------------------------------
16,450,316
------------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 6.4% (3.8% OF TOTAL ASSETS)
7,000 Allegheny Energy Supply Company, LLC, Term Loan (b) TBD 8/31/09 Ba2 BB 7,100,625
5,970 Calpine Construction Finance Company, L.P., Term 9.510% TBD B1 B 6,253,258
Loan B
1,995 Murray Energy Corporation, Term Loan C 11.250% 1/28/12 N/R N/R 2,094,750
2,916 Texas Genco LLC, Delayed Term Loan 5.410% 12/14/11 Ba2 BB 2,962,890
7,042 Texas Genco LLC, Term Loan 5.411% 12/14/11 Ba2 BB 7,155,333
------------------------------------------------------------------------------------------------------------------------------------
25,566,856
------------------------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 1.8% (1.1% OF TOTAL ASSETS)
6,938 The Jean Coutu Group Inc., Term Loan B 5.937% 7/30/11 B1 BB 7,056,764
------------------------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS - 1.7% (1.0% OF TOTAL ASSETS)
6,500 Dole Holding Company, LLC, Term Loan 8.688% 7/22/10 Ba3 B 6,703,125
------------------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES - 4.8% (2.9% OF TOTAL ASSETS)
800 Coffeyville Resources LLC, Letter of Credit 6.063% 6/24/12 B1 BB- 814,667
1,200 Coffeyville Resources LLC, Term Loan B 6.063% 6/24/12 B1 BB- 1,222,000
5,625 El Paso Corporation, Deposit-Funded Commitment 2.850% 11/23/09 B3 B 5,681,692
9,263 El Paso Corporation, Term Loan 6.240% 11/23/09 B3 B 9,386,242
2,000 Regency Gas Services LLC, Term Loan C 8.780% 12/01/10 B3 B- 2,010,000
------------------------------------------------------------------------------------------------------------------------------------
19,114,601
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE EQUIPMENT & SUPPLIES - 2.2% (1.3% OF TOTAL ASSETS)
6,000 Cooper Companies, Inc., Term Loan B 5.000% 10/20/11 Ba3 BB 6,041,250
2,599 Kinetic Concepts, Inc., Term Loan B-2 5.240% 8/11/10 Ba3 BB 2,629,816
------------------------------------------------------------------------------------------------------------------------------------
8,671,066
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE PROVIDERS & SERVICES - 8.9% (5.4% OF TOTAL ASSETS)
7,275 Community Health Systems, Inc., Term Loan 5.070% 8/19/11 N/R BB- 7,382,096
7,000 Davita Inc., Term Loan B (b) TBD TBD B1 BB- 7,117,639
5,445 IASIS Healthcare LLC, Term Loan B 5.766% 6/22/11 B1 B+ 5,523,759
990 Lifepoint Hospitals Holdings, Inc., Term Loan B 5.013% 9/30/11 Ba3 BB 1,000,077
2,985 Vanguard Health Holding Company I, LLC, Initial 6.350% 9/23/11 B2 B 3,037,238
Sub Tranche 2 Term Loan
11,910 Vanguard Health Holding Company I, LLC, Term Loan B 6.340% 9/23/11 B2 B 12,118,425
------------------------------------------------------------------------------------------------------------------------------------
36,179,234
------------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 8.1% (4.9% OF TOTAL ASSETS)
3,000 24 Hour Fitness Worldwide, Inc., Term Loan B 6.780% 6/06/05 B2 B 3,049,688
9,988 OpBiz, LLC, Term Loan A 6.504% 8/31/10 B3 B- 10,019,443
12 OpBiz, LLC, Term Loan B (PIK) 7.504% 8/31/10 B3 B- 11,921
2,000 Penn National Gaming Inc., Term Loan B (b) TBD TBD Ba3 BB- 2,033,907
4,000 Resorts International, Term Loan B 9.230% 3/22/13 B3 B- 4,030,626
26
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (continued)
$ 1,282 Venetian Casino Resort, LLC, Delayed Draw Term 0.750% 6/15/11 B1 B+ $ 14,423
Loan (c)
6,218 Venetian Casino Resort, LLC, Term Loan 5.240% 6/15/11 B1 B+ 6,302,336
603 Wyndham International, Inc., Letter of Credit 3.250% 5/10/11 B3 B 606,466
1,000 Wyndham International, Inc., Revolver (c) 6.625% 4/15/11 B3 B 111,389
6,381 Wyndham International, Inc., Term Loan B 6.625% 4/15/11 B3 B 6,425,224
------------------------------------------------------------------------------------------------------------------------------------
32,605,423
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES - 3.9% (2.4% OF TOTAL ASSETS)
8,429 Jarden Corporation, Term Loan 5.470% 1/24/12 B1 B+ 8,509,944
7,187 Sealy Mattress Company, Term Loan D 5.129% 4/06/12 B1 B+ 7,258,497
------------------------------------------------------------------------------------------------------------------------------------
15,768,441
------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 2.5% (1.5% OF TOTAL ASSETS)
9,900 Prestige Brands, Inc., Term Loan B 5.380% 4/06/11 B1 B+ 10,006,993
------------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 2.2% (1.3% OF TOTAL ASSETS)
8,630 Conseco, Inc., Term Loan 6.990% 6/22/10 B2 BB- 8,714,607
------------------------------------------------------------------------------------------------------------------------------------
IT SERVICES - 6.5% (3.9% OF TOTAL ASSETS)
15,930 Fidelity National, Term Loan B 5.100% 3/09/13 Ba3 BB 15,981,207
10,000 SunGard Data Systems Inc., Term Loan B (b) TBD TBD N/R N/R 10,140,625
------------------------------------------------------------------------------------------------------------------------------------
26,121,832
------------------------------------------------------------------------------------------------------------------------------------
MACHINERY - 1.5% (0.9% OF TOTAL ASSETS)
5,825 Dresser-Rand Group Inc., Term Loan 5.438% 10/10/10 B1 B+ 5,916,856
------------------------------------------------------------------------------------------------------------------------------------
MEDIA - 23.3% (14.0% OF TOTAL ASSETS)
10,973 Alliance Atlantis Communications Inc., Term Loan 5.273% 12/20/11 Ba2 BB 11,143,945
2,500 American Lawyer Media, Second Lien Term Loan 9.240% 2/24/11 Caa1 CCC 2,506,250
7,500 Century Cable Holdings, LLC, Discretionary Term 8.250% 12/31/09 N/R N/R 7,426,875
Loan (a)
9,000 Century Cable Holdings, LLC, Revolver (a) 7.250% 10/25/10 N/R N/R 8,828,438
11,985 Charter Communications Operating, LLC, Term Loan A 6.680% 4/27/10 B2 B 11,900,029
1,982 Charter Communications Operating, LLC, Term Loan B 6.930% 4/07/11 B2 B 1,977,188
6,848 Loews Cineplex Entertainment Corporation, Term Loan B 5.640% 6/30/11 B1 B 6,904,190
5,000 Metro-Goldwyn-Mayer Studios, Inc., Term Loan B 5.740% 4/08/12 N/R N/R 5,060,000
10,917 Panamsat Corporation, Term Loan B 5.650% 8/20/11 Ba3 BB+ 11,100,490
8,696 R.H. Donnelley Inc., Tranche D 5.203% 6/30/11 Ba3 N/R 8,824,984
4,988 Rainbow Media Holdings LLC, Term Loan 6.130% 3/31/12 B1 BB+ 5,039,869
3,960 Regal Cinemas Corporation, Term Loan 5.240% 11/10/10 Ba3 BB- 4,006,926
4,000 UPC Financing Partnership, Term Loan H2 6.254% 9/30/12 B1 B 4,033,334
4,940 WMG Acquisition Corp., Term Loan 5.449% 2/27/11 B1 B+ 4,994,224
------------------------------------------------------------------------------------------------------------------------------------
93,746,742
------------------------------------------------------------------------------------------------------------------------------------
METALS & MINING - 2.5% (1.5% OF TOTAL ASSETS)
6,723 Amsted Industries Incorporated, Term Loan B 6.120% 10/15/10 B1 BB- 6,812,584
3,000 Trout Coal Holdings, LLC, Second Lien Term Loan 8.500% 3/14/12 N/R N/R 3,015,938
------------------------------------------------------------------------------------------------------------------------------------
9,828,522
------------------------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES - 2.3% (1.4% OF TOTAL ASSETS)
875 NRG Energy, Inc., Credit-Linked Deposit 3.390% 12/24/11 Ba3 BB 886,016
1,118 NRG Energy, Inc., Term Loan 5.365% 12/20/11 Ba3 BB 1,133,467
6,965 Reliant Energy, Inc., Term Loan 6.070% 4/30/10 B1 B+ 7,052,609
------------------------------------------------------------------------------------------------------------------------------------
9,072,092
------------------------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 1.3% (0.8% OF TOTAL ASSETS)
4,975 Celero Energy, LP, Term Loan 9.908% 8/04/05 N/R N/R 5,068,280
------------------------------------------------------------------------------------------------------------------------------------
27
Nuveen Floating Rate Income Opportunity Fund (JRO) (continued)
Portfolio of INVESTMENTS July 31, 2005
WEIGHTED RATINGS**
PRINCIPAL AVERAGE STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY* MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 1.9% (1.1% OF TOTAL ASSETS)
$ 5,420 Boise Cascade Holdings, LLC, Term Loan D 5.250% 3/29/11 Ba3 BB $ 5,507,916
2,000 White Birch Paper Company, Second Lien Term Loan 10.909% 4/08/13 B3 B- 2,008,333
------------------------------------------------------------------------------------------------------------------------------------
7,516,249
------------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 0.8% (0.3% OF TOTAL ASSETS)
2,993 Talecris Biotherapeutics Inc., Term Loan B 6.536% 3/31/10 N/R N/R 2,999,981
------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 8.8% (5.2% OF TOTAL ASSETS)
1,826 Crescent Real Estate Funding XII, L.P., Term Loan 5.590% 1/12/06 N/R N/R 1,843,907
15,113 General Growth Properties, Inc., Term Loan B 5.490% 11/12/08 Ba2 BB+ 15,327,508
5,000 LNR Property Corp., Term Loan A 7.710% 2/03/08 B2 B+ 4,984,375
12,740 LNR Property Corp., Term Loan 6.210% 2/03/08 B2 B+ 12,872,694
------------------------------------------------------------------------------------------------------------------------------------
35,028,484
------------------------------------------------------------------------------------------------------------------------------------
SOFTWARE - 1.1% (0.7% OF TOTAL ASSETS)
4,443 Corel Corporation, First Lien Term Loan 7.680% 2/25/10 N/R N/R 4,443,750
------------------------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL - 3.5% (2.1% OF TOTAL ASSETS)
13,775 Jostens IH Corp., Term Loan C 5.938% 7/29/10 B1 B+ 13,998,843
------------------------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS - 1.8% (1.1% OF TOTAL ASSETS)
6,970 Ashtead Group Public Limited Company, Term Loan 5.563% 11/12/09 N/R BB- 7,074,550
------------------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Senior Loan Interests (cost $524,822,283) 530,120,806
------------------------------------------------------------------------------------------------------------------------------------
RATINGS**
PRINCIPAL STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS - 25.9% (15.5% OF TOTAL ASSETS)
DIVERSIFIED TELECOMMUNICATION SERVICES - 3.9% (2.3% OF TOTAL ASSETS)
5,000 Intelsat, Ltd., 4.875% plus six-month LIBOR 8.695% 1/15/12 B2 B+ 5,125,000
10,000 Qwest Corporation, 3.250% plus three-month LIBOR, 6.671% 6/15/13 Ba3 BB- 10,500,000
