ANNUAL REPORT March 31, 2002
Nuveen
Municipal Closed-End
Exchange-Traded
Funds
[photos of man with daughter]
SELECT PORTFOLIOS
NXP
NXQ
NXR
NXC
NXN
Dependable,
tax-free income
because
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
THE NUVEEN INVESTOR
See Page 9
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Dear
SHAREHOLDER
[photo of Timothy R. Schwertfeger]
Timothy R. Schwertfeger
Chairman of the Board
"I URGE YOU TO CONSIDER RECEIVING FUTURE FUND REPORTS AND OTHER INFORMATION
ELECTRONICALLY...SEE THE INSIDE FRONT COVER OF THIS REPORT FOR DETAILED
INSTRUCTIONS."
I am pleased to report that during the period covered by this report, your Fund
continued to meet its primary objective of providing attractive monthly income,
while at the same time offering opportunities to reduce overall portfolio
volatility. Detailed information on your Fund's performance can be found in the
Portfolio Manager's Comments and Performance Overview sections of this report. I
urge you to take the time to read them.
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In addition to providing you with steady tax-free income, your Nuveen Fund also
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overall investment strategy. These include careful research, constant
surveillance and judicious trading by Nuveen's seasoned portfolio management
team, with every action designed to supplement income, improve Fund structure,
better adapt to current market conditions or increase diversification. In
uncertain markets like these, prudent investors understand the importance of
diversification, balance, and risk management, all attributes your Nuveen Fund
can bring to your portfolio.
For more than 100 years, Nuveen has specialized in offering quality investments
such as these Nuveen Funds to those seeking to accumulate and preserve wealth.
Our mission continues to be to assist you and your financial advisor by offering
the investment services and products that can help you meet your financial
objectives. We thank you for continuing to choose Nuveen Investments as a
partner as you work toward that goal.
/s/ Timothy R. Schwertfeger
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
May 15, 2002
1
Nuveen Select Portfolios
(NXP, NXQ, NXR, NXC, NXN)
Portfolio Manager's
COMMENTS
Portfolio manager Tom Spalding reviews economic and market conditions, key
strategies, and recent Portfolio performance. Tom, who has 25 years of
investment management experience with Nuveen, has managed the Select Portfolios
since 1999.
WHAT WERE THE MAJOR DRIVERS OF THE U.S. ECONOMY AND THE MUNICIPAL MARKET DURING
THIS REPORTING PERIOD?
The two major forces at work during the twelve months ended March 31, 2002, were
the general slowdown in economic growth and the Federal Reserve's aggressive
easing of short-term interest rates. In addition, the events of September 11,
2001, and the uncertain geopolitical climate that followed also have impacted
the economy and the markets.
In the fixed-income markets, the general environment of the past twelve months
helped many municipal securities perform well. The trend toward increased
issuance established in 2001 continued in the first three months of 2002, with
$67.4 billion in new supply, up 10% over January-March 2001. On the demand side,
municipal bonds continued to be highly sought after by individual investors
looking for diversification, tax-free income and an alternative to a volatile
stock market. Institutional investors, especially traditional purchasers such as
insurance companies and pension plans, also have been active buyers in the new
issue market.
Looking at California and New York specifically, both states have experienced
declining economic growth over the past twelve months, tied, in part, to
specific events. New York was the state most impacted by the September 11
attacks, while California continued to deal with the aftermath of its 2001 power
crisis. Both states remained heavily dependent on economically sensitive revenue
sources such as sales, income, and capital gains taxes and, with the economic
downturn, now face budget shortfalls estimated at $7 billion in California and
$9 billion in New York. Despite these factors, New York's credit ratings
remained intact at A2/AA/AA. However, California's deficit, combined with
uncertainties surrounding the resolution of its power problems, put pressure on
the state's credit ratings. In November 2001, Moody's downgraded California's
general obligation bonds for the second time in twelve months to A1, while
Standard & Poor's and Fitch have maintained their ratings at A+/AA over the past
six months. During the first three months of 2002, New York issued $4.5 billion
in new municipal bonds, a 12% decline from January-March 2001 levels. However,
we expect this situation may reverse itself in coming months, with several large
deals already listed on state and city issuance calendars. For the same period,
California saw strong supply, issuing $8.1 billion in municipal debt, up 13%
over the first quarter of 2001. Faced with some of the highest state income
taxes in the nation, both California and New York investors continued to
demonstrate robust demand for in-state bonds.
HOW DID THE NUVEEN SELECT PORTFOLIOS PERFORM OVER THE PAST TWELVE MONTHS?
During the twelve months ended March 31, 2002, the Fed's policy of interest rate
easing, combined with favorable market technicals, created a generally positive
total return environment for municipal bonds. Individual results for the Nuveen
Select Portfolios are presented in the accompanying table.
TOTAL RETURN LEHMAN LIPPER
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
3/31/02 EQUIVALENT3 3/31/02 3/31/02 3/31/02
------------------------------------------------------------
NXP 6.15% 8.79% 3.41% 3.81% 2.96%
------------------------------------------------------------
NXQ 6.11% 8.73% 3.41% 3.81% 2.96%
------------------------------------------------------------
NXR 5.95% 8.50% 3.70% 3.81% 2.96%
------------------------------------------------------------
NXC 5.39% 8.49% 3.03% 3.41% 3.26%
------------------------------------------------------------
NXN 5.23% 8.05% 2.75% 3.82% 3.50%
------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
Overall, the market environment of the past twelve months favored funds with
longer durations4. As of March 31, 2002, the durations of the three national
Portfolios ranged from 2.82 to 4.02, compared with 7.57 for the Lehman Brothers
Municipal Bond Index, while NXC and NXN had durations of 2.97 and 4.00,
respectively, versus 8.09 and 7.23 for the Lehman California and New York
Tax-Exempt Bond Indexes. The relative performance of these Portfolios also was
influenced by overall market activity, portfolio structure and the call exposure
of individual holdings.
1 The performance of the national Portfolios is compared with that of the Lehman
Brothers Municipal Bond Index, an unleveraged index comprising a broad range
of investment-grade municipal bonds. The performances of NXC and NXN are
compared with those of the Lehman Tax-Exempt Bond Indexes for California and
New York, respectively. These unleveraged indexes comprise a broad range of
municipal bonds within each of those states. Results for the Lehman indexes do
not reflect any expenses.
2 The total returns of the national Portfolios are compared with the average
annualized return of the twelve funds in the Lipper General and Insured
Unleveraged Municipal Debt Funds category. NXC's total return is compared with
the average total return of the nine funds in the Lipper California Municipal
Debt Funds category, while the comparison for NXN is based on the average
total return of the nine funds in the Lipper New York Municipal Debt Funds
category. Portfolio and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment in order to equal the yield of the Nuveen Portfolio on an
after-tax basis. For the national Portfolios, the taxable-equivalent yield is
based on the portfoliomarket yield on the indicated date and a federal income
tax rate of 30%, while the taxable-equivalent yields for NXC and NXN are based
on their market yields on the indicated date and combined federal and state
income tax rates of 36.5% and 35%, respectively.
4 Duration is a measure of a portfolio's NAV volatility in reaction to interest
rate movements.
2
HOW DID THE MARKET ENVIRONMENT AFFECT THE PORTFOLIOS' DIVIDENDS AND SHARE
PRICES?
Over the twelve months ended March 31, 2002, relatively lower levels of bond
call exposure helped us maintain the dividends of NXR and NXC. These two
Portfolios have now provided shareholders with 13 consecutive months of stable
dividends. For the remaining three Portfolios, however, increased pressure from
call activity led to dividend cuts in September 2001.
Over the past year, several factors restricted demand for the Select Portfolios
and weighed on their share prices, including the recent dividend adjustments and
increased demand for leveraged tax-free fixed-income funds that might benefit
more directly from the lower short-term interest rate environment. As a result,
share prices for four of the five Portfolios declined, and all five Portfolios
continued to trade at a discount (share price below NAV).
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN SELECT PORTFOLIOS DURING THE
YEAR ENDED MARCH 31, 2002?
While investing the proceeds from sales and bond calls over the past twelve
months, we focused on identifying attractive bonds with the potential to support
the Portfolios' long-term dividend-payment capabilities, enhance total return
potential, and add value and diversification. In the national Portfolios, the
healthcare sector, which has benefited from stabilizing finances, performed
well. This sector remains an important strategic selection for us, providing the
potential for attractive income as well as competitive total returns. We also
emphasized economically sensitive sectors that we believed were poised for
strong performance, such as transportation. In general, we looked for bonds that
offered the best value in the 15-year to 18-year maturity range. In NXC and NXN,
we found value in bonds with maturities of 25 years and at least 9 years of call
protection that were trading at par or slight premiums in order to help sustain
these Portfolios' cashflow.
In view of recent world events, maintaining strong credit quality also remained
a primary area of emphasis. All three of the national Portfolios continued to
offer excellent credit quality, with allocations of bonds rated AAA/U.S.
guaranteed and AA ranging from 59% to 66% as of March 31, 2002. As part of
changes recently instituted in NXC and NXN, we have added a small number of
noninsured AA and A bonds - 6% in NXC and 3% in NXN - to these two Portfolios.
The balance of these Portfolios' assets remain invested in insured and/or U.S.
guaranteed securities, giving them extremely high credit quality.
All five of the Select Portfolios mark their ten-year anniversaries in 2002 and
have now entered the phase of their life cycles normally associated with
increased call exposure. Potential calls for the remainder of 2002 range from
39% of NXN's portfolio to 65% in NXC. While NXR will continue to see a higher
level of potential calls (13%) in 2003, the call exposure of the other four
Portfolios drops off significantly next year (4%-8%). The number of actual calls
experienced by the Portfolios will depend largely on market interest rates over
the next 21 months. Our general approach has been to wait and see if the bonds
will be called and then reinvest proceeds in bonds that can extend call
protection and improve structure, ultimately trying to bring durations more in
line with the benchmark averages.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN GENERAL AND THE NUVEEN SELECT
PORTFOLIOS IN PARTICULAR?
In general, our outlook for the fixed-income markets over the next twelve months
remains positive. The U.S. economy appears headed for a recovery, but one that
we think will be characterized by a moderate rate of growth, with inflation and
interest rates remaining low over the near term. Nationally, we believe new
municipal supply should continue to be strong, and we expect issuance in
California and New York to increase over 2001's high levels, as these states
deal with budget deficits and the continued need to provide essential services.
Given the current environment, we anticipate that much of 2002's issuance will
be insured. We expect demand for tax-exempt municipal bonds to remain robust, as
investors keep an eye on continued stock market fluctuations and look for ways
to rebalance their portfolios and reduce risk.
The Nuveen Select Portfolios are specialized municipal bond investments that
have in the past offered relatively modest amounts of active management and
specific termination dates. Shareholders will vote this summer on provisions
that would eliminate the termination dates and allow more dynamic, on-going
management options. We expect that these changes (if approved) will help
maintain portfolio integrity as we work past the Portfolios' 10-year marks and
allow greater flexibility in making the normal portfolio adjustments
necessitated by the increased call exposure associated with this period. In the
meantime, the Portfolios are performing as expected and in line with their
current management style.
Over the next twelve months, we will be looking to extend the Portfolios'
effective durations while remaining focused on strategies that add value for our
shareholders, provide support for dividends and total returns, and fully utilize
Nuveen's experience and research expertise to adjust to changes in market
conditions. Increased issuance, especially in California and New York, could
provide greater selection and opportunities to enhance the Portfolios' yields
and call protection. Overall, we believe the Nuveen Select Portfolios represent
an important element of investors' long-range financial programs, providing
dependable tax-free income as well as balance, diversification, and quality.
3
NXP
Nuveen Select Tax-Free Income Portfolio
Performance
OVERVIEW As of March 31, 2002
[PIE CHART DATA]:
AAA/U.S. Guaranteed 52%
AA 14%
A 23%
BBB 9%
NR 2%
PORTFOLIO STATISTICS
-----------------------------------------------------
Share Price $13.85
-----------------------------------------------------
Net Asset Value $14.67
-----------------------------------------------------
Market Yield 6.15%
-----------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.79%
-----------------------------------------------------
Fund Net Assets ($000) $240,275
-----------------------------------------------------
Average Effective Maturity (Years) 10.31
-----------------------------------------------------
Average Duration 4.22
-----------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 3/92)
-----------------------------------------------------
ON SHARE PRICE ON NAV
-----------------------------------------------------
1-Year 1.54% 3.41%
-----------------------------------------------------
5-Year 4.80% 5.37%
-----------------------------------------------------
10-Year 5.38% 6.74%
-----------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
-----------------------------------------------------
U.S. Guaranteed 36%
-----------------------------------------------------
Transportation 13%
-----------------------------------------------------
Tax Obligation/Limited 13%
-----------------------------------------------------
Healthcare 12%
-----------------------------------------------------
Tax Obligation/General 10%
-----------------------------------------------------
[BAR CHART DATA]:
2001-2002 Monthly Tax-Free Dividends Per Share2
Apr $0.073
May 0.073
Jun 0.073
Jul 0.073
Aug 0.073
Sep 0.071
Oct 0.071
Nov 0.071
Dec 0.071
Jan 0.071
Feb 0.071
Mar 0.071
[LINE CHART DATA]:
Share Price Performance
Weekly Closing Price
4/1/01 $14.95
14.66
14.87
14.93
14.97
14.86
14.85
14.7
15
14.92
14.75
14.91
15.04
14.95
14.88
14.91
14.75
14.84
15.09
14.95
15.05
15.12
15.14
15.12
14.08
14.35
14.7
14.2
14.04
14.2
14.3
14.32
14.1
14.02
14.1
13.52
13.55
13.63
13.8
14.05
14
14.17
14.1
14.3
14.38
14.32
14.4
14.28
14.34
14.09
13.88
3/31/02 13.85
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%.
2 The Fund also paid shareholders a capital gains distribution in December 2001
of $0.0230 per share.
4
NXQ
Nuveen Select Tax-Free Income Portfolio 2
Performance
OVERVIEW As of March 31, 2002
[PIE CHART DATA]:
AAA/U.S. Guaranteed 46%
AA 18%
A 23%
BBB 11%
NR 2%
PORTFOLIO STATISTICS
------------------------------------------------------
Share Price $13.66
------------------------------------------------------
Net Asset Value $14.53
------------------------------------------------------
Market Yield 6.11%
------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.73%
------------------------------------------------------
Fund Net Assets ($000) $255,887
------------------------------------------------------
Average Effective Maturity (Years) 11.48
------------------------------------------------------
Average Duration 3.44
------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 5/92)
------------------------------------------------------
ON SHARE PRICE ON NAV
------------------------------------------------------
1-Year 2.57% 3.41%
------------------------------------------------------
5-Year 5.40% 5.33%
------------------------------------------------------
Since Inception 5.12% 6.27%
------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
------------------------------------------------------
U.S. Guaranteed 39%
------------------------------------------------------
Healthcare 14%
------------------------------------------------------
Transportation 12%
------------------------------------------------------
Housing/Multifamily 11%
------------------------------------------------------
Tax Obligation/Limited 7%
------------------------------------------------------
[BAR CHART DATA]:
2001-2002 Monthly Tax-Free Dividends Per Share2
Apr $0.071
May 0.071
Jun 0.071
Jul 0.071
Aug 0.071
Sep 0.0695
Oct 0.0695
Nov 0.0695
Dec 0.0695
Jan 0.0695
Feb 0.0695
Mar 0.0695
[LINE CHART DATA]:
Share Price Performance
Weekly Closing Price
4/1/01 $14.95
14.66
14.87
14.93
14.97
14.86
14.85
14.7
15
14.92
14.75
14.91
15.04
14.95
14.88
14.91
14.75
14.84
15.09
14.95
15.05
15.12
15.14
15.12
14.08
14.35
14.7
14.2
14.04
14.2
14.3
14.32
14.1
14.02
14.1
13.52
13.55
13.63
13.8
14.05
14
14.17
14.1
14.3
14.38
14.32
14.4
14.28
14.34
14.09
13.88
3/31/02 13.85
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%.
2 The Fund also paid shareholders a capital gains distribution in December 2001
of $0.0169 per share.
