EX-99.1 2 c17041exv99w1.htm PRESS RELEASE exv99w1
 

(NUVEEN LOGO)
     
FOR IMMEDIATE RELEASE
  CONTACT: Chris Allen
ATTN: Business/Financial Editors
  (312)917-8331
 
  christopher.allen@nuveen.com
 
    
 
  Natalie Brown
 
  (312)917-8077
 
  natalie.brown@nuveen.com
Nuveen Investments Reports 2nd Quarter Earnings
And Assets Under Management of $172 Billion
Chicago, IL, July 26, 2007— Nuveen Investments, Inc. (NYSE: JNC), a leading provider of diversified investment services, today reported second quarter earnings of $48.6 million, up 5% from the prior year. Second quarter earnings per share (diluted) were $0.58, an increase of 4% from a year ago. The Company’s second quarter operating revenues of $204.3 million increased 19% over the prior year with advisory fee income up 17% year over year. Current quarter results include approximately $9 million in structuring fees and related costs incurred on closed-end funds launched during the quarter, which adversely affected earnings per share by $0.07 on a fully-diluted basis.
Second quarter gross sales were $7.8 billion. Gross sales in the period were comprised of $2.6 billion in institutional separate accounts, $2.3 billion in retail managed accounts, $1.9 billion in mutual funds and $1.1 billion in closed-end funds. Net flows were $1.9 billion.
Total assets under management increased to $171.6 billion at June 30, 2007, from $149.0 billion a year ago and from $161.6 billion at the beginning of the year. The 15% increase in assets under management over the prior year was driven by $9.3 billion of net flows, $12.9 billion of market appreciation and $0.4 billion from the acquisition of HydePark Investment Strategies (“HydePark”). From the beginning of the year, assets under management increased by $10.0 billion due to $4.9 billion of net flows, $4.7 billion of market appreciation and $0.4 billion from the acquisition of HydePark.
Commenting on the Company’s results, John Amboian, CEO of Nuveen Investments, said, “We are pleased to report another quarter of high-quality growth in revenue, earnings, and assets under management. We continue to make solid progress toward our objective of building a world-class institutional investment foundation that leverages a highly-respected and scaled high-net-worth and retail product, relationship and service franchise. Institutional sales across our investment teams were $2.6 billion this quarter, with net flows of $1.4 billion.
“In retail managed accounts gross sales of $2.3 billion declined approximately 50% compared to the prior year driven by our decision last year to close our Tradewinds international offering to new investors in managed accounts. Net outflows of $1.3 billion for the quarter were the result of Rittenhouse outflows and redemptions in our closed investment strategies at NWQ and Tradewinds. We remain in a transition period in our retail managed account business as we continue to ramp up other strategies, incubate new strategies and redeploy existing capacity to higher fee private-client and institutional platforms and channels.
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Nuveen Investments Reports Record 2nd Quarter Earnings — Page 2
“We also continued our increased focus on mutual funds, which grew to over $20 billion in assets under management. Mutual fund sales for the quarter were a record $1.9 billion, a 23% increase compared to prior year. Net flows of $0.6 billion were somewhat softer than in recent quarters as a result of current quarter redemptions in our high-yield municipal fund and our international value fund due to rebalancing of asset-allocation portfolios by two broker-dealers. In addition, we raised approximately $850 million in April in a new multi-currency income closed-end fund offering, and in June we raised approximately $300 million in a new closed-end fund offering, the Nuveen Tax-Advantaged Dividend Growth Fund.
“Our broadening investment capabilities and our diversified asset base position us well for continued growth,” said Amboian. “We ended the quarter with equity assets accounting for 53% of our total assets and municipal and taxable income-oriented portfolios comprising 37% and 10% of our total assets, respectively.”
Nuveen Investments will make available today at 10 a.m. central time a pre-recorded call discussing its second quarter results. To access this pre-recorded call, please visit the investor relations section of the Company’s website at www.nuveen.com.
As previously announced, on June 20, 2007 the Company entered into an agreement to be acquired by private equity investors led by Madison Dearborn Capital Partners. Pursuant to this agreement and subject to the terms and conditions therein, each outstanding share of the Company’s common stock (other than dissenting shares) will be acquired for $65.00 in cash.
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 growing range of specialized investment solutions under the high-quality brands of NWQ, Nuveen, Santa Barbara, Tradewinds, Rittenhouse and Symphony. In total, the Company manages $172 billion in assets as of June 30, 2007. 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.
IMPORTANT LEGAL INFORMATION
Nuveen Investments, Inc. (Nuveen) intends to file with the SEC a proxy statement and other related documents regarding the proposed transaction described in this communication. WE URGE INVESTORS TO READ THE PROXY STATEMENT AND THE OTHER RELATED DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT NUVEEN, THE PROPOSED TRANSACTION AND RELATED MATTERS. A definitive proxy statement will be sent to holders of Nuveen’s common stock seeking their approval of the proposed transaction. This communication is not a solicitation of a proxy from any security holder of Nuveen.
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Nuveen Investments Reports Record 2nd Quarter Earnings — Page 3
Investors will be able to obtain the proxy statement and the other related documents (when they become available) and other documents filed with the SEC free of charge at the SEC’s website at www.sec.gov. In addition, a copy of the proxy statement (when it becomes available) may be obtained free of charge by directing a request to Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606, Attention of the General Counsel.
Nuveen, its directors and executive officers and certain other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Such persons may have interests in the proposed transaction, including as a result of holding options or shares of Nuveen’s common stock. Information regarding Nuveen’s directors and executive officers is available in the proxy statement filed with the SEC by Nuveen on April 6, 2007. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials filed or to be filed with the SEC.
###
Financial Table Follows

 

 