144A
------------------------------------------------------------------------------------------------------------------------------------
15,625,000
------------------------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 2.5% (1.6% OF TOTAL ASSETS)
10,000 Stater Brothers Holdings, Floating Rate Note, 6.510% 6/15/10 B1 BB- 10,175,000
3.500% plus three-month LIBOR
------------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 6.8% (4.0% OF TOTAL ASSETS)
2,750 Harrahs Entertainment 7.875% 12/15/05 Ba1 BB+ 2,784,375
8,315 MGM Grand 7.250% 10/15/06 Ba1 BB+ 8,585,238
3,785 MGM Mirage 9.750% 6/01/07 Ba2 BB- 4,101,993
6,765 Park Place Entertainment 7.875% 12/15/05 Ba2 BB- 6,866,475
4,440 Park Place Entertainment 8.500% 11/15/06 Ba1 BB+ 4,660,513
------------------------------------------------------------------------------------------------------------------------------------
26,998,594
------------------------------------------------------------------------------------------------------------------------------------
MACHINERY - 3.4% (2.0% OF TOTAL ASSETS)
13,167 Navistar International, Series B 9.375% 6/01/06 Ba3 BB- 13,660,762
------------------------------------------------------------------------------------------------------------------------------------
MEDIA - 5.4% (3.2% OF TOTAL ASSETS)
18,000 Cablevision Systems Corp, Floating Rate Note, 7.880% 4/01/09 B3 B+ 18,652,500
4.500% plus six-month LIBOR
3,000 Emmis Operating Company, Floating Rate Note, 9.314% 6/15/12 B3 B- 3,018,750
5.875% plus three-month LIBOR, 144A
------------------------------------------------------------------------------------------------------------------------------------
21,671,250
------------------------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 3.1% (1.8% OF TOTAL ASSETS)
11,620 Tesoro Petroleum Corporation 8.000% 4/15/08 Ba2 BBB- 12,331,725
------------------------------------------------------------------------------------------------------------------------------------
28
RATINGS**
PRINCIPAL STATED --------------- MARKET
AMOUNT (000) DESCRIPTION(1) COUPON MATURITY MOODY'S S&P VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS - 0.8% (0.6% OF TOTAL ASSETS)
$ 3,000 Neff Rental 11.250% 6/15/12 Caa1 B- $ 3,120,000
------------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds (cost $104,781,555) 103,582,331
--------------------------------------------------------------------------------------------------------------------
MARKET
SHARES (000) DESCRIPTION(1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WARRANTS - 0.1% (0.0% OF TOTAL ASSETS)
MULTI-UTILITIES - 0.1% (0.0% OF TOTAL ASSETS)
26 Reliant Energy, Inc. 229,254
------------------------------------------------------------------------------------------------------------------------------------
Total Warrants (cost $184,679) 229,254
--------------------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HIGH-GRADE SHORT-TERM INVESTMENTS - 6.3% (3.8% OF TOTAL ASSETS)
$ 25,223 State Street Bank Euro Dollar Time Deposit, 3.000%, 8/01/05 25,223,483
=============-----------------------------------------------------------------------------------------------------------------------
Total High-Grade Short-Term Investments (cost $25,223,483) 25,223,483
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $655,012,000) - 164.9% (98.5% of total assets) 659,155,874
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (4.9)% (19,363,832)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value (60.0)% (240,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 399,792,042
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based
on net assets applicable to Common shares unless otherwise noted.
(2) Senior Loans in which the Fund invests generally pay interest at
rates which are periodically adjusted by reference to a base
short-term, floating lending rate plus an assigned fixed rate.
These floating lending rates are generally (i) the lending rate
referenced by the London Inter-Bank Offered Rate ("LIBOR"), or
(ii) the prime rate offered by one or more major United States
banks.
Senior Loans may be considered restricted in that the Fund
ordinarily is contractually obligated to receive approval from
the Agent Bank and/or Borrower prior to the disposition of a
Senior Loan.
* Senior Loans in the Fund's portfolio generally are subject to
mandatory and/or optional prepayment. Because of these mandatory
prepayment conditions and because there may be significant
economic incentives for a Borrower to prepay, prepayments of
Senior Loans in the Fund's portfolio may occur. As a result, the
actual remaining maturity of Senior Loans held in the Fund's
portfolio may be substantially less than the stated maturities
shown.
** Ratings (not covered by the report of independent registered
public accounting firm) below Baa by Moody's Investor Service,
Inc. or BBB by Standard & Poor's Group are considered to be below
investment grade.
(a) At or subsequent to July 31, 2005, this issue was under the
protection of the Federal Bankruptcy Court.
(b) Purchased on a when-issued or delayed delivery basis.
(c) Position represents an unfunded loan commitment outstanding at
July 31, 2005.
(d) Portion of position represents an unfunded loan commitment
outstanding at July 31, 2005.
144A 144A securities are those which are exempt from registration
under Rule 144A of the Securities Act of 1933, as amended. These
securities may only be resold in transactions exempt from
registration which are normally those transactions with qualified
institutional buyers.
TBD Senior Loan purchased on a when-issued or delayed delivery basis.
Certain details associated with this purchase are not known prior
to the settlement date of the transaction. In addition, Senior
Loans typically trade without accrued interest and therefore a
weighted average coupon rate is not available prior to
settlement. At settlement, if still unknown, the borrower or
counterparty will provide the Fund with the final weighted
average coupon rate and maturity date.
(PIK) In lieu of cash payment, interest accrued on "Payment in Kind"
investment increases principal outstanding.
N/R Investment is not rated.
See accompanying notes to financial statements.
29
Statement of
ASSETS AND LIABILITIES July 31, 2005
FLOATING RATE
SENIOR FLOATING RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $394,364,948, $1,008,658,373
and $629,788,517, respectively) $387,759,499 $1,015,031,956 $633,932,391
High-grade short-term investments (at cost, which approximates market value) 33,314,445 93,251,352 25,223,483
SAMIs, at value -- 46,786 --
Receivables:
Interest 2,753,696 8,653,400 4,766,430
Investments sold 1,936,271 6,614,614 5,436,500
Other assets 86,124 96,938 9,670
------------------------------------------------------------------------------------------------------------------------------------
Total assets 425,850,035 1,123,695,046 669,368,474
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Borrowings payable 103,000,000 -- --
Payable for investments purchased 23,542,500 55,571,250 29,000,000
Accrued expenses:
Management fees 166,973 462,107 294,635
Other 502,252 278,903 171,022
Preferred share dividends payable 40,427 188,897 110,775
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 127,252,152 56,501,157 29,576,432
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 46,000,000 400,000,000 240,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $252,597,883 $ 667,193,889 $399,792,042
====================================================================================================================================
Common shares outstanding 29,802,286 47,286,920 28,397,051
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 8.48 $ 14.11 $ 14.08
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 298,023 $ 472,869 $ 283,971
Paid-in surplus 282,945,133 667,333,695 400,578,691
Undistributed (Over-distribution of) net investment income 1,581,358 (4,083,203) (3,500,993)
Accumulated net realized gain (loss) from investments and SAMIs (25,621,182) (2,949,841) (1,713,501)
Net unrealized appreciation (depreciation) of investments and SAMIs (6,605,449) 6,420,369 4,143,874
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $252,597,883 $ 667,193,889 $399,792,042
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
30
Statement of
OPERATIONS Year Ended July 31, 2005
FLOATING RATE
SENIOR FLOATING RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $24,435,694 $52,033,342 $25,586,886
Fees 695,035 2,384,357 1,437,937
------------------------------------------------------------------------------------------------------------------------------------
Total investment income 25,130,729 54,417,699 27,024,823
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 3,392,123 8,828,304 5,048,312
Preferred shares - auction fees 114,829 999,934 511,234
Preferred shares - dividend disbursing agent fees 5,983 24,787 16,015
Shareholders' servicing agent fees and expenses 5,927 1,095 633
Interest expense 2,545,417 -- --
Commitment fees 338,720 -- --
Custodian's fees and expenses 182,888 474,217 276,065
Trustees' fees and expenses 6,645 18,794 12,665
Professional fees 105,144 79,411 78,915
Shareholders' reports - printing and mailing expenses 53,609 123,748 62,977
Stock exchange listing fees 11,815 21,640 6,366
Investor relations expense 62,583 96,622 76,798
Other expenses 21,727 19,484 7,713
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 6,847,410 10,688,036 6,097,693
Custodian fee credit (373) (4,350) (3,047)
Expense reimbursement (1,510,723) (3,409,123) (1,804,044)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 5,336,314 7,274,563 4,290,602
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 19,794,415 47,143,136 22,734,221
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from investments 1,525,914 117,910 1,024,549
Net realized gain from SAMIs -- 70,815 --
Change in net unrealized appreciation (depreciation) of investments (1,775,441) 4,701,658 4,143,874
Change in net unrealized appreciation (depreciation) of SAMIs -- 39,985 --
Net realized and unrealized gain (loss) (249,527) 4,930,368 5,168,423
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,124,957) (9,665,000) (5,249,687)
Net increase in net assets applicable to Common shares from operations $18,419,931 $42,408,504 $22,652,957
====================================================================================================================================
See accompanying notes to financial statements.
