The John Nuveen Company Reports Record Fourth Quarter and 2002 Earnings, Announces Name Change to Nuveen Investments, Inc.Business Editors CHICAGO--(BUSINESS WIRE)--Jan. 22, 2003 The John Nuveen Company (NYSE NYSE See: New York Stock Exchange :JNC JNC Joint National Committee JNC Japan Nuclear Cycle Development Institute JNC Judicial Nominating Commission JNC Jet Navigation Chart JNC Journal of Nuclear Cardiology JNC JNet Consultancy (Netherlands) ) today reported record net income of $33.7 million for the quarter ended December December: see month. 31, 2002, a 13% increase over the $30.0 million earned in the fourth quarter of 2001. Earnings per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) were $0.35 for the quarter. For the full year the Company reported record net income of $126.2 million, a 10% increase over the $114.7 million earned in 2001. Earnings per share (diluted) for 2002 were $1.29. Gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. of investment products in the quarter were $4.1 billion, with positive net flows of $2.2 billion. Gross sales for the full year were a record $15.6 billion, an increase of 10%, with net flows of $7.3 billion. Retail and institutional managed accounts comprised 45% of full year sales with closed-end closed-end adj. Issuing a fixed number of shares that can be traded publicly but are not redeemable by the issuer: a closed-end investment company. exchange traded funds Exchange Traded Funds (ETF) Also known as ETF. A basket of stocks similar to an index mutual fund. However, there are a number of important differences between ETFs and mutual funds. and mutual funds accounting for the remainder. Total assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. at December 31, 2002, increased to $79.7 billion, including approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $7 billion from the acquisition of NWQ Investment Management, as compared to $68.5 billion a year ago. Commenting on the Company's results, Nuveen Investments' Chairman, Tim Schwertfeger, said, "We are very pleased to be reporting our 8th consecutive year of record earnings in an environment that was extremely challenging overall. Our results reflect the stability and quality of our assets along with the strength of our relationships. Our range of relationships with institutions and financial advisors is broader than ever and enabled us to deliver over $15 billion in gross sales, the highest in our history, with strong net flows. "In a year when advisors and investors focused on balance and risk management, we experienced strong flows across our fixed income offerings. We introduced 18 municipal closed-end exchange traded offerings, which combined with our municipal mutual funds and managed accounts raised $4.8 billion in net new assets. Our introduction of the first Preferred Stock First preferred stock A type of preferred stock that has priority over other preferred issues and common stock when claiming dividends and assets. first preferred stock closed-end exchange traded fund Exchange Traded Fund Similar to an index mutual fund, these tracking stocks trade continuously. Two popular ETFs are the Standard and Poor's depositary receipt (SPDR) launched in 1993 and the NASDAQ-100 Index Tracking Stock (QQQ) which was launched in 1999. led to more than $4.1 billion in sales. Our ability to successfully innovate in·no·vate v. in·no·vat·ed, in·no·vat·ing, in·no·vates v.tr. To begin or introduce (something new) for or as if for the first time. v.intr. To begin or introduce something new. has extended our exchange traded fund category leadership beyond municipals to a growing range of high-quality income-oriented products. New income-oriented assets more than compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. for declines in equity valuations and negative flows from our growth portfolios. Strong Symphony symphony [Gr.,=sounding together], a sonata for orchestra. The Italian operatic overture, called sinfonia, was standardized by Alessandro Scarlatti at the end of the 17th cent. performance fees and the acquisition of NWQ in August also contributed to our success this year. "We ended the year and the quarter with positive net flows across all product lines - managed accounts, closed-end funds Closed-end fund An investment company that issues shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value. Related: Open-end fund. and mutual funds. This momentum will carry us into 2003 as advisors and their investors continue to re-focus on long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. portfolio construction. We will continue to meet their needs with the value, growth and income-oriented core components of a conservative, well-diversified portfolio Well-diversified portfolio A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been ." Company's Name Changed To Nuveen Investments Nuveen Investments is a public company in the asset management industry. References http://www.nuveen.com Nuveen's Corporate Website The Company also announced that it will change its name from "The John Nuveen Company" to "Nuveen Investments, Inc.," effective January January: see month. 