[NUVEEN INVESTMENT LOGO]
FOR IMMEDIATE RELEASE CONTACT: CHRIS ALLEN
ATTN: BUSINESS/FINANCIAL EDITORS (312) 917-8331
CHRISTOPHER.ALLEN@NUVEEN.COM
NUVEEN INVESTMENTS REPORTS 1ST QUARTER RECORD EARNINGS
WITH ASSETS UNDER MANAGEMENT OF $145 BILLION
CHICAGO, IL, APRIL 19, 2006 - Nuveen Investments, Inc. (NYSE: JNC), a leading
provider of diversified investment services, today reported record net income of
$44.9 million for the first quarter of 2006. Earnings per share (diluted) were
$0.54, an increase of 23% 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 $81.9 million, up 16% from
the prior year.
First quarter gross sales were $10.1 billion, with positive net flows of $5.9
billion. Gross sales of high-net-worth managed accounts and institutional
separate accounts were $8.8 billion with positive net flows of $5.0 billion.
Gross sales of mutual funds were $1.3 billion with net flows of $0.9 billion.
Total assets under management increased by $26 billion to $145 billion at March
31, 2006, from $119 billion a year ago and $136 billion at December 31, 2005.
The 22% increase in assets under management over the last year was driven by $15
billion of positive net flows as well as $8 billion of market appreciation and
$3 billion of assets from the acquisition of Santa Barbara Asset Management in
October 2005. Strong asset growth resulted in first quarter advisory fee revenue
increasing 19% year over year.
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 results. Our strong start to the year reflects our
broader, more diversified business base and investment expertise. From this
foundation we have been able to launch new product offerings and further expand
our relationships with financial advisors and institutions. Strong equity
markets were also a factor as equity assets under management increased to 48% of
our total assets while 42% were in municipal portfolios and 10% in taxable
income-oriented portfolios.
"Our strong sales and flows during the quarter were the result of continued
momentum in managed accounts, particularly in our international and global
equity offerings with $20 billion of assets under management. Having rapidly
achieved scale with these offerings, we recently established a separately
branded investment platform called Tradewinds NWQ to offer and manage global
value equities in a highly focused and specialized manner.
-more-
NWQ NUVEEN RITTENHOUSE SANTA BARBARA SYMPHONY Tradewinds NWQ
NUVEEN INVESTMENTS REPORTS 1ST QUARTER RECORD EARNINGS - PAGE 2
"We also continue to see positive flows into our municipal managed accounts,"
added Schwertfeger, "and we are optimistic about the in-roads Symphony is making
into retail managed accounts. Importantly, we also have seen accelerating growth
in our mutual funds this quarter with sales of $1.3 billion and positive net
flows of $864 million, more than twice the flows we saw a year ago and up 60%
from the prior quarter. Our mutual fund flows were almost equally divided
between equity and fixed-income funds.
"We continue to limit capacity in several of our most popular investment
strategies to ensure that we are providing the highest-quality investment
services," concluded Schwertfeger. "At the same time, we are introducing several
new retail and institutional products, building on our culture of innovation. We
are committed to further extending our current investment management
capabilities, to broadening our relationships in both the retail and
institutional markets and to maintaining a robust new product pipeline that
helps us meet the evolving needs of our customers."
Nuveen Investments, Inc. will host a conference call to discuss its first
quarter results today, April 19th, 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,
focused on fixed-income investments; Santa Barbara, committed to growth
equities; Tradewinds NWQ specializing in global value equities; Rittenhouse,
dedicated to "blue-chip" growth equities; and Symphony, with expertise in
alternative investments as well as equity and credit strategies. The Company
manages over $145 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
For the Year Ended December 31, 2005
and Quarter Ended March 31, 2006
In thousands, except share data
2005
------------------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
-------- ------- ------- ------- -------
REVENUES:
Investment advisory fees from
assets under management (1) $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
Closed-end 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
Closed-end 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
Closed-end 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
2006
------------------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
-------- ------- ------- ------- -------
REVENUES:
Investment advisory fees from
assets under management (1) $156,331 -- -- -- 156,331
Product distribution 1,237 -- -- -- 1,237
Performance fees/other revenue 2,578 -- -- -- 2,578
Total operating revenues 160,146 -- -- -- 160,146
EXPENSES:
Compensation and benefits 53,821 -- -- -- 53,821
Advertising and promotional costs 2,670 -- -- -- 2,670
Occupancy and equipment costs 5,931 -- -- -- 5,931
Amortization of intangible assets 1,673 -- -- -- 1,673
Travel and entertainment 2,108 -- -- -- 2,108
Outside and professional services 7,144 -- -- -- 7,144
Minority interest expense 1,481 -- -- -- 1,481
Other operating expenses 5,758 -- -- -- 5,758
Total operating expenses 80,586 -- -- -- 80,586
OTHER INCOME/(EXPENSE) 2,329 -- -- -- 2,329
INCOME BEFORE NET INTEREST
AND TAXES 81,889 -- -- -- 81,889
NET INTEREST EXPENSE (8,345) -- -- -- (8,345)
INCOME BEFORE TAXES 73,544 -- -- -- 73,544
INCOME TAXES:
Federal 24,122 -- -- -- 24,122
State 4,560 -- -- -- 4,560
Total income taxes 28,682 -- -- -- 28,682
NET INCOME $ 44,862 -- -- -- 44,862
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING:
Basic 78,670 -- -- -- 78,670
Diluted 83,688 -- -- -- 83,688
EARNINGS PER SHARE:
Basic $ 0.57 -- -- -- 0.57
Diluted $ 0.54 -- -- -- 0.54
GROSS SALES (in millions):
Mutual funds $ 1,347 -- -- -- 1,347
Managed accounts-retail 7,230 -- -- -- 7,230
Managed accounts-institutional 1,532 -- -- -- 1,532
Closed-end funds -- -- -- -- --
Total funds and accounts $ 10,109 -- -- -- 10,109
NET FLOWS (in millions):
Mutual funds $ 864 -- -- -- 864
Managed accounts-retail 4,114 -- -- -- 4,114
Managed accounts-institutional 932 -- -- -- 932
Closed-end funds (6) -- -- -- (6)
Total funds and accounts $ 5,903 -- -- -- 5,903
MANAGED FUNDS AND ACCOUNTS
(in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $136,117 -- -- -- 136,117
Acquisition of SBAM accts -- -- -- -- --
Sales - funds and accounts 10,109 -- -- -- 10,109
Dividend reinvestments 64 -- -- -- 64
Redemptions and withdrawals (4,269) -- -- -- (4,269)
Total net flows into funds
and accounts 5,903 -- -- -- 5,903
Appreciation/(depreciation)of
managed assets 2,997 -- -- -- 2,997
End of period $145,017 -- -- -- 145,017
Recap by product type:
Mutual funds $ 15,398 -- -- --
Closed-end funds 51,813 -- -- --
Managed accounts-retail 53,651 -- -- --
Managed accounts-institutional 24,154 -- -- --
Total assets under management $145,017 -- -- --
RECAP BY STYLE:
Equity-based $ 69,964 -- -- --
Municipals 60,585 -- -- --
Taxable income-oriented 14,468 -- -- --
Total assets under
management $145,017 -- -- --
(1) Advisory fee revenue will fluctuate based on the number of days in the
quarter. In 2006, 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.