31
Statement of
CHANGES IN NET ASSETS
FLOATING RATE FLOATING RATE
SENIOR INCOME (NSL) INCOME (JFR) INCOME OPPORTUNITY (JRO)
-------------------------- ----------------------- ------------------------------
FOR THE PERIOD
FOR THE PERIOD 7/27/04
3/25/04 (COMMENCEMENT
(COMMENCEMENT OF OPERATIONS
YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) YEAR ENDED THROUGH)
7/31/05 7/31/04 7/31/05 THROUGH 7/31/04 7/31/05 7/31/04
------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 19,794,415 $ 19,081,581 $ 47,143,136 $ 6,406,985 $ 22,734,221 $ 6,160
Net realized gain (loss) 1,525,914 (2,007,822) 117,910 71,956 1,024,549 --
from investments
Net realized gain from SAMIs -- -- 70,815 -- -- --
Change in net unrealized
appreciation (depreciation)
of investments (1,775,441) 16,691,236 4,701,658 1,671,925 4,143,874 --
Change in net unrealized
appreciation (depreciation)
of SAMIs -- -- 39,985 6,801 -- --
Distributions to Preferred
Shareholders from net investment
income (1,124,957) (538,267) (9,665,000) (1,145,857) (5,249,687) --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares from
operations 18,419,931 33,226,728 42,408,504 7,011,810 22,652,957 6,160
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (17,279,906) (15,362,547) (40,630,441) (9,402,550) (23,729,737) --
Tax return of capital -- -- -- (148,613) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable
to Common shares from distributions
to Common shareholders (17,279,906) (15,362,547) (40,630,441) (9,551,163) (23,729,737) --
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- 149,633 674,209,761 22,239,818 383,106,000
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 179,443 194,711 1,573,023 263,685 522,315 --
Preferred shares offering costs -- -- 83,802 (8,425,000) (5,105,746) --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from
capital share transactions 179,443 194,711 1,806,458 666,048,446 17,656,387 383,106,000
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares 1,319,468 18,058,892 3,584,521 663,509,093 16,579,607 383,112,160
Net assets applicable to Common
shares at the beginning of
period 251,278,415 233,219,523 663,609,368 100,275 383,212,435 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares
at the end of period $252,597,883 $251,278,415 $667,193,889 $663,609,368 $399,792,042 $383,212,435
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of period $ 1,581,358 $ 2,947,762 $ (4,083,203) $ (3,958,356) $ (3,500,993) $ 6,160
====================================================================================================================================
See accompanying notes to financial statements.
32
Statement of
CASH FLOWS Year Ended July 31, 2005
FLOATING RATE
SENIOR FLOATING RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
-----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS $ 18,419,931 $ 42,408,504 $ 22,652,957
Adjustments to reconcile the net increase in net assets applicable to Common
shares from operations to net cash provided by (used in) operating
activities:
Purchases of investment securities (385,034,450) (803,588,181) (920,770,354)
Proceeds from (Purchases of) high-grade short-term investment (22,684,359) 197,369,523 358,786,792
securities, net
Proceeds from sales and maturities of investment securities 394,980,811 741,456,453 287,409,940
Proceeds from the closing of SAMIs -- 34,047 --
Amortization/(Accretion) of premiums and discounts of investment securities
and SAMIs, net 597,480 3,664,264 2,539,972
(Increase) in receivable for interest (310,493) (2,441,872) (4,739,763)
(Increase) Decrease in receivable for investments sold (1,931,271) 2,703,828 (5,436,500)
(Increase) Decrease in other assets (8,593) 178,011 (9,670)
Increase (Decrease) in payable for investments purchased 15,441,350 (139,747,160) 29,000,000
Increase (Decrease) in management fees payable 31,322 (2,206) 294,594
Increase (Decrease) in other liabilities 193,887 27,630 162,056
Increase in Preferred share dividends payable 22,282 105,880 110,775
Net realized (gain) from investments (1,525,914) (117,910) (1,024,549)
Net realized (gain) from SAMIs -- (70,815) --
Net realized (gain)/loss from paydowns (2,754,982) 1,907,505 2,056,474
Change in net unrealized (appreciation)/depreciation of investments 1,775,441 (4,701,658) (4,143,874)
Change in net unrealized (appreciation) of SAMIs -- (39,985) --
Taxes paid on undistributed capital gains (111,979) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 17,100,463 39,145,858 (233,111,150)
-----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares:
Net proceeds from sale of shares -- -- 22,248,158
Organization and offering costs -- 149,633 (8,340)
Cash distributions paid to shareholders (17,100,463) (39,057,418) (23,207,422)
Organization and offering costs payable -- (321,875) (815,500)
Preferred Shares:
Net proceeds from sale of Preferred shares -- -- 240,000,000
Organization and offering costs -- 83,802 (5,105,746)
-----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (17,100,463) (39,145,858) 233,111,150
-----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH -- -- --
Cash at the beginning of year -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
CASH AT THE END OF YEAR $ -- $ -- $ --
====================================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid by Senior Income (NSL) for interest on bank borrowings during the
fiscal year ended July 31, 2005, was $2,253,363.
Non-cash financing activities not included herein consist of reinvestments of
Common share distributions of $179,443, $1,573,023 and $522,315 for Senior
Income (NSL), Floating Rate Income (JFR) and Floating Rate Income Opportunity
(JRO), respectively.
See accompanying notes to financial statements.
33
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding Common
share New York Stock Exchange symbols are Nuveen Senior Income Fund (NSL),
Nuveen Floating Rate Income Fund (JFR) and Nuveen Floating Rate Income
Opportunity Fund (JRO). The Funds are registered under the Investment Company
Act of 1940, as amended, as closed-end management investment companies.
Effective January 1, 2005, Nuveen Institutional Advisory Corp. ("NIAC") the
Funds' previous adviser, and its affiliate, Nuveen Advisory Corp. ("NAC"), were
merged into Nuveen Asset Management ("NAM"), each wholly owned subsidiaries of
Nuveen Investments, Inc. ("Nuveen"). As a result of the merger, NAM is now the
Adviser to all funds previously advised by either NIAC or NAC.
Prior to the commencement of operations of Floating Rate Income (JFR) and
Floating Rate Income Opportunity (JRO), each Fund had no operations other than
those related to organizational matters, the initial capital contribution of
$100,275 per Fund by NIAC, the recording of the organization expenses ($11,500
per Fund) and their reimbursement by Nuveen Investments, LLC, also a wholly
owned subsidiary of Nuveen.
Each Fund seeks to provide a high level of current income by investing primarily
in senior loans whose interest rates float or adjust periodically based on a
benchmark interest rate index.
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 senior loans, bonds and other securities in the Funds' investment
portfolios, other than subordinated loans issued by middle market companies, are
generally provided by one or more independent pricing services approved by the
Funds' Board of Trustees. Floating Rate Income Opportunity (JRO) currently
expects that the independent pricing services will be unable to provide a market
based price for certain of the privately negotiated subordinated loans issued by
middle market companies. The pricing services, with input from Symphony Asset
Management, LLC (" Symphony"), an indirect wholly owned subsidiary of Nuveen,
and the Adviser, will estimate the fair value for such subordinated loans,
subject to the supervision of Symphony and the Adviser. Floating Rate Income
Opportunity (JRO) may engage an independent appraiser to periodically provide an
independent determination of the value, or an opinion with respect to the
pricing services' value, of such loans. The pricing services typically value
exchange-listed securities at the last sales price on that day; and value senior
loans, bonds and other securities traded in the over-the-counter market at the
mean of the highest bona fide bid and lowest bona fide asked prices when current
quotations are readily available. The pricing services or, in the absence of a
pricing service for a particular investment, the Board of Trustees of the Funds,
or its designee, may establish fair market value using a wide variety of market
data including yields or prices of investments of comparable quality, type of
issue, coupon, maturity and rating, indications of value from security dealers,
evaluations of anticipated cash flows or collateral, general market conditions
and other information and analysis, including the obligor's credit
characteristics considered relevant by the pricing service or the Board of
Trustees' designee. High-grade short-term investments are valued at amortized
cost, which approximates market value.
The senior and subordinated loans in which the Funds invest are not listed on an
organized exchange and the secondary market for such investments may be less
liquid relative to markets for other fixed income securities. Consequently, the
value of senior and subordinated loans, determined as described above, may
differ significantly from the value that would have been determined had there
been an active market for that senior loan.
34
Investment Transactions
Investment transactions are recorded on a trade date basis. Trade date for
senior and subordinated loans purchased in the "primary market" is considered
the date on which the loan allocations are determined. Trade date for senior and
subordinated loans purchased in the "secondary market" is the date on which the
transaction is entered into. Realized gains and losses from investment
transactions are determined on the specific identification method. Investments
purchased on a when-issued or delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds maintain liquid assets with a current
value at least equal to the amount of the when-issued and delayed delivery
purchase commitments. At July 31, 2005, Senior Income (NSL), Floating Rate
Income (JFR) and Floating Rate Income Opportunity (JRO) had outstanding
when-issued and delayed delivery purchase commitments of $23,542,500,
$55,571,250 and $29,000,000, respectively.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Interest income also includes paydown gains and losses on senior and
subordinated loans. Fee income consists primarily of amendment fees. Amendment
fees are earned as compensation for evaluating and accepting changes to the
original loan agreement and are recognized when received.
Professional Fees
Professional fees presented in the Statement of Operations consist of legal fees
incurred in the normal course of operations, audit fees, tax consulting fees
and, in some cases, workout expenditures. Workout expenditures are incurred in
an attempt to protect or enhance an investment, or to pursue other claims or
legal actions on behalf of Fund shareholders.
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.
Dividends and Distributions to Common Shareholders
Each Fund intends to declare monthly income distributions to Common
shareholders. Net realized capital gains 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 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
Senior Income (NSL) has issued and outstanding 1,840 shares of Series TH,
Taxable Auctioned Preferred shares, $25,000 stated value per share, as a means
of effecting financial leverage. The dividend rate is determined every 28 days,
pursuant to a dutch auction process overseen by the auction agent, and is
payable at the end of each rate period. Senior Income (NSL)has also effected
financial leverage by borrowing, as described in footnote 8 below.
Effective May 21, 2004, Floating Rate Income (JFR) issued 4,000 shares of each
Series M, T, W and F, FundPreferred shares, $25,000 stated value per share, as a
means of effecting financial leverage. The dividend rate is determined every
seven days, pursuant to a dutch auction process overseen by the auction agent,
and is payable weekly at the end of each rate period.
Effective September 24, 2004, Floating Rate Income Opportunity (JRO) issued
3,200 shares of each Series M, TH and F, FundPreferred shares, $25,000 stated
value per share, as a means of effecting financial leverage. The dividend rate
is determined every seven days, pursuant to a dutch auction process overseen by
the auction agent, and is payable weekly at the end of each rate period.
