EX-99 3 c84652exv99.txt EARNINGS PRESS RELEASE EXHIBIT 99 [NUVEEN INVESTMENTS LOGO] FOR IMMEDIATE RELEASE CONTACT: LAUREL O'BRIEN ATTN: BUSINESS/FINANCIAL EDITORS MEDIA RELATIONS (312) 917-8254 NUVEEN INVESTMENTS REPORTS RECORD FIRST QUARTER EARNINGS ALSO ANNOUNCES CHANGE IN ACCOUNTING FOR STOCK OPTIONS CHICAGO, IL, APRIL 20, 2004 -- Nuveen Investments, Inc. (NYSE: JNC) today reported record net income of $40.0 million for the quarter ended March 31, 2004, a 23% increase over the first quarter of 2003. Earnings per share (diluted) were $0.42 for the quarter, up 24% from the same period last year. Operating revenues for the quarter were $119.7 million, up 18% from 2003. Gross sales of investment products in the first quarter were a record $6.1 billion, with positive net flows of $3.8 billion. Gross sales of retail and institutional managed accounts totaled $4.7 billion. Sales of closed-end exchange-traded funds were $1.0 billion and sales of mutual funds were $0.4 billion. Total assets under management were $101 billion at March 31, 2004, as compared to $81 billion a year ago and $95 billion at December 31, 2003. The 24% increase in assets under management from a year ago was driven by $11.1 billion in positive net flows and $8.4 billion of market appreciation. Commenting on the Company's results, Nuveen Investments' Chairman Tim Schwertfeger said, "We are very pleased to report strong results across the full range of our businesses this quarter. Record asset and earnings growth reflect the successful transformation of our Company well beyond our municipal heritage through expanded investment capabilities, client relationships and investment offerings over the last several years. Our deeply specialized investment teams and their commitment to long-term investing disciplines has enabled us to deliver strong performance while meeting the needs of advisors and their investors with the core value, growth and fixed income components of a conservative, well-diversified portfolio. Diversifying our assets under management to include growth and value stocks as well as preferred securities, convertible bonds, REITs, senior loans and alternative investments has added more balance to our business and expanded our opportunities for growth. "During the first quarter approximately 75% of gross sales and net flows came from non-municipal investment products. Equity sales of $3.8 billion were more than three times the level of our equity sales in the first quarter of 2003 and up over 80% from the prior quarter. - more - NUVEEN INVESTMENTS REPORTS RECORD FIRST QUARTER EARNINGS -- PAGE 2 "Additionally our strong first quarter sales and flows reflected $2.3 billion in sales of income-oriented products and $1.6 billion of net flows," said Schwertfeger. "We raised $600 million in a new floating-rate fund that provides investors with a measure of protection against rising short term interest rates, and added approximately $900 million in assets through our Nuveen municipal managed accounts and funds during the quarter. "We continue to believe our success reflects our ongoing commitment to core long-term investment disciplines, product innovation and strong relationships with financial advisors and affluent and high-net-worth investors as well as our institutional clients." The Company also announced that it will begin expensing the cost of stock options effective April 1, 2004. The methodology to be used will result in a restatement of financial results for the first quarter of 2004 and for prior periods. If the Company had adopted this accounting change in the first quarter of 2004, net income would have been reduced by $2.9 million, and diluted EPS would have been reduced by $0.03 per share. Similarly, last year's first quarter diluted EPS would have been reduced by $0.03 per share. Nuveen Investments, Inc. will host a conference call