5
NXR
Nuveen Select Tax-Free Income Portfolio 3
Performance
OVERVIEW As of March 31, 2002
[PIE CHART DATA]:
AAA/U.S. Guaranteed 38%
AA 21%
A 27%
BBB 11%
NR 3%
PORTFOLIO STATISTICS
-----------------------------------------------------
Share Price $13.42
-----------------------------------------------------
Net Asset Value $14.26
-----------------------------------------------------
Market Yield 5.95%
-----------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.50%
-----------------------------------------------------
Fund Net Assets ($000) $184,837
-----------------------------------------------------
Average Effective Maturity (Years) 10.99
-----------------------------------------------------
Average Duration 3.03
-----------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 7/92)
-----------------------------------------------------
ON SHARE PRICE ON NAV
-----------------------------------------------------
1-Year 3.84% 3.70%
-----------------------------------------------------
5-Year 6.25% 5.59%
-----------------------------------------------------
Since Inception 4.80% 5.87%
-----------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
-----------------------------------------------------
U.S. Guaranteed 35%
-----------------------------------------------------
Transportation 15%
-----------------------------------------------------
Utilities 12%
-----------------------------------------------------
Healthcare 10%
-----------------------------------------------------
Housing/Multifamily 10%
-----------------------------------------------------
[BAR CHART DATA]:
2001-2002 Monthly Tax-Free Dividends Per Share
Apr $0.0665
May 0.0665
Jun 0.0665
Jul 0.0665
Aug 0.0665
Sep 0.0665
Oct 0.0665
Nov 0.0665
Dec 0.0665
Jan 0.0665
Feb 0.0665
Mar 0.0665
[LINE CHART DATA]:
Share Price Performance
Weekly Closing Price
4/1/01 $14.34
14.1
14.25
14.25
14.45
14.48
14.39
14.05
14.45
14.45
14.35
14.44
14.64
14.64
14.36
14.24
14.21
14.4
14.49
14.59
14.68
14.6
14.59
14.64
13.69
14.05
14.45
14
13.94
14.08
14.13
14.19
13.86
13.86
13.9
13.43
13.72
13.2
13.51
13.67
13.69
13.84
13.73
14
14.04
13.78
13.75
13.78
13.74
13.6
13.35
3/31/02 13.66
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%.
6
NXC
Nuveen California Select Tax-Free Income Portfolio
Performance
OVERVIEW As of March 31, 2002
[PIE CHART DATA]:
AAA/U.S. Guaranteed 94%
A 6%
PORTFOLIO STATISTICS
-----------------------------------------------------
Share Price $14.25
-----------------------------------------------------
Net Asset Value $14.44
-----------------------------------------------------
Market Yield 5.39%
-----------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.70%
-----------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.49%
-----------------------------------------------------
Fund Net Assets ($000) $90,346
-----------------------------------------------------
Average Effective Maturity (Years) 10.09
-----------------------------------------------------
Average Duration 2.97
-----------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 6/92)
-----------------------------------------------------
ON SHARE PRICE ON NAV
-----------------------------------------------------
1-Year 7.95% 3.03%
-----------------------------------------------------
5-Year 6.17% 5.39%
-----------------------------------------------------
Since Inception 5.07% 5.76%
-----------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
-----------------------------------------------------
U.S. Guaranteed 35%
-----------------------------------------------------
Transportation 15%
-----------------------------------------------------
Tax Obligation/Limited 13%
-----------------------------------------------------
Healthcare 11%
-----------------------------------------------------
Tax Obligation/General 11%
-----------------------------------------------------
[BAR CHART DATA]:
2001-2002 Monthly Tax-Free Dividends Per Share2
Apr $0.064
May 0.064
Jun 0.064
Jul 0.064
Aug 0.064
Sep 0.064
Oct 0.064
Nov 0.064
Dec 0.064
Jan 0.064
Feb 0.064
Mar 0.064
[LINE CHART DATA]:
Share Price Performance
Weekly Closing Price
4/1/01 $13.95
13.88
13.79
13.7
14.01
14.35
14.39
14.35
14.27
14.35
14.27
14.18
14.4
14.5
14.36
14.24
14.23
14.34
14.44
14.56
14.66
14.71
14.73
14.78
13.9
14.19
14.62
14.62
14.44
14.39
14.73
14.69
14.82
14.79
14.86
14.89
14.83
14.66
14.54
14.62
14.91
14.83
14.84
14.91
14.95
14.79
15
14.83
14.8
14.66
14.18
3/31/02 14.25
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 36.5%.
2 The Fund also paid shareholders a capital gains distribution in December 2001
of $0.0240 per share.
7
NXN
Nuveen New York Select Tax-Free Income Portfolio
Performance
OVERVIEW As of March 31, 2002
[PIE CHART DATA]:
AAA/U.S. Guaranteed 97%
AA 3%
PORTFOLIO STATISTICS
-----------------------------------------------------
Share Price $13.76
-----------------------------------------------------
Net Asset Value $14.17
-----------------------------------------------------
Market Yield 5.23%
-----------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.47%
-----------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.05%
-----------------------------------------------------
Fund Net Assets ($000) $55,362
-----------------------------------------------------
Average Effective Maturity (Years) 12.40
-----------------------------------------------------
Average Duration 4.00
-----------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 6/92)
-----------------------------------------------------
ON SHARE PRICE ON NAV
-----------------------------------------------------
1-Year 3.17% 2.75%
-----------------------------------------------------
5-Year 6.19% 5.24%
-----------------------------------------------------
Since Inception 4.68% 5.42%
-----------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
-----------------------------------------------------
U.S. Guaranteed 36%
-----------------------------------------------------
Education and Civic Organizations 19%
-----------------------------------------------------
Water and Sewer 13%
-----------------------------------------------------
Healthcare 6%
-----------------------------------------------------
Tax Obligation/General 5%
-----------------------------------------------------
[BAR CHART DATA]:
2001-2002 Monthly Tax-Free Dividends Per Share
Apr $0.063
May 0.063
Jun 0.063
Jul 0.063
Aug 0.063
Sep 0.06
Oct 0.06
Nov 0.06
Dec 0.06
Jan 0.06
Feb 0.06
Mar 0.06
[LINE CHART DATA]:
Share Price Performance
Weekly Closing Price
4/1/01 $14.02
14.15
14.2
14.05
14.2
13.95
13.9
13.9
13.98
14.13
14.05
14.2
14.22
14.3
14.42
14.15
14.3
14.35
14.25
14.4
14.37
14.46
14.34
14.31
13.28
13.75
14.05
13.96
13.82
13.85
13.98
14.09
14.1
14.07
14.21
14.01
13.95
13.75
13.92
14
14.11
13.95
14.02
14.15
14.24
14.27
14.32
14.16
14.04
13.97
13.77
3/31/02 13.76
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 35%.
8
THE NUVEEN
INVESTOR
V1
[photo of boys walking]
Bond surveillance - a HIGH PRIORITY at NUVEEN
The Enron scandal has raised numerous questions about the real value of American
securities. Investors want to know what safeguards are in place to inspire their
trust and ensure their holdings are dependable. The Nuveen Investor recently
spoke with David Blair, Assistant Vice President and Senior Analyst at Nuveen,
about the research and surveillance processes used for Nuveen funds.
HOW DO NUVEEN'S RESEARCH ANALYSTS EVALUATE BONDS PRIOR TO PURCHASE?
We evaluate factors impacting market sectors, issuers and specific bonds and
assign credit ratings to bonds we consider for purchase. We seek to purchase
bonds with stable and improving credit characteristics, which have attractive
prices and yields relative to other bonds in their sectors.
HOW DO YOU CONDUCT YOUR RESEARCH?
We conduct detailed analyses that often involve site visits and discussions with
managers of the projects being financed. Since Nuveen is a major investor with
large buying power, issuers and project managers are willing to listen to us and
respond to our concerns.
IS THE RESEARCH AND ANALYSIS PROCESS ANY DIFFERENT WHEN CONSIDERING HIGH-YIELD
BONDS?
Up to 20 percent of some funds can be invested in below investment grade bonds
to help the fund attain a higher yield. This underscores the need for research.
If one of our 16 analysts believes a high-yield bond should be purchased, a
second analyst reviews the issue as well.
HOW DO YOU MONITOR THE VARIOUS BONDS ONCE THEY'VE BEEN PURCHASED?
We have a proprietary database with information and analysis on the bonds Nuveen
holds in its funds. Among other things, we are able to evaluate risk exposure to
sectors, issuers and specific bonds on an on-going basis.
HOW DOES THE RESEARCH DEPARTMENT COMMUNICATE THE INFORMATION GATHERED?
We conduct biweekly meetings within the research department and weekly meetings
with portfolio managers. We also write-up our findings and distribute them with
"buy," "hold" or "sell" recommendations to portfolio managers.
(continued on page 11)
Volume one 2002
------------------------------------------------
9 Bond Surveillance -
A High Priority at Nuveen
10 Is it Time to Rethink
Your Bond Strategy?
11 Many Investors Continue
to Find Solutions with Professional Advice
12 Fund Reports
Available Online
12 ETFConnect:
The Source for All Exchange-Traded Funds
(C)2002 Nuveen Investments.
All rights reserved.
[LOGO NUVEEN Investments]
9
V1
IS IT time to rethink
YOUR BOND STRATEGY?
Significant stock market losses in recent history have sent many investors
toward bonds as a way to potentially cut their losses and balance equity-
dominated portfolios. While many consider bonds a set-and-forget investment,
there are several circumstances that might prompt you to reassess -- and perhaps
revamp -- your bond holdings.
TAX BRACKET CHANGES
The Economic Growth and Tax Relief Reconciliation Act of 2001 has dropped tax
brackets a percentage point this year, but a higher salary, large bonus, sale of
assets or retirement may push you into a higher tax bracket for 2002.
If you are in a higher tax bracket and want to generate an income stream without
raising your tax burden, tax-free municipal bonds may be a prudent option. Even
if you are in a lower tax bracket, municipal bonds could make sense. The
question is whether municipal or taxable bonds will deliver a better taxable
yield.
RETIREMENT PLANS CHANGE
Whether you are near retirement or are currently enjoying it, you may want to
consider rebalancing your retirement accounts with less stock and more bonds, to
potentially reduce risk and try to preserve the assets that you have
accumulated. If you are just entering retirement you may want to make tax-free
municipal bonds a part of your portfolio to emphasize income generation and
protection from taxation.
RISK TOLERANCE CHANGES
The recent market volatility and market downturn may have caused many investors
to reevaluate their tolerance for risk. On the other hand, your portfolio might
have performed well over the last few years and you may not need to take on
extra risk to meet your long-term goals. In either situation you could take a
look at your bond portfolio and determine whether you need to make changes to
correspond with your tolerance for risk.
PORTFOLIO CHANGES
If you make significant changes to one or more of your investments, you'll want
to look at your portfolio as a whole, particularly with regard to overall asset
allocation. You may need to do some rebalancing to stay on track with your
investment strategy.
Your financial advisor can help. Regardless of how your circumstances change, he
or she can provide up-to-date information on the bond market and various funds
to help you decide how to maximize your returns consistent with your short- and
long-term financial goals.
No investment is risk free and some investments carry more risk than others. It
is important to know what the risks are, to evaluate them against any potential
rewards, and to determine your tolerance for risk when selecting an investment.
[photos of bridge to lighthouse and toddlers playing]
The Nuveen Investor Vol 02.1 NUVEEN Investments
10
V1
[photo of woman with daughter]
MANY INVESTORS CONTINUE
to find solutions with
PROFESSIONAL ADVICE
For many investors, current financial markets are confusing and frustrating.
According to research conducted for the Forum for Investor Advice*, that's the
number one reason many turn to a financial advisor. They want someone to suggest
ideas and provide consultation, dialogue and professional advice.
Investors say their advisors are helpful in other key ways, including...
o Saving time. After consultation, investors note that the second most
important reason for using an advisor is to have someone else monitor their
portfolio, reducing the amount of time they spend on investing.
o Help in sorting through information. Investors in the 21st century have more
products from which to choose than in the past. For example, there are
approximately 8,000 mutual funds today, up from 3,000 in 1990.
o Assistance in setting financial goals. According to investors who use a
financial advisor, they are more likely to have a plan for a specific
financial goal than do-it-yourself investors.
o Staying focused. Advisor-assisted investors are more likely than
do-it-yourself investors to have developed a comprehensive investment
program.
o Peace of mind. Investors say their comfort level in all types of markets is
higher when using an advisor for a "second opinion" on an investment
decision.
*The survey of 324 investors was conducted in December of 2000 by Market Facts
and analyzed by New York based Neuwirth Research. Of the 324, 166 said they had
an ongoing relationship with a financial advisor, while 157 described themselves
as do-it-yourselfers.
--------------------------------------------------------------------------------
(continued from page 9)
HOW ARE PROBLEM BONDS IDENTIFIED AND HANDLED?
We conduct surveillance on our bonds on a regular basis to ensure, among other
things, that deteriorating bonds are identified early. We then discuss any
emerging problems and potential courses of action with the portfolio manager.
HOW MANY ISSUES DOES THE RESEARCH DEPARTMENT FOLLOW?
We follow 12 sectors and 1,500 uninsured bonds, worth about $18 billion of
Nuveen's $45 billion in total municipal assets. The remaining $27 billion in
municipal assets are insured or escrowed (backed by Treasury bonds). For the
insured bonds, we monitor closely on a regular basis the insurers guaranteeing
the bonds.
WILL RESEARCH AND SURVEILLANCE CHANGE IN LIGHT OF PROBLEMS WITH ENRON
SECURITIES?
Overall, our investment process and surveillance have worked well and been
effective. However, we meet as a group on a regular basis and are constantly
evaluating ways to improve the process to respond to issues and the market
environment.
The Nuveen Investor Vol 02.1 NUVEEN Investments
11
LOOK AHEAD...
FUND REPORTS
available
ONLINE
Nuveen Fund information is now available online. Once you register, you'll
receive an e-mail notice with a link to your Fund's reports and other
information just as soon as it is ready. Registering takes only a few minutes.
If you receive statements from a brokerage firm or financial advisor, go to
WWW.INVESTORDELIVERY.COM. Enter your personal 13-character enrollment number
imprinted on the address sheet of this report near your name. From the options
on the follow-up page, select the New Enrollment-Create screen. Once there,
enter your e-mail address and a personal, four-digit PIN. Hit the Submit button.
Confirm the information you entered is correct, then hit Submit again.
[picture of InvestorDelivery.com website]
If you receive statements directly from Nuveen, go to WWW.NUVEEN.COM. Select the
Access Your Account tab, then select E-Report Enrollment. Finally, click on the
Enrollment Page. Once there, you'll need to provide your social security number
and e-mail address. Click on Enroll.
[picture of nuveen.com website]
After registering, you should receive a confirming e-mail within 24 hours. If
not, repeat these steps to ensure all information is accurate. You can use this
same process if you need to change your registration information or want to
cancel Internet viewing. The e-mail address you provide is strictly confidential
and will only be used to notify you of shareholder information.
The information in this newsletter should not be construed as specific tax or
investment advice. Contact your advisor for information about your particular
situation.
ETFCONNECT:
THE source for all
EXCHANGE-TRADED FUNDS
Last fall, Nuveen launched ETFConnect, the industry's first website
featuring all-encompassing information on exchanged-traded funds. Whatever
you're looking for in the world of Index ETFs or Closed-End Exchange-Traded
Funds - prices, NAVs, dividend information, performance histories, new
developments - this is the place. Highlights include Quick Facts sheets for more
than 500 funds, a multi-fund search capability, website links, a list of fund
sponsors, tools for portfolio tracking, and a continually updated education
center. Check out WWW.ETFCONNECT.COM.
[picture of etfconnect.com website]
The Nuveen Investor Vol 02.1 NUVEEN Investments
12
Nuveen Select Portfolios
(NXP, NXQ, NXR, NXC, NXN)
Trustees
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds under the Management Agreement, is the responsibility of
the Board of Trustees of the Funds. The number of trustees of the Funds is
currently set at seven, one of whom is an "interested person" (as the term is
defined in the Investment Company Act of 1940) and six of whom are not
interested persons. None of the trustees who are not interested persons of the
Funds have ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the trustees and officers of the
Funds, their principal occupations and other affiliations during the past five
years, the number of portfolios each oversees and other directorships they hold
are set forth below.
