(NUVEEN INVESTMENTS LOGO)
FOR IMMEDIATE RELEASE CONTACT: LAUREL O'BRIEN
ATTN: BUSINESS/FINANCIAL EDITORS MEDIA RELATIONS
(312) 917-8254
NUVEEN INVESTMENTS REPORTS RECORD FOURTH QUARTER AND FULL YEAR 2004 EARNINGS
ALONG WITH RECORD SALES AND NET FLOWS
Chicago, IL, January 19, 2005 - Nuveen Investments, Inc. (NYSE: JNC), a leading
provider of diversified investment services for institutional and high-net-worth
investors served by financial advisors, today reported record earnings for the
fourth quarter and the full year of 2004. Fourth quarter net income of $43.5
million increased 15% over the fourth quarter of 2003. Earnings per share
(diluted) of $0.45 for the quarter also rose 15% from the same period last year.
For the full year the Company reported record net income of $156.4 million and
earnings per share (diluted) of $1.63, both up 16% over 2003.
Fourth quarter gross sales were $8.1 billion, with positive net flows of $5.2
billion, an increase of 140% over the prior year. Gross sales for the full year
were a record $25.9 billion, an increase of 43%, with positive net flows of
$15.0 billion, up almost 60%. Net flows were positive across all product lines
for both the quarter and the full year. Gross sales of managed accounts totaled
$21.4 billion. Sales of closed-end exchange-traded funds were $2.9 billion and
sales of mutual funds were $1.6 billion.
Total assets under management increased to $115 billion at December 31, 2004,
from $95 billion a year ago. The 21% increase in assets under management from a
year ago was driven by $15 billion in positive net flows and $5 billion of stock
and bond market appreciation. Strong asset growth drove advisory fee revenue to
$476 million, up 18% over the prior year, with total operating revenues up 12%.
Commenting on the Company's results, Tim Schwertfeger, Chairman & CEO of Nuveen
Investments, said, "We are very pleased with the consistency of our growth and
the quality of our results as we report record sales, net flows and earnings for
the year, along with strong asset growth. Our results reflect Nuveen's 10th
consecutive year of record earnings and highlight the stability and quality of
our assets as well as our success in expanding our investment and distribution
capabilities and the breadth of our product offerings. This year, 70% of our
gross sales were in equity products with the remainder in municipal and taxable
fixed income products. Municipal assets now account for just half of our assets
under management, even as we've continued raising new municipal assets in the
last several years.
"Momentum in managed accounts, which includes customized NWQ value equity
portfolios, Rittenhouse growth equity portfolios, Nuveen fixed-income portfolios
and Symphony alternative investments, accounted for much of the double-digit
growth across sales, flows, revenues, assets and earnings this year. In
particular, strength at NWQ drove strong growth in managed accounts. Total
managed account sales in 2004 were $21.4 billion with flows of $11.8 billion -
four times prior year levels.
-more-
NUVEEN INVESTMENTS REPORTS RECORD FOURTH QUARTER AND 2004 EARNINGS - PAGE 2
"Our continued focus on product innovation also contributed to our success in
2004. In the 4th quarter we raised more than $700 million with our first
closed-end exchange-traded fund that pursues an integrated equity index option
strategy supported by a portfolio of common stock. This fund appeals to equity
investors looking for attractive tax-advantaged dividend income with reduced
volatility and the potential for more stable returns. Innovation and our
leadership in the closed-end exchange-traded fund arena enabled us to raise $2.9
billion in new assets in 2004 despite an environment of rising interest rates.
"We are pleased with the quality and diversity of our current asset base, as
equity-based portfolios are approaching 40% of our total assets under
management," concluded Schwertfeger. "We continue to believe our success
reflects our ongoing commitment to helping investors secure their long-term
goals with core long-term investment disciplines, conservatively-oriented
product innovation and strong relationships with leading advisors and
institutional clients."
Nuveen Investments, Inc. will host a conference call to discuss its fourth
quarter and full year results today, January 19, 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 designed to secure
long-term client goals. The Company serves institutional clients, financial
advisors and high-net-worth investors. The firm's asset management capabilities
are marketed through four distinct brands, each with an independent investment
team and area of expertise: Nuveen, focused on fixed-income investments; NWQ,
specializing in value-style equities; Rittenhouse, dedicated to conservative
growth-style equities; and Symphony, with expertise in alternative investment
portfolios. In total, the Company manages over $115 billion in assets. Nuveen
Investments, Inc. (NYSE: JNC) is an affiliate of The St. Paul Travelers
Companies, Inc. (NYSE: STA).
