[NUVEEN INVESTMENTS LOGO]
FOR IMMEDIATE RELEASE CONTACT: LAUREL O'BRIEN
ATTN: BUSINESS/FINANCIAL EDITORS MEDIA RELATIONS
(312) 917-8254
NUVEEN INVESTMENTS, INC. REPORTS RECORD THIRD QUARTER EARNINGS
CHICAGO, IL, OCTOBER 21, 2003 - Nuveen Investments, Inc. (NYSE: JNC) today
reported record net income of $37.4 million for the quarter ended September 30,
2003, a 17% increase over the third quarter of 2002. Earnings per share
(diluted) were $0.39 for the quarter as compared to $0.33 for the same period
last year. Third quarter operating revenues of $120.8 million increased 18% over
third quarter 2002.
Gross sales of investment products in the third quarter were $4.4 billion,
comprised of $2.8 billion in retail and institutional managed accounts, $1.3
billion in closed-end exchange-traded funds and $0.3 billion in mutual funds.
Positive net flows for the quarter were $2.1 billion.
For the first nine months of 2003, the Company reported net income of $104.0
million, an increase of 13% versus the same period of 2002. Earnings per share
(diluted) were $1.08 as compared to $0.94 for the first nine months of 2002.
Sales for the first nine months were $14.0 billion and net flows were $7.3
billion.
Total assets under management were $90.1 billion at September 30, 2003, as
compared to $76.9 billion a year ago and $79.7 billion at December 31, 2002. The
17% increase in assets under management from a year ago was driven by $9.5
billion in net flows and $3.6 billion of equity market appreciation.
Commenting on the Company's results, Nuveen Investments' Chairman Tim
Schwertfeger said, "We are very pleased to be reporting another quarter of
high-quality, consistent earnings growth. Our results reflect the successful
transformation of our business during the last several years and the expansion
of our relationships with financial advisors and institutional investors. Almost
70% of our net flows for the last year and more than 40% of our assets are in
asset classes other than municipals. The diversity of our business and our asset
base allowed us to capitalize on the recent strength in the equity markets as
well as investors' continued interest in income-oriented investments.
"Double-digit revenue, earnings, and asset growth this quarter were driven by
our continuing momentum in retail managed accounts and our continued ability to
offer innovative, new closed-end exchange-traded funds," said Schwertfeger.
"Retail managed account sales were up 60% over the prior
-more-
NUVEEN INVESTMENTS REPORTS RECORD THIRD QUARTER EARNINGS - PAGE 2
year with net flows up $1.2 billion due to strong demand for NWQ value equity
portfolios and Nuveen municipal accounts. While our Rittenhouse growth equity
portfolios had outflows, redemptions for Rittenhouse declined 37% year over
year, reflecting investors' increasing interest in growth stocks given their
relatively attractive valuations.
"We continue to be pleased with our growth from new products as we extend our
leadership in exchange-traded funds into several new asset classes such as
convertible bonds, preferred stocks, real estate and senior loans. In the third
quarter we raised approximately $300 million with the introduction of our first
exchange-traded fund that blends debt and equity investment strategies. This new
fund offers the potential for high current income and additional total return
potential with less sensitivity to interest rate fluctuations. We also raised
$945 million in exchange-traded fund assets this quarter through the issuance of
preferred shares that leveraged our convertible and preferred income fund
offered in June.
"Going forward, we believe our ability to innovate in new asset classes along
with providing the core equity and fixed-income components of a well-balanced
portfolio will serve us well. This approach should enable us to offer quality,
risk-managed investment solutions in a variety of market environments."
Nuveen Investments, Inc. will host a conference call to discuss its third
quarter financial results today, October 21, at 10:00 am central time. To access
this call live or listen to an audio replay, visit the investor relations
section of the Company's website at www.nuveen.com.
Nuveen Investments provides high-quality investment services that contribute to
the building of well-diversified, core investment portfolios. The Company serves
financial advisors and their high-net-worth clients, as well as a growing number
of institutional clients. Nuveen Investments today markets its capabilities
under four distinct brands: Nuveen, a leader in tax-free investments; NWQ, a
leader in value-style equities; Rittenhouse, a leader in conservative
growth-style equities; and Symphony, a leading institutional manager of
market-neutral alternative investment portfolios. In total, the Company now
manages more than $90 billion in assets. An affiliate of The St. Paul Companies
(NYSE: SPC), Nuveen Investments is listed on The New York Stock Exchange and
trades under the symbol "JNC."
Certain statements made by the Company in this release are forward-looking
statements. The Company's actual future results may differ significantly from
those anticipated in any forward-looking statements due to numerous factors.
These include, but are not limited to, the effects of the substantial
competition in the investment management business, including competition for
access to brokerage firms' retail distribution systems, the Company's reliance
on revenues from investment management contracts which renew annually,
regulatory developments, accounting pronouncements, and other additional risks
and uncertainties as set forth in the Company's filings with the SEC. The
Company undertakes no responsibility to update publicly or revise any
forward-looking statements.