Select Aggregate Market Index
Floating Rate Income (JFR) and Floating Rate Income Opportunity (JRO) may invest
in Select Aggregate Market Indexes ("SAMI") to synthetically increase their
exposure to the senior secured loan market during a period when the Funds
otherwise would have excess uninvested cash. The SAMI is designed to replicate
the performance and risk of the CSFB Leveraged Loan Index. An investment in a
SAMI, when combined with high-grade short-term investments such as repurchase
agreements related to U.S. government securities in an amount equal to the
notional amount of the SAMI, is designed to provide an aggregate return
equivalent to an investment in a basket of senior secured bank loan debt
("Reference Obligations"), less certain costs.
Upon entering into a SAMI, the Funds may pay the counterparty a premium based on
the notional amount. The premium, if any, will be amortized over the life of the
SAMI and recorded in other assets in the Statement of Assets and Liabilities.
The Funds will receive from the counterparty a fixed-rate interest payment based
on the notional amount of the contract. In exchange for the interest payment,
the Funds protect the counterparty from the risk of loss at the time of a credit
event, such as a bankruptcy or default, affecting any of the Reference
Obligations. Interest is recorded on an accrual basis and included in the
Statement of Operations. The Funds are required to provide collateral to the
counterparty based on a percentage of the notional amount of the SAMI and has
instructed the custodian to segregate liquid assets with a current value at
least equal to the remaining notional amount of the SAMI. The SAMI is valued
daily and any change in value is recorded in "Change in net unrealized
appreciation (depreciation) of SAMI" in the Statement of Operations. Although
there are economic advantages of entering into SAMI transactions, there are also
additional risks, including but not limited to senior loan credit risk and the
inability of the counterparty to meet its interest payment obligations. Floating
Rate Income Opportunity (JRO) did not invest in a SAMI during the fiscal year
ended July 31, 2005.
35
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 credits earned on the Funds' cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Organization and Offering Costs
Nuveen Investments, LLC has agreed to reimburse all organization expenses
(approximately $11,500 per Fund) and pay all Common share offering costs (other
than the sales load) that exceed $.03 per Common share for Floating Rate Income
(JFR) and Floating Rate Income Opportunity (JRO). Floating Rate Income's (JFR)
and Floating Rate Income Opportunity's (JRO) share of Common share offering
costs ($1,064,356 and $812,340, respectively) were recorded as reductions of the
proceeds from the sale of Common shares.
Costs incurred by Floating Rate Income (JFR) and Floating Rate Income
Opportunity (JRO) in connection with their offering of FundPreferred shares
($8,341,198 and $5,105,746, respectively) were recorded as a reduction to
paid-in surplus.
Indemnifications
Under the Funds' organizational documents, its Officers and Trustees 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 and Preferred shares were as follows:
FLOATING RATE FLOATING RATE
SENIOR INCOME (NSL) INCOME (JFR) INCOME OPPORTUNITY (JRO)
---------------------------- ------------------------ ---------------------------------
FOR THE FOR THE
PERIOD 3/25/04 PERIOD 7/27/04
(COMMENCEMENT (COMMENCEMENT
YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) YEAR ENDED OF OPERATIONS)
7/31/05 7/31/04 7/31/05 THROUGH 7/31/04 7/31/05 THROUGH 7/31/04
------------------------------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 47,150,000 1,553,100 26,800,000
Shares issued to
shareholders due to
reinvestment of
distributions 20,084 22,048 111,210 18,710 36,951 --
------------------------------------------------------------------------------------------------------------------------------------
20,084 22,048 111,210 47,168,710 1,590,051 26,800,000
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares sold -- -- -- 16,000 9,600 --
====================================================================================================================================
36
3. INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding high-grade short-term investments)
during the fiscal year ended July 31, 2005, were as follows:
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Purchases $385,034,450 $803,588,181 $920,770,354
Sales and maturities 394,980,811 741,456,453 287,409,940
====================================================================================================================================
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 certain gains and losses on investment transactions and for
Floating Rate Income (JFR) and Floating Rate Income Opportunity (JRO)
recognition of premium amortization.
At July 31, 2005, the cost of investments was as follows:
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Cost of investments $427,679,393 $1,105,838,537 $657,029,609
====================================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at July 31, 2005, were as follows:
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 5,510,229 $ 7,670,116 $ 5,048,225
Depreciation (12,115,678) (5,225,345) (2,921,960)
------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $ (6,605,449) $ 2,444,771 $ 2,126,265
====================================================================================================================================
The tax components of undistributed net ordinary income and net realized gains
at July 31, 2005, were as follows:
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Undistributed net ordinary income * $ 3,141,702 $ 3,566,259 $ 782,340
Undistributed net long-term capital gains -- -- --
====================================================================================================================================
* Net ordinary income consists of net taxable income derived from dividends,
interest and net short-term capital gains, if any. Undistributed net
ordinary income (on a tax basis) has not been reduced for the dividend
declared on July 1, 2005, paid on August 1, 2005.
37
Notes to
FINANCIAL STATEMENTS (continued)
The tax character of distributions paid during the fiscal years ended July 31,
2005, and July 31, 2004, was designated for purposes of the dividends paid
deduction as follows:
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
2005 (NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net ordinary income * $18,143,299 $49,780,115 $26,710,473
Distributions from net long-term capital gains -- -- --
====================================================================================================================================
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
2004 (NSL) (JFR)** (JRO)***
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net ordinary income * $15,890,967 $7,281,029 $ --
Distributions from net long-term capital gains -- -- --
Tax return of capital -- 148,613 --
====================================================================================================================================
* Net ordinary income consists of net taxable income derived from
dividends, interest and net short-term capital gains, if any.
** For the period March 25, 2004 (commencement of operations) through
July 31, 2004.
*** For the period July 27, 2004 (commencement of operations) through July
31, 2004.
At July 31, 2005, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Expiration year:
2010 $14,916,928 $ -- $ --
2011 10,704,254 -- --
2012 -- -- --
2013 -- 819,145 30,377
------------------------------------------------------------------------------------------------------------------------------------
Total $25,621,182 $819,145 $ 30,377
====================================================================================================================================
38
The following Funds elected to defer net realized losses from investments
incurred from November 1, 2004 through July 31, 2005 ("post-October losses") in
accordance with Federal income tax regulations. The following post-October
losses are treated as having arisen on the first day of the following fiscal
year.
FLOATING
FLOATING RATE
RATE INCOME
INCOME OPPORTUNITY
(JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
$2,068,644 $1,679,895
====================================================================================================================================
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Funds' management fees are separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser, and a specific fund-level component, based only on the amount of assets
within each Fund. This pricing structure enables Nuveen fund shareholders to
benefit from growth in the assets within each individual fund as well as from
growth in the amount of complex-wide assets managed by the Adviser. As of August
31, 2005, the complex-level fee rate was .1896%.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily Managed Assets of each Fund as follows:
SENIOR INCOME (NSL)
AVERAGE DAILY MANAGED ASSETS FUND-LEVEL FEE RATE
------------------------------------------------------------------------------------------------------------------------------------
For the first $1 billion .6500%
For the next $1 billion .6375
For the next $3 billion .6250
For the next $5 billion .6000
For Managed Assets over $10 billion .5750
====================================================================================================================================
FLOATING RATE INCOME (JFR)
FLOATING RATE INCOME OPPORTUNITY (JRO)
AVERAGE DAILY MANAGED ASSETS FUND-LEVEL FEE RATE
------------------------------------------------------------------------------------------------------------------------------------
For the first $500 million .6500%
For the next $500 million .6250
For the next $500 million .6000
For the next $500 million .5750
For Managed Assets over $2 billion .5500
====================================================================================================================================
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 follows:
COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE
------------------------------------------------------------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion .1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion (2) .1400
====================================================================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets"
means the average daily net assets of each fund including assets
attributable to all types of leverage used by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
(2) With respect to the complex-wide Managed Assets over $91 billion, the
fee rate or rates that will apply to such assets will be determined at
a later date. In the unlikely event that complex-wide Managed Assets
reach $91 billion prior to a determination of the complex-level fee
rate or rates to be applied to Managed Assets in excess of $91
billion, the complex-level fee rate for such complex-wide Managed
Assets shall be .1400% until such time as a different rate or rates is
determined.
39
Notes to
FINANCIAL STATEMENTS (continued)
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Adviser has entered
into Sub-Advisory Agreements with Symphony, under which Symphony manages the
investment portfolio of the Funds. Symphony is compensated for its services to
the Funds from the management fee paid to the Adviser.
The Funds pay no compensation directly to those of its Trustees 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
Trustees has adopted a deferred compensation plan for independent Trustees that
enables Trustees 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.
For the first ten years of Senior Income's (NSL) operations, the Adviser has
agreed to reimburse the Fund, as a percentage of average daily Managed Assets,
for fees and expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
OCTOBER 31, OCTOBER 31,
------------------------------------------------------------------------------------------------------------------------------------
1999* .45% 2005 .35%
2000 .45 2006 .25
2001 .45 2007 .15
2002 .45 2008 .10
2003 .45 2009 .05
2004 .45
====================================================================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Senior Income (NSL) for any portion of
its fees and expenses beyond October 31, 2009.
For the first eight years of Floating Rate Income's (JFR) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily
Managed Assets, for fees and expenses in the amounts and for the time periods
set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
------------------------------------------------------------------------------------------------------------------------------------
2004* .32% 2009 .32%
2005 .32 2010 .24
2006 .32 2011 .16
2007 .32 2012 .08
2008 .32
====================================================================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Floating Rate Income (JFR) for any
portion of its fees and expenses beyond March 31, 2012.
For the first eight years of Floating Rate Income Opportunity's (JRO)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily Managed Assets, for fees and expenses in the amounts and for the
time periods set forth below:
YEAR ENDING YEAR ENDING
JULY 31, JULY 31,
------------------------------------------------------------------------------------------------------------------------------------
2004* .30% 2009 .30%
2005 .30 2010 .22
2006 .30 2011 .14
2007 .30 2012 .07
2008 .30
====================================================================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Floating Rate Income Opportunity (JRO)
for any portion of its fees and expenses beyond July 31, 2012.
40
6. COMMITMENTS
Pursuant to the terms of certain of the variable rate senior loan agreements,
the Funds may have unfunded senior loan commitments. Each Fund will maintain
with its custodian, cash, liquid securities and/or liquid senior loans having an
aggregate value at least equal to the amount of unfunded senior loan
commitments. At July 31, 2005, Senior Income (NSL) had unfunded loan commitments
of $1,310,961, Floating Rate Income (JFR) had $5,476,623 while Floating Rate
Income Opportunity (JRO) had $2,438,221 in unfunded loan commitments.
