EXHIBIT 99.1
[NUVEEN INVESTMENTS LOGO]
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 RECORD 2ND QUARTER EARNINGS -- UP 13% FROM PRIOR YEAR
AND ASSETS UNDER MANAGEMENT OF $149 BILLION
CHICAGO, IL, JULY 19, 2006 -- Nuveen Investments, Inc. (NYSE: JNC), a leading
provider of diversified investment services, today reported net income of $46.4
million for the second quarter of 2006, up 13% over the prior year. Second
quarter earnings per share (diluted) were $0.56, an increase of 12% from a year
ago. Earnings before interest and taxes, which for comparative purposes exclude
the effects of new borrowings incurred for a $600 million share repurchase in
the second quarter of 2005, were $83.5 million, up 18% from the prior year.
Second quarter gross sales were $9.2 billion, with positive net flows of $5.1
billion. Gross sales of high-net-worth managed accounts during the second
quarter were $4.9 billion and gross sales of institutional separate accounts
were $2.6 billion. Second quarter gross sales of mutual funds were $1.5 billion
and sales of closed-end exchange-traded funds were $0.2 billion.
Year-to-date net income and earnings per share (diluted) were up 8% and 18%,
respectively, over the prior year. Earnings before interest and taxes were up
17% year-to-date. Gross sales for the first six months were $19.3 billion, with
positive net flows of $11.0 billion. Net flows were positive across all product
lines for both the quarter and year-to-date.
Total assets under management increased to $149 billion at June 30, 2006, from
$124 billion a year ago and $136 billion at the beginning of the year. The 20%
increase in assets under management over the prior year was driven by $17
billion of positive net flows, $5 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 advisory fee revenue increasing 25% in the
second quarter and 22% year-to-date from last year's level.
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 assets under management, revenues and
earnings. The deep investment specialization that resides in our investment
teams, and their growing record of high-quality investment performance, coupled
with our focus on product innovation and service excellence enabled us to
achieve strong results in the second quarter even as markets softened.
-more-
NUVEEN INVESTMENTS REPORTS RECORD 2ND QUARTER EARNINGS -- PAGE 2
"The quality of our investment performance enabled us to deliver strong returns
for investors and solid gross sales and net flows in the second quarter --
particularly in managed accounts -- despite the volatility in both domestic and
global markets, as well as continuing concerns about rising interest rates.
Retail managed account net flows were $2.2 billion in the second quarter with
Tradewinds' international strategy accounting for the majority of these flows.
The combined flows into Symphony, Santa Barbara, NWQ and Nuveen were offset by
Rittenhouse outflows of $540 million," said Schwertfeger. "Net flows into
institutional accounts of $1.8 billion in the second quarter were up
significantly versus both prior year and prior quarter with positive flows into
our institutional offerings of international value equities, global all-cap
equities, taxable fixed-income, stable growth equities, municipals and
alternative investments.
"Our increased focus on mutual funds continues to accelerate the growth of our
product line and our assets under management. We realized $850 million of net
flows into our mutual funds, led by our value equity funds and our municipal
high-yield fund. In addition, we raised approximately $200 million in a Nuveen
closed-end exchange-traded fund during June. The Nuveen Global Government
Enhanced Income Fund, managed by our Nuveen taxable fixed-income team, is
designed to provide income from a portfolio of investments in government debt
securities issued by countries around the world," added Schwertfeger.
"We ended the quarter with equity assets under management increasing to 49% of
our total assets, and municipal and taxable income-oriented portfolios
comprising 41% and 10% of total assets respectively," concluded Schwertfeger.
"We are pleased with the quality and diversity of our asset mix. We continue to
believe our commitment to help investors secure their long-term financial goals
with our high-quality investment disciplines, our innovative products and our
strong relationships with leading financial advisors and consultants will remain
key to future growth."
Nuveen Investments will host a conference call to discuss its second quarter
results today 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, 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 $149 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 the Quarter Ended June 30, 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) $156,331 169,140 -- -- 325,471
Product distribution 1,237 733 -- -- 1,970
Performance fees/other revenue 2,578 2,302 -- -- 4,880
Total operating revenues 160,146 172,175 -- -- 332,321
EXPENSES:
Compensation and benefits 53,821 59,646 -- -- 113,467
Advertising and promotional
costs 2,670 2,676 -- -- 5,346
Occupancy and equipment
costs 5,931 5,975 -- -- 11,906
Amortization of intangible
assets 1,673 2,798 -- -- 4,471
Travel and entertainment 2,108 2,677 -- -- 4,786
Outside and professional
services 7,144 7,543 -- -- 14,687
Minority interest expense 1,481 1,607 -- -- 3,087
Other operating expenses 5,758 9,083 -- -- 14,841
Total operating expenses 80,586 92,004 -- -- 172,590
OTHER INCOME/(EXPENSE) 2,329 3,286 -- -- 5,614
INCOME BEFORE NET INTEREST
AND TAXES 81,889 83,457 -- -- 165,346
NET INTEREST EXPENSE (8,345) (7,389) -- -- (15,735)
INCOME BEFORE TAXES 73,544 76,068 -- -- 149,611
INCOME TAXES:
Federal 24,122 24,950 -- -- 49,072
State 4,560 4,716 -- -- 9,276
Total income taxes 28,682 29,666 -- -- 58,348
NET INCOME $ 44,862 46,402 -- -- 91,263
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING:
Basic 77,804 78,028 -- -- 77,916
Diluted 83,044 83,069 -- -- 83,043
EARNINGS PER SHARE:
Basic $ 0.58 0.59 -- -- 1.17
Diluted $ 0.54 0.56 -- -- 1.10
GROSS SALES (in millions):
Mutual funds $ 1,347 1,505 -- -- 2,852
Managed accounts-retail 7,230 4,875 -- -- 12,105
Managed accounts
-institutional 1,532 2,581 -- -- 4,113
Closed-end funds -- 226 -- -- 226
Total funds and accounts $ 10,109 9,187 -- -- 19,296
NET FLOWS (in millions):
Mutual funds $ 864 856 -- -- 1,720
Managed accounts-retail 4,114 2,178 -- -- 6,292
Managed accounts
-institutional 932 1,811 -- -- 2,742
Closed-end funds (6) 228 -- -- 222
Total funds and accounts $ 5,903 5,072 -- -- 10,976
MANAGED FUNDS AND ACCOUNTS
(in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $136,117 145,017 -- -- 136,117
Acquisition of SBAM accts -- -- -- -- --
Sales - funds and accounts 10,109 9,187 -- -- 19,296
Dividend reinvestments 64 86 -- -- 149
Redemptions and
withdrawals (4,269) (4,200) -- -- (8,470)
Total net flows into
funds and accounts 5,903 5,072 -- -- 10,976
Appreciation/
(depreciation)of
managed assets 2,997 (1,096) -- -- 1,901
End of period $145,017 148,994 -- -- 148,994
RECAP BY PRODUCT TYPE:
Mutual funds $ 15,398 16,133 -- --
Closed-end funds 51,813 51,388 -- --
Managed accounts-retail 53,651 55,277 -- --
Managed accounts
- institutional 24,154 26,195 -- --
Total assets
under management $145,017 148,994 -- --
RECAP BY STYLE:
Equity-based $ 69,964 73,636 -- --
Municipals 60,585 60,643 -- --
Taxable income-oriented 14,468 14,715 -- --
Total assets
under management $145,017 148,994 -- --
(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.