YEAR FIRST PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR APPOINTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND AND TERM OF OFFICE DURING PAST 5 YEARS OVERSEEN BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger (1) Chairman of the 1996 Chairman and Director (since July 1996) of The 129
3/28/1949 Board, President Term John Nuveen Company and Nuveen Investments; prior
333 W. Wacker Drive and Trustee Indefinite (2) thereto, Executive Vice President and Director
Chicago, IL 60606 of The John Nuveen Company and Nuveen Investments;
Director (since 1992) and Chairman (since 1996)
of Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.; Chairman and Director (since January
1997) of Nuveen Asset Management, Inc.; Director
(since 1996) of Institutional Capital Corporation;
Chairman and Director(since 1999) of Rittenhouse
Financial Services Inc.; Chief Executive Officer
(since September 1999) of Nuveen Senior Loan Asset
Management Inc.
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
JAMES E. BACON Trustee 1992 Treasurer (1997-present), Cathedral of St. John 17
2/27/1931 Term the Devine (New York City); formerly (1992-1999),
333 W. Wacker Drive Indefinite (2) Director of Lone Star Industries, Inc.; previously,
Chicago, IL 60606 Director and Executive Vice President of U.S. Trust
Corporation and Trustee of United States Trust
Company of New York.
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM E. BENNETT Trustee 2001 Private Investor; previously, President and Chief 17
10/16/1946 Term Executive Officer, Draper & Kramer, Inc. (September
333 W. Wacker Drive Indefinite (2) 1995 - August 1998).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
JACK B. EVANS Trustee 1999 President, The Hall-Perrine Foundation, a private 17
10/22/1948 Term philanthropic corporation (since 1996); Director,
333 W. Wacker Drive Indefinite (2) Federal Reserve Bank of Chicago; Director, Alliant
Chicago, IL 60606 Energy; Director and Vice Chairman United
Fire & Casualty Company; formerly President and
Chief Operating Officer, SCI Financial Group, Inc.,
a regional financial services firm.
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM L. KISSICK Trustee 1992 Emeritus Professor, School of Medicine and the 17
7/29/1932 Term Wharton School of Management and former
333 W. Wacker Drive Indefinite (2) Chairman, Leonard Davis Institute of Health Economics,
Chicago, IL 60606 University of Pennsylvania; Adjunct Professor,
Health Policy and Management, Yale University.
------------------------------------------------------------------------------------------------------------------------------------
THOMAS E. LEAFSTRAND Trustee 1992 Retired; previously, Vice President in charge of 17
11/11/1931 Term Municipal Underwriting and Dealer Sales at The
333 W. Wacker Drive Indefinite (2) Northern Trust Company.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
SHEILA W. WELLINGTON Trustee 1994 President (since 1993) of Catalyst (a not-for-profit 17
2/24/1932 Term organization focusing on women's leadership
333 W. Wacker Drive Indefinite (2) development in business and the professions).
Chicago, IL 60606
13
Nuveen Select Portfolios
(NXP, NXQ, NXR, NXC, NXN)
Trustees
AND OFFICERS (CONTINUED)
YEAR FIRST PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR APPOINTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND AND TERM OF OFFICE DURING PAST 5 YEARS OVERSEEN BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
MICHAEL T. ATKINSON Vice President 2002 Vice President (since January 2002), formerly, 129
2/3/1966 Assistant Vice President (since 2000), previously,
333 W. Wacker Drive Associate of Nuveen Investments.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
PAUL L. BRENNAN Vice President 2002 Vice President (since January 2002), formerly, 127
11/10/1966 Assistant Vice President, of Nuveen Advisory Corp.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
PETER H. D'ARRIGO Vice President and 1999 Vice President of Nuveen Investments (since January 129
11/28/1967 Treasurer 1999), prior thereto, Assistant Vice President (from
333 W. Wacker Drive January 1997); formerly, Associate of Nuveen
Chicago, IL 60606 Investments; Vice President and Treasurer (since
September 1999) of Nuveen Senior Loan Asset
Management Inc.; Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
MICHAEL S. DAVERN Vice President 1997 Vice President of Nuveen Advisory Corp. 127
6/26/1957
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
SUSAN M. DESANTO Vice President 2001 Vice President of Nuveen Advisory Corp. (since 129
9/8/1954 August 2001); previously, Vice President of Van Kampen
333 W. Wacker Drive Investment Advisory Corp. (since 1998); prior thereto,
Chicago, IL 60606 Assistant Vice President of Van Kampen Investment
Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
JESSICA R. DROEGER Vice President 2002 Vice President (since January 2002), formerly 129
9/24/1964 Assistant Vice President and Assistant General
333 W. Wacker Drive Counsel (since May 1998) of Nuveen Investments;
Chicago, IL 60606 Assistant Vice President and Assistant Secretary
(since 1998) of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.; prior thereto, Associate
at the law firm D`Ancona Partners LLC
------------------------------------------------------------------------------------------------------------------------------------
LORNA C. FERGUSON Vice President 1998 Vice President of Nuveen Investments; Vice President 129
10/24/1945 (since January 1998) of Nuveen Advisory Corp. and
333 W. Wacker Drive Nuveen Institutional Advisory Corp.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM M. FITZGERALD Vice President 1995 Managing Director of Nuveen Advisory Corp. and 127
3/2/1964 Nuveen Institutional Advisory Corp. (since February
333 W. Wacker Drive 2001); prior thereto, Vice President of Nuveen
Chicago, IL 60606 Advisory Corp.; Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
STEPHEN D. FOY Vice President and 1998 Vice President of Nuveen Investments and (since May 129
5/31/1954 Controller 1998) The John Nuveen Company; Vice President (since
333 W. Wacker Drive September 1999) of Nuveen Senior Loan Asset
Chicago, IL 60606 Management Inc.; Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
J. THOMAS FUTRELL Vice President 1992 Vice President of Nuveen Advisory Corp.; 127
7/5/1955 Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
14
YEAR FIRST PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR APPOINTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND AND TERM OF OFFICE DURING PAST 5 YEARS OVERSEEN BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
RICHARD A. HUBER Vice President 1997 Vice President of Nuveen Institutional Advisory Corp. 127
3/26/1963 (since March 1998) and Nuveen Advisory Corp.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
STEVEN J. KRUPA Vice President 1990 Vice President of Nuveen Advisory Corp. 127
8/21/1957
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
DAVID J. LAMB Vice President 2000 Vice President (since March 2000) of Nuveen 129
3/22/1963 Investments, previously Assistant Vice President
333 W. Wacker Drive (since January 1999); prior thereto, Associate of
Chicago, IL 60606 Nuveen Investments; Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
LARRY W. MARTIN Vice President and 1992 Vice President, Assistant Secretary and Assistant 129
7/27/1951 Assistant Secretary General Counsel of Nuveen Investments;
333 W. Wacker Drive Vice President and Assistant Secretary of
Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.; Vice President and Assistant
Secretary of The John Nuveen Company and
Nuveen Asset Management, Inc.; Vice President
and Assistant Secretary (since September 1999)
of Nuveen Senior Loan Asset Management Inc.
------------------------------------------------------------------------------------------------------------------------------------
EDWARD F. NEILD, IV Vice President 1996 Managing Director (since September 1997), previously 129
7/7/1965 Vice President of Nuveen Advisory Corp. and Nuveen
333 W. Wacker Drive Institutional Advisory Corp.; Chartered
Chicago, IL 60606 Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
THOMAS J. O'SHAUGHNESSY Vice President 2002 Vice President (since January 2002), formerly, 127
9/4/1960 Assistant Vice President (1998), of Nuveen
333 W. Wacker Drive Advisory Corp.; prior thereto, Portfolio Manager.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
THOMAS C. SPALDING, JR. Vice President 1982 Vice President of Nuveen Advisory Corp. and 127
7/31/1951 Nuveen Institutional Advisory Corp.; Chartered
333 W. Wacker Drive Financial Analyst.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
GIFFORD R. ZIMMERMAN Vice President and 1992 Managing Director (since January 2002; formerly 129
9/9/1956 Secretary Vice President), Assistant Secretary and Associate
333 W. Wacker Drive General Counsel, formerly Assistant General Counsel,
Chicago, IL 60606 of Nuveen Investments; Managing Director (since
January 2002; formerly Vice President) and Assistant
Secretary of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.; Vice President
and Assistant Secretary of The John Nuveen
Company; Managing Director (since January 2002;
formerly Vice President) and Assistant Secretary
(since September 1999) of Nuveen Senior Loan
Asset Management Inc.; Chartered Financial Analyst.
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and director of
Nuveen Advisory Corp.
(2) Trustees serve an indefinite term until his/her successor is elected.
(3) Officers serve one year terms through July of each year.
15
Report of
INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3
NUVEEN CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO
(FORMERLY NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO)
NUVEEN NEW YORK SELECT TAX-FREE INCOME PORTFOLIO
(FORMERLY NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO)
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Select Tax-Free Income Portfolio,
Nuveen Select Tax-Free Income Portfolio 2, Nuveen Select Tax-Free Income
Portfolio 3, Nuveen California Select Tax-Free Income Portfolio, and Nuveen New
York Select Tax-Free Income Portfolio as of March 31, 2002, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Trusts'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of March 31, 2002, by correspondence with
the custodian and brokers or other auditing procedures when replies from brokers
were not received. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Select Tax-Free Income Portfolio, Nuveen Select Tax-Free Income Portfolio
2, Nuveen Select Tax-Free Income Portfolio 3, Nuveen California Select Tax-Free
Income Portfolio, and Nuveen New York Select Tax-Free Income Portfolio at March
31, 2002, and the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then ended
in conformity with accounting principles generally accepted in the United
States.
/s/ Ernst & Young LLP
Chicago, Illinois
May 8, 2002
16
Nuveen Select Tax-Free Income Portfolio (NXP)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.2%
$ 485 Alabama Housing Finance Authority, Single Family Mortgage 4/04 at 102.00 Aaa $ 506,849
Revenue Bonds (Collateralized Home Mortgage Revenue
Bond Program), 1994 Series A-1, 6.550%, 10/01/14
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 6.5%
4,750 State Public Works Board of the State of California, Community 3/04 at 102.00 Aaa 5,225,950
Colleges Lease Revenue Bonds (Various Community College
Projects), 1994 Series B, 7.000%, 3/01/14
(Pre-refunded to 3/01/04)
3,000 State Public Works Board of the State of California, Department 11/04 at 102.00 Aaa 3,366,540
of Corrections Lease Revenue Bonds (California State Prison,
Monterey County (Soledad II)), 1994 Series A, 6.875%,
11/01/14 (Pre-refunded to 11/01/04)
4,905 California Statewide Communities Development Authority, 8/02 at 102.00 A3*** 5,067,944
Hospital Revenue Certificates of Participation (Cedars-Sinai
Medical Center), Series 1992, 6.500%, 8/01/15
(Pre-refunded to 8/01/02)
2,000 Los Angeles County Metropolitan Transportation Authority, 7/03 at 102.00 AAA 2,041,500
California, Proposition A Sales Tax Revenue Refunding
Bonds, Series 1993-A, 5.625%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 8.5%
Colorado Housing and Finance Authority, Single Family Program
Senior Revenue Bonds, Series 1992A-1:
1,910 6.800%, 11/01/12 (Pre-refunded to 5/01/02) 5/02 at 102.00 AA+ 1,945,106
535 6.875%, 11/01/16 (Pre-refunded to 5/01/02) 5/02 at 102.00 AA+ 544,560
5,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 5,129,700
Refunding Bonds, Series 2001B, 5.625%, 11/15/17
(Alternative Minimum Tax)
10,750 City and County of Denver, Colorado, Airport System Revenue No Opt. Call A 12,709,080
Bonds, Series 1991D, 7.750%, 11/15/13
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.4%
1,000 District of Columbia, Hospital Revenue Refunding Bonds, 8/06 at 102.00 AAA 1,069,420
Medlantic Healthcare Group, Inc. Issue, Series 1996A,
5.750%, 8/15/16
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.1%
250 Escambia County, Florida, Pollution Control Revenue Bonds 12/03 at 102.00 BBB 242,650
(Champion International Corporation Project), Series 1993,
5.875%, 6/01/22 (Alternative Minimum Tax)
7,000 State of Florida Board of Education, Public Education Capital 6/02 at 101.00 AAA 7,129,080
Outlay Bonds, Series 1991-C, 6.625%, 6/01/22
(Pre-refunded to 6/01/02)
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.5%
1,330 State of Hawaii, Certificates of Participation (Kapolei State 11/08 at 101.00 AAA 1,298,958
Office Building), 1998 Series A, 5.000%, 5/01/17
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.7%
2,000 Central Lake County Joint Action Water Agency, Illinois, Interim 5/03 at 102.00 AAA 2,002,720
Water Revenue Bonds, Series 1993, 5.375%, 5/01/20
City of Chicago Heights, Illinois, General Obligation Corporate
Purpose Bonds, Series 1993:
3,820 5.650%, 12/01/15 12/08 at 100.00 AAA 3,973,449
2,600 5.650%, 12/01/17 12/08 at 100.00 AAA 2,685,020
2,500 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call N/R 1,531,350
Special Facility Revenue Refunding Bonds (United Air Lines
Inc. Project), Series 2001C, 6.300%, 5/01/16
7,000 Cook County, Illinois, General Obligation Bonds, Series 1992A, 11/02 at 102.00 AAA 7,345,310
6.600%, 11/15/22 (Pre-refunded to 11/15/02)
1,000 Illinois Educational Facilities Authority, Revenue Bonds 5/08 at 101.00 A 975,410
(Midwestern University), Series 1998B, 5.500%, 5/15/18
17
Nuveen Select Tax-Free Income Portfolio (NXP) (continued)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 3,000 Illinois Educational Facilities Authority, Revenue Refunding 7/03 at 102.00 AAA $ 3,195,450
Bonds (Loyola University of Chicago), Series 1989-A,
6.100%, 7/01/15 (Pre-refunded to 7/01/03)
2,365 Illinois Health Facilities Authority, Revenue and Revenue No Opt. Call N/R*** 2,584,756
Refunding Bonds (Evangelical Hospitals Corporation),
Series 1992B, 6.500%, 4/15/09
3,850 Illinois Health Facilities Authority, Revenue Bonds (Sarah Bush 5/02 at 102.00 Aaa 3,953,988
Lincoln Health Center), Series 1992, 7.250%, 5/15/22
(Pre-refunded to 5/15/02)
1,320 Illinois Health Facilities Authority, Revenue Bonds (Decatur 10/11 at 100.00 A 1,309,004
Memorial Hospital), Series 2001, 5.600%, 10/01/16
800 Illinois Housing Development Authority, Homeowner Mortgage 2/10 at 100.00 AA 824,336
Revenue Bonds, Series 2000-D3, 5.700%, 8/01/17
1,500 Illinois Housing Development Authority, Homeowner Mortgage 7/10 at 100.00 AA 1,547,565
Revenue Bonds, Series 1999-G1, 5.700%, 8/01/17
2,000 State of Illinois, General Obligation Bonds, Series 1994, 8/04 at 102.00 AA 2,113,360
5.875%, 8/01/14
2,200 Metropolitan Pier and Exposition Authority, Illinois, McCormick No Opt. Call AAA 953,744
Place Expansion Project Bonds, Series 1992A, 0.000%, 6/15/17