7. SENIOR LOAN PARTICIPATION COMMITMENTS
With respect to the senior loans held in each Fund's portfolio, the Funds may:
1) invest in assignments; 2) act as a participant in primary lending syndicates;
or 3) invest in participations. If a Fund purchases a participation of a senior
loan interest, the Fund would typically enter into a contractual agreement with
the lender or other third party selling the participation, rather than directly
with the Borrower. As such, the Fund not only assumes the credit risk of the
Borrower, but also that of the Selling Participant or other persons
interpositioned between the Fund and the Borrower.
Senior Income (NSL) had the following participation commitments outstanding at
July 31, 2005:
COUNTERPARTY COMMITMENT AMOUNT MARKET VALUE
------------------------------------------------------------------------------------------------------------------------------------
Bear, Stearns & Co., Inc. $2,000,000 $1,961,875
Morgan Stanley 1,640,000 1,608,738
====================================================================================================================================
Floating Rate Income (JFR) and Floating Rate Income Opportunity (JRO) had no
such participation commitments outstanding at July 31, 2005.
8. BORROWINGS
In accordance with Senior Income's (NSL) current investment policies, the Fund
may utilize financial leverage for investment purposes in an amount currently
anticipated to represent approximately 40% of the Fund's total assets, and in no
event exceeding 50% of the Fund's total assets.
Senior Income (NSL) has entered into a commercial paper program ($110 million
maximum) with Bank One's conduit financing agency, Falcon Asset Securitization
Corp. ("Falcon"), whose sole purpose is the issuance of high grade commercial
paper. Falcon uses the proceeds to make advances to Senior Income (NSL) and to
many other borrowers who comprise Falcon's total borrowing base. For the fiscal
year ended July 31, 2005, the average daily balance of borrowings under the
commercial paper program agreement was $103 million. The average interest rate
paid for funding and program usage fees on such borrowings was 2.47%.
Senior Income (NSL) has also entered into a $110 million liquidity facility. If
the facility is utilized, interest on the borrowings would be charged a variable
interest rate. An unused commitment fee of .095% on 102% of the unused portion
of the $110 million facility is charged. There were no borrowings under the
revolving credit agreement during the fiscal year ended July 31, 2005.
9. ANNOUNCEMENT REGARDING PARENT COMPANY OF ADVISER
In early April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul
Travelers"), which owned 79% of Nuveen, (A) completed a public offering of a
substantial portion of its equity stake in Nuveen, (B) sold Nuveen $200 million
of its Nuveen shares, (C) entered into an agreement with Nuveen to sell an
additional $400 million of its Nuveen shares on a "forward" basis with payment
for and settlement of these shares delayed for several months, and (D) entered
into agreements with two unaffiliated investment banking firms to sell an amount
equal to most or all of its remaining Nuveen shares for current payment but for
future settlement. Transactions (C) and (D) above were settled in late July,
which effectively reduced St. Paul Travelers' controlling stake in Nuveen and
was deemed an "assignment" (as defined in the 1940 Act) of the investment
management agreements between the Funds and the Adviser, which resulted in the
automatic termination of each agreement under the 1940 Act. In anticipation of
such deemed assignment, the Board of Trustees had approved new ongoing
investment management agreements for each Fund and the submission of those
agreements for approval by each respective Fund's shareholders, which
shareholder approval was received prior to the settlement of transactions (C)
and (D). The new ongoing management agreements took effect upon such settlement.
41
Notes to
FINANCIAL STATEMENTS (continued)
10. SUBSEQUENT EVENT -- DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their net investment
income which was paid on September 1, 2005, to shareholders of record on August
15, 2005, as follows:
FLOATING
FLOATING RATE
SENIOR RATE INCOME
INCOME INCOME OPPORTUNITY
(NSL) (JFR) (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Dividend per share $.0510 $.0760 $.0760
====================================================================================================================================
42
Financial
HIGHLIGHTS
43
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
====================================================================================================================================
SENIOR INCOME (NSL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 $ 8.44 $ .66 $ -- $(.04) $ -- $ .62 $ (.58) $ -- $ (.58)
2004 7.84 .64 .50 (.02) -- 1.12 (.52) -- (.52)
2003(c) 7.38 .60 .41 (.02) -- .99 (.53) -- (.53)
2002(c) 8.13 .68 (.71) (.04) -- (.07) (.68) -- (.68)
2001(c) 9.47 1.09 (1.29) (.09) -- (.29) (1.03) (.02) (1.05)
FLOATING RATE INCOME (JFR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 14.07 1.00 .10 (.20) -- .90 (.86) -- (.86)
2004(a) 14.33 .14 .04 (.02) -- .16 (.21) -- (.21)
FLOATING RATE INCOME
OPPORTUNITY (JRO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 14.30 .80 .19 (.19) -- .80 (.84) -- (.84)
2004(b) 14.33 -- -- -- -- -- -- -- --
====================================================================================================================================
Total Returns
-------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
===========================================================================================
SENIOR INCOME (NSL)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 $ -- $ 8.48 $ 8.97 (3.40)% 7.53%
2004 -- 8.44 9.91 24.50 14.61
2003(c) -- 7.84 8.43 25.93 14.25
2002(c) -- 7.38 7.20 (21.16) (.65)
2001(c) -- 8.13 9.96 15.35 (3.30)
FLOATING RATE INCOME (JFR)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 -- 14.11 13.69 (1.99) 6.56
2004(a) (.21) 14.07 14.85 .40 (.39)
FLOATING RATE INCOME
OPPORTUNITY (JRO)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 (.18) 14.08 13.41 (5.13) 4.47
2004(b) (.03) 14.30 15.01 .07 (.21)
===========================================================================================
Ratios/Supplemental Data
------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
----------------------------- --------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
=================================================================================================================================
SENIOR INCOME (NSL)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 $252,598 2.70% 7.21% 2.10% 7.80% 100%
2004 251,278 2.23 7.10 1.50 7.83 91
2003(c) 233,220 2.66 7.57 1.90 8.33 80
2002(c) 219,459 3.12 8.20 2.37 8.95 64
2001(c) 241,641 4.32 11.74 3.62 12.44 52
FLOATING RATE INCOME (JFR)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 667,194 1.60 6.56 1.09 7.07 74
2004(a) 663,609 1.37* 2.46* .93* 2.90* 14
FLOATING RATE INCOME
OPPORTUNITY (JRO)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 399,792 1.53 5.25 1.08 5.70 58
2004(b) 383,212 1.28* (.01)* .98* .29* 0
=================================================================================================================================
Preferred Stock at End of Year Borrowings at End of Year
---------------------------------------------------- -------------------------------
Aggregate Liquidation Asset Aggregate Asset
Amount and Market Coverage Amount Coverage
Outstanding (000) Value Per Share Per Share Outstanding (000) Per $1,000
==========================================================================================================
SENIOR INCOME (NSL)
----------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 $ 46,000 $25,000 $162,281 $103,000 $3,899
2004 46,000 25,000 161,564 103,000 3,886
2003(c) 46,000 25,000 151,750 103,000 3,711
2002(c) 46,000 25,000 144,271 103,000 3,577
2001(c) 46,000 25,000 156,327 103,000 3,793
FLOATING RATE INCOME (JFR)
----------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 400,000 25,000 66,700 -- --
2004(a) 400,000 25,000 66,476 -- --
FLOATING RATE INCOME OPPORTUNITY (JRO)
----------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2005 240,000 25,000 66,645 -- --
2004(b) -- -- -- -- --
==========================================================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of changes in
the market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on 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. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement from the Adviser,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ o Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
o Income ratios reflect income earned on assets attributable to
Preferred shares and bank borrowings, where applicable.
o With respect to Senior Income (NSL), each ratio includes the effect of
the interest expense paid on bank borrowings as follows:
Ratio of Interest
Expense to Average
Net Assets Applicable to
Common Shares
------------------------
2005 1.00
2004 .48
2003 .74
2002 1.09
2001 2.19
(a) For the period March 25, 2004 (commencement of operations)through July 31,
2004.
(b) For the period July 27, 2004 (commencement of operations)through July 31,
2004.
(c) Unaudited.
See accompanying notes to financial statements.
44-45 spread
Board Members
AND OFFICERS
The management of the Fund, including general supervision of the duties
performed for the Fund by the Adviser, is the responsibility of the Board
Members of the Fund. The number of board members of the Fund is currently set at
nine. None of the board members who are not "interested" persons of the Fund 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 Fund,
their principal occupations and other affiliations during the past five years,
the number of portfolios each oversees and other directorships they hold are set
forth below.
NUMBER OF PORTFOLIOS
PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger(1) Chairman of 1994 Chairman and Director (since 1996) of Nuveen 155
3/28/49 the Board Investments, Inc. and Nuveen Investments, LLC;
333 W. Wacker Drive and Trustee Director (since 1992) and Chairman (since
Chicago, IL 60606 1996) of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Chairman and
Director (since 1997) of Nuveen Asset
Management; Director (since 1996) of
Institutional Capital Corporation; Chairman
and Director (since 1999) of Rittenhouse Asset
Management, Inc.; Chairman of Nuveen
Investments Advisers Inc. (since 2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 155
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (1989) as Senior Vice President of The 155
7/29/34 Northern Trust Company; Director, Community
333 W. Wacker Drive Advisory Board for Highland Park and Highwood,
Chicago, IL 60606 United Way of the North Shore (since 2002).
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a 155
10/22/48 private philanthropic corporation (since
333 W. Wacker Drive 1996); Director and Vice Chairman, United Fire
Chicago, IL 60606 Group, a publicly held company; Adjunct
Faculty Member, University of Iowa; Director,
Gazette Companies; Life Trustee of Coe
College; Director, Iowa College Foundation;
formerly, Director, Alliant Energy; formerly,
Director, Federal Reserve Bank of Chicago;
formerly, President and Chief Operating
Officer, SCI Financial Group, Inc., a regional
financial services firm.
------------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, 155
3/6/48 School of Business at the University of
333 W. Wacker Drive Connecticut (since 2003); previously, Senior
Chicago, IL 60606 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 of Xerox
Corporation (since 2004).
------------------------------------------------------------------------------------------------------------------------------------
David J. Kundert Board member 2005 Retired (2004) as Chairman, JPMorgan Asset 153
10/28/42 President and CEO, Banc One Investment
333 W. Wacker Drive Advisors Corporation, and President, One Group
Chicago, IL 60606 Mutual Funds; prior thereto, Executive Vice
President, Banc One Corporation and Chairman
and CEO, Banc One Investment Management Group;
Board of Regents, Luther College; currently a
member of the American and Wisconsin Bar
Associations.
