EX-99.1 3 dex991.htm PRESS RELEASE (RESULTS OF OPERATIONS) Press Release (results of operations)
 
Exhibit 99.1
LOGO
 
 
Neuberger Berman Inc.
605 Third Avenue
New York, NY 10158-3698
Tel 212.476.9000
 
 
Contact:
Robert Matza
Executive Vice President
Chief Operating Officer
Neuberger Berman
(212) 476-9808
 
NEUBERGER BERMAN’S THIRD QUARTER EARNINGS
$0.42 PER SHARE VERSUS $0.47
 
Assets Under Management $53.6 Billion
 
Net Cash Flows Remain Positive
 
NEW YORK, NY, October 22, 2002 … Neuberger Berman Inc. (NYSE: NEU) today reported net income of $29.2 million, or $0.42 per share (diluted and basic), for the third quarter ended September 30, 2002. Included in these figures is $1.2 million, or $0.01 per share, in pretax costs associated with the completion of the offering of three Neuberger Berman Intermediate Municipal Funds. In the comparable period last year, net income was $33.5 million, or $0.47 per share (diluted and basic). Net revenues declined 4.6% to $142.9 million from $149.9 million in the 2001 quarter.
 
Cash earnings for the quarter, which exclude certain non-cash items such as deferred taxes and depreciation and amortization, were $51.5 million, or $0.73 per share (diluted) and $0.74 per share (basic). This compares with cash earnings in the year-ago period of $39.4 million, or $0.55 per share (diluted) and $0.56 per share (basic). The sharp rise in the 2002 quarter is primarily attributable to the realization of the deferred

 
tax benefit associated with the vesting of shares in the Employee Defined Contribution Stock Incentive Plan that occurred with the secondary stock offering on July 29, 2002.
 
At quarter end, assets under management were $53.6 billion, up 2.8% from $52.1 billion at September 30, 2001, but down 8.7% from $58.7 billion at the end of the previous quarter.
 
Common shares outstanding were 69.8 million at the end of the 2002 quarter, down from 70.4 million in the prior year period. The Company continues to believe it is advantageous to use free cash to repurchase its stock, and aggressively pursued its common stock repurchase program in the quarter, purchasing 720,000 shares for $22.1 million. This brings the total number of shares repurchased since the program’s inception to 7.0 million shares at a cost of $256.4 million. An authorization for $68.6 million remains outstanding.
 
As was the case in the second quarter of 2002, the Company’s effective tax rate increased this period to 42.8%, up from 42.1% last year. This higher tax rate is attributable to a lower level of investment income, primarily because of lower interest rates and narrow spreads.
 
Confidence in Future Prospects
 
Jeffrey B. Lane, Neuberger Berman’s President and Chief Executive Officer, said, “We are three-quarters of the way through the third year of a severe bear market — with declines year-to-date of over 24% and almost 29% in the Dow Jones Industrial Average and the Standard & Poor’s 500 Index, respectively. Given this truly dismal market environment, and the seasonally slow nature of the summer period, I am quite pleased with our Company’s performance in the quarter.

“Let’s examine some highlights of this difficult period. Even though our clients — and we as portfolio managers — clearly loathe the decline in assets we’ve experienced, it should be noted that, on a relative basis, our investment performance has been good, particularly in fixed income. Our capabilities in this sector have been enhanced further with the recent addition of a highly successful team of high-yield bond professionals as well as the public offering in September of three Neuberger Berman closed-end municipal bond funds.
 
“It is also noteworthy that net cash flows in the Mutual Fund and Institutional segment remained positive in the quarter — even before the addition of new assets of $443 million from the above-mentioned municipal funds and approximately $400 million in assets managed by the high-yield team — and are substantially ahead year-to-date from the 2001 period. An important contributor to these positive net cash flows was the excellent results of our Wrap business, which has assets under management exceeding $5 billion, almost double the amount last year.
 
“Finally, we have also been very diligent about keeping expenses under control throughout this downturn, although market conditions have precipitated a selective reduction in our workforce of approximately 2% early in the fourth quarter.
 