31, 2003. The change reflects the Company's development over the past decade from a pure municipal bond manager to a diversified diversified (di·verˑ·s investment management company. Nuveen Investments provides deep specialization A career option pursued by some attorneys that entails the acquisition of detailed knowledge of, and proficiency in, a particular area of law. As the law in the United States becomes increasingly complex and covers a greater number of subjects, more and more attorneys are in value and growth equities, fixed income and market-neutral alternative investments through its NWQ, Rittenhouse, Nuveen and Symphony sub-brands. The new name carries forward the Company's 100-year-old dependable and conservative, long-term investment philosophy that unites Nuveen Investments and its sub-brands. "Since 1898, advisors and their clients have been able to count on Nuveen Investments to provide dependable and conservative investment solutions, " Schwertfeger commented. "Over the past decade, we have built on this tradition by building a core set of high-quality equity and fixed income specialties. Our clients have come to appreciate our more diversified equity and fixed income specialties, as well as our continued adherence adherence /ad·her·ence/ (ad-her´ens) the act or condition of sticking to something. immune adherence to dependable and conservative, long-term investing principles. Changing our name to 'Nuveen Investments' reflects our successful evolution as a company." Nuveen Investments, Inc. will continue to trade on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "JNC." Earnings Conference Call The John Nuveen Company will host a conference call to discuss its fourth quarter and full year 2002 financial results today, January 22, at 10:00 am central time. To access this call live or listen to an audio replay, visit the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at nuveen.com. Shareholders Meeting The Company also announced a new date for its annual shareholders meeting. The meeting will take place on May 16, 2003, not the previously announced date of May 8. About Nuveen Investments Nuveen Investments provides high-quality investment services that contribute to the building of well-diversified, core investment portfolios. The Company serves financial advisors and their high-net-worth clients, as well as a growing number of institutional clients. Nuveen Investments today markets its capabilities under four distinct brands: Nuveen, a leader in tax-free tax-free adj. Not subject to taxation; tax-exempt. tax-free Adjective not needing to have tax paid on it: a tax-free lump sum Adj. 1. investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; and Symphony, a leading institutional manager of market-neutral alternative investment portfolios. In total, the Company now manages approximately $80 billion in assets. An affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. of The St. Paul St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery Companies (NYSE:SPC 1. (business) SPC - Statistical Process Control. Something to do with quality management. 2. (body) SPC - Software Productivity Centre. 3. (company) SPC - Software Publishing Corporation. 4. ), 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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 BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. firms' retail distribution systems, the Company's reliance on revenues from investment management contracts which renew annually, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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
THE JOHN NUVEEN COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2001
and December 31, 2002
In thousands, except share data
2001
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
REVENUES:
Investment advisory fees
from assets under
management (1) $79,527 79,029 86,124 85,909 330,588
Product distribution 4,258 5,004 5,085 5,166 19,513
Positioning profit/(loss) (100) 278 1,991 881 3,049
Other revenue/performance fees 2,017 1,914 4,340 9,682 17,953
Total operating revenues 85,702 86,225 97,539 101,638 371,104
EXPENSES:
Compensation and benefits 21,470 21,436 24,026 26,201 93,134
Advertising and promotional
costs 4,442 4,025 4,650 4,634 17,751
Occupancy and equipment
costs 3,169 3,510 3,767 4,066 14,512
Amortization of goodwill and
intangible assets 2,041 2,041 2,139 3,188 9,409
Travel & entertainment 2,156 2,264 2,152 2,507 9,078
Other operating expenses 7,724 7,579 11,751 11,410 38,464
Total operating expenses 41,003 40,855 48,484 52,006 182,348
OPERATING INCOME 44,698 45,370 49,055 49,632 188,755
OTHER INCOME/(EXPENSE) 1,075 1,016 (1,128) (164) 799
INCOME BEFORE TAXES 45,773 46,386 47,926 49,469 189,554
INCOME TAXES:
Federal 14,922 14,800 16,312 15,989 62,024
State 2,892 3,571 2,851 3,518 12,832
