(NUVEEN INVESTMENTS LOGO)
FOR IMMEDIATE RELEASE CONTACT: LAUREL O'BRIEN
ATTN: BUSINESS/FINANCIAL EDITORS MEDIA RELATIONS
(312) 917-8254
NUVEEN INVESTMENTS REPORTS RECORD FIRST QUARTER EARNINGS
CHICAGO, IL, APRIL 25, 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
first quarter of the year. Net income of $43.2 million increased 14% over the
first quarter of 2004. Earnings per share (diluted) of $0.44 for the quarter
rose 13% from the same period last year. First quarter operating revenues were
$135 million, with investment advisory fees increasing 17% over the prior year.
First quarter gross sales were $7.7 billion, with positive net flows of $4.3
billion. Gross sales of institutional separate accounts and high-net-worth
managed accounts totaled $5.6 billion. Gross sales of closed-end exchange-traded
funds were $1.4 billion and gross sales of mutual funds were $0.7 billion.
Total assets under management increased to approximately $119 billion at March
31, 2005, from $101 billion a year ago and $115 billion at December 31, 2004.
The increase in assets under management from a year ago was driven by $16
billion in positive net flows and $2 billion of market appreciation. Assets
under management at the end of the quarter included 49% in municipal portfolios,
38% in equity-based portfolios and 13% in taxable income-oriented portfolios.
Commenting on the Company's results, Tim Schwertfeger, Chairman & CEO of Nuveen
Investments, said, "We are very pleased to report another quarter of
high-quality, consistent growth in earnings and assets under management. Our
strong start to the year illustrates the positive impact of our expanded
business platform and reinforces our reputation for consistent, dependable
service. Our continued growth reflects our increasing ability to provide
investors with high-quality investment solutions, even in challenging market
environments.
"Double-digit revenue, earnings and asset growth this quarter were driven by
strong sales momentum in managed accounts. First quarter managed account sales
of $5.6 billion were up almost 20% versus the prior year, with net flows of $2.5
billion. Positive flows were driven by NWQ value portfolios and Nuveen municipal
accounts, while Rittenhouse conservative growth accounts had net outflows.
"We raised $1.4 billion in two new closed-end exchange-traded funds in the first
quarter," added Schwertfeger. "We launched our second fund investing in an
equity-index option strategy, designed for investors seeking risk-managed
equity-based investments with the potential for consistent current income and
market appreciation over time. We also offered the industry's first fund
consisting primarily of floating rate preferred securities that pay
tax-qualified dividends. Product innovation and our expansion into a variety of
asset classes have reinforced our leadership position in the exchange-traded
fund arena and continue to add diversity and stability to our assets under
management.
(more)
NWQ NUVEEN RITTENHOUSE S Y M P H O N Y
NUVEEN INVESTMENTS REPORTS RECORD FIRST QUARTER EARNINGS- PAGE 2
"Earlier this month we completed a secondary offering of JNC stock and are
pleased to have become a fully independent public company. We are excited about
the opportunity to advance our strategic development and look forward to serving
a much broader base of shareholders as we work to grow our business in a
high-quality manner," concluded Schwertfeger.
In conjunction with the secondary offering, the Company announced a $600 million
repurchase of JNC common shares, representing approximately 19% of the Company's
outstanding shares, financed with $150 million of available cash and $450
million of new debt. While the repurchase of these shares is being completed
through two steps - a $200 million repurchase in April and a $400 million
forward purchase (plus interest) that will settle later this year - the $600
million repurchase has been recorded by Nuveen Investments as if it were
completed in its entirety in April 2005. As a result, the Company currently has
75.9 million shares of common stock outstanding for purposes of computing basic
earnings per share.
Higher interest expense arising from the share repurchase will make traditional
year-over-year comparisons of reported net income somewhat difficult over the
next several quarters. Therefore, in future earnings announcements, the Company
will add information about earnings before interest and taxes (EBIT) to assist
the reader in assessing results from business operations relative to prior
periods. Additionally, the Company will highlight earnings per share amounts to
best compare the combined effects of results from business operations and the
share repurchase from period to period.