“That Neuberger Berman has performed this well through the most trying conditions in recent memory gives me confidence, both in the strength of our business model and in our future prospects. As I have said repeatedly, times like these can only raise investors’ awareness of the need for professional guidance and advice. I believe also that investors will be drawn more and more to firms like ours — pure client advocates who are unencumbered by the apparent conflicts between research and investment banking that the securities industry is attempting to resolve. I am confident that Neuberger Berman will be in a unique position to capitalize even further on our enviable, 63-year reputation for integrity and independence. Money management is what we do, our

 
clients’ best interests are always paramount, and our professional and support staff are second to none in terms of their knowledge and dedication.”
 
Nine Month Results
 
For the first nine months of 2002, net income declined 6.4% to $94.9 million from $101.4 million in the same period last year. Per share earnings were $1.34 (diluted) and $1.36 (basic) in the 2002 period versus $1.38 (diluted) and $1.40 (basic). Net revenues were up slightly to $463.4 million from $461.7 million.
 
PRIVATE ASSET MANAGEMENT
 
Net Revenues: $70.3 Million vs. $73.3 Million, Down 4.1%
Pretax Income:$34.8 Million vs. $37.6 Million, Down 7.6%
 
Assets under management in this segment at quarter-end were $20.8 billion, down 4.4% from $21.8 billion at September 30, 2001, and down 11.8% from $23.6 billion at the end of the previous quarter. Although adversely affected by the severe market declines, investment performance in the segment year-to-date has outpaced the rate of return of both the S&P 500 Index and the Dow Jones Industrial Average.
 
As assets under management have declined, so have investment advisory and administrative fees, which were down 5.5% versus the prior year period, but are up 4.8% year-to-date. Commission revenues in this seasonally slow period were essentially even with last year’s level, but were down 19.1% from the previous quarter. Expenses remained relatively flat quarter-over-quarter as well. Pretax profit margins declined to 49.5% compared with 51.3% in the 2001 period, and the segment accounted for 68.2% of the Company’s total pretax income.
 
During the quarter the national sales force of Client Consultants generated $372 million in new assets, almost 9% more than in the previous quarter, bringing their year-to-date total of new assets to $1.2 billion. As a result of current market conditions, more than

the usual amount of these assets continue to be invested in fixed-income products, which carry lower profit margins than equities.
 
MUTUAL FUND AND INSTITUTIONAL
 
Net Revenues: $53.2 Million vs. $56.2 Million, Down 5.4%
Pretax Income: $19.2 Million vs. $22.4 Million, Down 14.6%
 
Assets under management in this segment were $32.8 billion at the end of the quarter, up 8.0% from $30.4 billion at September 30, 2001, and down 6.6% from $35.1 billion at June 30, 2002. Mutual fund performance in the quarter was mixed, though approximately half the assets in the Company’s equity funds outperformed both their benchmarks and the S&P 500. The relative performance of the fixed-income funds is very good year-to-date, with the Neuberger Berman High Income Bond Fund significantly outpacing its peer group.
 
As announced, public offerings of three closed-end municipal bond funds — the Neuberger Berman Intermediate Fund, the California Intermediate Fund and the New York Intermediate Fund — were completed on September 25, 2002, adding $443 million of new assets under management. They are traded on the American Stock Exchange.
 
Net cash flows in the segment remained positive overall at $921 million, including approximately $843 million in new assets, as previously discussed, versus $169 million in last year’s quarter. Mutual Fund and Sub-Advised Accounts recorded a small net cash outflow of $8 million, which was more than offset by net cash inflows of $176 million from Institutional Separate Accounts and $753 million from the Consultant Services Group (Wrap). The latter unit continues to record excellent progress, with assets under management at over $5.0 billion, up significantly from $2.5 billion a year ago and $4.2 billion at June 30, 2002.

 
PROFESSIONAL SECURITIES SERVICES
 
Net Revenues: $20.3 Million vs. $22.2 Million, Down 8.3%
Pretax Income: $2.8 Million vs. $3.5 Million, Down 18.1%
 
The performance of this business segment in the period — though significantly better than in the previous quarter — continues to be seriously affected by the poor market environment. Net interest income continued to decline as a result of lower average balances related to client financing, narrow interest spreads and lower interest rates. Given the steady growth evidenced in its client base, this unit is expected to enhance the Company’s overall profitability when the markets improve.
 
CORPORATE
 
Corporate includes various expenses, including administrative costs that are not directly related to the day-to-day operations of our principal business. The net pretax loss of $5.8 million in the quarter was essentially flat with last year’s level.
 