2,500 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/03 at 102.00 AAA 2,648,775
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13 (Pre-refunded to 6/01/03)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.3%
5,000 Duneland School Building Corporation, Indiana, First Mortgage 2/09 at 101.00 AAA 4,925,050
Bonds, Series 1999 Refunding, 5.125%, 2/01/18
3,000 Indiana Bond Bank, Special Hospital Program Revenue Bonds 4/02 at 102.00 A+ 3,069,930
(Hendricks Community Hospital Financing Program),
Series 1992A, 7.125%, 4/01/13
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.7%
4,030 City of Wichita, Kansas, Revenue Bonds (CSJ Health System 5/02 at 102.00 A+*** 4,104,716
of Wichita, Inc.), Series 1985 XXV (Remarketed),
7.200%, 10/01/15
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.0%
1,100 Jefferson County, Kentucky, Health System Revenue Bonds 10/08 at 101.00 AAA 1,106,776
(Alliant Health System, Inc.), Series 1998, 5.125%, 10/01/18
3,230 Lexington-Fayette Urban County Government, Kentucky, 11/04 at 102.00 AAA 3,585,332
Governmental Project Revenue Bonds (University of
Kentucky Alumni Association, Inc. Commonwealth Library
Project), Series 1994, 6.750%, 11/01/15
(Pre-refunded to 11/01/04)
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.6%
875 Maine Educational Loan Authority, Educational Loan Revenue 12/02 at 102.00 A 900,375
Bonds (Supplemental Educational Loan Program), Series
1992A-2, 7.150%, 12/01/16 (Alternative Minimum Tax)
Maine Educational Loan Authority, Educational Loan Revenue Bonds
(Supplemental Educational Loan Program), Series 1992A-1:
1,390 6.800%, 12/01/07 (Alternative Minimum Tax) 12/02 at 102.00 Aaa 1,432,937
1,575 7.000%, 12/01/16 (Alternative Minimum Tax) 12/02 at 102.00 Aaa 1,619,683
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.1%
500 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA- 518,755
Revenue Bonds, Partners Healthcare System Issue,
Series C, 6.000%, 7/01/17
2,000 Plymouth County, Massachusetts, Certificates of Participation 10/02 at 102.00 Aaa 2,092,180
(Plymouth County Correctional Facility), Series A, 7.000%,
4/01/22 (Pre-refunded to 10/01/02)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 0.3%
1,000 Michigan Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101.00 BBB- 835,110
(The Detroit Medical Center Obligated Group),
Series 1998A, 5.125%, 8/15/18
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.5%
1,120 Minnesota Housing Finance Agency, Single Family Mortgage 7/08 at 101.00 AA+ 1,122,666
Revenue Bonds, Series 1995A, 5.200%, 1/01/17
18
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.6%
$ 3,600 Calhoun County, Mississippi, Solid Waste Disposal Revenue 4/07 at 103.00 BBB $ 3,842,712
Bonds (Weyerhauser Company Project), Series 1992,
6.875%, 4/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 2.4%
6,025 Director of the State of Nevada, Department of Business and 1/10 at 100.00 AAA 5,844,612
Industry, Revenue Bonds (Las Vegas Monorail Project),
1st Tier Series 2000, 5.375%, 1/01/40
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.8%
1,800 New Hampshire Housing Finance Authority, Single Family 5/11 at 100.00 Aa2 1,804,968
Mortgage Acquisition Bonds, Series 2001A, 5.600%,
7/01/21 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 9.5%
7,250 Metropolitan Transportation Authority, New York, Commuter 7/02 at 101.00 A3 7,421,970
Facilities 1987 Service Contract Bonds, Series 5,
7.000%, 7/01/12
3,000 Metropolitan Transportation Authority, New York, Transit 7/02 at 100.00 AA- 3,030,060
Facilities Service Contract Bonds, Series N, 6.000%, 7/01/11
City of New York, New York, General Obligation Bonds, Fiscal
1995 Series A:
305 6.250%, 8/01/10 (Pre-refunded to 8/01/04) 8/04 at 101.50 Aaa 332,941
4,865 6.250%, 8/01/10 8/04 at 101.50 A 5,247,438
4,465 New York State Dormitory Authority, State University Educational 5/02 at 102.00 AAA 4,585,778
Facilities Revenue Bonds, Series 1991A, 7.250%, 5/15/18
(Pre-refunded to 5/15/02)
1,600 New York State Dormitory Authority, Revenue Bonds (Mount 7/10 at 101.00 BBB 1,706,928
Sinai New York University Health Obligated Group),
Series 2000A, 6.500%, 7/01/17
435 New York State Medical Care Facilities Finance Agency, 8/02 at 102.00 AA- 445,375
Mental Health Services Facilities Improvement Revenue
Bonds, 1991 Series D, 7.400%, 2/15/18
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.2%
2,755 Ohio Housing Finance Agency, Residential Mortgage Revenue 9/07 at 102.00 Aaa 2,854,015
Bonds, Series 1997A (Remarketed), 6.050%,
9/01/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.1%
Pennsylvania Higher Educational Facilities Authority, Revenue
Bonds (Thomas Jefferson University), 1992 Series A:
1,750 6.625%, 8/15/09 (Pre-refunded to 8/15/02) 8/02 at 102.00 A1*** 1,815,993
750 6.625%, 8/15/09 8/02 at 102.00 AAA 777,570
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 6.4%
10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 10,342,800
Purchase Revenue Bonds, Series 2002, 5.875%,
12/01/19 (DD, settling 4/01/02)
5,000 South Carolina Housing Finance and Development Authority, 5/02 at 102.00 Aaa 5,109,650
Multifamily Housing Revenue Bonds, 1992 Series A,
6.875%, 11/15/23
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.4%
5,750 Memphis-Shelby County Airport Authority, Tennessee, Airport 7/03 at 102.00 BBB 5,720,560
Special Facilities and Project Revenue Bonds (Federal
Express Corporation), Series 1993, 6.200%, 7/01/14
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 13.7%
6,150 Dallas Independent School District, Dallas County, Texas, 2/12 at 100.00 AAA 6,124,908
General Obligation Bonds, Series 2002 Refunding,
5.250%, 2/15/20 (WI, settling 4/04/02)
9,825 Harris County Health Facilities Development Corporation, Texas, 6/02 at 102.00 A3*** 10,199,725
Hospital Revenue Bonds (Memorial Hospital System Project),
Series 1992, 7.125%, 6/01/15 (Pre-refunded to 6/01/02)
3,500 Irving Independent School District, Dallas County, Texas, 2/12 at 100.00 AAA 3,255,175
General Obligation Bonds, Series 2002A
Refunding, 5.000%, 2/15/31
4,000 Port of Corpus Christi Authority, Nueces County, Texas, Pollution 4/02 at 102.00 BBB 4,088,840
Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax)
19
Nuveen Select Tax-Free Income Portfolio (NXP) (continued)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 4,190 Red River Authority, Texas, Pollution Control Revenue Bonds 4/02 at 102.00 BBB $ 4,282,809
(Hoechst Celanese Corporation), Series 1992, 6.875%,
4/01/17 (Alternative Minimum Tax)
City of San Antonio, Texas, Water System Revenue Refunding
Bonds, Series 1992:
1,450 6.000%, 5/15/16 (Pre-refunded to 5/15/02) 5/02 at 100.00 AAA 1,457,932
2,990 6.000%, 5/15/16 (Pre-refunded to 5/15/02) 5/02 at 100.00 AAA 3,006,266
95 6.000%, 5/15/16 (Pre-refunded to 5/15/07) 5/07 at 100.00 AAA 103,458
465 6.000%, 5/15/16 No Opt. Call AAA 510,444
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 9.0%
2,500 Snohomish County Public Utility District No. 1, Washington, 1/03 at 100.00 A+*** 2,589,725
Electric System Refunding Revenue Bonds, Series 1991A,
7.000%, 1/01/16 (Pre-refunded to 1/01/03)
5,700 Snohomish County Public Utility District No. 1, Washington, 7/02 at 102.00 Aaa 6,497,772
Generation System Revenue Bonds, Series 1989,
6.750%, 1/01/12
3,000 Washington State Healthcare Facilities Authority, Revenue 12/07 at 101.00 AAA 2,933,430
Bonds (Catholic Health Initiatives), Series 1997A,
5.125%, 12/01/17
9,750 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 9,535,793
Bonds (Providence Health System), Series 2001A,
5.125%, 10/01/17
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.3%
1,885 Marshall County, West Virginia, Special Obligation Refunding No Opt. Call AAA 2,101,304
Bonds, Series 1992, 6.500%, 5/15/10
1,000 West Virginia Housing Development Fund, Housing Finance 5/02 at 103.00 AAA 1,030,800
Bonds, 1992 Series A, 7.000%, 5/01/24
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.1%
5,000 Wisconsin Housing and Economic Development Authority, 4/02 at 102.00 AA 5,104,199
Housing Revenue Bonds, 1992 Series B, 7.050%, 11/01/22
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 1.1%
2,550 Wyoming Community Development Authority, Single Family 5/02 at 103.00 AA 2,613,877
Mortgage Revenue Bonds (Federally Insured or Guaranteed
Mortgage Loans), Series 1988-G, 7.200%, 6/01/10
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 229,590 Total Investments (cost $225,211,553) - 98.0% 235,554,911
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 4,719,981
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 240,274,892
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
20
Nuveen Select Tax-Free Income Portfolio 2 (NXQ)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.8%
$ 1,000 City of Fort Smith, Arkansas, Water and Sewer Revenue Bonds, 10/11 at 100.00 AAA $ 974,390
Series 2002A Refunding and Construction, 5.000%, 10/01/19
1,000 Sebastian County, Arkansas, Public Health Facilities Board 11/11 at 101.00 A2 951,210
Hospital Revenue Improvement Bonds (Sparks Regional
Medical Center), Series 2001A, 5.250%, 11/01/21
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 5.4%
3,250 State Public Works Board of the State of California, Community 3/04 at 102.00 Aaa 3,575,650
Colleges Lease Revenue Bonds (Various Community College
Projects), 1994 Series B, 7.000%, 3/01/14
(Pre-refunded to 3/01/04)
2,000 State Public Works Board of the State of California, The Regents No Opt. Call Aa2 2,159,440
of the University of California Lease Revenue Refunding Bonds
(Various University of California Projects), 1993 Series A,
5.500%, 6/01/14
5,000 State Public Works Board of the State of California, Department 11/04 at 102.00 Aaa 5,610,900
of Corrections Lease Revenue Bonds (California State Prison,
Monterey County (Soledad II)), 1994 Series A, 6.875%,
11/01/14 (Pre-refunded to 11/01/04)
500 State Public Works Board of the State of California, Community 12/08 at 101.00 A 506,390
Colleges Lease Revenue Refunding Bonds (Various Community
College Projects), 1998 Series A, 5.250%, 12/01/16
500 City of Contra Costa Water District, California, Water Revenue 10/07 at 100.00 AA- 498,660
Bonds, Refunding Series 1997H, 5.000%, 10/01/17
500 Contra Costa County, California, Certificates of Participation 11/07 at 102.00 AAA 513,765
(Merrithew Memorial Hospital Replacement Project),
Refunding Series 1997, 5.375%, 11/01/17
1,000 City of Fresno, California, Health Facility Revenue Bonds (Holy 12/03 at 102.00 AAA 1,031,670
Cross Health System Corporation), Series 1993B,
5.625%, 12/01/15
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.9%
1,940 Colorado Housing and Finance Authority, Single Family 5/02 at 102.00 AA+ 1,983,631
Program Senior Bonds, Series 1992A-3, 7.000%, 11/01/24
(Alternative Minimum Tax) (Pre-refunded to 5/01/02)
5,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 5,129,700
Refunding Bonds, Series 2001B, 5.625%, 11/15/17
(Alternative Minimum Tax)
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992B:
2,335 7.250%, 11/15/12 (Alternative Minimum Tax) 11/02 at 102.00 Aaa 2,454,902
(Pre-refunded to 11/15/02)
9,130 7.250%, 11/15/12 (Alternative Minimum Tax) 11/02 at 102.00 A 9,481,322
1,100 University of Colorado Hospital Authority, Hospital Revenue 11/11 at 100.00 A3 1,048,795
Bonds, Series 2001A, 5.600%, 11/15/31
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 5.1%
4,600 District of Columbia, Hospital Revenue Refunding Bonds, 8/02 at 102.00 A3*** 4,780,320
Washington Hospital Center Medlantic Issue, Series
1992A, 7.125%, 8/15/19 (Pre-refunded to 8/15/02)
500 District of Columbia, Hospital Revenue Refunding Bonds, 8/06 at 102.00 AAA 534,710
Medlantic Healthcare Group, Inc. Issue, Series 1996A,
5.750%, 8/15/16
7,500 Washington, District of Columbia, General Obligation Bonds, 6/02 at 102.00 AAA 7,707,825
Series 1992B, 6.300%, 6/01/12 (Pre-refunded to 6/01/02)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.3%
8,180 Hillsborough County, Florida, Environmentally Sensitive Land 7/02 at 102.00 A1*** 8,439,470
Acquisition and Protection Program Bonds, Series 1992,
6.375%, 7/01/11 (Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.4%
1,100 State of Hawaii, Certificates of Participation (Kapolei State 11/08 at 101.00 AAA 1,074,326
Office Building), 1998 Series A, 5.000%, 5/01/17
21
Nuveen Select Tax-Free Income Portfolio 2 (NXQ) (continued)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.7%
$ 8,420 Chicago Metropolitan Housing Development Corporation, Illinois, 7/02 at 102.00 AA $ 8,615,176
Housing Development Revenue Refunding Bonds (FHA-Insured
Mortgage Loans - Section 8 Assisted Projects), Series 1992A,
6.800%, 7/01/17
2,400 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call N/R 1,470,096
Special Facility Revenue Refunding Bonds (United Air Lines
Inc. Project), Series 2001C, 6.300%, 5/01/16
8,070 Cook County, Illinois, General Obligation Bonds, Series 1992A, 11/02 at 102.00 AAA 8,468,093
6.600%, 11/15/22 (Pre-refunded to 11/15/02)
2,500 Illinois Educational Facilities Authority, Revenue Bonds (Columbia 12/03 at 102.00 BBB 2,475,300
College), Series 1993, 6.125%, 12/01/18
Illinois Educational Facilities Authority, Revenue Refunding Bonds
(Columbia College), Series 1992:
2,610 6.875%, 12/01/17 (Pre-refunded to 12/01/04) 12/04 at 100.00 N/R*** 2,856,541
1,140 6.875%, 12/01/17 12/04 at 100.00 BBB 1,167,850
3,000 Illinois Health Facilities Authority, Revenue Bonds (Rush- 11/03 at 102.00 AAA 2,935,290
Presbyterian-St. Luke's Medical Center Obligated Group),
Series 1993, 5.250%, 11/15/20
1,900 Illinois Housing Development Authority, Homeowner Mortgage 2/10 at 100.00 AA 1,957,798
Revenue Bonds, Series 2000-D3, 5.700%, 8/01/17
Metropolitan Pier and Exposition Authority, Illinois, McCormick
Place Expansion Project Bonds, Series 1992A:
2,205 6.500%, 6/15/22 (Pre-refunded to 6/15/03) 6/03 at 102.00 Aaa 2,356,594
45 6.500%, 6/15/22 6/03 at 102.00 Aa3 46,496
5,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/03 at 102.00 AAA 5,297,550
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13 (Pre-refunded to 6/01/03)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.0%
2,400 Westfield-Washington South School Building Corporation, 7/02 at 102.00 A*** 2,481,120
Indiana, First Mortgage Revenue Bonds, Series 1992,
6.500%, 7/15/13 (Pre-refunded to 7/15/02)
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.6%
Iowa Tobacco Settlement Authority, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
1,000 5.300%, 6/01/25 6/11 at 101.00 A1 878,330
3,500 5.600%, 6/01/35 6/11 at 101.00 A1 3,118,465
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 5.8%
3,000 Louisiana Public Facilities Authority, Revenue Bonds (Tulane 7/12 at 100.00 AAA 2,914,110
University), Series 2002A, 5.125%, 7/01/27 Louisiana Public
Facilities Authority, Revenue Bonds (Tulane University), Series
1992:
2,590 6.625%, 11/15/21 (Pre-refunded to 11/15/02) 11/02 at 102.00 A+*** 2,717,143
8,835 6.625%, 11/15/21 (Pre-refunded to 11/15/02) 11/02 at 102.00 A+*** 9,268,710
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.4%
3,000 Massachusetts Health and Educational Facilities, Revenue Bonds, 10/02 at 102.00 A2*** 3,134,580
Jordan Memorial Hospital Issue, Series 1992C, 6.875%,
10/01/22 (Pre-refunded to 10/01/02)
3,000 Massachusetts Health and Educational Facilities Authority, 10/11 at 101.00 BBB+ 2,968,080
Revenue Bonds, Berkshire Health System Issue,
Series 2001E, 6.250%, 10/01/31
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.8%
2,065 City of Billings, Montana, Tax Increment Urban Renewal Bonds, 9/02 at 101.00 Baa3 2,105,990
Refunding Series 1992, 7.100%, 3/01/08
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 5.2%
500 Las Vegas Convention and Visitors Authority, Clark County, 7/06 at 101.00 AAA 509,890
Nevada, General Obligation Limited Tax Bonds,