46
NUMBER OF PORTFOLIOS
PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUND (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Board member 1997 Chairman, formerly, Senior Partner and Chief 155
9/24/44 Operating Officer, Miller-Valentine Partners
333 W. Wacker Drive Ltd., a real estate investment company;
Chicago, IL 60606 formerly, Vice President, Miller-Valentine
Realty, a construction company; Board Member
and Chair of the Finance Committee, member of
the Audit Committee of Premier Health
Partners, the not-for-profit company of Miami
Valley Hospital; Board Member, formerly Chair,
Dayton Development Coalition; President,
Dayton Philharmonic Orchestra Association;
formerly, Member, Community Advisory Board,
National City Bank, Dayton, Ohio and
Business Advisory Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy 155
12/29/47 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
------------------------------------------------------------------------------------------------------------------------------------
Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance 155
1/22/50 (since 1997), Northwestern University;
333 W. Wacker Drive Director (since 2003), Chicago Board of
Chicago, IL 60606 Options Exchange; Director (since 2003),
National Mentor Holdings, a privately-held,
national provider of home and community-based
services; Chairman (since 1997), Board of
Directors, Rubicon, an insurance company owned
by Northwestern University; Director (since
1997), Evanston of Commerce and Evanston
Inventure, a business development
organization.
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant 155
9/9/56 Administrative Secretary and Associate General Counsel,
333 W. Wacker Drive Officer formerly, Vice President and Assistant General
Chicago, IL 60606 Counsel of Nuveen Investments, LLC; Managing
Director (since 2002), General Counsel and
Assistant Secretary, formerly, Vice President
of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Managing
Director (since 2002), Assistant Secretary and
Associate General Counsel, formerly, Vice
President (since 2000), of Nuveen Asset
Management; Managing Director (since 2004) and
Assistant Secretary (since 1994) of Nuveen
Investments, Inc.; Assistant Secretary of NWQ
Investment Management Company, LLC (since
2002); Vice President and Assistant Secretary
of Nuveen Investments Advisers Inc. (since
2002); Managing Director, Associate General
Counsel and Assistant Secretary of Rittenhouse
Asset Management, Inc. (since 2003); Chartered
Financial Analyst.
47
Board Members
AND OFFICERS (CONTINUED)
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Julia L. Antonatos Vice President 2004 Managing Director (since 2005), previously, 155
9/22/63 Vice President (since 2002), formerly,
333 W. Wacker Drive Assistant Vice President (since 1999) of .
Chicago, IL 60606 Nuveen Investments, LLC; Chartered Financial
Analyst
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, 155
2/3/66 and Assistant Assistant Vice President (since 2000) of
333 W. Wacker Drive Secretary Nuveen Investments, LLC.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC 155
11/28/67 and Treasurer (since 1999); Vice President and Treasurer of
333 W. Wacker Drive Nuveen Investments, Inc. (since 1999); Vice
Chicago, IL 60606 President and Treasurer of Nuveen Advisory
Corp. and Nuveen Institutional Advisory Corp
(since 1999)(3); Vice President and Treasurer
of Nuveen Asset Management (since 2002) and of
Nuveen Investments Advisers Inc.; Assistant
Treasurer of NWQ Investment Management
Company, LLC (since 2002); Vice President and
Treasurer of Nuveen Rittenhouse Asset
Management, Inc. (since 2003); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 1998 Vice President (since 2002) and Assistant 155
9/24/64 and Secretary General Counsel (since 1998), formerly,
333 W. Wacker Drive Assistant Vice President (since 1998) of
Chicago, IL 60606 Nuveen Investments, LLC; Vice President (since
2002 and Assistant Secretary (since 1998),
formerly Assistant Vice President of Nuveen
Advisory Corp. and Nuveen Institutional
Advisory Corp.(3); and (since 2005) Nuveen
Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004) formerly, Vice 155
10/24/45 President of Nuveen Investments, LLC; Managing
333 W. Wacker Drive Director (since 2004) formerly, Vice President
60606 (since 1998) of Nuveen Advisory Corp. IL and
Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2005) of Nuveen Asset
Management.
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen 155
3/2/64 Investments, LLC; Managing Director (since
333 W. Wacker Drive 2001), formerly, Vice President (since 1995)
Chicago, IL 60606 of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Managing
Director (since 2001) of Nuveen Asset
Management; Vice President (since 2002) of
Nuveen Investment Advisers Inc.; Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds 155
5/31/54 and Controller Controller (since 1998) of Nuveen Investments,
333 W. Wacker Drive LLC; formerly, Vice President and Funds
Chicago, IL 60606 Controller (1998-2004) of Nuveen Investments,
Inc.; Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
James D. Grassi Vice President 2004 Vice President and Deputy Director of 155
4/13/56 and Chief Compliance (since 2004) of Nuveen Investments,
333 W. Wacker Drive Compliance LLC, Nuveen Investments Advisers Inc., Nuveen
Chicago, IL 60606 Officer Asset Management and Rittenhouse Asset
Management, Inc.; previously, Vice President
and Deputy Director of Compliance (2004) of
Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.(3); formerly, Senior Attorney
(1994 to 2004), The Northern Trust Company.
48
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen 155
3/22/63 Investments, LLC; Certified Public Accountant.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999) of Nuveen 155
8/27/61 Investments, LLC.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and 155
7/27/51 and Assistant Assistant General Counsel of Nuveen
333 W. Wacker Drive Secretary Investments, LLC; Vice President and Assistant
Chicago, IL 60606 Secretary of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Vice
President (since 2005) and Assistant Secretary
of Nuveen Investments, Inc. and of Nuveen
Asset Management; Vice President (since 2000),
Assistant Secretary and Assistant General
Counsel (since 1998) of Rittenhouse Asset
Management; Vice President and Assistant
Secretary of Nuveen Investments Advisers Inc.
(since 2002); Assistant Secretary of NWQ
Investment Management Company, LLC (since
2002).
(1) Mr. Schwertfeger is an "interested person" of the Fund, as defined in
the Investment Company Act of 1940, because he is an officer and board
member of the Adviser.
(2) Board members serve an indefinite term until his/her successor is
elected. The year first elected or appointed represents the year in
which the board member was first elected or appointed to any fund in
the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year
first elected or appointed represents the year in which the Officer
was first elected or appointed to any fund in the Nuveen Complex.
49
ANNUAL INVESTMENT
MANAGEMENT AGREEMENT
APPROVAL PROCESS
At a meeting held on May 10-12, 2005, the Board of Trustees of the Funds,
including the independent Trustees, unanimously approved the Investment
Management Agreement between each Fund and NAM and the Sub-Advisory Agreement
between NAM and Symphony for each Fund (NAM and Symphony are each a "Fund
Adviser").
THE APPROVAL PROCESS
To assist the Board in its evaluation of an advisory contract with a Fund
Adviser, the independent Trustees received a report in adequate time in advance
of their meeting which outlined, among other things, the services provided by
the Fund Adviser; the organization of the Fund Adviser, including the
responsibilities of various departments and key personnel; the Fund's past
performance as well as the Fund's performance compared to funds of similar
investment objectives compiled by an independent third party (a "Peer Group") as
described below and with recognized and/or customized benchmarks (as
appropriate); the profitability of the Fund Adviser and certain industry
profitability analyses for advisers to unaffiliated investment companies; the
expenses of the Fund Adviser in providing the various services; the advisory
fees of the Fund Adviser, including comparisons of such fees with the management
fees of comparable funds in its Peer Group as well as comparisons of the Fund
Adviser's management fees with the fees the Fund Adviser assesses to other types
of investment products or accounts, if any; the soft dollar practices of the
Fund Adviser; and the expenses of each Fund, including comparisons of the Fund's
expense ratios (after any fee waivers) with the expense ratios of its Peer
Group. This information supplements that received by the Board throughout the
year regarding Fund performance, expense ratios, portfolio composition, trade
execution and sales activity.
In addition to the foregoing materials, independent legal counsel to the
independent Trustees provided, in advance of the meeting, a legal memorandum
outlining, among other things, the duties of the Trustees under the 1940 Act as
well as the general principles of relevant state law in reviewing and approving
advisory contracts; the requirements of the 1940 Act in such matters; an
adviser's fiduciary duty with respect to advisory agreements and compensation;
the standards used by courts in determining whether investment company boards of
directors have fulfilled their duties and factors to be considered by the board
in voting on advisory agreements.
At the Board meeting, NAM made a presentation to and responded to questions from
the Board. In addition, the independent Trustees noted that Symphony has also
previously made written or oral presentations to the Board providing it with the
opportunity to explain its investment strategies, discuss market conditions, and
highlight any material issues. Many of these presentations were part of site
visits by the Board throughout the year. After the presentations and after
reviewing the written materials, the independent Trustees met privately with
their legal counsel to review the Board's duties in reviewing advisory contracts
and consider the renewal of the advisory contract. It is with this background
that the Trustees considered each advisory contract (which includes sub-advisory
contracts) with a Fund Adviser. The independent Trustees, in consultation with
independent counsel, reviewed the factors set out in judicial decisions and SEC
directives relating to the renewal of advisory contracts. As outlined in more
detail below, the Trustees considered all factors they believed relevant with
respect to each Fund, including the following: (a) the nature, extent and
quality of the services to be provided by the Fund Adviser; (b) the investment
performance of the Fund and the Fund Adviser; (c) the costs of the services to
be provided and profits to be realized by the Fund Adviser and its affiliates
from the relationship with the Fund; (d) the extent to which economies of scale
would be realized as the Fund grows; and (e) whether fee levels reflect these
economies of scale for the benefit of Fund investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, extent and quality of the respective Fund Adviser's
services, the Trustees reviewed information concerning the types of services
that a Fund Adviser or its affiliates provide and are expected to provide to the
Nuveen Funds; narrative and statistical information concerning the Fund's
performance record and how such performance compares to the Fund's Peer Group
and recognized benchmarks and/or customized benchmarks (as described in further
detail in Section B below); information describing the Fund Adviser's
organization and its various departments, the experience and responsibilities of
key personnel, and available resources. In the discussion of key personnel, the
Trustees received materials regarding the changes or additions in personnel of
the applicable Fund Adviser. The Trustees further noted the willingness of the
personnel of NAM to engage in open, candid discussions with the Board. The
Trustees further considered the quality of the Fund Adviser's investment process
in making portfolio management decisions, including any refinements or
improvements to the portfolio management processes, enhancements to technology
and systems that are available to portfolio managers, and any additions of new
personnel which may strengthen or expand the research and investment
capabilities of the Fund Adviser. In their review of the advisory contracts for
the fixed income funds, the Trustees also noted that Nuveen won the Lipper Award
for Best Fund Family: Fixed Income-Large Asset Class, for 2004. Given the
Trustees' experience with the Funds, other Nuveen funds and the Fund Advisers,
the Trustees noted that they were familiar with and continue to have a good
understanding of the organization, operations and personnel of the Fund
Advisers.