Neuberger Berman Inc. through its subsidiaries is an investment advisory company with $53.6 billion in assets under management, as of September 30, 2002. For 63 years, the firm has provided clients with a broad range of investment products, services and strategies. The Company engages in private asset management, wealth management services, tax planning and personal and institutional trust services, mutual funds and institutional management, and professional securities services for individuals, institutions, corporations, pension funds, foundations and endowments. Its website, and this news release, can be accessed at www.nb.com.
 
###
 
Statements made in this release that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from a decline in the securities markets or a decline in the Company’s products’ performance, a general downturn in the economy, competition from

other companies, changes in government policy or regulation, inability of the Company to attract or retain key employees, inability of the Company to implement its operating strategy and acquisition strategy, inability of the Company to manage rapid expansion and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations.
 

 
Neuberger Berman Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
For the Periods Ending (in thousands, except per share data)
 
    
Three Months Ended
     
Fav (Unfav)
  
                     
Change From
  
    
September 30,
2002
   
June 30,
2002
   
September 30,
2001
     
June 30,
2002
     
September 30,
2001
  
REVENUES:
                                     
Investment advisory and administrative fees
   
$
101,314
   
$
113,355
   
$
106,974
 
   
(10.6
%)
   
(5.3
%)
Commissions
   
 
32,671
   
 
37,319
   
 
32,136
 
   
(12.5
%)
   
1.7
%
Interest
   
 
15,138
   
 
18,523
   
 
32,850
 
   
(18.3
%)
   
(53.9
%)
Principal transactions in securities, net
   
 
68
   
 
762
   
 
(226
)
   
(91.1
%)
   
130.1
%
Clearance fees
   
 
3,063
   
 
3,133
   
 
3,196
 
   
(2.2
%)
   
(4.2
%)
Other income
   
 
1,272
   
 
678
   
 
800
 
   
87.6
%
   
59.0
%
    
  
  
             
        Gross revenues
   
 
153,526
   
 
173,770
   
 
175,730
 
   
(11.6
%)
   
(12.6
%)
Interest expense
   
 
10,629
   
 
13,440
   
 
25,870
 
   
20.9
%
   
58.9
%
    
  
  
             
        Net revenues after interest expense
   
 
142,897
   
 
160,330
   
 
149,860
 
   
(10.9
%)
   
(4.6
%)
    
  
  
             
OPERATING EXPENSES:
                                     
Employee compensation and benefits
   
 
55,038
   
 
66,713
   
 
58,981
 
   
17.5
%
   
6.7
%
Information technology
   
 
6,379
   
 
6,075
   
 
5,701
 
   
(5.0
%)
   
(11.9
%)
Rent and occupancy
   
 
5,915
   
 
5,739
   
 
5,556
 
   
(3.1
%)
   
(6.5
%)
Brokerage, clearing and exchange fees
   
 
3,240
   
 
3,270
   
 
3,071
 
   
0.9
%
   
(5.5
%)
Advertising and sales promotion
   
 
1,806
   
 
2,248
   
 
1,337
 
   
19.7
%
   
(35.1
%)
Distribution and fund administration
   
 
5,767
   
 
6,328
   
 
4,870
 
   
8.9
%
   
(18.4
%)
Professional fees
   
 
3,430
   
 
3,192
   
 
3,534
 
   
(7.5
%)
   
2.9
%
Depreciation and amortization
   
 
3,794
   
 
3,803
   
 
3,398
 
   
0.2
%
   
(11.7
%)
Other expenses
   
 
6,559
   
 
6,251
   
 
5,608
 
   
(4.9
%)
   
(17.0
%)
    
  
  
             
        Total operating expenses
   
 
91,928
   
 
103,619
   
 
92,056
 
   
11.3
%
   
0.1
%
    
  
  
             
        Net income before taxes
   
 
50,969
   
 
56,711
   
 
57,804
 
   
(10.1
%)
   
(11.8
%)
Provision for income taxes
   
 
21,789
   
 
24,243
   
 
24,335
 
   
10.1
%
   
10.5
%
    
  
  
             
        Net income
   
$
29,180
   
$
32,468
   
$
33,469
 
   
(10.1
%)
   
(12.8
%)
    
  
  