###
Financial Table Follows
NUVEEN INVESTMENTS
CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 2002 and the Quarter Ended September 30, 2003
In thousands, except share data
<Table>
<Caption>
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2002 2003
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1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
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REVENUES:
Investment advisory fees from
assets under management (1) $85,155 86,056 91,013 93,251 355,476 $ 95,244 99,047 103,479 -- 297,770
Product distribution 4,871 1,667 2,839 2,707 12,083 1,584 3,278 2,169 -- 7,031
Performance fees/other revenue 2,584 2,624 8,554 15,126 28,888 4,719 3,772 15,179 -- 23,670
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Total operating revenues 92,609 90,348 102,406 111,084 396,447 101,547 106,097 120,827 -- 328,471
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EXPENSES:
Compensation and benefits 22,852 21,718 27,343 31,657 103,570 28,880 29,063 36,711 -- 94,654
Advertising and promotional costs 3,467 3,500 3,065 2,576 12,608 2,555 3,096 2,834 -- 8,485
Occupancy and equipment costs 4,019 4,153 4,843 4,896 17,912 4,902 4,922 4,732 -- 14,556
Amortization of intangible assets 713 698 1,183 1,209 3,803 1,302 1,302 1,302 -- 3,906
Travel & entertainment 1,981 2,132 2,026 2,400 8,539 1,781 1,956 1,955 -- 5,691
Outside services 1,914 2,277 2,306 2,129 8,627 1,898 1,917 2,008 -- 5,823
Other operating expenses 8,079 6,077 7,216 8,164 29,536 5,924 7,355 8,410 -- 21,689
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Total operating expenses 43,026 40,554 47,983 53,032 184,596 47,242 49,610 57,952 -- 154,804
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OPERATING INCOME 49,583 49,794 54,423 58,051 211,851 54,305 56,487 62,875 -- 173,667
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INTEREST EXPENSE AND OTHER (178) 244 (2,310) (2,746) (4,991) (981) (916) 1,816) -- (3,712)
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INCOME BEFORE TAXES 49,405 50,038 52,113 55,305 206,860 53,324 55,571 61,059 -- 169,954
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INCOME TAXES:
Federal 16,155 16,561 17,000 18,709 68,425 17,597 17,942 19,927 -- 55,466
State 3,261 3,024 3,106 2,860 12,251 3,093 3,620 3,764 -- 10,476
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Total income taxes 19,416 19,585 20,105 21,569 80,675 20,690 21,562 23,691 -- 65,942
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NET INCOME $29,989 30,452 32,008 33,736 126,185 $ 32,634 34,009 37,368 -- 104,012
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AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING(2):
Basic 94,922 94,398 93,312 93,033 93,910 92,566 92,473 92,773 -- 92,605
Diluted 99,585 99,141 96,878 96,591 98,042 95,687 95,787 96,296 -- 95,924
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EARNINGS PER SHARE:
Basic $ 0.32 0.32 0.34 0.36 1.34 $ 0.35 0.37 0.40 -- 1.12
Diluted $ 0.30 0.31 0.33 0.35 1.29 $ 0.34 0.36 0.39 -- 1.08
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GROSS SALES (in millions):
Mutual funds $ 287 371 469 386 1,513 $ 385 446 348 -- 1,179
Managed accounts-retail 1,662 1,322 1,364 1,346 5,693 1,546 1,703 2,205 -- 5,454
Managed accounts-institutional 140 166 533 508 1,347 538 477 552 -- 1,567
Exchange-traded funds-common 869 906 1,947 968 4,689 1,306 2,104 353 -- 3,763
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Total funds and accounts
excluding Muni/Fund Preferred(TM) 2,956 2,765 4,313 3,207 13,242 3,774 4,730 3,458 -- 11,963
Exchange-traded funds-Muni/Fund
Preferred(TM) 239 556 431 933 2,159 422 694 946 -- 2,061
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Total funds and accounts (3) $ 3,195 3,321 4,744 4,141 15,400 $ 4,196 5,424 4,404 -- 14,024
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MANAGED FUNDS AND ACCOUNTS
(in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $68,485 69,538 68,496 76,928 68,485 $ 79,719 81,360 88,258 -- 79,719
Acquisition of NWQ accounts -- -- 6,904 -- 6,904 -- -- -- -- --
Sales - funds and accounts 3,195 3,321 4,744 4,141 15,400 4,196 5,424 4,404 -- 14,024
Dividend and defined portfolio
reinvestments 83 96 119 136 435 74 96 102 -- 272
Redemptions and withdrawals (1,597) (2,824) (2,209) (2,098) (8,727) (2,165) (2,432) (2,421) -- (7,018)
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Total net flows into funds
and accounts 1,681 593 9,559 2,178 14,012 2,105 3,088 2,085 -- 7,278
Appreciation / (depreciation)
of managed assets (629) (1,635) (1,126) 612 (2,778) (463) 3,810 (284) -- 3,063
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End of period $69,538 68,496 76,928 79,719 79,719 $ 81,360 88,258 90,059 -- 90,059
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RECAP BY PRODUCT TYPE:
Mutual funds $11,775 11,641 11,866 11,849 $ 11,889 12,228 12,043 --
Exchange-traded funds 32,965 35,051 38,523 39,944 41,565 45,315 46,131 --
Managed accounts-retail 19,243 16,973 18,753 19,403 19,321 21,692 22,985 --
Managed accounts-institutional 5,555 4,831 7,786 8,523 8,585 9,023 8,900 --
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Total assets under management $69,538 68,496 76,928 79,719 $ 81,360 88,258 90,059 --
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</Table>
(1) Advisory fee revenue will fluctuate based on the number of days in the
quarter - Q1 has 90 days, Q2 has 91 days, Q3 and Q4 have 92 days.
(2) All prior period share data has been restated to reflect the 2-for-1 stock
split in Q2 of 2002.
(3) Excludes $194 million in Defined Portfolio sales in Q1 of 2002.