SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 1, 2002
THE JOHN NUVEEN COMPANY
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11123 36-3817266
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
333 West Wacker Drive, Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (312) 917-7700
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
As previously disclosed under cover of a Current Report on Form 8-K
filed on August 14, 2002, The John Nuveen Company completed its purchase of NWQ
Investment Management Company, Inc.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Pro Forma Financial Information
1) Unaudited Pro Forma Condensed Financial Statements of The John
Nuveen Company
a) Consolidated Statement of Income for the Year Ended December 31,
2001
b) Consolidated Statement of Income for the Six Month Period Ended
June 30, 2002
c) Notes to Consolidated Statements of Income
d) Consolidated Balance Sheet as of June 30, 2002
e) Notes to Consolidated Balance Sheet
(b) Interim Financial Statements
1) Unaudited Condensed Financial Statements of NWQ Investment
Management Company (A Wholly Owned Subsidiary of Old Mutual Asset
Managers (US) LLC)
a) Balance Sheet as of June 30, 2002
b) Statement of Income for the Six Month Period Ended June 30, 2002
c) Statement of Cash Flows for the Six Month Period Ended June 30,
2002
(c) Exhibits
Not Applicable
The John Nuveen Company
Unaudited Pro Forma Condensed Consolidated Financial Statements
The following unaudited pro forma condensed consolidated financial statements
give effect to the acquisition of NWQ Investment Management Company, Inc. by The
John Nuveen Company (the "Company"). The unaudited pro forma condensed
consolidated balance sheet was prepared as if the transaction had occurred on
June 30, 2002. The unaudited condensed consolidated statement of income for the
twelve months ended December 31, 2001 was prepared as if the transaction had
occurred on January 1, 2001. The unaudited pro forma condensed consolidated
statement of income for the six months ended June 30, 2002 was prepared as if
the transaction had occurred on January 1, 2002.
The pro forma adjustments are applied to the historical consolidated financial
statements of the Company, using the purchase method of accounting and
information available. Under purchase accounting, the acquisition cost of such
ownership interest will be allocated to the assets and liabilities acquired
based on their relative fair value as of the closing date of the transaction,
with any excess of the acquisition cost over fair value of the assets acquired
less the fair value of the liabilities assumed recorded as goodwill. The final
allocations may be different from the amounts reflected herein. However,
management of the Company believes that any adjustments will not have a material
financial impact.
This pro forma financial information is presented for illustrative purposes
only. It is not necessarily indicative of the results of operations or financial
position which would have been reported had the acquisition actually occurred on
the dates indicated, above, nor is it necessarily indicative of the Company's
future financial results of operations.
THE JOHN NUVEEN COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<Table>
<Caption>
PRO NUVEEN
NUVEEN NWQ ELIMINATION FORMA PRO
ACTUAL ACTUAL ADJUSTMENTS REFERENCE ADJUSTMENTS REFERENCE FORMA
--------- -------- ----------- --------- ----------- --------- ---------
Operating Revenues:
Investment advisory fees from assets
under management $ 330,588 $ 29,772 $ $ 360,360
Underwriting and distribution of
investment products 19,513 -- 19,513
Positioning profits, net 3,049 -- 3,049
Other operating revenue 17,953 -- 17,953
--------- -------- -------- --------- ---------
Total operating revenues 371,103 29,772 -- -- 400,875
Operating Expenses:
Compensation and benefits 93,134 19,282 (5,899) (1) 3,100 (5) 109,617
Advertising and promotional costs 17,751 17,751
Occupancy and equipment costs 14,512 1,248 15,760
Amortization of goodwill and other
intangible assets 9,409 10,358 (10,358) (2) 3,100 (6) 12,509
Travel and entertainment 9,078 860 9,938
Other operating expenses 38,464 3,709 (881) (3) 41,292
--------- -------- -------- --------- ---------
Total operating expenses 182,348 35,457 (17,138) 6,200 206,867
Operating Income 188,755 (5,685) 17,138 (6,200) 194,008
Non-Operating Income/(Expense) 799 (2,115) 2,115 (4) (3,110) (7) (2,311)
--------- -------- -------- --------- ---------
Income before taxes 189,554 (7,800) 19,253 (9,310) 191,697
Income taxes 74,856 -- 873 (8) 75,729
--------- -------- -------- --------- ---------
Net income $ 114,698 $ (7,800) $ 19,253 (10,183) $ 115,968
========= ======== ======== ========= =========
Average common and common equivalent
shares outstanding:
Basic 94,300 94,300
========= =========
Diluted 101,688 101,688
========= =========
Earnings per common share:
Basic $ 1.20 $ 1.22
========= =========
Diluted $ 1.13 $ 1.14
========= =========
</Table>
The accompanying notes are an integral part of these unaudited pro forma
financial statements.