to discuss its first quarter results today, April 20, 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 that contribute to the building of well-diversified investment portfolios. The Company serves institutional clients, financial advisors and high-net-worth investors. The firm's asset management capabilities are marketed through four distinct brands, each with an independent investment team and area of expertise: Nuveen, focused on tax-free investments; NWQ, specializing in value-style equities; Rittenhouse, dedicated to conservative growth-style equities; and Symphony, with expertise in alternative investment portfolios. In total, the Company manages more than $100 billion in assets. Nuveen Investments, Inc. (NYSE: JNC) is an affiliate of The St. Paul Travelers Companies, Inc. (NYSE: STA). 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. ### Financial Table Follows NUVEEN INVESTMENTS CONSOLIDATED STATEMENTS OF INCOME For the Year Ended December 31, 2003 and the Quarter Ended March 31, 2004 In thousands, except share data
2003 -------------------------------------------------- 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL -------- ------- ------- ------- -------- REVENUES: Investment advisory fees from assets under management (1) $ 95,244 99,047 103,479 107,077 404,847 Product distribution 1,584 3,278 2,169 2,175 9,206 Performance fees/other revenue 4,719 3,772 15,179 14,306 37,976 -------- ------- ------- ------- -------- Total operating revenues 101,547 106,097 120,827 123,557 452,028 -------- ------- ------- ------- -------- EXPENSES: Compensation and benefits 28,880 29,063 36,711 35,403 130,057 Advertising and promotional costs 2,555 3,096 2,834 3,143 11,627 Occupancy and equipment costs 4,902 4,922 4,732 4,765 19,321 Amortization of intangible assets 1,302 1,302 1,302 1,302 5,208 Travel & entertainment 1,781 1,956 1,955 2,035 7,726 Outside and professional services 4,545 4,994 5,170 5,623 20,331 Other operating expenses 3,278 4,278 5,248 4,495 17,299 -------- ------- ------- ------- -------- Total operating expenses 47,242 49,610 57,952 56,766 211,570 -------- ------- ------- ------- -------- OPERATING INCOME 54,305 56,487 62,875 66,792 240,458 -------- ------- ------- ------- -------- INTEREST EXPENSE AND OTHER (981) (916) (1,816) (1,458) (5,171) -------- ------- ------- ------- -------- INCOME BEFORE TAXES 53,324 55,571 61,059 65,333 235,288 -------- ------- ------- ------- -------- INCOME TAXES: Federal 17,597 17,942 19,927 21,322 76,788 State 3,093 3,620 3,764 4,027 14,504 -------- ------- ------- ------- -------- Total income taxes 20,690 21,562 23,691 25,349 91,292 -------- ------- ------- ------- -------- NET INCOME $ 32,634 34,009 37,368 39,984 143,996 ======== ======= ======= ======= ======== AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING: Basic 92,566 92,473 92,773 92,632 92,612 Diluted 95,687 95,787 96,296 96,005 95,944 -------- ------- ------- ------- -------- EARNINGS PER SHARE: Basic $ 0.35 0.37 0.40 0.43 1.55 Diluted $ 0.34 0.36 0.39 0.42 1.50 ======== ======= ======= ======= ======== GROSS SALES (in millions): Mutual funds $ 385 446 348 357 1,536 Managed accounts-retail 1,546 1,703 2,205 2,490 7,943 Managed accounts-institutional 538 477 552 769 2,336 Exchange-traded funds-common 1,306 2,104 353 341 4,105 -------- ------- ------- ------- -------- Total funds and accounts excluding Muni/Fund Preferred(TM) 3,774 4,730 3,458 3,956 15,920 Exchange-traded funds-Muni/Fund Preferred(TM) 422 694 946 117 2,179 -------- ------- ------- ------- -------- Total funds and accounts $ 4,196 5,424 4,404 4,074 18,098 ======== ======= ======= ======= ======== MANAGED FUNDS AND ACCOUNTS (in millions): ASSETS UNDER MANAGEMENT: Beginning of period $ 79,719 81,360 88,258 90,059 79,719 Sales - funds and accounts 4,196 5,424 4,404 4,074 18,098 Dividend and defined portfolio reinvestments 