             
Net income per common share
                                     
        Net income per share—Basic
   
$
0.42
   
$
0.46
   
$
0.47
 
              
    
  
  
             
        Net income per share—Diluted
   
$
0.42
   
$
0.46
   
$
0.47
 
              
    
  
  
             
Cash earnings per common share
                                     
        Cash earnings per share—Basic
   
$
0.74
   
$
0.53
   
$
0.56
 
              
    
  
  
             
        Cash earnings per share—Diluted
   
$
0.73
   
$
0.52
   
$
0.55
 
              
    
  
  
             
Weighted average common shares
        outstanding—Basic
   
 
69,397
   
 
69,878
   
 
70,568
 
              
    
  
  
             
Weighted average common shares
        outstanding—Diluted
   
 
70,055
   
 
70,885
   
 
71,722
 
              
    
  
  
             

8

Neuberger Berman Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
For the Periods Ending
(in thousands, except per share data)
 
    
Nine Months Ended
     
Fav (Unfav)
  
                
Change From
  
    
September 30,
2002
   
September 30,
2001
     
September 30,
2001
  
REVENUES:
                       
Investment advisory and administrative fees
   
$
323,581
   
$
312,869
     
3.4
%
Commissions
   
 
109,588
   
 
107,017
     
2.4
%
Interest
   
 
53,039
   
 
135,152
     
(60.8
%)
Principal transactions in securities, net
   
 
1,332
   
 
1,330
     
0.2
%
Clearance fees
   
 
9,127
   
 
10,004
     
(8.8
%)
Other income
   
 
4,785
   
 
2,667
     
79.4
%
    
  
        
        Gross revenues
   
 
501,452
   
 
569,039
     
(11.9
%)
Interest expense
   
 
38,030
   
 
107,313
     
64.6
%
    
  
        
        Net revenues after interest expense
   
 
463,422
   
 
461,726
     
0.4
%
    
  
        
OPERATING EXPENSES:
                       
Employee compensation and benefits
   
 
190,190
   
 
189,752
     
(0.2
%)
Information technology
   
 
18,251
   
 
16,621
     
(9.8
%)
Rent and occupancy
   
 
17,157
   
 
15,064
     
(13.9
%)
Brokerage, clearing and exchange fees
   
 
9,549
   
 
8,827
     
(8.2
%)
Advertising and sales promotion
   
 
6,247
   
 
7,060
     
11.5
%
Distribution and fund administration
   
 
17,915
   
 
14,194
     
(26.2
%)
Professional fees
   
 
9,164
   
 
8,234
     
(11.3
%)
Depreciation and amortization
   
 
11,294
   
 
9,361
     
(20.6
%)
Other expenses
   
 
18,154
   
 
17,579
     
(3.3
%)
    
  
        
        Total operating expenses
   
 
297,921
   
 
286,692
     
(3.9
%)
    
  
        
        Net income before taxes
   
 
165,501
   
 
175,034
     
(5.4
%)
Provision for income taxes
   
 
70,606
   
 
73,647
     
4.1
%
    
  
        
        Net income
   
$
94,895
   
$
101,387
     
(6.4
%)
    
  
        
Net income per common share
                       
        Net income per share—Basic
   
$
1.36
   
$
1.40
         
    
  
        
        Net income per share—Diluted
   
$
1.34
   
$
1.38
         
    
  
        
Cash earnings per common share
                       
        Cash earnings per share—Basic
   
$
1.84
   
$
1.79
         
    
  
        
        Cash earnings per share—Diluted
   
$
1.82
   
$
1.76
         
    
  
        
Weighted average common shares
        outstanding—Basic
   
 
69,771
   
 
72,330
         
    
  
        
Weighted average common shares
        outstanding—Diluted
   
 
70,744
   
 
73,646
         
    
  
        

Neuberger Berman Inc. and Subsidiaries
Selected Segment Financial Data (Unaudited)
For the Periods Ending
(in thousands)
    
Three Months Ended
     
Fav (Unfav)
  
                         
Change From
  
    
September 30,
2002
     
June 30,
2002
     
September 30,
2001
     
June 30,
2002
     
September 30,
2001
  
PRIVATE ASSET MANAGEMENT
                                         
Net revenues after interest expense
   
$
70,250
 
   
$
80,398
 
   
$
73,288
 
   
(12.6
%)
   