THE JOHN NUVEEN COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2002
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<Table>
<Caption>
PRO
NUVEEN NWQ ELIMINATION FORMA NUVEEN
ACTUAL ACTUAL ADJUSTMENTS REFERENCE ADJUSTMENTS REFERENCE PRO FORMA
--------- --------- ----------- --------- ----------- ---------- ---------
Operating Revenues:
Investment advisory fees from assets
under management $171,211 $ 17,527 $ $ 188,738
Underwriting and distribution of
investment products 6,538 -- 6,538
Positioning losses, net (127) -- (127)
Other operating revenue 5,335 -- 5,335
-------- --------- --------- ------ ---------
Total operating revenues 182,957 17,527 -- -- 200,484
Operating Expenses:
Compensation and benefits 44,570 7,638 -- 1,550 (5) 53,758
Advertising and promotional costs 6,967 6,967
Occupancy and equipment costs 8,172 724 8,896
Amortization of other intangible assets 1,411 5,217 (5,217) (2) 1,550 (6) 2,961
Travel and entertainment 4,113 489 4,602
Other operating expenses 18,353 2,685 (531) (3) 20,507
-------- --------- ---------- ------ ---------
Total operating expenses 83,586 16,753 (5,748) 3,100 97,691
Operating Income 99,371 774 5,748 (3,100) 102,793
Non-Operating Income/(Expense): 71 (1,068) 1,068 (4) (1,555) (7) (1,484)
-------- --------- ---------- ------ ---------
Income before taxes 99,442 (294) 6,816 (4,655) 101,309
Income taxes 39,001 -- 761 (8) 39,762
-------- --------- ---------- ------ ---------
Net income $ 60,441 $ (294) $ 6,816 (5,416) $ 61,547
======== ========= ========== ====== =========
Average common and common equivalent
shares outstanding:
Basic 94,659 94,659
======== =========
Diluted 99,362 99,362
======== =========
Earnings per common share:
Basic $ 0.64 $ 0.65
======== =========
Diluted $ 0.61 $ 0.62
======== =========
</Table>
The accompanying notes are an integral part of these unaudited pro forma
financial statements.
THE JOHN NUVEEN COMPANY
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Elimination adjustments are summarized as follows:
(1) Adjustment to reflect the elimination of compensation expense related to
historical retention arrangements between the previous Parent (Old Mutual)
and NWQ.
(2) Adjustment reflects the elimination of amortization of the identified
intangible assets. These intangible assets were not part of the acquired
assets of NWQ.
(3) Adjustment to reflect the elimination of license fees paid to an affiliate
of the previous parent.
(4) Adjustment to reflect the elimination of interest expense associated with a
note payable with an affiliate of the previous parent. This note was not
part of the purchase of NWQ.
Proforma adjustments to give effect to the acquisition are summarized as
follows:
(5) Adjustment to reflect increase in compensation expense related to new
retention arrangements with key management.
(6) Adjustment reflects the amortization of the identified intangible assets
arising from the transaction over the assets appropriate estimated useful
lives. Pursuant to SFAS 142, Goodwill associated with the transaction is
not amortized.
(7) Interest income and interest expense have been adjusted to reflect the
lower cash balances available for investing and the debt incurred pursuant
to the transaction. The interest rate on the debt incurred is variable
based on the monthly LIBOR rate. If this rate were to increase 0.125%, the
annual effect on interest expense would be an estimated increase of
$312,500.
(8) All pro forma adjustments and were combined with the net loss as reported
and tax effected at the appropriate rate.
THE JOHN NUVEEN COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2002
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
NUVEEN NWQ PRO FORMA NUVEEN
ACTUAL ACTUAL ADJUSTMENTS REFERENCE PRO FORMA
--------- ------- ----------- --------- ---------
ASSETS
Cash and cash equivalents $ 116,765 (10,760) (69,604) (2A), (3) & 4 $ 36,401
Management and distribution fees receivable 37,522 9,333 46,855
Other receivables 7,138 - 7,138
Securities owned (trading account), at market value:
Nuveen defined portfolios 3 3
Bonds and notes - -
Deferred income tax asset, net - -
Furniture, equipment, & leasehold improvements,
at cost less accum. depn. & amort. 27,544 1,281 28,825
Other investments 60,602 - 60,602
Goodwill, at cost less accumulated amortization 360,925 127,489 (1) 488,414
Other intangible assets, net of accumulated
amortization 43,216 27,900 (1) 71,116
Prepaid expenses and other assets 39,819 124 39,943
--------- ------- ------- ---------
$ 693,534 (22) 85,785 $ 779,297
========= ======= ======= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes Payable $ 183,000 87,000 (2B) $ 270,000
Accrued compensation and other expenses 30,817 10,176 (4,015) (3) 36,978
Deferred compensation 28,253 28,253
Security purchase obligations - -
Deferred income tax liability, net 3,858 3,858
Other liabilities 19,816 19,816
--------- ------- ------- ---------
Total liabilities 265,744 10,176 82,985 358,905
--------- ------- ------- ---------
Redeemable preferred stock, at redemption value;
5,000,000 shares authorized, 225,000 shares
issued 5,625 5,625
Minority interest 40,930 - 2,800 (4) 43,730
Common stockholders' equity:
Class A Common stock, $.01 par value;
160,000,000 shares authorized, 46,967,682
shares issued 470 470
Class B Common stock, $.01 par value;
80,000,000 shares authorized, 73,325,214
shares issued 733 733
Additional paid-in capital 148,356 (10,198) 138,158
Retained earnings 647,525 647,525
Unamortized cost of restricted stock awards (1,142) (1,142)
Accumulated other comprehensive income/(loss) (4,072) (4,072)
--------- ------- ------- ---------
791,870 (10,198) - 781,672
Less common stock held in treasury, at cost
(26,451,796 shares) (410,635) (410,635)
--------- ------- ------- ---------
Total common stockholders' equity 381,235 (10,198) - 371,037
--------- ------- ------- ---------
$ 693,534 (22) 85,785 $ 779,297
========= ======= ======= =========
The accompanying notes are an integral part of these unaudited pro forma
financial statements.