Series 1996, 5.500%, 7/01/17
13,250 Director of the State of Nevada, Department of Business and 1/10 at 100.00 AAA 12,853,295
Industry, Revenue Bonds (Las Vegas Monorail Project), 1st
Tier Series 2000, 5.375%, 1/01/40
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.6%
$ 3,850 Metropolitan Transportation Authority, New York, Transit 7/02 at 100.00 AA- $ 3,888,577
Facilities Service Contract Bonds, Series N, 6.000%, 7/01/11
2,700 Dormitory Authority of the State of New York, Revenue Bonds 7/10 at 101.00 BBB 2,880,441
(Mount Sinai New York University Health Obligated Group),
Series 2000A, 6.500%, 7/01/17
4,000 Medical Care Facilities Finance Agency of the State of New York, 2/05 at 102.00 AAA 4,475,360
New York Hospital FHA-Insured Mortgage Revenue Bonds,
Series 1994A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05)
5,000 Triborough Bridge and Tunnel Authority, New York, Convention No Opt. Call AA- 5,760,050
Center Bonds, Series E, 7.250%, 1/01/10
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.6%
1,500 Charlotte-Mecklenburg Hospital Authority (DBA Carolinas 1/11 at 101.00 AA 1,407,525
Healthcare System), North Carolina, Healthcare System
Revenue Bonds, Series 2001A, 5.000%, 1/15/31
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.4%
2,800 Cuyahoga County, Ohio, Hospital Revenue Bonds (Meridia 8/05 at 102.00 AAA 3,092,488
Health System), Series 1995, 6.250%, 8/15/14
(Pre-refunded to 8/15/05)
3,000 Erie County, Ohio, Hospital Improvement and Refunding Revenue 7/02 at 102.00 A 3,059,430
Bonds (Firelands Community Hospital Project), Series 1992,
6.750%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.4%
6,000 Oklahoma City Water Utilities Trust, Oklahoma, Water and 7/02 at 100.00 AAA 6,065,220
Sewer Revenue Bonds, 6.400%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.5%
1,000 Dauphin County General Authority, Pennsylvania, Health System 2/09 at 101.00 AAA 983,240
Revenue Bonds (Pinnacle Health System Project), Series
1999, 5.125%, 8/15/17
6,295 Pennsylvania Intergovernmental Cooperation Authority, Special 6/02 at 100.00 Aaa 6,362,168
Tax Revenue Bonds (City of Philadelphia Funding Program),
Series 1992, 6.800%, 6/15/22 (Pre-refunded to 6/15/02)
1,000 Philadelphia Authority for Industrial Development, Pennsylvania, 7/11 at 101.00 AAA 1,015,190
Airport Revenue Bonds (Philadelphia Airport System Project),
Series 2001A, 5.500%, 7/01/17 (Alternative Minimum Tax)
3,250 Philadelphia School District, Pennsylvania, General Obligation 2/12 at 100.00 AAA 3,260,758
Bonds, Series 2002A, 5.500%, 2/01/31
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.2%
5,500 Rhode Island Depositors Economic Corporation, Special 8/02 at 102.00 AAA 5,704,985
Obligation Bonds, 1992 Series A, 6.900%, 8/01/13
(Pre-refunded to 8/01/02)
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 4.4%
4,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 4,137,120
Purchase Revenue Bonds, Series 2002, 5.875%, 12/01/19
(DD, settling 4/01/02)
7,000 Richland County, South Carolina, Solid Waste Disposal Facilities 5/02 at 102.00 BBB 7,154,770
Revenue Bonds (Union Camp Corporation Project), Series
1992-A, 6.750%, 5/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.7%
4,235 Tennessee Housing Development Agency, Homeownership 7/02 at 102.00 AA 4,331,727
Program Bonds, Issue WR, 6.800%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 7.9%
3,275 Bexar County, Texas, Health Facilities Development Corporation, 8/04 at 102.00 AAA 3,616,157
Hospital Revenue Bonds (Baptist Memorial Hospital System
Project), Series 1994, 6.900%, 2/15/14
(Pre-refunded to 8/15/04)
4,650 Cleveland Housing Corporation, Texas, Mortgage Revenue 7/02 at 101.00 AAA 4,701,522
Refunding Bonds (FHA-Insured - Section 8), Series 1992-C,
7.375%, 7/01/24
2,500 Harris County Health Facilities Development Corporation, Texas, 10/05 at 102.00 AAA 2,611,875
Revenue Refunding Bonds (Children's Hospital Project),
Series 1995, 5.500%, 10/01/16
7,600 Port of Corpus Christi Authority, Nueces County, Texas, 4/02 at 102.00 BBB 7,768,796
Pollution Control Revenue Bonds (Hoechst Celanese
Corporation), Series 1992, 6.875%, 4/01/17
(Alternative Minimum Tax)
1,460 Red River Authority, Texas, Pollution Control Revenue Bonds 4/02 at 102.00 BBB 1,492,339
(Hoechst Celanese Corporation), Series 1992, 6.875%,
4/01/17 (Alternative Minimum Tax)
23
Nuveen Select Tax-Free Income Portfolio 2 (NXQ) (continued)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.7%
$ 1,655 Ogden City School District Municipal Building Authority, No Opt. Call A3*** $ 1,692,188
Weber County, Utah, Lease Revenue Bonds (Central Middle
School Project), Series 1992, 6.700%, 1/01/12
105 Utah Housing Finance Agency, Single Family Mortgage Purchase 7/02 at 102.00 Aaa 106,781
Refunding Senior Bonds, Series 1992, 6.800%, 1/01/12
------------------------------------------------------------------------------------------------------------------------------------
VERMONT - 2.6%
3,000 Vermont Housing Finance Agency, Multifamily Housing Bonds,
1999 Series C, 5.800%, 8/15/16 2/09 at 100.00 AAA 3,052,650
3,600 Vermont Industrial Development Authority, Industrial Development 9/02 at 102.00 A 3,670,416
Refunding Revenue Bonds (Stanley Works Project),
Series 1992, 6.750%, 9/01/10
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.3%
2,000 Washington State Healthcare Facilities Authority, Revenue 12/07 at 101.00 AAA 1,955,620
Bonds (Catholic Health Initiatives), Series 1997A,
5.125%, 12/01/17
6,715 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 6,567,471
Bonds (Providence Health System), Series 2001A,
5.125%, 10/01/17
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.7%
1,750 West Virginia School Building Authority, Capital Improvement 7/02 at 102.00 A+*** 1,806,403
Revenue Bonds, Series 1992-A, 6.625%, 7/01/22
(Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.0%
10,000 Wisconsin Housing and Economic Development Authority, 4/02 at 102.00 AA 10,211,999
Housing Revenue Bonds, 1992 Series D, 7.200%, 11/01/13
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 246,005 Total Investments (cost $243,288,562) - 98.4% 251,886,839
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 4,000,435
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 255,887,274
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
(DD) Security purchased on a delayed delivery basis.
See accompanying notes to financial statements.
24
Nuveen Select Tax-Free Income Portfolio 3 (NXR)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 2.8%
$ 3,000 State Public Works Board of the State of California, Department 11/04 at 102.00 Aaa $ 3,366,540
of Corrections Lease Revenue Bonds (California State Prison,
Monterey County (Soledad II)), 1994 Series A, 6.875%,
11/01/14 (Pre-refunded to 11/01/04)
500 City of Fresno, California, Health Facility Revenue Refunding 12/03 at 102.00 AAA 511,260
Bonds (Holy Cross Health System Corporation), Series 1993A,
5.625%, 12/01/18
1,335 City of Torrance, California, Hospital Revenue Bonds (Little 7/02 at 102.00 A*** 1,379,509
Company of Mary Hospital Project), Series 1992, 6.875%,
7/01/15 (Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.7%
2,500 City of Colorado Springs, Colorado, Utilities System Refunding 11/02 at 100.00 AA 2,544,025
Revenue Bonds, Series 1992A, 6.125%, 11/15/20
2,700 City and County of Denver, Colorado, Airport System Revenue No Opt. Call A 3,192,048
Bonds, Series 1991D, 7.750%, 11/15/13
(Alternative Minimum Tax)
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992B:
815 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102.00 Aaa 856,850
(Pre-refunded to 11/15/02)
3,185 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102.00 A 3,319,216
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992C:
470 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102.00 Aaa 492,701
(Pre-refunded to 11/15/02)
3,530 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102.00 A 3,667,882
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.1%
250 Connecticut Health and Educational Facilities Authority, Revenue 7/02 at 102.00 AAA 257,735
Bonds, Bridgeport Hospital Issue, Series A, 6.625%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 3.5%
2,000 District of Columbia, Hospital Revenue Refunding Bonds, 8/02 at 102.00 A3*** 2,078,400
Washington Hospital Center Medlantic Issue, Series 1992A,
7.125%, 8/15/19 (Pre-refunded to 8/15/02)
Washington, District of Columbia, General Obligation Bonds,
Series 1993E:
445 6.000%, 6/01/13 (Pre-refunded to 6/01/03) 6/03 at 102.00 AAA 472,185
1,305 6.000%, 6/01/13 6/03 at 102.00 AAA 1,386,654
2,495 6.000%, 6/01/13 6/03 at 102.00 AAA 2,617,629
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.7%
3,125 City of Tampa, Florida, Revenue Bonds (The Florida Aquarium 5/02 at 102.00 N/R*** 3,203,313
Project), Series 1992, 7.550%, 5/01/12
(Pre-refunded to 5/01/02)
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.4%
Fulco Hospital Authority, Georgia, Refunding Revenue
Anticipation Certificates (Georgia Baptist Healthcare System
Project), Series 1992B:
2,250 6.250%, 9/01/13 (Pre-refunded to 9/01/02) 9/02 at 102.00 Baa1*** 2,334,083
2,000 6.375%, 9/01/22 (Pre-refunded to 9/01/02) 9/02 at 102.00 Baa1*** 2,075,800
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 16.1%
3,000 Village of Bryant, Illinois, Pollution Control Revenue Refunding 8/02 at 102.00 A2 3,040,830
Bonds (Central Illinois Light Company Project), Series 1992,
6.500%, 2/01/18
2,475 Chicago Metropolitan Housing Development Corporation, Illinois, 7/02 at 102.00 AA 2,531,579
Housing Development Revenue Refunding Bonds (FHA-Insured
Mortgage Loans - Section 8 Assisted Projects), Series 1992A,
6.850%, 7/01/22
2,550 City of Chicago, Illinois, Mortgage Revenue Bonds (FHA-Insured 6/02 at 102.00 AAA 2,601,536
Mortgage Loan - Lakeview Towers Project), Series 1992,
6.600%, 12/01/20
25
Nuveen Select Tax-Free Income Portfolio 3 (NXR) (continued)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 700 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call N/R $ 428,778
Special Facility Revenue Refunding Bonds (United Air Lines
Inc. Project), Series 2001C, 6.300%, 5/01/16
1,700 City of Chicago, Illinois, Chicago O'Hare International Airport, 1/03 at 102.00 AAA 1,708,279
General Airport Second Lien Revenue Refunding Bonds,
Series 1993A, 5.600%, 1/01/18 (Alternative Minimum Tax)
1,930 Illinois Development Finance Authority, Revenue Bonds 5/11 at 101.00 BBB+ 1,889,702
(Midwestern University), Series 2001B, 5.750%, 5/15/16
1,500 Illinois Health Facilities Authority, Revenue Bonds (Evangelical No Opt. Call N/R*** 1,667,685
Hospitals Corporation), Series 1992C, 6.250%, 4/15/22
4,000 Illinois Health Facilities Authority, Revenue Bonds (Franciscan 9/06 at 100.00 AAA 4,451,800
Sisters Healthcare Corporation Project), Series 1992B,
6.625%, 9/01/13 (Pre-refunded to 9/01/06)
1,000 Illinois Health Facilities Authority, Revenue Bonds (Mercy Center 10/02 at 102.00 Baa2*** 1,043,010
for Healthcare Services), Series 1992, 6.650%, 10/01/22
(Pre-refunded to 10/01/02)
620 Illinois Housing Development Authority, Homeowner Mortgage 2/10 at 100.00 AA 638,860
Revenue Bonds, Series 2000-D3, 5.700%, 8/01/17
7,750 Illinois Toll Highway Authority, Toll Highway Priority Revenue 1/03 at 102.00 AAA 8,153,543
Bonds, 1992 Series A, 6.375%, 1/01/15
(Pre-refunded to 1/01/03)
1,360 Board of Regents of Sangamon State University, Illinois, Auxiliary 10/02 at 102.00 AAA 1,418,398
Facilities System Revenue Bonds, Series 1992, 6.375%,
10/01/17 (Pre-refunded to 10/01/02)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.1%
1,205 Allen County, Indiana, Refunding Certificates of Participation, 5/02 at 101.00 Aa3*** 1,221,605
Series 1991, 6.500%, 11/01/17 (Pre-refunded to 5/01/02)
3,500 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A+ 3,341,170
Bonds (The Methodist Hospital, Inc), Series 2001,
5.375%, 9/15/22
2,000 Warren Township School Building Corporation, Marion County, 7/02 at 102.00 A+*** 2,064,460
Indiana, First Mortgage Bonds, Series 1992A, 6.000%,
7/15/12 (Pre-refunded to 7/15/02)
2,725 Warrick County, Indiana, Environmental Improvement Revenue 5/03 at 102.00 Aa2 2,760,398
Bonds (Southern Indiana Gas and Electric Company Project),
1993 Series B, 6.000%, 5/01/23 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.8%
Iowa Tobacco Settlement Authority, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
1,000 5.300%, 6/01/25 6/11 at 101.00 A1 878,330
2,850 5.600%, 6/01/35 6/11 at 101.00 A1 2,539,322
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.5%
Trimble County, Kentucky, Pollution Control Revenue Bonds
(Louisville Gas and Electric Company Project), 1990 Series B:
500 6.550%, 11/01/20 (Alternative Minimum Tax) 9/02 at 102.00 Aaa 520,225
(Pre-refunded to 9/16/02)
4,080 6.550%, 11/01/20 (Alternative Minimum Tax) 9/02 at 102.00 A1 4,154,705
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2%
4,000 Louisiana Public Facilities Authority, Revenue Bonds (Baton 2/03 at 101.00 AA 4,158,040
Rouge Water Works Company Project), Series 1992,
6.400%, 2/01/10 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.0%
1,270 Massachusetts Health and Educational Facilities Authority, 11/02 at 102.00 Aaa 1,331,773
Revenue Bonds, MetroWest Health, Inc. Issue, Series C,
6.500%, 11/15/18 (Pre-refunded to 11/15/02)
500 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA- 518,755
Revenue Bonds, Partners Healthcare System Issue,
Series C, 6.000%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 6.9%
4,000 Michigan State Housing Development Authority, Single Family 6/06 at 102.00 AA+ 4,143,360
Mortgage Revenue Bonds, 1996 Series C, 5.950%, 12/01/17
8,240 Michigan State Housing Development Authority, Limited 9/02 at 103.00 AAA 8,512,826
Obligation Multifamily Housing Revenue Bonds (Greenwood
Villa Project), Series 1992, 6.625%, 9/15/17
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.7%
Clark County, Nevada, Las Vegas-McCarran International Airport
Passenger Facility Charge Revenue Bonds, Series 1992B:
$ 1,955 6.500%, 7/01/12 (Alternative Minimum Tax) 7/02 at 102.00 A+ $ 1,995,566
980 6.250%, 7/01/22 (Alternative Minimum Tax) 7/02 at 102.00 Aaa 1,009,978
(Pre-refunded to 7/01/02)
20 6.250%, 7/01/22 (Alternative Minimum Tax) 7/02 at 102.00 A+ 20,175
4,000 Director of the State of Nevada, Department of Business and 1/10 at 100.00 AAA 3,880,240
Industry Revenue Bonds (Las Vegas Monorail Project), 1st
Tier Series 2000, 5.375%, 1/01/40
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.2%
2,195 New Hampshire Housing Finance Authority, Single Family 5/11 at 100.00 Aa2 2,201,058
Mortgage Acquisition Bonds, Series 2001A, 5.600%,
7/01/21 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 9.1%
2,335 Long Island Power Authority, New York, Electric System General 9/11 at 100.00 A- 2,332,105
Revenue Bonds, Series 2001A, 5.375%, 9/01/21
1,750 City of New York, New York, General Obligation Bonds, Fiscal 8/02 at 101.50 Aaa 1,807,278
1992 Series C, 7.000%, 8/01/17 (Pre-refunded to 8/01/02)
20 City of New York, New York, General Obligation Bonds, Fiscal 8/02 at 101.50 A 20,381
1992 Series D, 7.500%, 2/01/18
855 City of New York, New York, General Obligation Bonds, Fiscal 8/02 at 101.50 A 870,954
1992 Series B, 7.000%, 2/01/18
City of New York Municipal Water Finance Authority, New York,
Water and Sewer System Revenue Bonds, Fiscal 1993 Series B:
4,000 6.000%, 6/15/17 6/02 at 101.50 AA 4,085,600
2,785 6.375%, 6/15/22 (Pre-refunded to 6/15/02) 6/02 at 101.00 AAA 2,840,171
2,130 Dormitory Authority of the State of New York, City University No Opt. Call A3 2,453,888
System Consolidated Second General Resolution Revenue
Bonds, Series 1990C, 7.500%, 7/01/10
2,000 Medical Care Facilities Finance Agency of the State of New 8/02 at 102.00 AAA 2,153,940
York, Hospital and Nursing Home FHA-Insured Mortgage
