EX-99.1 2 c04387exv99w1.txt PRESS RELEASE [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.