NUVEEN INVESTMENTS
CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 2006 and the Quarter Ended June 30, 2007
In thousands, except share data
                                         
    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  
 
                                        
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  

 

 

                                         
    2006  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Total  
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 HydePark accounts
     —       —       —       —       —  
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 MANAGER:
                                        
Nuveen
   $ 75,005       75,072       77,195       78,328          
NWQ
     31,806       32,145       33,066       35,564          
Rittenhouse
     5,072       4,159       3,687       3,519          
Santa Barbara
     4,037       4,169       4,429       4,576          
Symphony
     6,247       6,870       7,168       7,651          
Tradewinds
     22,850       26,579       28,623       31,970          
HydePark
     —       —       —       —          
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          
 
                                        

 

 

                                         
    2007  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Total  
REVENUES:
                                        
 
                                        
Investment advisory fees from assets under management (1)
   $ 189,716       197,981       —       —       387,697  
Product distribution
     1,422       2,152       —       —       3,575  
Performance fees/other revenue
     5,689       4,133       —       —       9,822  
Total operating revenues
     196,827       204,266       —       —       401,093  
 
                                        
EXPENSES:
                                        
 
                                        
Compensation and benefits
     73,475       75,009       —       —       148,485  
Advertising and promotional costs
     3,391       4,258       —       —       7,648  
Occupancy and equipment costs
     6,741       6,638       —       —       13,379  
Amortization of intangible assets
     1,967       2,036       —       —       4,003  
Travel and entertainment
     2,185       2,676       —       —       4,861  
Outside and professional services
     8,005       8,387       —       —       16,393  
Minority interest expense
     2,335       2,043       —       —       4,377  
Other operating expenses
     7,673       18,434       —       —       26,106  
Total operating expenses
     105,772       119,481       —       —       225,253  
 
                                        
OTHER INCOME/(EXPENSE)
     1,314       2,054       —       —       3,368  
 
                                        
NET INTEREST EXPENSE
     (5,906 )     (6,536 )     —       —       (12,442 )
 
                                        
INCOME BEFORE TAXES
     86,464       80,303       —       —       166,766  
 
                                        
INCOME TAXES:
                                        
 
                                        
Federal
     28,239       26,227       —       —       54,466  
State
     5,914       5,493       —       —       11,407  
Total income taxes
     34,153       31,720       —       —       65,873  
 
                                        
NET INCOME
   $ 52,310       48,583       —       —       100,893  
 
                                        
AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING:
                                        
 
                                        
Basic
     77,965       78,306       —       —       78,137  
Diluted
     83,370       83,935       —       —       83,659  
 
                                        
EARNINGS PER SHARE:
                                        
 
                                        
Basic
   $ 0.67       0.62       —       —       1.29  
Diluted
   $ 0.63       0.58       —       —       1.21  
 
                                        
GROSS SALES (in millions):
                                        
 
                                        
Mutual funds
   $ 1,682       1,859       —       —       3,540  
Managed accounts-retail
     2,759       2,260       —       —       5,019  
Managed accounts-institutional
     3,398       2,576       —       —       5,973  
Closed-end funds
     296       1,133       —       —       1,429  
Total funds and accounts
   $ 8,134       7,827       —       —       15,961  

 

 

                                         
    2007  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Total  
NET FLOWS (in millions):
                                        
Mutual funds
   $ 1,015       621       —       —       1,636  
Managed accounts-retail
     (547 )     (1,253 )     —       —       (1,800 )
Managed accounts-institutional
     2,249       1,390       —       —       3,639  
Closed-end funds
     316       1,147       —       —       1,463  
Total funds and accounts
   $ 3,033       1,906       —       —       4,939  
 
                                        
MANAGED FUNDS AND ACCOUNTS (in millions):
                                        
 
                                        
ASSETS UNDER MANAGEMENT:
                                        
Beginning of period
   $ 161,609       166,095       —       —       161,609  
Acquisition of HydePark accounts
     —       363       —       —       363  
Sales — funds and accounts
     8,134       7,827       —       —       15,961  
Dividend reinvestments
     103       108       —       —       210  
Redemptions and withdrawals
     (5,204 )     (6,029 )     —       —       (11,233 )
Total net flows into funds and accounts
     3,033       1,906       —       —       4,939  
Appreciation/ (depreciation)of managed assets
     1,453       3,238       —       —       4,691  
End of period
   $ 166,095       171,602       —       —       171,602  
 
                                        
RECAP BY PRODUCT TYPE:
                                        
Mutual funds
   $ 19,584       20,160       —       —          
Closed-end funds
     53,091       53,423       —       —          
Managed accounts-retail
     58,713       59,495       —       —          
Managed accounts-institutional
     34,707       38,524       —       —          
Total assets under management
   $ 166,095       171,602       —       —          
 
                                        
RECAP BY MANAGER:
                                        
Nuveen
   $ 79,430       78,703       —       —          
NWQ
     36,277       38,599       —       —          
Rittenhouse
     3,333       3,235       —       —          
Santa Barbara
     4,583       5,040       —       —          
Symphony
     8,953       10,293       —       —          
Tradewinds
     33,518       35,316       —       —          
HydePark
     —       415       —       —          
Total assets under management
   $ 166,095       171,602       —       —          
 
                                        
RECAP BY STYLE:
                                        
Equity-based
   $ 85,531       90,752       —       —          
Municipals
     64,519       64,014       —       —          
Taxable income-oriented
     16,045       16,836       —       —          
Total assets under management
   $ 166,095       171,602       —       —          
 
(1)   Advisory fee revenue will fluctuate based on the number of days in the quarter — In 2007, Q1 has 90 days, Q2 has 91 days, Q3 and Q4 have 92 days.