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 (1)
For the Years Ended December 31, 2003 and December 31, 2004
In thousands, except share data
2003
---------------------------------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
--------- ------- ------- --------- ---------
REVENUES:
Investment advisory fees from
assets under management(2) $ 95,244 99,047 103,479 107,077 404,847
--------- ------- ------- --------- ---------
Product distribution 1,584 3,278 2,169 2,175 9,206
Performance fees/other revenue 4,719 3,772 15,179 14,306 37,976
--------- ------- ------- --------- ---------
Total operating revenues 101,547 106,097 120,827 123,557 452,028
--------- ------- ------- --------- ---------
EXPENSES:
Compensation and benefits 32,063 32,860 40,440 38,827 144,189
Advertising and promotional costs 2,555 3,096 2,834 3,143 11,627
Occupancy and equipment costs 4,902 4,922 4,732 4,765 19,321
Amortization of intangible assets 1,302 1,302 1,302 1,302 5,208
Travel and entertainment 1,781 1,956 1,955 2,035 7,726
Outside and professional services 4,545 4,994 5,170 5,623 20,331
Other operating expenses 3,278 4,278 5,248 4,495 17,299
--------- ------- ------- --------- ---------
Total operating expenses 50,425 53,407 61,681 60,189 225,702
--------- ------- ------- --------- ---------
OPERATING INCOME 51,122 52,690 59,146 63,368 226,326
--------- ------- ------- --------- ---------
INTEREST EXPENSE AND OTHER (981) (916) (1,816) (1,458) (5,171)
--------- ------- ------- --------- ---------
INCOME BEFORE TAXES 50,141 51,774 57,330 61,910 221,155
--------- ------- ------- --------- ---------
INCOME TAXES:
Federal 16,598 16,851 18,683 20,317 72,449
State 2,908 3,379 3,658 3,755 13,701
--------- ------- ------- --------- ---------
Total income taxes 19,506 20,231 22,341 24,072 86,150
--------- ------- ------- --------- ---------
NET INCOME $ 30,635 31,544 34,989 37,837 135,005
========= ======= ======= ========= =========
AVERAGE COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING:
Basic 92,566 92,473 92,773 92,632 92,612
Diluted 95,687 95,787 96,296 96,005 95,944
--------- ------- ------- --------- ---------
EARNINGS PER SHARE:
Basic $ 0.33 0.34 0.38 0.41 1.46
Diluted $ 0.32 0.33 0.36 0.39 1.41
========= ======= ======= ========= =========
GROSS SALES (in millions):
Mutual funds $ 385 446 348 357 1,536
Managed accounts-retail 1,546 1,703 2,205 2,490 7,943
Managed accounts-institutional 538 477 552 769 2,336
Exchange-traded funds-common 1,306 2,104 353 341 4,105
--------- ------- ------- --------- ---------
Total funds and accounts excluding
Muni/Fund Preferred(TM) 3,774 4,730 3,458 3,956 15,920
Exchange-traded funds-Muni/Fund
Preferred(TM) 422 694 946 117 2,179
--------- ------- ------- --------- ---------
Total funds and accounts $ 4,196 5,424 4,404 4,074 $ 18,098
========= ======= ======= ========= =========
MANAGED FUNDS AND ACCOUNTS (in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $ 79,719 81,360 88,258 90,059 79,719
Sales - funds and accounts 4,196 5,424 4,404 4,074 18,098
Dividend and defined portfolio
reinvestments 74 96 102 141 413
Redemptions and withdrawals (2,165) (2,432) (2,421) (2,054) (9,073)
--------- ------- ------- --------- ---------
Total net flows into funds
and accounts 2,105 3,088 2,085 2,161 9,438
Appreciation/(depreciation) of
managed assets (463) 3,810 (284) 3,136 6,199
--------- ------- ------- --------- ---------
End of period $ 81,360 88,258 90,059 95,356 95,356
========= ======= ======= ========= =========
RECAP BY PRODUCT TYPE:
Mutual funds $ 11,889 12,228 12,043 $ 12,285
Exchange-traded funds 41,565 45,315 46,131 47,094
Managed accounts-retail 19,321 21,692 22,985 25,676
Managed accounts-institutional 8,585 9,023 8,900 10,300
--------- ------- ------- --------- ---------
Total assets under management $ 81,360 88,258 90,059 95,356
========= ======= ======= ========= =========