50
In addition to advisory services, the independent Trustees considered the
quality of the administrative or non-advisory services provided. In this regard,
NAM provides the Funds with such administrative and other services (exclusive
of, and in addition to, any such services provided by others for the Funds) and
officers and other personnel as are necessary for the operations of the
respective Fund. In addition to investment management services, NAM and its
affiliates provide each Fund with a wide range of services, including: preparing
shareholder reports; providing daily accounting; providing quarterly financial
statements; overseeing and coordinating the activities of other service
providers; administering and organizing Board meetings and preparing the Board
materials for such meetings; providing legal support (such as helping to prepare
registration statements, amendments thereto and proxy statements and responding
to regulatory inquiries); and performing other Fund administrative tasks
necessary for the operation of the respective Fund (such as tax reporting and
fulfilling regulatory filing requirements). In addition, in evaluating the
administrative services, the Trustees considered, in particular, a Fund
Adviser's policies and procedures for assuring compliance with applicable laws
and regulations in light of the new SEC regulations governing compliance. The
Trustees noted NAM's focus on compliance and its compliance systems. In their
review, the Trustees considered, among other things, the additions of
experienced personnel to NAM's compliance group and modifications and other
enhancements to NAM's computer systems. In addition to the foregoing, the
Trustees also noted that NAM outsources certain services that cannot be
replicated without significant costs or at the same level of expertise. Such
outsourcing has been a beneficial and efficient use of resources by keeping
expenses low while obtaining quality services. Further, as the Funds utilize a
sub-adviser, the Trustees considered NAM's ability and procedures to monitor
Symphony's performance, business practices and compliance policies and
procedures. In this regard, the Trustees noted the role of NAM's investment
oversight committee, including its increased personnel, the responsibilities and
experience of the staff, and procedures to monitor sub-advisers, including the
use of site visits.
In addition to the above, in reviewing the variety of additional services that
NAM or its affiliates must provide to closed-end funds, such as the Funds, the
independent Trustees determined that Nuveen's commitment to supporting the
secondary market for the common shares of its closed-end funds is particularly
noteworthy. In this regard, the Trustees noted Nuveen's efforts to sponsor
numerous forums for analysts and specialists regarding the various Nuveen
closed-end funds, its creation of a new senior position dedicated to providing
secondary market support services and enhancing communications with investors
and analysts, and its advertising and media relations efforts designed to raise
investor and analyst awareness of the closed-end funds.
In evaluating the services of Symphony, the independent Trustees noted that the
Sub-Advisory Agreements were essentially agreements for portfolio management
services only and Symphony was not expected to supply other significant
administrative services to the Funds.
Based on their review, the Trustees found that, overall, the nature, extent and
quality of services provided (and expected to be provided) to the Fund under the
Investment Management Agreement or Sub-Advisory Agreement, as applicable, were
of a high level and were quite satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND FUND ADVISERS
As previously noted, the Board received a myriad of performance information
regarding each Fund and its Peer Group, if available. Among other things, the
Board received materials reflecting a Fund's historic performance, the Fund's
performance compared to its Peer Group (as available) and its performance
compared to recognized and/or customized benchmarks (as applicable). The
Trustees reviewed performance information including, among other things, total
return information compared with a Fund's Peer Group as well as recognized
and/or customized benchmarks (as appropriate) for the one-, three- and five-year
periods (as applicable) ending December 31, 2004. This information supplements
the Fund performance information provided to the Board at each of their
quarterly meetings. Based on their review, the Trustees determined that the
respective Fund's absolute and relative investment performance over time had
been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
In evaluating the management fees and expenses that a Fund is expected to
bear, the Trustees considered the Fund's current management fee structure,
the sub-advisory fee arrangements and the Fund's expected expense ratios in
absolute terms as well as compared with the fees and expense ratios of the
unaffiliated funds in its Peer Group. The Trustees reviewed the financial
information of the respective Fund Adviser, including its respective
revenues, expenses and profitability. In reviewing fees, the Trustees,
among other things, reviewed comparisons of the Fund's gross management
fees (fees after fund-level and complex-wide level breakpoints but before
reimbursements and fee waivers), net management fees (after breakpoints and
reimbursements and fee waivers) and total expense ratios (before and after
waivers) with those of the unaffiliated funds in its Peer Group and peer
averages. In this regard, the Trustees noted that the relative ranking of
the Nuveen funds on fees and expenses was aided by the significant level of
fee reductions provided by the fund-level and complex-wide breakpoint
schedules, and the fee waivers and reimbursements provided by Nuveen for
certain funds launched since 1999. The complex-wide breakpoint schedule was
instituted in 2004 and is described in further detail below in Section D
entitled "Economies of Scale and Whether Fee Levels Reflect These Economies
of Scale." In its review, the Trustees noted that all taxable closed-end
exchange-traded Nuveen funds had net expense ratios below or within an
acceptable range compared to peers.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Trustees further compared the fees of NAM to the fees NAM or an
affiliate thereof assessed for other types of clients (such as separate
managed accounts as well as fees charged on funds that are not offered by
Nuveen but are sub-advised by one of Nuveen's investment management teams).
With respect to separately managed accounts, the advisory fees to such
separate managed accounts are generally lower than those charged to the
comparable Fund. The Trustees noted, however, the additional services that
are provided and the costs incurred by Nuveen in managing and operating
registered investment companies, such
51
ANNUAL INVESTMENT MANAGEMENT
AGREEMENT APPROVAL PROCESS (continued)
as the Funds, compared to individually managed separate accounts. For
instance, as described above, NAM and its affiliates provide numerous
services to the Funds including, but not limited to, preparing shareholder
reports; providing daily accounting; preparing quarterly financial
statements; overseeing and coordinating the activities of other service
providers; administering and organizing Board meetings and preparing the
Board materials for such meetings; providing legal support; and
administering all other aspects of the Fund's operations. Further, the
Trustees noted the increased compliance requirements for funds in light of
new SEC regulations and other legislation. These services are generally not
required to the same extent, if at all, for separate accounts. In addition
to the differences in services, the Trustees also considered, among other
things, the differences in product distribution, investor profiles and
account sizes. Accordingly, the Trustees believe that the nature and number
of services provided to operate a Fund merit the higher fees than those to
separate managed accounts.
In considering the fees of Symphony, the Trustees also considered the
pricing schedule Symphony charges for similar investment management
services for other fund sponsors or clients. The Trustees also compared the
sub-advisory fees to the significantly higher fees assessed to hedge funds
by Symphony. Generally, the sub-advisory fees were at the lower end of the
Symphony's fee schedule.
3. PROFITABILITY OF ADVISERS
In conjunction with its review of fees, the Trustees also considered the
profitability of NAM (which incorporated Nuveen's wholly-owned
subsidiaries, such as Symphony). The Trustees reviewed the respective Fund
Adviser's revenues, expenses and profitability margins (on both a pre-tax
and after-tax basis). In reviewing profitability, the Trustees recognized
that one of the most difficult issues in determining profitability is
establishing a method of allocating expenses. Accordingly, the Trustees
reviewed a Fund Adviser's assumptions and methodology of allocating
expenses. In this regard, the methods of allocation used appeared
reasonable but the Board noted the inherent limitations in allocating costs
among various advisory products. The Trustees also recognized that
individual fund or product line profitability of other advisers is
generally not publicly available. Further, profitability may be affected by
numerous factors including the types of funds managed, expense allocations,
business mix, etc. and therefore comparability of profitability is somewhat
limited. Nevertheless, to the extent available, the Trustees considered the
respective Fund Adviser's profit margin compared to the profitability of
various publicly-traded investment management companies and/or investment
management companies that publicly disclose some or all of their financial
results compiled by three independent third-party service providers. The
Trustees also reviewed the revenues, expenses and profit margins of various
unaffiliated advisory firms with similar amounts of assets under management
for the last year prepared by NAM. Based on their review, the Trustees were
satisfied that each Fund Adviser's level of profitability from its
relationship with each Fund was reasonable in light of the services
provided.
In evaluating the reasonableness of the compensation, the Trustees also
considered any other revenues paid to a Fund Adviser as well as any
indirect benefits (such as soft dollar arrangements, if any) the Fund
Adviser and its affiliates are expected to receive that are directly
attributable to their management of the Funds, if any. See Section E below
for additional information. Based on their review of the overall fee
arrangements of the applicable Fund, the Trustees determined that the
advisory fees and expenses of the respective Fund were reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
In reviewing the compensation, the Trustees have long understood the benefits of
economies of scale as the assets of a fund grow and have sought to ensure that
shareholders share in these benefits. One method for shareholders to share in
economies of scale is to include breakpoints in the advisory fee schedules that
reduce fees as fund assets grow. Accordingly, the Trustees received and reviewed
the schedules of advisory fees for each Fund, including fund-level breakpoints
thereto. In addition, after lengthy negotiations with management, the Board in
May, 2004 approved a complex-wide fee arrangement pursuant to which fees of the
funds in the Nuveen complex, including the Funds, are reduced as the assets in
the fund complex reach certain levels. The complex-wide fee arrangement was
introduced on August 1, 2004 and the Trustees reviewed data regarding the
reductions of fees for the Funds for the period of August 1, 2004 to December
31, 2004. In evaluating the complex-wide fee arrangement, the Trustees
considered, among other things, the historic and expected fee savings to
shareholders as assets grow, the amount of fee reductions at various asset
levels, and that the arrangement would extend to all Funds in the Nuveen
complex. The Trustees also considered the impact, if any, the complex-wide fee
arrangement may have on the level of services provided. Based on their review,
the Trustees concluded that the breakpoint schedule and complex-wide fee
arrangement currently was acceptable and desirable in providing benefits from
economies of scale to shareholders.
52
E. INDIRECT BENEFITS
In evaluating fees, the Trustees also considered any indirect benefits or
profits the respective Fund Adviser or its affiliates may receive as a result of
its relationship with each Fund. In this regard, the Trustees considered any
benefits from soft dollar arrangements. The Trustees noted that although NAM
manages a large amount of assets, it has very little, if any, brokerage to
allocate. This is due to the fact that NAM typically manages the portfolios of
the municipal funds in the Nuveen complex and municipal bonds generally trade on
a principal basis. Accordingly, NAM does not currently have any soft dollar
arrangements and does not pay excess brokerage commissions (or spreads on
principal transactions) in order to receive research services. The Trustees also
considered the soft dollar arrangements of the sub-adviser. The Trustees noted
that Symphony also does not use soft dollar arrangements.