(4.1
%)
Net income before taxes
   
$
34,758
 
   
$
38,218
 
   
$
37,601
 
   
(9.1
%)
   
(7.6
%)
MUTUAL FUND & INSTITUTIONAL
                                         
Net revenues after interest expense
   
$
53,166
 
   
$
59,703
 
   
$
56,195
 
   
(10.9
%)
   
(5.4
%)
Net income before taxes
   
$
19,151
 
   
$
24,060
 
   
$
22,432
 
   
(20.4
%)
   
(14.6
%)
PROFESSIONAL SECURITIES SERVICES
                                         
Net revenues after interest expense
   
$
20,329
 
   
$
20,745
 
   
$
22,177
 
   
(2.0
%)
   
(8.3
%)
Net income before taxes
   
$
2,846
 
   
$
734
 
   
$
3,477
 
   
287.7
%
   
(18.1
%)
CORPORATE
                                         
Net loss after interest expense
   
$
(848
)
   
$
(516
)
   
$
(1,800
)
   
(64.3
%)
   
52.9
%
Net loss before taxes
   
$
(5,786
)
   
$
(6,301
)
   
$
(5,706
)
   
8.2
%
   
(1.4
%)
TOTAL
                                         
Net revenues after interest expense
   
$
142,897
 
   
$
160,330
 
   
$
149,860
 
   
(10.9
%)
   
(4.6
%)
Net income before taxes
   
$
50,969
 
   
$
56,711
 
   
$
57,804
 
   
(10.1
%)
   
(11.8
%)
                               
    
Nine Months Ended
     
Fav (Unfav)
                
                  
Change From
                
    
September 30,
2002
     
September 30,
2001
     
September 30,
2001
                
PRIVATE ASSET MANAGEMENT
                                         
Net revenues after interest expense
   
$
232,141
 
   
$
222,677
 
   
 
4.3
%
              
Net income before taxes
   
$
111,349
 
   
$
108,757
 
   
 
2.4
%
              
MUTUAL FUND & INSTITUTIONAL
                                         
Net revenues after interest expense
   
$
169,606
 
   
$
168,424
 
   
 
0.7
%
              
Net income before taxes
   
$
64,860
 
   
$
62,670
 
   
 
3.5
%
              
PROFESSIONAL SECURITIES SERVICES
                                         
Net revenues after interest expense
   
$
63,748
 
   
$
75,332
 
   
 
(15.4
%)
              
Net income before taxes
   
$
7,199
 
   
$
21,344
 
   
 
(66.3
%)
              
CORPORATE
                                         
Net loss after interest expense
   
$
(2,073
)
   
$
(4,707
)
   
 
56.0
%
              
Net loss before taxes
   
$
(17,907
)
   
$
(17,737
)
   
 
(1.0
%)
              
TOTAL
                                         
Net revenues after interest expense
   
$
463,422
 
   
$
461,726
 
   
 
0.4
%
              
Net income before taxes
   
$
165,501
 
   
$
175,034
 
   
 
(5.4
%)
              

Neuberger Berman Inc. and Subsidiaries
Assets Under Management (Unaudited)
For the Periods Ending
(in millions)
    
Three Months Ended
     
Fav (Unfav) Change From
  
    
September 30,
     
June 30,
     
September 30,
     
June 30,
       
September 30,
  
    
2002
     
2002
     
2001
     
2002
       
2001
  
PRIVATE ASSET MANAGEMENT
                                           
Assets under management, beginning of period
   
$
23,593
 
   
$
25,731
 
   
$
24,253
 
                
    
  
  
               
Net additions
   
 
216
 
   
 
213
 
   
 
266
 
                
Market depreciation
   
 
(3,001
)
   
 
(2,351
)
   
 
(2,757
)
                
    
  
  
               
Total decrease
   
 
(2,785
)
   
 
(2,138
)
   
 
(2,491
)
                
    
  
  
               
Assets under management, end of period (1)
   
$
20,808
 
   
$
23,593
 
   
$
21,762
 
   
(11.8
%)
     
(4.4
%)
    
  
  
               
MUTUAL FUND & INSTITUTIONAL
                                           
Equity Separate Accounts
                                           
Assets under management, beginning of period
   
$
6,091
 
   
$
6,542
 
   
$
6,810
 
                
    
  
  
               
Net additions (withdrawals)
   