2004
---------------------------------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
--------- ------- ------- ------- -------
REVENUES:
Investment advisory fees from
assets under management(2) $ 112,355 115,345 120,989 127,125 475,814
Product distribution 2,427 1,833 2,290 2,409 8,959
Performance fees/other revenue 4,912 3,235 8,338 4,379 20,864
--------- ------- ------- ------- -------
Total operating revenues 119,694 120,413 131,617 133,913 505,637
--------- ------- ------- ------- -------
EXPENSES:
Compensation and benefits 36,651 39,233 45,380 44,057 165,321
Advertising and promotional costs 3,019 3,121 3,460 2,557 12,158
Occupancy and equipment costs 4,813 4,776 5,018 5,133 19,740
Amortization of intangible assets 1,299 1,273 1,273 1,273 5,118
Travel and entertainment 1,863 2,089 1,730 2,299 7,981
Outside and professional services 5,446 5,800 5,507 5,464 22,216
Other operating expenses 4,874 5,418 4,793 5,144 20,229
--------- ------- ------- ------- -------
Total operating expenses 57,965 61,709 67,161 65,927 252,762
--------- ------- ------- ------- -------
OPERATING INCOME 61,729 58,704 64,457 67,985 252,875
--------- ------- ------- ------- -------
INTEREST EXPENSE AND OTHER 199 42 (626) 16 (369)
--------- ------- ------- ------- -------
INCOME BEFORE TAXES 61,928 58,746 63,831 68,001 252,506
--------- ------- ------- ------- -------
INCOME TAXES:
Federal 20,183 19,197 20,835 22,781 82,996
State 3,868 3,571 3,935 1,730 13,103
--------- ------- ------- ------- -------
Total income taxes 24,051 22,767 24,769 24,511 96,099
--------- ------- ------- ------- -------
NET INCOME $ 37,877 35,979 39,062 43,490 156,408
========= ======= ======= ======= =======
AVERAGE COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING:
Basic 92,867 92,609 92,435 92,776 92,671
Diluted 96,305 95,494 95,415 97,269 96,121
--------- ------- ------- ------- -------
EARNINGS PER SHARE:
Basic $ 0.41 0.39 0.42 0.47 1.69
Diluted $ 0.39 0.38 0.41 0.45 1.63
========= ======= ======= ======= =======
GROSS SALES (in millions):
Mutual funds $ 391 282 407 545 1,625
Managed accounts-retail 3,716 3,466 3,576 4,740 15,497
Managed accounts-institutional 963 1,728 1,128 2,120 5,939
Exchange-traded funds-common 871 77 405 713 2,066
--------- ------- ------- ------- -------
Total funds and accounts excluding
Muni/Fund Preferred(TM) 5,941 5,553 5,516 8,118 25,127
Exchange-traded funds-Muni/Fund
Preferred(TM) 152 435 235 -- 822
--------- ------- ------- ------- -------
Total funds and accounts $ 6,092 5,988 5,751 8,118 25,949
========= ======= ======= ======= =======
MANAGED FUNDS AND ACCOUNTS (in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $ 95,356 100,923 101,857 106,891 95,356
Sales - funds and accounts 6,092 5,988 5,751 8,118 25,949
Dividend and defined portfolio
reinvestments 72 82 87 148 389
Redemptions and withdrawals (2,367) (2,962) (2,947) (3,041) (11,316)
--------- ------- ------- ------- -------
Total net flows into funds
and accounts 3,797 3,108 2,891 5,226 15,022
Appreciation/(depreciation) of
managed assets 1,771 (2,175) 2,144 3,336 5,076
--------- ------- ------- ------- -------
End of period $ 100,923 101,857 106,891 115,453 115,453
========= ======= ======= ======= =======
RECAP BY PRODUCT TYPE:
Mutual funds $ 12,438 11,873 12,293 12,680
Exchange-traded funds 48,620 47,262 49,226 50,216
Managed accounts-retail 28,587 30,302 32,265 36,975
Managed accounts-institutional 11,278 12,419 13,107 15,581
--------- ------- ------- ------- -------
Total assets under management $ 100,923 101,857 106,891 115,453
========= ======= ======= ======= =======
(1) The Company began expensing the cost of stock options on April 1, 2004.
All historical financial information has been restated.
(2) Advisory fee revenue will fluctuate based on the number of days in the
quarter - In 2004, Q1 has 91 days, Q2 has 91 days, Q3 and Q4 have 92
days.