74 96 102 141 413 Redemptions and withdrawals (2,165) (2,432) (2,421) (2,054) (9,073) -------- ------- ------- ------- -------- Total net flows into funds and accounts 2,105 3,088 2,085 2,161 9,438 Appreciation / (depreciation) of managed assets (463) 3,810 (284) 3,136 6,199 -------- ------- ------- ------- -------- End of period $ 81,360 88,258 90,059 95,356 95,356 ======== ======= ======= ======= ======== RECAP BY PRODUCT TYPE: Mutual funds $ 11,889 12,228 12,043 12,285 Exchange-traded funds 41,565 45,315 46,131 47,094 Managed accounts-retail 19,321 21,692 22,985 25,676 Managed accounts-institutional 8,585 9,023 8,900 10,300 -------- ------- ------- ------- Total assets under management $ 81,360 88,258 90,059 95,356 ======== ======= ======= ======= 2004 ------------------------------------------------ 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL -------- ------- ------- ------- ------- REVENUES: Investment advisory fees from assets under management (1) $112,355 - - - 112,355 Product distribution 2,427 - - - 2,427 Performance fees/other revenue 4,912 - - - 4,912 -------- ------ ------- ------ ------- Total operating revenues 119,694 - - - 119,694 -------- ------ ------- ------ ------- EXPENSES: Compensation and benefits 33,213 - - - 33,213 Advertising and promotional costs 3,019 - - - 3,019 Occupancy and equipment costs 4,813 - - - 4,813 Amortization of intangible assets 1,299 - - - 1,299 Travel & entertainment 1,863 - - - 1,863 Outside and professional services 5,446 - - - 5,446 Other operating expenses 4,874 - - - 4,874 -------- ------ ------- ------ ------- Total operating expenses 54,527 - - - 54,527 -------- ------ ------- ------ ------- OPERATING INCOME 65,167 - - - 65,167 -------- ------ ------- ------ ------- INTEREST EXPENSE AND OTHER 199 - - - 199 -------- ------ ------- ------ ------- INCOME BEFORE TAXES 65,365 - - - 65,365 -------- ------ ------- ------ ------- INCOME TAXES: Federal 21,333 - - - 21,333 State 4,029 - - - 4,029 -------- ------ ------- ------ ------- Total income taxes 25,362 - - - 25,362 -------- ------ ------- ------ ------- NET INCOME $ 40,004 - - - 40,004 ======== ====== ======= ====== ======= AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING: Basic 92,867 - - - 92,867 Diluted 96,305 - - - 96,305 -------- ------ ------- ------ ------- EARNINGS PER SHARE: Basic $ 0.43 - - - 0.43 Diluted $ 0.42 - - - 0.42 ======== ====== ======= ====== ======= GROSS SALES (in millions): Mutual funds $ 391 - - - 391 Managed accounts-retail 3,716 - - - 3,716 Managed accounts-institutional 963 - - - 963 Exchange-traded funds-common 871 - - - 871 -------- ------ ------- ------ ------- Total funds and accounts excluding Muni/Fund Preferred(TM) 5,941 - - - 5,941 Exchange-traded funds-Muni/Fund Preferred(TM) 152 - - - 152 -------- ------ ------- ------ ------- Total funds and accounts $ 6,092 - - - 6,092 ======== ====== ======= ====== ======= MANAGED FUNDS AND ACCOUNTS (in millions): ASSETS UNDER MANAGEMENT: Beginning of period $ 95,356 - - - 95,356 Sales - funds and accounts 6,092 - - - 6,092 Dividend and defined portfolio reinvestments 72 - - - 72 Redemptions and withdrawals (2,367) - - - (2,367) -------- ------ ------- ------ ------- Total net flows into funds and accounts 3,797 - - - 3,797 Appreciation / (depreciation) of managed assets 1,771 - - - 1,771 -------- ------ ------- ------ ------- End of period $100,923 - - - 100,923 ======== ====== ======= ====== ======= RECAP BY PRODUCT TYPE: Mutual funds $ 12,438 - - - Exchange-traded funds 48,620 - - - Managed accounts-retail 28,587 - - - Managed accounts-institutional 11,278 - - - -------- ------ ------- ------ Total assets under management $100,923 - - - ======== ====== ======= ======
(1) Advisory fee revenue will fluctuate based on the number of days in the quarter - In 2004, Q1 has 91 days, Q2 has 91 days, Q3 and Q4 have 92 days.