Revenue Bonds, 1992 Series C, 6.250%, 8/15/12
(Pre-refunded to 8/15/02)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.9%
2,500 Cambria County Hospital Development Authority, Pennsylvania, 7/02 at 102.00 AAA 2,578,975
Hospital Revenue Refunding and Improvement Bonds
(Conemaugh Valley Memorial Hospital Project), Series
1992B, 6.375%, 7/01/18 (Pre-refunded to 7/01/02)
2,435 Dauphin County Industrial Development Authority, Pennsylvania, No Opt. Call A- 2,792,385
Water Development Refunding Revenue Bonds (Dauphin
Consolidates Water Supply Company), Series 1992B,
6.700%, 6/01/17
4,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding 7/02 at 102.00 AAA 4,105,400
Bonds (FNMA Insured Mortgage Loans), Issue 1992,
6.500%, 7/01/23
2,000 Pennsylvania Higher Educational Facilities Authority, Revenue 5/03 at 102.00 A 2,063,740
Bonds (Drexel University), Series 1993, 6.375%, 5/01/17
1,000 Philadelphia Authority for Industrial Development, Pennsylvania, 7/11 at 101.00 AAA 1,015,190
Airport Revenue Bonds (Philadelphia Airport System Project),
Series 2001A, 5.500%, 7/01/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.1%
4,000 South Carolina Public Service Authority, Revenue Bonds, 1992 7/02 at 102.00 Aa2 4,120,800
Refunding Series A, 6.375%, 7/01/11
City of Spartanburg, South Carolina, Water System Improvement
Refunding Revenue Bonds, Series 1992:
310 6.250%, 6/01/17 (Pre-refunded to 6/01/02) 6/02 at 101.00 A+*** 315,475
1,290 6.250%, 6/01/17 (Pre-refunded to 6/01/02) 6/02 at 101.00 AAA 1,312,898
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 2.2%
4,000 South Dakota Health and Educational Facilities Authority, 9/02 at 102.00 AAA 4,153,080
Revenue Bonds, Rapid City Regional Hospital Issue,
Series 1992, 6.150%, 9/01/18 (Pre-refunded to 9/01/02)
27
Nuveen Select Tax-Free Income Portfolio 3 (NXR) (continued)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 3.5%
$ 2,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa2 $ 1,974,100
Tennessee, Hospital Facilities Revenue Bonds (Baptist
Health System of East Tennessee), Series 2002,
6.375%, 4/15/22
4,420 Memphis-Shelby County Airport Authority, Tennessee, Special 9/02 at 102.00 BBB 4,563,738
Facilities Revenue Refunding Bonds (Federal Express
Corporation), Series 1992, 6.750%, 9/01/12
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.2%
3,755 Grand Prairie Industrial Development Authority, Texas, Industrial 12/02 at 102.00 A 3,898,403
Development Revenue Refunding Bonds (Baxter International
Inc. Project), Series 1992, 6.550%, 12/01/12
2,500 Harris County Health Facilities Development Corporation, Texas, 10/04 at 101.00 AAA 2,719,900
Hospital Revenue Bonds (Hermann Hospital), Series 1994,
6.375%, 10/01/17 (Pre-refunded to 10/01/04)
5,000 North Central Texas Health Facilities Development Corporation, 5/06 at 102.00 AA- 4,928,600
Hospital Revenue Refunding Bonds (Baylor Healthcare
System Project), Series 1995, 5.250%, 5/15/16
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 4.4%
Port of Seattle, Washington, Revenue Bonds, Series 1992B:
290 6.000%, 11/01/17 (Alternative Minimum Tax) 11/02 at 100.00 Aa2*** 296,513
3,710 6.000%, 11/01/17 (Alternative Minimum Tax) 11/02 at 100.00 Aa2 3,758,304
(Pre-refunded to 11/01/02)
4,000 Washington Public Power Supply System, Nuclear Project No. 1 7/02 at 102.00 AAA 4,127,960
Refunding Revenue Bonds, Series 1992A, 6.500%,
7/01/15 (Pre-refunded to 7/01/02)
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 4.3%
2,500 Berkeley County Building Commission, West Virginia, Hospital 11/02 at 102.00 BBB+ 2,568,300
Revenue Bonds (City Hospital Project), Series 1992,
6.500%, 11/01/09
3,000 Mason County, West Virginia, Pollution Control Revenue Bonds 10/02 at 102.00 BBB+ 3,071,400
(Appalachian Power Company Project), Series 1992J,
6.600%, 10/01/22
West Virginia School Building Authority, Capital Improvement
Revenue Bonds, Series 1992-A:
1,855 6.500%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102.00 A+*** 1,914,192
395 6.500%, 7/01/12 7/02 at 102.00 A+ 406,987
------------------------------------------------------------------------------------------------------------------------------------
$ 176,345 Total Investments (cost $175,058,642) - 98.4% 181,832,473
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 3,004,661
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 184,837,134
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
28
Nuveen California Select Tax-Free Income Portfolio (NXC)
(Formerly the Nuveen Insured California Select Tax-Free Income Portfolio)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.7%
$ 1,410 California Educational Facilities Authority, Refunding Revenue 4/02 at 100.00 AAA $ 1,413,948
Bonds (Loyola Marymount University), Series 1992,
6.000%, 10/01/14
750 California Educational Facilities Authority, Revenue Bonds 8/09 at 100.00 A1 752,588
(Pepperdine University), Series 2002A, 5.500%, 8/01/32
(WI, settling 4/04/02)
3,000 California Infrastructure and Economic Development Bank, 10/11 at 101.00 A- 3,015,450
Revenue Bonds (The J. David Gladstone Institutes Project),
Series 2001, 5.500%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.2%
2,500 California Health Facilities Financing Authority, Insured Hospital 10/02 at 102.00 AAA 2,606,025
Revenue Bonds (Scripps Memorial Hospitals), Series
1992A, 6.400%, 10/01/12
4,000 California Health Facilities Financing Authority, Insured Hospital 8/02 at 102.00 AAA 4,136,760
Revenue Bonds (San Diego Hospital Association),
Series 1992B, 6.125%, 8/01/11
1,880 California Statewide Communities Development Authority, 6/07 at 101.00 AAA 1,937,660
Revenue Bonds (Los Angeles Orthopedic Hospital Foundation
and Orthopedic Hospital), Series 2000, 5.500%, 6/01/17
1,500 California Statewide Communities Development Authority, 11/09 at 102.00 A+ 1,458,075
Insured Mortgage Hospital Revenue Bonds (Mission
Community Hospital), Series 2001, 5.375%, 11/01/26
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.0%
Golden West Schools Financing Authority, California, 1999
Revenue Bonds (School District General Obligation Refunding
Program), Series A:
4,650 0.000%, 8/01/16 No Opt. Call AAA 2,161,041
1,750 0.000%, 2/01/17 No Opt. Call AAA 780,500
2,375 8/01/17 No Opt. Call AAA 1,030,821
2,345 0.000%, 2/01/18 No Opt. Call AAA 975,332
Mountain View-Los Altos Union High School District, Santa Clara
County, California, 1995 General Obligation Capital Appreciation
Bonds, Series C:
1,015 0.000%, 5/01/17 No Opt. Call AAA 447,229
1,080 0.000%, 5/01/18 No Opt. Call AAA 443,718
4,000 City of Oakland, Alameda County, California, General Obligation 6/02 at 102.00 AAA 4,107,160
Bonds, Series 1992, 6.000%, 6/15/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 13.3%
3,500 State Public Works Board of the State of California, Department No Opt. Call AAA 4,115,685
of Corrections Lease Revenue Bonds (Calipatria State Prison
in Imperial County), 1991 Series A, 6.500%, 9/01/17
1,200 Los Angeles County Metropolitan Transportation Authority, 7/03 at 102.00 AAA 1,224,900
California, Proposition A Sales Tax Revenue Refunding
Bonds, Series 1993-A, 5.625%, 7/01/18
4,000 San Bernardino County, California, Certificates of Participation 11/02 at 102.00 AAA 4,149,360
(1992 West Valley Detention Center Refinancing Project),
6.000%, 11/01/18
2,445 Walnut Public Financing Authority, Los Angeles County, 9/02 at 102.00 AAA 2,532,091
California, 1992 Tax Allocation Revenue Bonds (Walnut
Improvement Project), 6.500%, 9/01/22
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 15.1%
5,000 City of Los Angeles Harbor Department, California, Revenue 8/11 at 100.00 AAA 5,152,400
Refunding Bonds, Series 2001B, 5.500%, 8/01/17
3,675 Palm Springs Financing Authority, California, Revenue Bonds 7/02 at 102.00 AAA 3,759,268
(Palm Springs Regional Airport), Series 1992, 6.000%,
1/01/12 (Alternative Minimum Tax)
3,750 Port of Oakland, California, Revenue Bonds, Series 1992-E, 11/02 at 102.00 AAA 3,916,275
6.500%, 11/01/16 (Alternative Minimum Tax)
820 City and County of San Francisco Airports Commission, 5/03 at 102.00 AAA 845,297
California, Revenue Bonds (San Francisco International
Airport), Second Series, Issue 4 Refunding, 6.200%,
5/01/20 (Alternative Minimum Tax)
29
Nuveen California Select Tax-Free Income Portfolio (NXC) (continued)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 34.6%
$ 4,000 City of Los Angeles Community Redevelopment Agency, 7/02 at 102.00 AAA $ 4,124,400
California, Tax Allocation Bonds (Hollywood Redevelopment
Project), Series B, 6.100%, 7/01/22 (Pre-refunded to 7/01/02)
4,000 City of Los Angeles, California, Wastewater System Revenue 6/02 at 102.00 AAA 4,111,080
Bonds, Series 1992-B, 6.250%, 6/01/12
(Pre-refunded to 6/01/02)
1,665 Los Angeles County, California, Certificates of Participation 4/02 at 102.00 AAA 1,703,928
(Edmund D. Edelman Children's Court and Petersen Museum
Projects), 6.000%, 4/01/12 (Pre-refunded to 4/30/02)
1,500 Modesto Irrigation District Financing Authority, California, 9/02 at 102.00 AAA 1,557,450
Domestic Water Project Revenue Bonds, Series 1992A,
6.125%, 9/01/19 (Pre-refunded to 9/01/02)
Rio Linda Union School District, California, General Obligation
Bonds, Series 1992A:
475 6.250%, 8/01/15 (Pre-refunded to 8/01/02) 8/02 at 102.00 AAA 491,715
3,310 6.375%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 102.00 AAA 3,427,902
3,500 Sacramento Municipal Utility District, California, Electric 8/02 at 102.00 AAA 3,630,760
Revenue Bonds, Series 1992B, 6.375%, 8/15/22
(Pre-refunded to 8/15/02)
4,000 San Diego County, California, Certificates of Participation 8/04 at 102.00 AAA 4,438,200
(1994 Inmate Reception Center and Cooling Plant Financing),
6.750%, 8/01/14 (Pre-refunded to 8/01/04)
City and County of San Francisco Airports Commission,
California, Revenue Bonds (San Francisco International Airport),
Second Series, Issue 1 Refunding:
1,405 6.300%, 5/01/11 (Pre-refunded to 5/01/02) 5/02 at 102.00 AAA 1,438,875
2,095 6.300%, 5/01/11 (Pre-refunded to 5/01/02) 5/02 at 102.00 AAA 2,145,510
1,330 City and County of San Francisco Airports Commission, 5/03 at 102.00 AAA 1,409,148
California, Revenue Bonds (San Francisco International
Airport), Second Series, Issue 4 Refunding, 6.200%,
5/01/20 (Alternative Minimum Tax)
(Pre-refunded to 5/01/03)
1,000 Tulare County, California, Certificates of Participation (1992 11/02 at 102.00 AAA 1,046,560
Financing Project), Series A, 6.125%, 11/15/12
(Pre-refunded to 11/15/02)
1,555 Walnut Public Financing Authority, Los Angeles County, 9/02 at 102.00 AAA 1,617,013
California, 1992 Tax Allocation Revenue Bonds (Walnut
Improvement Project), 6.500%, 9/01/22
(Pre-refunded to 9/01/02)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.8%
2,550 M-S-R Public Power Agency, California, Revenue Bonds (San 7/02 at 100.00 AAA 2,567,748
Juan Project), Series 1991E, 6.000%, 7/01/22
3,000 Northern California Power Agency, Revenue Bonds 7/02 at 102.00 AAA 3,092,760
(Hydroelectric Project Number One), 1992 Refunding
Series A, 6.250%, 7/01/12
1,225 Turlock Irrigation District, California, Revenue Refunding Bonds,
Series 1992-A, 6.250%, 1/01/12 No Opt. Call AAA 1,405,749
------------------------------------------------------------------------------------------------------------------------------------
$ 93,255 Total Investments (cost $86,115,170) - 98.7% 89,170,381
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 1,175,958
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 90,346,339
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
30
Nuveen New York Select Tax-Free Income Portfolio (NXN)
(Formerly the Nuveen Insured New York Select Tax-Free Income Portfolio)
Portfolio of INVESTMENTS March 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 17.9%
$ 1,700 Town of Amherst Industrial Development Agency, New York, 8/12 at 101.00 AAA $ 1,648,167
Civic Facility Revenue Bonds (UBF Faculty - Student Housing
Corporation Creekside Project), 2002 Series A,
5.000%, 8/01/22
1,000 City of New York Industrial Development Agency, New York, 11/04 at 102.00 AAA 1,093,310
Civic Facility Revenue Bonds (USTA National Tennis Center
Incorporated Project), 6.375%, 11/15/14
570 Dormitory Authority of the State of New York, City University No Opt. Call AAA 665,766
System Consolidated Second General Resolution Revenue
Bonds, Series 1990C, 7.500%, 7/01/10
1,100 Dormitory Authority of the State of New York, Insured Revenue 7/02 at 101.00 AAA 1,126,081
Bonds (Mount Sinai School of Medicine), Series 1991,
6.750%, 7/01/15
2,500 Dormitory Authority of the State of New York, Insured Revenue 7/02 at 102.00 AAA 2,575,450
Bonds (Marist College), Series 1992, 6.000%, 7/01/12
1,425 Dormitory Authority of the State of New York, Insured Revenue 7/07 at 101.00 AAA 1,420,483
Bonds (Rochester Institute of Technology), Series 1997,
5.250%, 7/01/22
1,430 Dormitory Authority of the State of New York, Revenue Bonds 7/11 at 101.00 AA- 1,372,914
(Upstate Community Colleges), 2002 Series A,
5.000%, 7/01/23
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 5.2%
1,680 Dormitory Authority of the State of New York, Winthrop 7/11 at 101.00 AAA 1,691,122
University Hospital Association Revenue Bonds (Winthrop
South Nassau University Health System Obligated Group),
Series 2001A, 5.250%, 7/01/17
1,195 Dormitory Authority of the State of New York, South Nassau 7/11 at 101.00 AAA 1,202,911
Communities Hospital Revenue Bonds (Winthrop South
Nassau University Health System Obligation Group),
Series 2001B, 5.250%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.7%
1,330 New Hartford Housing Development Corporation, New York, 7/02 at 100.00 AAA 1,335,333
Mortgage Revenue Refunding Bonds (Village Point
Project - FHA-Insured Mortgage Loan Section 8 Assisted
Project), Series 1992-A, 7.375%, 1/01/24
1,245 New York State Housing Finance Agency, FHA-Insured 8/02 at 102.00 AAA 1,275,702
Multifamily Housing Mortgage Revenue Bonds,
Series 1992C, 6.450%, 8/15/14
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.4%
2,500 New York State Mortgage Agency, Mortgage Revenue Bonds, 4/11 at 100.00 Aaa 2,434,525
Thirty First Series A, 5.300%, 10/01/31
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.5%
2,000 Dormitory Authority of the State of New York, FHA-Insured 8/11 at 101.00 AAA 1,914,220
Mortgage Nursing Home Revenue Bonds (Norwegian
Christian Home and Health Center), Series 2001,
5.200%, 8/01/36
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 4.9%
Town of Clarkstown, Rickland County, New York, 1992 Various
Purposes Serial Bonds:
505 5.600%, 6/15/10 No Opt. Call AAA 548,279
525 5.600%, 6/15/11 No Opt. Call AAA 572,885
525 5.600%, 6/15/12 No Opt. Call AAA 574,308
10 City of New York, New York, General Obligation Bonds, Fiscal 8/02 at 101.50 AAA 10,287
1992 Series C, 6.250%, 8/01/11
1,000 West Islip Union Free School District, Suffolk County, New York, 10/10 at 100.00 Aaa 987,780
General Obligation Bonds, Series 2001, 5.000%, 10/01/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 2.4%
1,000 Nassau County Interim Finance Authority, New York, Sales Tax 11/06 at 101.00 AAA 982,930
Secured Revenue Bonds, Series 2001-A2, 5.125%, 11/15/21
20 New York State Medical Care Facilities Finance Agency, Mental 8/02 at 102.00 AAA 20,633
Health Services Facilities Improvement Revenue Bonds, 1992
Series D, 6.100%, 8/15/13
31
Nuveen New York Select Tax-Free Income Portfolio (NXN) (continued)
Portfolio of INVESTMENTS September 30, 2001 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 140 New York State Medical Care Facilities Finance Agency, Mental 8/02 at 102.00 AAA $ 143,193
Health Services Facilities Improvement Revenue Bonds,
1992 Series B, 6.250%, 8/15/18
200 New York State Thruway Authority, Highway and Bridge Trust 4/05 at 102.00 AAA 201,844
Fund Bonds, Series 1995B, 5.125%, 4/01/15
