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 EARNINGS AND
ENDS YEAR WITH ASSETS UNDER MANAGEMENT OF $162 BILLION
CHICAGO, IL, JANUARY 19, 2007 -- Nuveen Investments, Inc. (NYSE: JNC), a leading
provider of diversified investment services for institutions and high-net-worth
investors, today reported record earnings for the fourth quarter and full year
of 2006. Fourth quarter net income of $50.2 million increased 15% over the
fourth quarter of 2005 and earnings per share (diluted) of $0.60 rose 13% from
the same period last year. The Company's fourth quarter operating revenues of
$195.6 million increased 24% over the prior year. Assets under management
increased 5% in the quarter to approximately $162 billion on positive net flows
of $2.0 billion and $5.4 billion of market appreciation.
For the full year 2006, the Company reported net income of $187.7 million and
earnings per share (diluted) of $2.26, up 10% and 14%, respectively, over the
prior year. Operating revenues reached $710 million, up 20% year over year.
Gross sales for the full year were a record $32.1 billion with record net flows
of $15.3 billion. Net flows were positive across all product lines. Net flows
into institutional separate accounts were $5.6 billion for the year, while net
flows into high-net-worth managed accounts were $5.5 billion. 2006 mutual fund
net flows were $3.6 billion and closed-end fund net flows were $0.6 billion.
For the full year, assets under management increased $25 billion from their
December 31, 2005 level of $136 billion. The 19% increase in assets under
management over the prior year was driven by $15 billion of positive net flows
and $10 billion of market appreciation -- primarily from global and domestic
equity strategies. Strong asset growth resulted in advisory fee revenue
increasing 23% for the full year.
Commenting on the Company's results, Tim Schwertfeger, Chairman & CEO of Nuveen
Investments, said, "We are extremely pleased with the quality of our results in
2006, as well as the rate of our strategic development. We delivered our twelfth
consecutive year of record earnings, along with strong sales, net flows and
operating revenues. Our significant asset growth reflects our continued success
in expanding our investment capabilities and product offerings. A wider range of
investment strategies enabled us to benefit from the strong equity markets in
2006 as the domestic and global equity assets we manage increased to over 50% of
our total assets under management.
"We developed and strengthened relationships with institutional consultants and
retail financial advisors throughout the year which helped us achieve sales of
$32.1 billion and net flows of $15.3 billion -- increases of 17% and 13% over
the prior year, respectively. We experienced positive net flows across all of
our investment teams with the exception of Rittenhouse. We made significant
progress on our strategic initiatives during the year as we focused on expanding
our institutional business and adding to our mutual funds," added Schwertfeger.
"For the year, our institutional sales were $8.7 billion with net flows of $5.6
billion. Net flows were almost double 2005 levels driven by demand for
Tradewinds' international and global strategies. We also experienced positive
institutional net flows in Nuveen fixed income strategies, Santa Barbara growth
portfolios, NWQ value investments and Symphony alternative investments and
long-only strategies. Through Symphony we completed our second collateralized
loan obligation (CLO) offering in the fourth quarter of this year. Our
institutional client base is expanding both domestically and internationally as
our specialized investment teams add to their records of high-quality, long-term
investment performance.
"Mutual fund net flows of $3.6 billion were driven by accelerating sales of
several of our equity funds adding to the strength of our municipal high-yield
fund. Mutual fund net flows for the year were nearly twice the level of 2005.
Our equity funds accounted for much of the increase with approximately 45% of
net flows moving into equity funds. We launched seven new mutual funds during
the year and seeded a number of additional strategies for future product
introductions, which should position us well for continued growth in mutual
funds.
"Net flows into our retail managed accounts were $5.5 billion over the last
twelve months. While net flows were substantial, they were down 16% from prior
year as a result of our decision to close our Tradewinds international offering
in April. We know that the closure of some of our most popular offerings in
retail managed accounts has reduced our near-term asset growth in this segment;
however, we believe that closing these products positions us best to meet the
long-term performance expectations of our clients. Moreover, we continue to
broaden our distribution in retail managed accounts and launch new products for
this channel," said Schwertfeger. "Our high-quality investment capabilities and
our excellent sales and service platforms position us well for future growth in
retail managed accounts and across all of our businesses."