THE JOHN NUVEEN COMPANY
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2002
(UNAUDITED)
GENERAL NOTE: The NWQ Interim Balance Sheet as of June 30, 2002 is not
representative of the assets purchased and liabilities assumed by
The John Nuveen Company ("TJNC"). This Pro Forma Balance Sheet as
of June 30, 2002 more accurately reflects the NWQ balance sheet
purchased in the transaction.
(1) Allocation of Purchase Price Based on Current Valuation:
Total Purchase Price (including direct costs) $145,191
Net Book Value of Assets Acquired (10,198)
Total Fair Value of Identified Intangibles 27,900
--------
Excess Purchase Price over Identifiable Assets (Goodwill) $127,489
(2) Purchase Price Paid As:
Cash $ 68,389 (A)
Loan Payable 87,000 (B)
--------
$155,389
(3) To reflect the elimination of NWQ payable to Old Mutual (former parent) $ 4,015
(4) To reflect anticipated NWQ minority interest. $ 2,800
NWQ INVESTMENT MANAGEMENT COMPANY
(A Wholly Owned Subsidiary of Old Mutual Asset Managers (US) LLC)
Balance Sheet (unaudited)
June 30, 2002
Current Assets:
Cash and cash equivalents $ 7,851,336
Investment management fees receivable 1,560,225
Prepaid expenses 199,563
------------
Total current assets 9,611,124
Fixed assets, net 1,306,048
Intangible assets, net 15,781,400
Other assets 106,906
------------
Total assets $ 26,805,478
============
Current liabilities
Accounts payable and accrued expenses $ 3,594,946
Accrued compensation 3,001,800
Due to affiliates (1,210,428)
Current portion of note payable 833,334
------------
Total current liabilities 6,219,652
Note payable 19,583,333
Total liabilities 25,802,985
Stockholder's equity
Common stock, par value $0.1 per share. 200,000
shares authorized, issued, and outstanding 2,000
Additional paid-in-capital 12,218,581
Accumulated deficit (11,218,088)
------------
Total stockholder's equity 1,002,493
Total liabilities and stockholder's equity $ 26,805,478
============
NWQ INVESTMENT MANAGEMENT COMPANY
(A Wholly Owned Subsidiary of Old Mutual Asset Managers (US) LLC)
Statement of Operations (unaudited)
Six-month period ended June 30, 2002
Revenues
Investment management fees $ 17,527,125
Operating expenses
Compensation and related expenses 7,638,058
Restructuring compensation costs --
Amortization of intangible assets 5,217,398
Rent expense 479,664
Depreciation 244,327
Other operating expenses 3,173,814
------------
Total operating expense 16,753,261
Operating income/(loss) 773,864
Interest expense, net 1,067,709
------------
Net loss before taxes (293,845)
------------
Income tax --
------------
Net loss $ (293,845)
============
NWQ INVESTMENT MANAGEMENT COMPANY
(A Wholly Owned Subsidiary of Old Mutual Asset Managers (US) LLC)
Statement of Cash Flows (unaudited)
Six-month period ended June 30, 2002
Cash flows from operating activities:
Net loss $ (293,845)
Items not requiring cash that are included in net loss:
Amortization of cost assigned to contracts acquired 5,217,398
Depreciation 244,327
Changes in assets and liabilities:
Decrease in investment management fees receivable 213,330
Increase in prepaid expenses (98,590)
Decrease in receivable from Parent 2,793,141
Increase in due from affiliate (1,433,337)
Increase in accounts payable and accrued expenses 909,507
Decrease in accrued compensation (783,136)
-----------
Net cash provided by operating activities 6,768,795
-----------
Cash flows from investing activities:
Net purchases of fixed assets (335,070)
-----------
Net cash used in investing activities (335,070)
-----------
Cash flows from financing activities:
Decrease in note payable (416,667)
-----------
Net cash used in financing activities (416,667)
-----------
Net increase in cash and cash equivalents 6,017,058
Cash and cash equivalents, beginning of period 1,834,278
-----------
Cash and cash equivalents, end of period $ 7,851,336
===========
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE JOHN NUVEEN COMPANY
By: /s/ Margaret E. Wilson
--------------------------------
Margaret E. Wilson
Senior Vice President of Finance
(Principal Accounting Officer)
Dated: October 15, 2002