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.7%
2,500 Port Authority of New York and New Jersey, Consolidated Bonds, 1/05 at 101.00 AAA 2,623,975
Ninety-Seventh Series, 6.500%, 7/15/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 34.1%
3,500 Metropolitan Transportation Authority, New York, Commuter 7/02 at 102.00 AAA 3,610,180
Facilities Revenue Bonds, Series 1992B, 6.250%, 7/01/17
(Pre-refunded to 7/01/02)
2,250 Metropolitan Transportation Authority, New York, Transit 7/02 at 102.00 AAA 2,321,550
Facilities Revenue Bonds, Series J, 6.375%, 7/01/10
(Pre-refunded to 7/01/02)
245 City of New York, New York, General Obligation Bonds, Fiscal 8/02 at 101.50 AAA 252,404
1992 Series C, 6.250%, 8/01/11 (Pre-refunded to 8/01/02)
2,000 City of New York, New York, General Obligation Bonds, Fiscal 8/04 at 101.00 AAA 2,209,220
1995 Series B1, 6.950%, 8/15/12 (Pre-refunded to 8/15/04)
1,000 City of New York Municipal Water Finance Authority, New York, 6/02 at 101.50 AAA 1,024,420
Water and Sewer System Revenue Bonds, Fiscal 1992
Series C, 6.200%, 6/15/21 (Pre-refunded to 6/15/02)
1,505 Dormitory Authority of the State of New York, Judicial Facilities No Opt. Call AAA 1,803,622
Lease Revenue Bonds, Suffolk County Issue, Series 1986,
7.375%, 7/01/16
1,370 Dormitory Authority of the State of New York, Insured Revenue 7/02 at 102.00 AAA 1,412,251
Bonds (Siena College), Series 1992, 6.000%, 7/01/11
(Pre-refunded to 7/01/02)
2,500 Medical Care Facilities Finance Agency of the State of New York, 8/04 at 100.00 AAA 2,629,350
Hospital and Nursing Home FHA-Insured Mortgage Revenue
Bonds, 1992 Series C, 6.250%, 8/15/12
(Pre-refunded to 8/15/04)
2,500 Medical Care Facilities Finance Agency of the State of New York, 2/05 at 102.00 AAA 2,797,100
New York Hospital FHA-Insured Mortgage Revenue Bonds,
1994 Series A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05)
230 Medical Care Facilities Finance Agency of the State of New York, 8/02 at 102.00 AAA 238,356
Mental Health Services Facilities Improvement Revenue
Bonds, 1992 Series D, 6.100%, 8/15/13
(Pre-refunded to 8/15/02)
485 Suffolk County Water Authority, New York, Waterworks No Opt. Call AAA 561,577
Revenue Bonds, Series 1986-V, 6.750%, 6/01/12
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 12.7%
City of New York Municipal Water Finance Authority, New York,
Water and Sewer System Revenue Bonds, Fiscal 1992 Series A
Refunding:
1,400 5.750%, 6/15/18 6/02 at 101.50 AAA 1,428,266
3,500 5.750%, 6/15/18 6/02 at 101.50 AAA 3,565,834
2,000 New York State Environmental Facilities Corporation, State Clean 6/12 at 100.00 AAA 2,021,119
Water and Drinking Water Revolving Funds Revenue Bonds
(New York City Municipal Water Finance Authority Projects),
Second Resolution Bonds, Series 2002B, 5.250%, 6/15/19
------------------------------------------------------------------------------------------------------------------------------------
$ 50,585 Total Investments (cost $50,528,993) - 94.5% 52,297,347
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 5.5% 3,064,389
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 55,361,736
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
32
Statement of
ASSETS AND LIABILITIES March 31, 2002
SELECT SELECT SELECT CALIFORNIA NEW YORK
TAX-FREE TAX-FREE 2 TAX-FREE 3 SELECT TAX-FREE SELECT TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in municipal securities,
at market value $235,554,911 $251,886,839 $181,832,473 $89,170,381 $52,297,347
Cash 94,459 733,732 1,037,081 1,064,495 518,608
Receivables:
Interest 5,210,587 4,801,910 2,970,568 1,325,811 807,569
Investments sold 17,222,500 4,001,845 -- -- 2,020,000
Other assets 56,258 59,013 45,713 25,590 19,112
------------------------------------------------------------------------------------------------------------------------------------
Total assets 258,138,715 261,483,339 185,885,835 91,586,277 55,662,636
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 16,495,682 4,145,724 -- 753,975 --
Accrued expenses:
Surveillance and administration fees 50,066 64,050 46,655 23,155 14,191
Other 155,231 162,600 139,932 62,356 52,285
Dividends payable 1,162,844 1,223,691 862,114 400,452 234,424
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 17,863,823 5,596,065 1,048,701 1,239,938 300,900
------------------------------------------------------------------------------------------------------------------------------------
Net assets $240,274,892 $255,887,274 $184,837,134 $90,346,339 $55,361,736
====================================================================================================================================
Shares outstanding 16,378,096 17,607,068 12,964,124 6,257,070 3,907,069
====================================================================================================================================
Net asset value per share outstanding
(net assets divided by shares outstanding) $ 14.67 $ 14.53 $ 14.26 $ 14.44 $ 14.17
====================================================================================================================================
NET ASSETS CONSIST OF:
Capital paid-in $ 163,781 $ 176,071 $ 129,641 $ 62,571 $ 39,071
Paid-in surplus 227,625,305 245,680,398 178,364,129 87,121,714 53,605,750
Balance of undistributed net investment income 1,458,982 703,513 361,155 107,137 30,328
Accumulated net realized gain (loss) from
investment transactions 683,466 729,015 (791,622) (294) (81,767)
Net unrealized appreciation of investments 10,343,358 8,598,277 6,773,831 3,055,211 1,768,354
------------------------------------------------------------------------------------------------------------------------------------
Net assets $240,274,892 $255,887,274 $184,837,134 $90,346,339 $55,361,736
====================================================================================================================================
See accompanying notes to financial statements.
33
Statement of
OPERATIONS Year Ended March 31, 2002
SELECT SELECT SELECT CALIFORNIA NEW YORK
TAX-FREE TAX-FREE 2 TAX-FREE 3 SELECT TAX-FREE SELECT TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $15,329,319 $16,187,233 $11,291,711 $ 5,250,204 $ 3,116,340
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Surveillance and administration fees 596,860 762,390 554,308 275,705 169,065
Shareholders' servicing agent fees and expenses 70,399 66,731 49,535 19,322 17,108
Custodian's fees and expenses 56,528 60,727 37,928 26,752 25,349
Trustees' fees and expenses 20,340 22,069 15,870 6,595 6,018
Professional fees 21,605 26,677 11,827 9,210 5,371
Shareholders' reports - printing and mailing expenses 58,768 63,235 59,982 21,029 12,838
Stock exchange listing fees 31,429 31,432 31,435 22,456 22,194
Investor relations expense 62,823 68,308 47,374 17,651 12,898
Other expenses 9,219 10,317 7,621 4,705 3,543
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 927,971 1,111,886 815,880 403,425 274,384
Custodian fee credit (23,186) (18,973) (22,971) (6,979) (6,578)
------------------------------------------------------------------------------------------------------------------------------------
Next expenses 904,785 1,092,913 792,909 396,446 267,806
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 14,424,534 15,094,320 10,498,802 4,853,758 2,848,534
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain from investment transactions 1,111,671 1,103,729 22,630 149,331
245,948
Change in net unrealized appreciation
(depreciation) of investments (7,241,071) (7,340,586) (3,682,776) (2,218,344) (1,540,357)
------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (6,129,400) (6,236,857) (3,660,146) (2,069,013) (1,294,409)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 8,295,134 $ 8,857,463 $ 6,838,656 $ 2,784,745 $ 1,554,125
====================================================================================================================================
See accompanying notes to financial statements.
34
Statement of
CHANGES IN NET ASSETS
SELECT TAX-FREE (NXP) SELECT TAX-FREE 2 (NXQ) SELECT TAX-FREE 3 (NXR)
----------------------------- ------------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/02 3/31/01 3/31/02 3/31/01 3/31/02 3/31/01
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 14,424,534 $ 14,826,210 $ 15,094,320 $ 15,331,134 $ 10,498,802 $ 10,559,903
Net realized gain from
investment transactions 1,111,671 81,990 1,103,729 9,407 22,630 249,350
Change in net unrealized appreciation
(depreciation) of investments (7,241,071) 2,461,003 (7,340,586) 2,434,860 (3,682,776) 2,422,827
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 8,295,134 17,369,203 8,857,463 17,775,401 6,838,656 13,232,080
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From undistributed net
investment income (14,118,971) (14,707,536) (14,816,349) (15,291,745) (10,345,370) (10,559,280)
From accumulated net realized gains
from investment transactions (376,696) -- (297,559) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (14,495,667) (14,707,536) (15,113,908) (15,291,745) (10,345,370) (10,559,280)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets (6,200,533) 2,661,667 (6,256,445) 2,483,656 (3,506,714) 2,672,800
Net assets at the beginning
of year 246,475,425 243,813,758 262,143,719 259,660,063 188,343,848 185,671,048
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $240,274,892 $246,475,425 $255,887,274 $262,143,719 $184,837,134 $188,343,848
====================================================================================================================================
Balance of undistributed net
investment income at the
end of year $ 1,458,982 $ 351,649 $ 703,513 $ 192,208 $ 361,155 $ 107,659
====================================================================================================================================
35
Statement of
CHANGES IN NET ASSETS (continued)
CALIFORNIA SELECT TAX-FREE (NXC) NEW YORK SELECT TAX-FREE (NXN)
--------------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/02 3/31/01 3/31/02 3/31/01
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,853,758 $ 4,941,478 $ 2,848,534 $ 3,028,460
Net realized gain from
investment transactions 149,331 79,582 245,948 8,584
Change in net unrealized appreciation
(depreciation) of investments (2,218,344) 1,352,959 (1,540,357) 758,168
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 2,784,745 6,374,019 1,554,125 3,795,212
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From undistributed net
investment income (4,805,497) (4,943,085) (2,871,874) (3,039,700)
From accumulated net realized gains
from investment transactions (150,170) (79,465) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (4,955,667) (5,022,550) (2,871,874) (3,039,700)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (2,170,922) 1,351,469 (1,317,749) 755,512
Net assets at the beginning of year 92,517,261 91,165,792 56,679,485 55,923,973
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $90,346,339 $92,517,261 $55,361,736 $56,679,485
====================================================================================================================================
Balance of undistributed net
investment income at the
end of year $ 107,137 $ 21,819 $ 30,328 $ 53,668
====================================================================================================================================
See accompanying notes to financial statements.
36
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The Trusts covered in this report and their corresponding New York Stock
Exchange symbols are Nuveen Select Tax-Free Income Portfolio (NXP), Nuveen
Select Tax-Free Income Portfolio 2 (NXQ), Nuveen Select Tax-Free Income
Portfolio 3 (NXR), Nuveen California Select Tax-Free Income Portfolio (NXC)
(formerly the Nuveen Insured California Select Tax-Free Income Portfolio) and
Nuveen New York Select Tax-Free Income Portfolio (NXN) (formerly the Nuveen
Insured New York Select Tax-Free Income Portfolio).
Each Trust seeks to provide stable dividends consistent with the preservation of
capital, exempt from regular federal and designated state income taxes, where
applicable, by investing primarily in a diversified portfolio of municipal
obligations. The Trusts are registered under the Investment Company Act of 1940
as closed-end, diversified management investment companies.
The Trusts' investment adviser, Nuveen Institutional Advisory Corp. ( the
"Adviser"), a wholly owned subsidiary of The John Nuveen Company, administers
the investments and maintains ongoing surveillance of such investments to ensure
that they continue to meet the Trusts' investment objectives and credit quality
standards. The Adviser does not intend to adjust the portfolios except 1) to
invest interest payments on municipal obligations that are not currently needed
to pay dividends or expenses; 2) to reinvest principal payments on municipal
obligations resulting from their maturity or early redemption; 3) to sell
municipal obligations when the Adviser believes that continuing to hold them
would be inconsistent with maintaining the Trusts' high credit quality, and to
reinvest the proceeds of such sales; and 4) for certain other purposes.
The following is a summary of significant accounting policies followed by the
Trusts in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Trusts' investment portfolio are provided
by a pricing service approved by the Trust's Board of Trustees. When price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. If it is determined that market prices for a security are
unavailable or inappropriate, the Board of Trustees of the Trusts may establish
a fair value for the security. Temporary investments in securities that have
variable rate and demand features qualifying them as short-term securities are
valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade-date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. Any securities so purchased are subject to
market fluctuation during this period. The Trusts have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
March 31, 2002, Select Tax-Free (NXP), Select Tax-Free 2 (NXQ) and California
Select Tax-Free (NXC) had outstanding delayed delivery and/or when-issued
purchase commitments of $16,495,682, $4,145,724 and $753,975, respectively.
There were no such outstanding purchase commitments in either of the other
Trusts.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
for financial reporting purposes.
Income Taxes
Each Trust is a separate taxpayer for federal income tax purposes. Each Trust
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its net investment
income to its shareholders. Therefore, no federal income tax provision is
required. Furthermore, each Trust intends to satisfy conditions which will
enable interest from municipal securities, which is exempt from regular federal
and designated state income taxes, where applicable, to retain such tax-exempt
status when distributed to shareholders of the Trusts. All monthly tax-exempt
income dividends paid during the fiscal year ended March 31, 2002, have been
designated Exempt Interest Dividends.
37
Notes to
FINANCIAL STATEMENTS (continued)
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend. Generally,
payment is made or reinvestment is credited to shareholder accounts on the first
business day after month-end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
income tax regulations, which may differ from accounting principles generally
accepted in the United States. Accordingly, temporary over-distributions as a
result of these differences may occur and will be classified as either
distributions in excess of net investment income, distributions in excess of net
realized gains and/or distributions in excess of net ordinary taxable income
from investment transactions, where applicable.