Total income taxes 17,814 18,371 19,163 19,508 74,856
NET INCOME $27,959 28,015 28,763 29,961 114,698
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING (2):
Basic 93,682 93,820 95,216 94,461 94,299
Diluted 102,618 101,752 101,730 100,607 101,687
EARNINGS PER SHARE:
Basic $ 0.29 0.30 0.30 0.32 1.20
Diluted $ 0.27 0.28 0.28 0.30 1.13
GROSS SALES (in millions):
Mutual funds $ 305 290 293 358 1,246
Managed accounts-retail 1,801 1,892 1,491 1,699 6,883
Managed accounts
-institutional 135 108 167 278 687
Exchange-traded funds-common 1,043 102 965 654 2,764
Total funds and accounts
excluding
Muni/Fund Preferred(TM) 3,283 2,392 2,916 2,988 11,579
Exchange-traded funds-
Muni/Fund Preferred(TM) 117 477 - 579 1,174
Total funds and accounts $ 3,400 2,869 2,916 3,567 12,753
Defined portfolios
(unit trusts) 411 387 311 373 1,481
Total $ 3,811 3,256 3,227 3,940 14,234
MANAGED FUNDS AND ACCOUNTS
(in millions):
Assets under management:
Beginning of period (3) $61,540 60,848 62,562 66,477 61,540
Acquisition of Symphony
funds and accounts - - 4,064 - 4,064
Sales - funds and accounts 3,400 2,869 2,916 3,567 12,753
Dividend and defined
portfolio reinvestments 80 106 125 131 442
Redemptions and
withdrawals (1,280)(1,305) (1,821) (2,530) (6,936)
Appreciation/
(depreciation)of
managed assets (2,892) 44 (1,369) 839 (3,379)
subtotal 60,848 62,562 66,477 68,485 68,485
Money market funds 441 428 - - -
End of period $ 61,289 62,990 66,477 68,485 68,485
Recap by product type:
Mutual funds $ 11,401 11,491 11,843 11,814
Exchange-traded funds 29,630 30,012 31,397 32,000
Managed accounts-retail 17,048 18,302 17,466 18,961
Managed accounts
- institutional 2,768 2,756 5,771 5,712
Money market funds 441 428 - -
Total assets
under management $ 61,289 62,990 66,477 68,485
2002
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
REVENUES:
Investment advisory fees
from assets under
management (1) $85,155 86,056 91,013 93,251 355,476
Product distribution 4,871 1,667 2,839 2,707 12,083
Positioning profit/(loss) (114) (13) 13 3 (111)
Other revenue/performance fees 2,698 2,637 8,541 15,123 28,999
Total operating revenues 92,609 90,348 102,406 111,084 396,447
EXPENSES:
Compensation and benefits 22,852 21,718 27,343 31,657 103,570
Advertising and promotional
costs 3,467 3,500 3,065 2,576 12,608
Occupancy and equipment
costs 4,019 4,153 4,843 4,896 17,912
Amortization of intangible
assets 713 698 1,183 1,209 3,803
Travel & entertainment 1,981 2,132 2,026 2,400 8,539
Other operating expenses 9,999 8,353 9,519 10,297 38,169
Total operating expenses 43,032 40,553 47,979 53,037 184,601
OPERATING INCOME 49,577 49,794 54,427 58,047 211,845
OTHER INCOME/(EXPENSE) (172) 243 (2,314) (2,742) (4,985)
INCOME BEFORE TAXES 49,405 50,038 52,113 55,305 206,860
INCOME TAXES:
Federal 16,155 16,561 17,000 18,709 68,425
State 3,261 3,024 3,106 2,860 12,251
Total income taxes 19,416 19,585 20,105 21,569 80,675
NET INCOME $29,989 30,452 32,008 33,736 126,185
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING (2):
Basic 94,922 94,398 93,312 93,033 93,910
Diluted 99,585 99,141 96,878 96,591 98,042
EARNINGS PER SHARE:
Basic $ 0.32 0.32 0.34 0.36 1.34
Diluted $ 0.30 0.31 0.33 0.35 1.29
GROSS SALES (in millions):
Mutual funds $ 287 371 469 386 1,513
Managed accounts-retail 1,662 1,322 1,364 1,346 5,693
Managed accounts
-institutional 140 166 533 508 1,347
Exchange-traded funds-common 869 906 1,947 968 4,689
Total funds and accounts
excluding
Muni/Fund Preferred(TM) 2,956 2,765 4,313 3,207 13,242
Exchange-traded funds-
Muni/Fund Preferred(TM) 239 556 431 933 2,159
Total funds and accounts $ 3,195 3,321 4,744 4,141 15,400
Defined portfolios
(unit trusts) 194 - - - 194
Total $ 3,389 3,321 4,744 4,141 15,594
MANAGED FUNDS AND ACCOUNTS
(in millions):
Assets under management:
Beginning of period (3) $68,485 69,538 68,496 76,928 68,485
Acquisition of Symphony
funds and accounts - - - - -
Acquisition of NWQ accounts - - 6,904 - 6,904
Sales - funds and accounts 3,195 3,321 4,744 4,141 15,400
Dividend and defined
portfolio reinvestments 83 96 119 136 435
Redemptions and
withdrawals (1,597)(2,824) (2,209) (2,098) (8,727)
Appreciation/
(depreciation)of
managed assets (629)(1,635) (1,126) 612 (2,778)
subtotal 69,538 68,496 76,928 79,719 79,719
Money market funds - - - - -
End of period $ 69,538 68,496 76,928 79,719 79,719
Recap by product type:
Mutual funds $ 11,775 11,641 11,866 11,849
Exchange-traded funds 32,965 35,051 38,523 39,944
Managed accounts-retail 19,243 16,973 18,753 19,403
Managed accounts
- institutional 5,555 4,831 7,786 8,523
Money market funds - - - -
Total assets
under management $ 69,538 68,496 76,928 79,719
(1) Advisory fee revenue will fluctuate based on the number of days in
the quarter - Q1 has 90 days, Q2 has 91 days, Q3 and Q4 have 92
days.
(2) All prior period share data have been restated to reflect both the
3-for-2 stock split in Q3 of 2001 and the 2-for-1 stock split in
Q2 of 2002.
(3) Excluding money market funds.
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