 
(68
)
   
 
74
 
   
 
(122
)
                
Market depreciation
   
 
(958
)
   
 
(525
)
   
 
(895
)
                
    
  
  
               
Total decrease
   
 
(1,026
)
   
 
(451
)
   
 
(1,017
)
                
    
  
  
               
Assets under management, end of period
   
$
5,065
 
   
$
6,091
 
   
$
5,793
 
   
(16.8
%)
     
(12.6
%)
    
  
  
               
Fixed Income Separate Accounts
                                           
Assets under management, beginning of period
   
$
5,437
 
   
$
5,262
 
   
$
5,280
 
                
    
  
  
               
Net additions
   
 
244
 
   
 
1
 
   
 
163
 
                
Market appreciation
   
 
236
 
   
 
174
 
   
 
162
 
                
    
  
  
               
Total increase
   
 
480
 
   
 
175
 
   
 
325
 
                
    
  
  
               
Assets under management, end of period
   
$
5,917
 
   
$
5,437
 
   
$
5,605
 
   
8.8
%
     
5.6
%
    
  
  
               
Consultant Services Group
                                           
Assets under management, beginning of period
   
$
4,237
 
   
$
3,544
 
   
$
2,277
 
                
    
  
  
               
Net additions
   
 
753
 
   
 
671
 
   
 
304
 
                
Market appreciation (depreciation)
   
 
21
 
   
 
22
 
   
 
(39
)
                
    
  
  
               
Total increase
   
 
774
 
   
 
693
 
   
 
265
 
                
    
  
  
               
Assets under management, end of period
   
$
5,011
 
   
$
4,237
 
   
$
2,542
 
   
18.3
%
     
97.1
%
    
  
  
               
Mutual Fund and Sub-Advised Accounts
                                           
Assets under management, beginning of period
   
$
19,342
 
   
$
20,794
 
   
$
19,616
 
                
    
  
  
               
Net additions (withdrawals)
   
 
(8
)
   
 
519
 
   
 
(176
)
                
Market depreciation
   
 
(2,537
)
   
 
(1,971
)
   
 
(3,007
)
                
    
  
  
               
Total decrease
   
 
(2,545
)
   
 
(1,452
)
   
 
(3,183
)
                
    
  
  
               
Assets under management, end of period (2)
   
$
16,797
 
   
$
19,342
 
   
$
16,433
 
   
(13.2
%)
     
2.2
%
    
  
  
               
Sub-Total Mutual Fund & Institutional
                                           
Assets under management, beginning of period
   
$
35,107
 
   
$
36,142
 
   
$
33,983
 
                
    
  
  
               
Net additions
   
 
921
 
   
 
1,265
 
   
 
169
 
                
Market depreciation
   
 
(3,238
)
   
 
(2,300
)
   
 
(3,779
)
                
    
  
  
               
Total decrease
   
 
(2,317
)
   
 
(1,035
)
   
 
(3,610
)
                
    
  
  
               
Assets under management, end of period
   
$
32,790
 
   
$
35,107
 
   
$
30,373
 
   
(6.6
%)
     
8.0
%
    
  
  
               
TOTAL
                                           
Assets under management, beginning of period
   
$
58,700
 
   
$
61,873
 
   
$
58,236
 
                
    
  
  
               
Net additions
   
 
1,137
 
   
 
1,478
 
   
 
435
 
                
Market depreciation
   
 
(6,239
)
   
 
(4,651
)
   
 
(6,536
)
                
    
  
  
               
Total decrease
   
 
(5,102
)
   
 
(3,173
)
   
 
(6,101
)
                
    
  
  
               
Assets under management, end of period
   
$
53,598
 
   
$
58,700
 
   
$
52,135
 
   
(8.7
%)
     
2.8
%
    
  
  
               
Equity component of assets under management
   
 
58
%
   
 
66
%
   
 
68
%
                
    
  
  
               
 
Note  1:
 
As of September 30, 2002, Private Asset Management included $58 of assets invested in EMM's Hedge Fund products.
 
Note  2:
 
As of September 30, 2002, Mutual Fund and Sub-Advised Accounts included $143 of client assets invested in the Fund Advisory Service wrap mutual fund program with third party funds, a decrease of $21 from the prior quarter.

