(NUVEEN INVESTMENTS GRAPHIC)
FOR IMMEDIATE RELEASE CONTACT: CHRIS ALLEN
ATTN: BUSINESS/FINANCIAL EDITORS (312) 917-8331
CHRISTOPHER.ALLEN@NUVEEN.COM
KATHLEEN CARDOZA
(312) 917-7813
KATHLEEN.CARDOZA@NUVEEN.COM
NUVEEN INVESTMENTS REPORTS 4TH QUARTER EPS OF $0.53
ENDING YEAR WITH ASSETS UNDER MANAGEMENT OF $136 BILLION
CHICAGO, IL, JANUARY 18, 2006 -- Nuveen Investments, Inc. (NYSE: JNC), a leading
provider of diversified investment services, today reported net income of $43.5
million for the fourth quarter of 2005. Earnings per share (diluted) were $0.53,
an increase of 18% from the same period last year reflecting earnings growth and
a $600 million share repurchase in April 2005. Earnings before interest and
taxes, which for comparative purposes excludes the effects of new borrowings
incurred to repurchase the shares, were $79.3 million, up 15% from the prior
year.
For the year 2005, the Company reported record net income of $171.2 million and
earnings per share (diluted) of $1.99, up 9% and 22%, respectively, over the
prior year. Earnings before interest and taxes were $297.8 million, up 14% year
over year.
Fourth quarter gross sales were $7.4 billion, with positive net flows of $3.8
billion. Gross sales for the full year were a record $27.4 billion, with
positive net flows of $13.6 billion. Net flows were positive across all product
lines for the quarter and the year. Gross sales of high-net-worth managed
accounts were $15.6 billion for the year, while gross sales of institutional
separate accounts were $6.3 billion. 2005 gross sales of mutual funds were $3.2
billion and sales of closed-end exchange-traded funds were $2.3 billion.
Total assets under management increased to $136 billion at December 31, 2005,
from $115 billion a year ago. The 18% increase in assets under management over
the last year was driven by $14 billion of positive net flows as well as $4
billion of equity appreciation and $3 billion of assets from the acquisition of
Santa Barbara Asset Management in October 2005. Strong asset growth resulted in
advisory fee revenue increasing 20% in the fourth quarter and 18% for the year.
Commenting on the Company's results, Tim Schwertfeger, Chairman & CEO of Nuveen
Investments, said, "We are very pleased to report record sales, revenues and
earnings in 2005, along with strong growth in assets under management. This is
our eleventh consecutive year
-more-
NUVEEN INVESTMENTS REPORTS 4TH QUARTER EPS OF $0.53 -- PAGE 2
of reporting record earnings reflecting the stability and quality of our assets,
our expanding investment capabilities and the strength of our relationships with
advisors and their affluent and high-net-worth investors, and increasingly, with
institutional investors.
"Our efforts to broaden and extend our investment capabilities were key
contributors to record gross sales for the year," added Schwertfeger. "We built
upon NWQ's investment management expertise to develop international and global
strategies that raised approximately $10 billion in assets over the last twelve
months. We introduced Symphony into retail managed accounts in 2005, with a
small-cap core offering; they also launched their first CLO raising $400
million. We rounded out our growth offerings with the acquisition of Santa
Barbara Asset Management and we continued to raise assets through new
sub-advisory mandates. Additionally, mutual fund sales of $3.2 billion were
almost double 2004 sales, as we began to focus on expanding our presence in the
mutual fund marketplace.
"We are well-positioned for the future as we ended the year with 45% of our
assets under management in equity-based portfolios, 44% in municipal portfolios
and 11% in taxable income-oriented portfolios," concluded Schwertfeger.
"Managing more equity assets than municipal assets - even as we continue to grow
our municipal business - is a major milestone for our firm and reinforces our
commitment to continue broadening and diversifying our business platform."
Nuveen Investments, Inc. will host a conference call to discuss its fourth
quarter and full year results today, January 18th, 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 help
secure the long-term goals of institutions and high-net-worth investors as well
as the consultants and financial advisors who serve them. Nuveen Investments
markets its highly specialized investment teams, each with its own brand name
and area of expertise: NWQ, specializing in value-style equities; Nuveen,
managing fixed-income investments; Santa Barbara, committed to growth equities;
Rittenhouse, focused on "blue-chip" growth equities; and Symphony, with
expertise in alternative investments as well as equity and income portfolios. In
total, the Company manages just over $136 billion in assets. 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. Earnings before interest and taxes presented in this
press release is a non-GAAP financial measure. See the attached Consolidated
Statements of Income for a reconciliation of earnings before interest and taxes
to net income, the most closely comparable GAAP measure.