Derivative Financial Instruments
The Trusts are not authorized to invest in derivative financial instruments.
Custodian Fee Credit
Each Trust has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Trust's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
Change in Accounting Policy
As required, effective April 1, 2001, the Trusts have adopted the provisions of
the new AICPA Audit and Accounting Guide for Investment Companies and began
accreting taxable market discount on debt securities. Prior to April 1, 2001,
the Trusts did not accrete taxable market discount on debt securities until they
were sold. The cumulative effect of this accounting change had no impact on the
total net assets or the net asset values of the Trusts, but resulted in an
increase in the cost of securities and a corresponding decrease in net
unrealized appreciation, based on securities held by the Trusts on April 1,
2001, as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
-----------------------------------------------------------------------------
$801,770 $233,334 $100,064 $37,057 $--
=============================================================================
The Statement of Changes in Net Assets and Financial Highlights for the prior
periods have not been restated to reflect this change in presentation.
The effect of this change for the fiscal year ended March 31, 2002, was to
increase investment income with a corresponding decrease in net unrealized
appreciation as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
----------------------------------------------------------------------------
$130,960 $38,241 $14,523 $5,899 $--
============================================================================
2. TRUST SHARES
There were no share transactions during the fiscal year ended March 31, 2002,
nor during the fiscal year ended March 31, 2001, in any of the Trusts.
38
3. DISTRIBUTIONS TO SHAREHOLDERS
The Trusts declared dividend distributions from their tax-exempt net investment
income which were paid May 1, 2002, to shareholders of record on April 15, 2002,
as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0710 $.0695 $.0665 $.0640 $.0600
=========================================================================================================
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities during the fiscal year ended
March 31, 2002, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Purchases:
Long-term municipal securities $64,806,939 $52,703,739 $20,072,849 $10,487,340 $14,605,815
Short-term municipal securities 12,100,000 15,000,000 6,930,000 8,000,000 8,000,000
Sales and maturities:
Long-term municipal securities 63,234,650 53,764,000 17,240,275 11,085,291 15,647,200
Short-term municipal securities 12,100,000 15,000,000 6,930,000 8,000,000 9,500,000
=========================================================================================================
5. INCOME TAX INFORMATION
The following information is presented on an income tax basis as of March 31,
2002. Differences between amounts for financial statement and federal income tax
purposes are primarily due to timing differences in recognizing income on
taxable market discount securities and timing differences in recognizing certain
gains and losses on security transactions.
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Cost of investments $224,278,823 $243,016,987 $174,944,055 $86,072,508 $50,528,993
=========================================================================================================
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Gross unrealized appreciation $12,712,503 $10,430,575 $7,586,869 $3,589,169 $2,122,560
Gross unrealized depreciation (1,436,415) (1,560,723) (698,451) (491,296) (354,206)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation
of investments $11,276,088 $ 8,869,852 $6,888,418 $3,097,873 $1,768,354
=========================================================================================================
The tax components of undistributed net investment income and realized gains of
March 31, 2002, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Undistributed tax-exempt income $526,252 $431,938 $246,568 $64,181 $30,328
Undistributed ordinary income* -- -- -- -- --
Undistributed long-term capital gains 683,466 729,015 -- -- --
=========================================================================================================
The tax character of distributions paid during the fiscal year ended March 31,
2002, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Distributed from tax-exempt income $14,118,971 $14,816,349 $10,345,370 $4,805,497 $2,871,874
Distributed from ordinary income* -- -- -- -- --
Distributed from long-term capital gains 376,696 297,559 -- 150,170 --
=========================================================================================================
*Ordinary income consists of taxable market discount income and short-term
capital gains, if any.
39
Notes to
FINANCIAL STATEMENTS (continued)
At March 31, 2002, the following Trusts had unused capital loss carryforwards
available to be applied against future capital gains, if any. If not applied,
the carryforwards will expire as follows:
NEW YORK
SELECT SELECT
TAX-FREE 3 TAX-FREE
(NXR) (NXN)
-----------------------------------------------------------------------------
Expiration year:
2004 $113,514 $77,988
2005 674,505 1,480
2006 3,603 828
2007 -- 933
2008 -- 538
-----------------------------------------------------------------------------
Total $791,622 $81,767
=============================================================================
6. SURVEILLANCE AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Trusts' investment management agreements with the Adviser, each Trust
pays an annual surveillance and administration fee, payable monthly, at the
rates set forth below, which are based upon the average daily net assets of each
Trust as follows:
SELECT TAX-FREE 2 (NXQ)
SELECT TAX-FREE 3 (NXR)
CALIFORNIA SELECT TAX-FREE (NXC)
AVERAGE DAILY NET ASSETS SELECT TAX-FREE (NXP) NEW YORK SELECT TAX-FREE (NXN)
---------------------------------------------------------------------------------------------------------
For the first $125 million .2500 of 1% .3000 of 1%
For the next $125 million .2375 of 1 .2875 of 1
For the next $250 million .2250 of 1 .2750 of 1
For the next $500 million .2125 of 1 .2625 of 1
For the next $1 billion .2000 of 1 .2500 of 1
For net assets over $2 billion .1875 of 1 .2375 of 1
=========================================================================================================
The fee compensates the Adviser for performing ongoing administration,
surveillance and portfolio adjustment services. The Trusts pay no compensation
directly to those of its Trustees who are affiliated with the Adviser or to
their officers, all of whom receive remuneration for their services to the
Trusts from the Adviser or its affiliates.
40
7. INVESTMENT COMPOSITION
At March 31, 2002, the revenue sources by municipal purpose, expressed as a
percent of long-term investments, were as follows:
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
(NXP) (NXQ) (NXR) (NXC) (NXN)
---------------------------------------------------------------------------------------------------------
Basic Materials 2% 3% --% --% --%
Education and Civic Organizations 2 4 4 6 19
Healthcare 12 14 10 11 6
Housing/Multifamily 4 11 10 -- 5
Housing/Single Family 6 3 4 -- 5
Long-Term Care -- -- -- -- 4
Tax Obligation/General 10 1 2 11 5
Tax Obligation/Limited 13 7 1 15 3
Transportation 13 12 15 15 5
U.S. Guaranteed 37 39 34 34 35
Utilities -- -- 12 8 --
Water and Sewer 1 3 6 -- 13
Other -- 3 2 -- --
---------------------------------------------------------------------------------------------------------
100% 100% 100% 100% 100%
=========================================================================================================
Certain long-term investments owned by the Trusts are covered by insurance
issued by several private insurers or are backed by an escrow or trust
containing U.S. Government or U.S. Government agency securities, both of which
ensure the timely payment of principal and interest in the event of default (55%
for Select Tax-Free (NXP), 61% for Select Tax-Free 2 (NXQ), 45% for Select
Tax-Free 3 (NXR), 100% for California Select Tax-Free (NXC), and 100% for New
York Select Tax-Free (NXN)). Such insurance or escrow, however, does not
guarantee the market value of the municipal securities or the value of any of
the Trusts' shares.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Trust.
41
Financial
HIGHLIGHTS
Selected data for a share outstanding throughout each year:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ -----------------------------
NET
REALIZED/ ENDING
BEGINNING NET UNREALIZED NET NET ENDING
NET ASSET INVESTMENT INVESTMENT INVESTMENT CAPITAL ASSET MARKET
VALUE INCOME GAIN (LOSS) TOTAL INCOME GAINS TOTAL VALUE VALUE
====================================================================================================================================
SELECT TAX-FREE (NXP)
====================================================================================================================================
Year Ended 3/31:
2002(a) $15.05 $.88 $(.38) $ .50 $(.86) $(.02) $(.88) $14.67 $13.8500
2001 14.89 .91 .15 1.06 (.90) -- (.90) 15.05 14.5000
2000 15.55 .90 (.66) .24 (.90) -- (.90) 14.89 13.6875
1999 15.62 .90 (.07) .83 (.90) -- (.90) 15.55 16.3750
1998 15.15 .90 .47 1.37 (.90) -- (.90) 15.62 15.8750
SELECT TAX-FREE 2 (NXQ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 14.89 .86 (.36) .50 (.84) (.02) (.86) 14.53 13.6600
2001 14.75 .87 .14 1.01 (.87) -- (.87) 14.89 14.1500
2000 15.41 .87 (.66) .21 (.87) -- (.87) 14.75 13.3750
1999 15.43 .87 (.02) .85 (.87) -- (.87) 15.41 15.8750
1998 14.95 .88 .49 1.37 (.89) -- (.89) 15.43 15.3125
SELECT TAX-FREE 3 (NXR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 14.53 .81 (.28) .53 (.80) -- (.80) 14.26 13.4200
2001 14.32 .81 .21 1.02 (.81) -- (.81) 14.53 13.7000
2000 14.98 .82 (.66) .16 (.82) -- (.82) 14.32 12.8750
1999 14.96 .82 .02 .84 (.82) -- (.82) 14.98 15.2500
1998 14.35 .82 .62 1.44 (.83) -- (.83) 14.96 14.9375
CALIFORNIA SELECT TAX-FREE (NXC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 14.79 .78 (.34) .44 (.77) (.02) (.79) 14.44 14.2500
2001 14.57 .79 .23 1.02 (.79) (.01) (.80) 14.79 13.9400
2000 15.26 .79 (.67) .12 (.79) (.02) (.81) 14.57 13.7500
1999 15.21 .79 .05 .84 (.79) -- (.79) 15.26 15.7500
1998 14.53 .79 .69 1.48 (.80) -- (.80) 15.21 15.3125
NEW YORK SELECT TAX-FREE (NXN)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 14.51 .73 (.33) .40 (.74) -- (.74) 14.17 13.7600
2001 14.31 .78 .20 .98 (.78) -- (.78) 14.51 14.0500
2000 14.92 .78 (.61) .17 (.78) -- (.78) 14.31 12.6875
1999 14.91 .78 .01 .79 (.78) -- (.78) 14.92 15.1250
1998 14.28 .78 .63 1.41 (.78) -- (.78) 14.91 15.0000
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------
TOTAL RETURNS BEFORE CREDIT AFTER CREDIT**
------------------------ ----------------------------- ------------------------------
RATIO OF NET RATIO OF NET
BASED ON ENDING RATIO OF INVESTMENT RATIO OF INVESTMENT
BASED ON NET NET EXPENSES TO INCOME TO EXPENSES TO INCOME TO PORTFOLIO
MARKET ASSET ASSETS AVERAGE AVERAGE AVERAGE AVERAGE TURNOVER
VALUE* VALUE* (000) NET ASSETS NET ASSETS NET ASSETS NET ASSETS RATE
====================================================================================================================================
SELECT TAX-FREE (NXP)
====================================================================================================================================
Year Ended 3/31:
2002(a) 1.54% 3.41% $240,275 .38% 5.89% .37% 5.89% 26%
2001 12.63 7.32 246,475 .35 6.06 .35 6.07 2
2000 (11.09) 1.62 243,814 .36 5.97 .36 5.97 --
1999 9.02 5.43 254,635 .36 5.78 .36 5.78 1
1998 14.06 9.24 255,865 .36 5.83 .36 5.83 1
SELECT TAX-FREE 2 (NXQ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 2.57 3.41 255,887 .43 5.79 .42 5.80 21
2001 12.46 7.04 262,144 .41 5.89 .40 5.90 2
2000 (10.38) 1.43 259,660 .40 5.82 .40 5.82 1
1999 9.51 5.63 271,240 .40 5.65 .40 5.65 1
1998 14.92 9.34 271,752 .40 5.72 .40 5.72 --
SELECT TAX-FREE 3 (NXR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 3.84 3.70 184,837 .44 5.59 .42 5.60 9
2001 12.97 7.36 188,344 .47 5.66 .46 5.67 2
2000 (10.29) 1.11 185,671 .41 5.65 .41 5.65 --
1999 7.78 5.76 194,165 .42 5.45 .42 5.45 --
1998 19.38 10.24 193,899 .42 5.56 .42 5.56 --
CALIFORNIA SELECT TAX-FREE (NXC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 7.95 3.03 90,346 .44 5.27 .43 5.28 12
2001 7.23 7.21 92,517 .43 5.38 .42 5.39 2
2000 (7.57) .90 91,166 .45 5.37 .45 5.38 3
1999 8.22 5.65 95,501 .44 5.20 .44 5.20 1
1998 16.52 10.41 95,164 .44 5.31 .44 5.31 --
NEW YORK SELECT TAX-FREE (NXN)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2002(a) 3.17 2.75 55,362 .49 5.04 .48 5.05 28
2001 17.36 7.02 56,679 .48 5.39 .47 5.40 3
2000 (11.18) 1.21 55,924 .50 5.36 .49 5.37 --
1999 6.14 5.40 58,303 .49 5.19 .49 5.19 --
1998 18.31 10.07 58,250 .49 5.30 .49 5.30 --
====================================================================================================================================
* Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Net Asset Value is the
combination of reinvested dividend income, reinvested capital gains
distributions, if any, and changes in net asset value per share. Total
returns are not annualized.
** After custodian fee credit, where applicable.
(a) As required, effective April 1, 2001, the Trusts have adopted the
provisions of the new AICPA Audit and Accounting Guide for Investment
Companies and began accreting taxable market discount on debt securities.
The effect of this change for the fiscal year ended March 31, 2002, was to
increase net investment income per share with a corresponding decrease in
net realized/unrealized investment gain (loss) per share and increase the
ratio of net investment income to average net assets as follows:
SELECT SELECT SELECT CALIFORNIA SELECT NEW YORK SELECT
TAX-FREE (NXP) TAX-FREE 2 (NXQ) TAX-FREE 3 (NXR) TAX-FREE (NXC) TAX-FREE (NXN)
---------------------------------------------------------------------------------------
2002 per share impact ($) .01 -- -- -- --
2002 income ratio impact (%) .05 .01 .01 .01 --
The Financial Highlights for the prior periods have not been restated to reflect
this change in presentation.
See accompanying notes to financial statements.
42-43 SPREAD
Build Your Wealth
AUTOMATICALLY
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Exchange-Traded Fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
AN AMENDMENT TO THE PLAN
Under the current terms of the Plan, shares you acquire by reinvestment are
purchased on the open market, whether the Fund's shares are then trading at a
premium or discount to it's net asset value. To ensure that shares will be
acquired at the most favorable price, the Plan will be amended as of September
1, 2002. As of that date, the shares you acquire by reinvesting will either be
purchased on the open market or newly issued by the Fund. If the shares are
trading at or above net asset value at the time of valuation, the Fund will
issue new shares at the then-current market price. If the shares are trading at
less than net asset value, shares for your account will be purchased on the open
market. Dividends and distributions received to purchase shares in the open
market will normally be invested shortly after the dividend payment date. No
interest will be paid on dividends and distributions awaiting reinvestment.
Because the market price of shares may increase before purchases are completed,
the average purchase price per share may exceed the market price at the time of
valuation, resulting in the acquisition of fewer shares than if the dividend or
distribution had been paid in shares issued by the Fund. A pro rata portion of
any applicable brokerage commissions on open market purchases will be paid by
Plan participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBILITY
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
44
Fund
INFORMATION
BOARD OF TRUSTEES
James F. Bacon
William E. Bennett
Jack B. Evans
William T. Kissick
Thomas E. Leafstrand
Timothy R. Schwertfeger
Sheila W. Wellington
FUND MANAGER
Nuveen Institutional Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN, TRANSFER AGENT
AND SHAREHOLDER SERVICES
JPMorgan Chase Bank
P.O. Box 660086
Dallas, TX 75266-0086
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
icago, IL
Each Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. No shares were
repurchased during the twelve-month period ended March 31, 2002. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
45
Serving Investors
FOR GENERATIONS
[photo of John Nuveen, Sr.]
For over a century, generations of Americans have relied on Nuveen Investments
to help them grow and keep the money they've earned. Financial advisors,
investors and their families have associated Nuveen Investments with quality,
expertise and dependability since 1898. That is why financial advisors have
entrusted the assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisors and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
To find out more about how Nuveen Investments' products and services can help
you preserve your financial security, talk with your financial advisor, or call
us at (800) 257-8787 for more information, includng a prospectus where
applicable. Please read that information carefully before you invest.
[LOGO: NUVEEN Investments]
Nuveen Investments o 333 West Wacker Drive
Chicago, IL 60606 o www.nuveen.com PAN-1-3-02