Neuberger Berman Inc. and Subsidiaries
Assets Under Management (Unaudited)
For the Periods Ending
(in millions)
                  
Fav (Unfav)
  
    
Nine Months Ended
     
Change From
  
    
September 30,
2002
     
September 30,
2001
     
September 30,
2001
  
PRIVATE ASSET MANAGEMENT
                         
Assets under management, beginning of period
   
$
25,004
 
   
$
22,510
 
       
    
  
      
        Net additions
   
 
461
 
   
 
1,760
 
       
        Market depreciation
   
 
(4,657
)
   
 
(2,508
)
       
    
  
      
        Total decrease
   
 
(4,196
)
   
 
(748
)
       
    
  
      
Assets under management, end of period (1)
   
$
20,808
 
   
$
21,762
 
   
(4.4
%)
    
  
      
MUTUAL FUND & INSTITUTIONAL
                         
Equity Separate Accounts
                         
Assets under management, beginning of period
   
$
6,290
 
   
$
6,402
 
       
    
  
      
        Net additions (withdrawals)
   
 
(22
)
   
 
222
 
       
        Market depreciation
   
 
(1,203
)
   
 
(831
)
       
    
  
      
        Total decrease
   
 
(1,225
)
   
 
(609
)
       
    
  
      
Assets under management, end of period
   
$
5,065
 
   
$
5,793
 
   
(12.6
%)
    
  
      
Fixed Income Separate Accounts
                         
Assets under management, beginning of period
   
$
5,229
 
   
$
5,298
 
       
    
  
      
        Net additions
   
 
338
 
   
 
13
 
       
        Market appreciation
   
 
350
 
   
 
294
 
       
    
  
      
        Total increase
   
 
688
 
   
 
307
 
       
    
  
      
Assets under management, end of period
   
$
5,917
 
   
$
5,605
 
   
5.6
%
    
  
      
Consultant Services Group
                         
Assets under management, beginning of period
   
$
3,037
 
   
$
1,796
 
       
    
  
      
        Net additions
   
 
1,876
 
   
 
750
 
       
        Market appreciation (depreciation)
   
 
98
 
   
 
(4
)
       
    
  
      
        Total increase
   
 
1,974
 
   
 
746
 
       
    
  
      
Assets under management, end of period
   
$
5,011
 
   
$
2,542
 
   
97.1
%
    
  
      
Mutual Fund and Sub-Advised Accounts
                         
Assets under management, beginning of period
   
$
19,488
 
   
$
19,480
 
       
    
  
      
        Net additions
   
 
1,407
 
   
 
98
 
       
        Market depreciation
   
 
(4,098
)
   
 
(3,145
)
       
    
  
      
        Total decrease
   
 
(2,691
)
   
 
(3,047
)
       
    
  
      
Assets under management, end of period (2)
   
$
16,797
 
   
$
16,433
 
   
2.2
%
    
  
      
Sub-Total Mutual Fund & Institutional
                         
Assets under management, beginning of period
   
$
34,044
 
   
$
32,976
 
       
    
  
      
        Net additions
   
 
3,599
 
   
 
1,083
 
       
        Market depreciation
   
 
(4,853
)
   
 
(3,686
)
       
    
  
      
        Total decrease
   
 
(1,254
)
   
 
(2,603
)
       
    
  
      
Assets under management, end of period
   
$
32,790
 
   
$
30,373
 
   
8.0
%
    
  
      
TOTAL
                         
Assets under management, beginning of period
   
$
59,048
 
   
$
55,486
 
       
    
  
      
        Net additions
   
 
4,060
 
   
 
2,843
 
       
        Market depreciation
   
 
(9,510
)
   
 
(6,194
)
       
    
  
      
        Total decrease
   
 
(5,450
)
   
 
(3,351
)
       
    
  
      
Assets under management, end of period
   
$
53,598
 
   
$
52,135
 
   
2.8
%
    
  
      
Equity component of assets under management
   
 
58
%
   
 
68
%
       
    
  
      
 
Note  1:
 
As of September 30, 2002, Private Asset Management included $58 of assets invested in EMM’s Hedge Fund products.
 
Note  2:
 
As of September 30, 2002, Mutual Fund and Sub-Advised Accounts included $143 of client assets invested in the Fund Advisory Service wrap mutual fund program with third party funds, an increase of $55 from the prior year period.