In addition to soft dollar arrangements, the Trustees also considered any other
revenues, if any, received by NAM or its affiliates. In this regard, for Nuveen
funds with outstanding preferred shares and new closed-end funds, the Trustees
also considered revenues received by Nuveen for serving as agent for
broker-dealers at its preferred trading desk and for acting as co-manager in the
initial public offering of new closed-end exchange-traded funds.
F. OTHER CONSIDERATIONS
Nuveen, until recently, was a majority owned subsidiary of St. Paul Travelers
Companies, Inc. ("St. Paul"). As noted, St. Paul earlier this year announced its
intention to divest its equity stake in Nuveen. Nuveen is the parent of NAM.
Pursuant to a series of transactions, St. Paul had begun to reduce its interest
in Nuveen which would ultimately result in a change of control of Nuveen and
therefore NAM. As mandated by the 1940 Act, such a change in control would
result in an assignment of the Investment Management Agreement with NAM and the
automatic termination of such agreement. Accordingly, the Board also considered
the approval of a New Investment Management Agreement with each Fund in light
of, and which would take effect upon, the anticipated change of control. More
specifically, the Board considered for each Fund a New Investment Management
Agreement on substantially identical terms to the existing Investment Management
Agreement, to take effect after the change of control has occurred and the
contract has been approved by Fund shareholders. In its review, the Board
considered whether the various transactions necessary to divest St. Paul's
interest will have an impact on the various factors they considered in approving
NAM, such as the scope and quality of services to be provided following the
change of control. In reviewing the St. Paul transactions, the Board considered,
among other things, the impact, if any, on the operations and organizational
structure of NAM; the possible benefits and costs of the transactions to the
respective Fund; the potential implications of any arrangements used by Nuveen
to finance certain of the transactions; the ability of NAM to perform its duties
after the transactions; whether a Fund's fee structure or expense ratio would
change; any changes to the current practices of the respective Fund; any changes
to the terms of the advisory agreement; and any anticipated changes to the
operations of NAM. Based on its review, the Board determined that St. Paul's
divestiture would not affect the nature and quality of services provided by NAM,
the terms of the Investment Management Agreement, including the fees thereunder,
and would not materially affect the organization or operations of NAM.
Accordingly, the Board determined that their analysis of the various factors
regarding their approval of NAM would continue to apply after the change of
control.
In addition to the foregoing, a change in control of NAM may be deemed an
assignment of the Sub-Advisory Agreement between NAM and Symphony. Further,
Symphony is a wholly-owned subsidiary of Nuveen. Accordingly, the change of
control of Nuveen would also result in a change of control of such sub-adviser
resulting in the automatic termination of its existing Sub-Advisory Agreements.
The Board therefore considered approval of a New Sub-Advisory Agreement with
Symphony in light of the anticipated change of control. More specifically, the
Board considered approval of each New Sub-Advisory Agreement on substantially
identical terms as the respective Original Sub-Advisory Agreement, to take
effect after the change of control has occurred and the agreement has been
approved by Fund shareholders. In reviewing the impact of the St. Paul divesture
on Symphony, the Board considered the same factors as outlined previously with
respect to their review of NAM. As with NAM, the Board concluded that the St.
Paul divestiture would not affect the nature and quality of services provided by
Symphony, the terms of the Sub-Advisory Agreement, including the fees paid
thereunder, and would not materially affect the organization or operations of
Symphony. Accordingly, the Board determined that their analysis of the various
factors regarding their review and approval of Symphony, as sub-adviser, would
continue to apply following the change in control.
G. APPROVAL
The Trustees did not identify any single factor discussed previously as
all-important or controlling. The Trustees, including a majority of independent
Trustees, concluded that the terms of the Investment Management and Sub-Advisory
Agreements were fair and reasonable, that the respective Fund Adviser's fees are
reasonable in light of the services provided to each Fund, that the renewal of
the NAM Investment Management Agreement and each Sub-Advisory Agreement should
be approved, and that the new, post-change of control NAM Investment Management
Agreement and the Sub-Advisory Agreements be approved and recommended to
shareholders.
53
Reinvest Automatically
EASILY AND CONVENIENTLY
SIDEBAR TEXT: NUVEEN MAKES
REINVESTING EASY.
A PHONE CALL IS ALL IT TAKES TO
SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding.
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. Dividends and distributions received to purchase
shares in the open market will normally be invested shortly after the dividend
payment date. No interest will be paid on dividends and distributions awaiting
reinvestment. Because the market price of the shares may increase before
purchases are completed, the average purchase price per share may exceed the
market price at the time of valuation, resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the Fund. A pro rata portion of any applicable brokerage commissions on open
market purchases will be paid by Plan participants. These commissions usually
will be lower than those charged on individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
54
Other Useful
INFORMATION
In April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul Travelers")
sold the majority of its controlling equity interest in Nuveen Investments, Inc.
("Nuveen") to the general public. Nuveen is the parent of Nuveen Asset
Management ("NAM"), which is each Fund's investment manager. This sale was
deemed to be an "assignment" of the investment management agreement between each
Fund and NAM and, if applicable, of the sub-advisory agreement between NAM and
the Fund's sub-adviser. As required by law, the shareholders of each Fund were
asked to approve a new investment management agreement and, if applicable, a new
subadvisory agreement that reflected this change in ownership. The shareholders
of each Fund voted this approval at a Shareholders' Meeting on July 26, 2005.
There were no changes to the investment objectives or management of any Fund as
a result of these actions.
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2005, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual. Each Fund has filed with the Securities and Exchange
Commission the certification of its Chief Executive Officer and Chief Financial
Officer required by Section 302 of the Sarbanes-Oxley Act.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
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.
BOARD OF TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Eugene S. Sunshine
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common 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.
55
Nuveen Investments:
SERVING Investors
For GENERATIONS
Photo of: 2 women looking at a photo album.
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS'
DIFFERENT NEEDS.
Managing more than $120 billion in assets, Nuveen Investments offers access to a
number of different asset classes and investing solutions through a variety of
products. Nuveen Investments markets its capabilities under four distinct
brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; and
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest.
Be sure to obtain a prospectus, where applicable. Investors should consider the
investment objective and policies, risk considerations, charges and expenses of
the Fund carefully before investing. The prospectus contains this and other
information relevant to an investment in the Fund. For a prospectus, please
contact your securities representative or Nuveen Investments, 333 W. Wacker Dr.,
Chicago, IL 60606. Please read the prospectus carefully before you invest or
send money.
Learn more
about Nuveen Funds at
WWW.NUVEEN.COM/ETF
o Share prices
o Fund details
o Daily financial news
o Investor education
o Interactive planning tools
Logo: NUVEEN Investments
EAN-C-0705D
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 Floating Rate Income Fund
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that Ernst & Young LLP provided to the Fund, except for those non-audit services
that were subject to the pre-approval exception under Rule 2-01 of Regulation
S-X (the "pre-approval exception"). The pre-approval exception for services
provided directly to the Fund waives the pre-approval requirement for services
other than audit, review or attest services if: (A) the aggregate amount of all
such services provided constitutes no more than 5% of the total amount of
revenues paid by the Fund to its accountant during the fiscal year in which the
services are provided; (B) the Fund did not recognize the services as non-audit
services at the time of the engagement; and (C) the services are promptly
brought to the Audit Committee's attention, and the Committee (or its delegate)
approves the services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
Audit Fees Billed Audit-Related Fees Tax Fees All Other Fees
Fiscal Year Ended to Fund Billed to Fund Billed to Fund Billed to Fund
------------------------------------------------------------------------------------------------------------------------------------
July 31, 2005 $ 58,333 $ 0 $ 919 $ 1,550
----------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------------------
July 31, 2004 * $ 33,000 $ 0 $ 0 $ 1,000
----------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------------------
The above "All Other Fees" are fees paid to audit firms to perform agreed upon
procedures required by the rating agencies to rate fund preferred shares. The
above "Tax Fees" were billed for professional services for tax advice, tax
compliance, and tax planning.
* Revised from 2004 filing to include fees paid to audit registration
statements for common, preferred stock offerings, and agreed upon
procedures.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
Fiscal Year Ended Audit-Related Fees Tax Fees Billed to All Other Fees
Billed to Adviser and Adviser and Billed to Adviser
Affiliated Fund Affiliated Fund and Affiliated Fund
Service Providers Service Providers Service Providers
---------------------------------------------------------------------------------------------------------------------
July 31, 2005 $ 0 $ 282,575 $ 0
------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------
July 31, 2004 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" are primarily fees billed to the Adviser for Fund tax
return preparation.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. For
engagements entered into on or after May 6, 2003, the Audit Committee is
required to pre-approve non-audit services that Ernst & Young LLP provides to
the Adviser and any Affiliated Fund Services Provider, if the engagement related
directly to the Fund's operations and financial reporting (except for those
subject to the de minimis exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the Fund's last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating Ernst & Young LLP's independence.
Fiscal Year Ended Total Non-Audit Fees
billed to Adviser and
Affiliated Fund Service Total Non-Audit Fees
Providers (engagements billed to Adviser and
related directly to the Affiliated Fund Service
Total Non-Audit Fees operations and financial Providers (all other
Billed to Fund reporting of the Fund) engagements) Total
------------------------------------------------------------------------------------------------------------------------------------
July 31, 2005 $ 1,919 $ 282,575 $ 0 $ 284,494
July 31, 2004 $ 0 $ 0 $ 0 $ 0
The above "Non-Audit Fees billed to Adviser" for 2005 include "Tax-Fees" billed
to Adviser in the amount of $282,575 from previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the audit
committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the audit committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the audit committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the audit committee at
the next audit committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B.
Evans, William J. Schneider and Eugene S. Sunshine.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
the Adviser would either engage an independent third party to determine how the
proxy should be voted or vote the proxy with the consent, or based on the
instructions, of the Fund's Board of Directors or Trustees or its
representative. In the case of a conflict of interest, the proxy would be
submitted to the applicable Fund's Board to determine how the proxy should be
voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17
CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the
results were provided to the Board of Directors or Trustees and made available
to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable at this time.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Floating Rate Income Fund
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: October 7, 2005
-------------------------------------------------------------------
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: October 7, 2005
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: October 7, 2005
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.