###
Financial Table Follows
NUVEEN INVESTMENTS
CONSOLIDATED STATEMENTS OF INCOME (1)
For the Years Ended December 31, 2004
and December 31, 2005
In thousands, except share data
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
Minority interest expense 469 468 470 469 1,876
Other operating expenses 4,404 4,950 4,323 4,675 18,353
Total operating expenses 57,965 61,709 67,161 65,927 252,762
OTHER INCOME/(EXPENSE) 2,845 2,380 1,454 869 7,547
INCOME BEFORE NET INTEREST
AND TAXES 64,574 61,084 65,910 68,854 260,422
NET INTEREST EXPENSE (2,646) (2,338) (2,079) (853) (7,916)
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 1,023 512 640 713 2,888
Total funds and accounts $ 6,092 5,988 5,751 8,118 25,949
NET FLOWS (in millions):
Mutual funds $ 45 (207) 142 308 288
Managed accounts-retail 2,212 1,749 1,603 2,803 8,367
Managed accounts
-institutional 506 1,048 504 1,398 3,455
Exchange-traded funds 1,034 518 643 717 2,911
Total funds and accounts $ 3,797 3,108 2,891 5,226 15,022
MANAGED FUNDS AND ACCOUNTS
(in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $ 95,356 100,923 101,857 106,891 95,356
Acquisition of SBAM
accounts -- -- -- -- --
Sales - funds and accounts 6,092 5,988 5,751 8,118 25,949
Dividend 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
RECAP BY STYLE:
Equity-Based $ 31,282 34,763 37,271 45,327
Municipals 56,478 54,737 56,960 57,909
Taxable Income-oriented 13,164 12,357 12,660 12,217
Total assets
under management $100,923 101,857 106,891 115,453
2005
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
REVENUES:
Investment advisory fees
from assets under
management (2) $131,209 135,363 141,136 151,955 559,663
Product distribution 2,803 2,440 1,233 1,880 8,356
Performance fees/other revenue 856 1,088 15,882 3,284 21,110
Total operating revenues 134,868 138,890 158,252 157,119 589,130
EXPENSES:
Compensation and benefits 43,038 44,034 55,881 52,242 195,194
Advertising and promotional
costs 2,669 3,070 3,596 3,160 12,495
Occupancy and equipment
costs 5,400 5,181 5,539 5,528 21,648
Amortization of intangible
assets 1,273 1,273 1,273 1,673 5,492
Travel and entertainment 1,686 2,095 1,871 2,706 8,357
Outside and professional
services 5,829 6,477 6,302 6,394 25,002
Minority interest expense 1,406 1,406 1,406 1,591 5,809
Other operating expenses 4,544 7,490 6,119 7,089 25,242
Total operating expenses 65,845 71,025 81,987 80,382 299,239
OTHER INCOME/(EXPENSE) 1,858 2,826 688 2,515 7,887
INCOME BEFORE NET INTEREST
AND TAXES 70,881 70,692 76,953 79,252 297,778
NET INTEREST EXPENSE (989) (4,418) (5,583) (7,949) (18,939)
INCOME BEFORE TAXES 69,892 66,274 71,371 71,302 278,839
INCOME TAXES:
Federal 22,941 21,753 23,214 23,123 91,032
State 3,758 3,563 4,672 4,659 16,652
Total income taxes 26,699 25,317 27,886 27,782 107,684
NET INCOME $ 43,193 40,957 43,484 43,520 171,156
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING:
Basic 93,757 78,238 76,294 77,369 81,356
Diluted 98,913 82,580 81,190 81,998 86,111
EARNINGS PER SHARE:
Basic $ 0.46 0.52 0.57 0.56 2.10
Diluted $ 0.44 0.50 0.54 0.53 1.99
GROSS SALES (in millions):
Mutual funds $ 702 697 923 868 3,191
Managed accounts-retail 3,684 3,376 3,981 4,562 15,603
Managed accounts
-institutional 1,882 1,823 957 1,635 6,297
Exchange-traded funds 1,414 560 13 315 2,302
Total funds and accounts $ 7,682 6,456 5,875 7,380 27,393
NET FLOWS (in millions):
Mutual funds $ 350 352 594 538 1,835
Managed accounts-retail 1,195 1,248 1,739 2,380 6,562
Managed accounts
-institutional 1,328 1,270 (329) 561 2,830
Exchange-traded funds 1,424 576 32 327 2,359
Total funds and accounts $ 4,297 3,447 2,035 3,806 13,585
MANAGED FUNDS AND ACCOUNTS
(in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $115,453 118,505 124,018 128,172 115,453
Acquisition of SBAM accts - - - 3,379 3,379
Sales - funds and accounts 7,682 6,456 5,875 7,380 27,393
Dividend reinvestments 61 92 105 187 445
Redemptions and
withdrawals (3,447) (3,101) (3,944) (3,761) (14,253)
Total net flows into
funds and accounts 4,297 3,447 2,035 3,806 13,585
Appreciation/
(depreciation) of
managed assets (1,244) 2,066 2,119 758 3,699
End of period $118,505 124,018 128,172 136,117 136,117
Recap by product type:
Mutual funds $ 12,887 13,505 14,050 14,495
Exchange-traded funds 51,050 52,534 52,094 51,997
Managed accounts-retail 37,715 39,695 43,222 47,675
Managed accounts
- institutional 16,853 18,284 18,807 21,950
Total assets
under management $118,505 124,018 128,172 136,117
RECAP BY STYLE:
Equity-Based $ 46,109 49,395 53,808 61,399
Municipals 57,894 60,069 60,058 60,421
Taxable Income-oriented 14,503 14,554 14,307 14,297
Total assets
under management $118,505 124,018 128,172 136,117
(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.
Note: Income before net interest and taxes (EBIT) is not a Generally Accepted
Accounting Principle (GAAP) disclosure and should not be considered in
isolation. In addition to net income, EBIT will be reported over the next
several quarters to help the reader in assessing the results from business
operations relative to prior periods given the increased debt on our balance
sheet - and the accompanying higher interest expense - as a result of a $600
million share repurchase in April 2005.