Nuveen Investments will host a conference call to discuss its fourth quarter and
full year results today at 10 a.m. central time. Access to the teleconference
will be available via the Company's website at www.nuveen.com or by dialing
(866) 248-7869 or (706) 679-2134 and referencing conference ID number 5895351.
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 approximately $162 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 the
following financial table 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 Years Ended December 31, 2005
and December 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) $ 156,275 168,923 176,925 183,725 685,847
Product distribution 1,237 733 1,697 1,077 4,745
Performance fees/other revenue 2,635 2,519 3,284 10,798 19,236
Total operating revenues 160,146 172,175 181,906 195,600 709,828
EXPENSES:
Compensation and benefits 53,821 59,646 72,911 77,307 263,686
Advertising and promotional
costs 2,670 2,676 3,728 4,427 13,500
Occupancy and equipment
costs 5,931 5,975 6,032 6,246 24,184
Amortization of intangible
assets 1,673 2,798 1,995 1,967 8,433
Travel and entertainment 2,108 2,677 2,290 3,082 10,158
Outside and professional
services 7,144 7,543 7,411 8,713 30,811
Minority interest expense 1,481 1,607 1,398 1,744 6,230
Other operating expenses 5,758 9,083 9,324 7,618 31,782
Total operating expenses 80,586 92,004 105,089 111,104 388,783
OTHER INCOME/(EXPENSE) 2,329 3,286 6,721 3,391 15,726
INCOME BEFORE NET INTEREST
AND TAXES 81,889 83,457 83,537 87,887 336,770
NET INTEREST EXPENSE (8,345) (7,389) (6,678) (5,753) (28,166)
INCOME BEFORE TAXES 73,544 76,068 76,859 82,134 308,605
INCOME TAXES:
Federal 24,122 24,950 24,901 25,975 99,948
State 4,560 4,716 5,775 5,925 20,976
Total income taxes 28,682 29,666 30,676 31,900 120,924
NET INCOME $ 44,862 46,402 46,183 50,234 187,680
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING:
Basic 77,804 78,028 77,669 77,908 77,852
Diluted 83,044 83,069 82,934 83,401 83,148
EARNINGS PER SHARE:
Basic $ 0.58 0.59 0.59 0.64 2.41
Diluted $ 0.54 0.56 0.56 0.60 2.26
GROSS SALES (in millions):
Mutual funds $ 1,347 1,505 1,374 1,416 5,642
Managed accounts--retail 7,230 4,875 2,500 2,517 17,122
Managed accounts
-institutional 1,532 2,581 2,450 2,183 8,747
Closed-end funds - 226 369 - 595
Total funds and accounts $ 10,109 9,187 6,694 6,116 32,106
NET FLOWS (in millions):
Mutual funds $ 864 856 886 1,015 3,622
Managed accounts-retail 4,114 2,178 (454) (350) 5,488
Managed accounts
-institutional 932 1,811 1,590 1,275 5,607
Closed-end funds (6) 228 380 15 616
Total funds and accounts $ 5,903 5,072 2,402 1,955 15,332
MANAGED FUNDS AND ACCOUNTS
(in millions):
ASSETS UNDER MANAGEMENT:
Beginning of period $ 136,117 145,017 148,994 154,167 136,117
Acquisition of SBAM accts - - - - -
Sales -- funds and accounts 10,109 9,187 6,694 6,116 32,106
Dividend reinvestments 64 86 102 247 498
Redemptions and
withdrawals (4,269) (4,200) (4,394) (4,409) (17,272)
Total net flows into
funds and accounts 5,903 5,072 2,402 1,955 15,332
Appreciation/
(depreciation) of
managed assets 2,997 (1,096) 2,771 5,487 10,160
End of period $ 145,017 148,994 154,167 161,609 161,609
RECAP BY PRODUCT TYPE:
Mutual funds $ 15,398 16,133 17,407 18,532
Closed-end funds 51,813 51,388 52,791 52,958
Managed accounts-retail 53,651 55,277 55,633 58,556
Managed accounts
- institutional 24,154 26,195 28,335 31,563
Total assets
under management $ 145,017 148,994 154,167 161,609
RECAP BY STYLE:
Equity-based $ 69,964 73,636 76,773 82,772
Municipals 60,585 60,643 62,765 63,751
Taxable income-oriented 14,468 14,715 14,629 15,086
Total assets
under management $ 145,017 148,994 154,167 161,609
(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.