Nuveen Investments, Inc. will host a conference call to discuss its first
quarter results today, April 25, 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 blue chip growth
equities; and Symphony, with expertise in alternative investments and structured
equity and income portfolios. In total, the Company manages approximately $119
billion in assets. Nuveen Investments, Inc. 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 (1)
For the Year Ended December 31, 2004 and the Quarter Ended March 31, 2005
In thousands, except share data
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2004 2005
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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 (2) $112,355 115,345 120,989 127,125 475,814 $131,209 - - - 131,209
Product distribution 2,427 1,833 2,290 2,409 8,959 2,803 - - - 2,803
Performance fees/other revenue 4,912 3,235 8,338 4,379 20,864 856 - - - 856
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Total operating revenues 119,694 120,413 131,617 133,913 505,637 134,868 - - - 134,868
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EXPENSES:
Compensation and benefits 36,651 39,233 45,380 44,057 165,321 43,038 - - - 43,038
Advertising and promotional costs 3,019 3,121 3,460 2,557 12,158 2,669 - - - 2,669
Occupancy and equipment costs 4,813 4,776 5,018 5,133 19,740 5,400 - - - 5,400
Amortization of intangible assets 1,299 1,273 1,273 1,273 5,118 1,273 - - - 1,273
Travel and entertainment 1,863 2,089 1,730 2,299 7,981 1,686 - - - 1,686
Outside and professional services 5,446 5,800 5,507 5,464 22,216 5,829 - - - 5,829
Other operating expenses 4,874 5,418 4,793 5,144 20,229 5,950 - - - 5,950
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Total operating expenses 57,965 61,709 67,161 65,927 252,762 65,845 - - - 65,845
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OTHER INCOME/(EXPENSE) 2,845 2,380 1,454 869 7,547 1,858 - - - 1,858
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INCOME BEFORE NET INTEREST AND TAXES 64,574 61,084 65,910 68,854 260,422 70,881 - - - 70,881
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NET INTEREST EXPENSE (2,646) (2,338) (2,079) (853) (7,916) (989) - - - (989)
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INCOME BEFORE TAXES 61,928 58,746 63,831 68,001 252,506 69,892 - - - 69,892
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INCOME TAXES:
Federal 20,183 19,197 20,835 22,781 82,996 22,941 - - - 22,941
State 3,868 3,571 3,935 1,730 13,103 3,758 - - - 3,758
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Total income taxes 24,051 22,767 24,769 24,511 96,099 26,699 - - - 26,699
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NET INCOME $ 37,877 35,979 39,062 43,490 156,408 $ 43,193 - - - 43,193
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AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING:
Basic 92,867 92,609 92,435 92,776 92,671 93,757 - - - 93,757
Diluted 96,305 95,494 95,415 97,269 96,121 98,913 - - - 98,913
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EARNINGS PER SHARE:
Basic $ 0.41 0.39 0.42 0.47 1.69 $ 0.46 - - - 0.46
Diluted $ 0.39 0.38 0.41 0.45 1.63 $ 0.44 - - - 0.44
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GROSS SALES (in millions):
Mutual funds $ 391 282 407 545 1,625 $ 702 - - - 702
Managed accounts-retail 3,716 3,466 3,576 4,740 15,497 3,684 - - - 3,684
Managed accounts-institutional 963 1,728 1,128 2,120 5,939 1,882 - - - 1,882
Exchange-traded funds 1,023 512 640 713 2,888 1,414 - - - 1,414
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Total funds and accounts $ 6,092 5,988 5,751 8,118 25,949 $ 7,682 - - - 7,682
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NET FLOWS (in millions):
Mutual funds $ 45 (207) 142 308 288 $ 350 - - - 350
Managed accounts-retail 2,212 1,749 1,603 2,803 8,367 1,195 - - - 1,195
Managed accounts-institutional 506 1,048 504 1,398 3,455 1,328 - - - 1,328
Exchange-traded funds 1,034 518 643 717 2,911 1,424 - - - 1,424
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Total funds and accounts $ 3,797 3,108 2,891 5,226 15,022 $ 4,297 - - - 4,297
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MANAGED FUNDS AND ACCOUNTS
(in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $ 95,356 100,923 101,857 106,891 95,356 $115,453 - - - 115,453
Sales - funds and accounts 6,092 5,988 5,751 8,118 25,949 7,682 - - - 7,682
Dividend and defined portfolio
reinvestments 72 82 87 148 389 61 - - - 61
Redemptions and withdrawals (2,367) (2,962) (2,947) (3,041) (11,316) (3,447) - - - (3,447)
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Total net flows into funds and
accounts 3,797 3,108 2,891 5,226 15,022 4,297 - - - 4,297
Appreciation/(depreciation)
of managed assets 1,771 (2,175) 2,144 3,336 5,076 (1,244) - - - (1,244)
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End of period $100,923 101,857 106,891 115,453 115,453 $118,505 - - - 118,505
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RECAP BY PRODUCT TYPE:
Mutual funds $ 12,438 11,873 12,293 12,680 $ 12,887 - - -
Exchange-traded funds 48,620 47,262 49,226 50,216 51,050 - - -
Managed accounts-retail 28,587 30,302 32,265 36,975 37,715 - - -
Managed accounts-institutional 11,278 12,419 13,107 15,581 16,853 - - -
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Total assets under management $100,923 101,857 106,891 115,453 $118,505 - - -
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RECAP BY STYLE:
Equity-based $ 30,535 33,320 35,094 42,345 $ 45,370 - - -
Municipals 56,478 54,737 56,960 57,909 57,894 - - -
Taxable income-oriented 13,911 13,800 14,838 15,199 15,242 - - -
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Total assets under management $100,923 101,857 106,891 115,453 $118,505 - - -
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(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 2005, Q1 has 90 days, Q2 has 91 days, Q3 and Q4 have 92 days.