##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
 For
the transition period from  to
 Commission file number 1-11123
 NUVEEN INVESTMENTS, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    36-3817266
(I.R.S. Employer
Identification No.)333 West Wacker Drive, Chicago, Illinois
(Address of principal executive offices)
    
    60606
(Zip Code)
 (312) 917-7700
 No Changes
  þ o
  þ o o
 o þ




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##### 



NUVEEN INVESTMENTS, INC.
 TABLE OF CONTENTS
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets (Unaudited),
June 30, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Income (Unaudited),
Three Months Ended June 30, 2007 and 2006
Six Months Ended June 30, 2007 and 2006
    
    
    4Consolidated Statement of Changes in Common Stockholders
Equity (Unaudited), Six Months Ended June 30, 2007
    
    
    5Consolidated Statements of Cash Flows (Unaudited),
Six Months Ended June 30, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
(Unaudited)
    
    
    7Item 2.Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    14Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4.Controls and Procedures
    
    
    28PART II. OTHER INFORMATIONItem 1 through Item 6
    
    
    29Signatures
    
    
    32Certification of Chief Executive OfficerCertification of Principal Financial Officer906 Certification of Chief Executive Officer906 Certification of Principal Financial Officer




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 NUVEEN INVESTMENTS, INC.
 
 Consolidated Balance Sheets
Unaudited
(in thousands, except share data)
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCash and cash equivalents
    
    $
    159,952
    
    
    $
    223,168Management and distribution fees receivable
    
    
    88,313
    
    
    
    87,239Other receivables
    
    
    60,290
    
    
    
    23,481Furniture, equipment, and leasehold improvements, at cost less accumulated depreciation
and amortization of $71,471 and $67,973, respectively
    
    
    39,046
    
    
    
    33,454Investments
    
    
    157,874
    
    
    
    129,099Goodwill
    
    
    670,048
    
    
    
    634,290Other intangible assets, at cost less accumulated amortization of $31,230 and $27,226, respectively
    
    
    67,533
    
    
    
    67,374Current taxes receivable
    
    
    14,425
    
    
    
    4,007Other assets
    
    
    21,394
    
    
    
    25,660$
    1,278,875
    
    
    $
    1,227,772LIABILITIES AND STOCKHOLDERS EQUITYShort-Term Obligations:Notes payable
    
    $
    50,000
    
    
    $
    100,000Accounts payable
    
    
    14,796
    
    
    
    13,885Accrued compensation and other expenses
    
    
    84,401
    
    
    
    120,431Other short-term liabilities
    
    
    62,295
    
    
    
    24,962Total Short-Term Obligations
    
    
    211,492
    
    
    
    259,278Long-Term Obligations:Senior term notes
    
    $
    544,915
    
    
    $
    544,504Deferred compensation
    
    
    45,459
    
    
    
    41,578Deferred income tax liability, net
    
    
    20,380
    
    
    
    23,280Other long-term liabilities
    
    
    26,136
    
    
    
    23,444Total Long-Term Obligations
    
    
    636,890
    
    
    
    632,806Total Liabilities
    
    
    848,382
    
    
    
    892,084Minority interest
    
    
    48,271
    
    
    
    44,969Common stockholders equity:Class A
Common stock, $0.01 par value; 160,000,000 shares authorized; 120,911,480 shares issued at June 30, 2007 and December 31, 2006
    
    
    1,209
    
    
    
    1,209Additional paid-in capital
    
    
    304,143
    
    
    
    276,479Retained earnings
    
    
    1,156,532
    
    
    
    1,091,136Unamortized cost of restricted stock awards
    
    
    (30,975
    )
    
    
    (21,796
    )Accumulated other comprehensive income/(loss)
    
    
    (481
    )
    
    
    (1,141
    )1,430,428
    
    
    
    1,345,887Less common stock held in treasury, at cost (41,009,437 and 42,096,405 shares, respectively)
    
    
    (1,048,206
    )
    
    
    (1,055,168
    )Total common stockholders equity
    
    
    382,222
    
    
    
    290,719$
    1,278,875
    
    
    $
    1,227,772
 See accompanying notes to consolidated financial statements.
 3




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##### Table of Contents



NUVEEN INVESTMENTS, INC.
 
 Consolidated Statements of Income
Unaudited
(in thousands, except per share data)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Operating revenues:Investment advisory fees from assets under management
    
    $
    197,981
    
    
    $
    168,923
    
    
    $
    387,697
    
    
    $
    325,198Product distribution
    
    
    2,152
    
    
    
    733
    
    
    
    3,575
    
    
    
    1,970Performance fees / other revenue
    
    
    4,133
    
    
    
    2,519
    
    
    
    9,821
    
    
    
    5,153Total operating revenues
    
    
    204,266
    
    
    
    172,175
    
    
    
    401,093
    
    
    
    332,321Operating expenses:Compensation and benefits
    
    
    75,009
    
    
    
    59,646
    
    
    
    148,485
    
    
    
    113,467Advertising and promotional costs
    
    
    4,258
    
    
    
    2,676
    
    
    
    7,648
    
    
    
    5,346Occupancy and equipment costs
    
    
    6,638
    
    
    
    5,975
    
    
    
    13,379
    
    
    
    11,906Amortization of intangible assets
    
    
    2,036
    
    
    
    2,798
    
    
    
    4,003
    
    
    
    4,471Travel and entertainment
    
    
    2,676
    
    
    
    2,677
    
    
    
    4,861
    
    
    
    4,786Outside and professional services
    
    
    8,387
    
    
    
    7,543
    
    
    
    16,393
    
    
    
    14,687Minority interest expense
    
    
    2,043
    
    
    
    1,607
    
    
    
    4,377
    
    
    
    3,087Other operating expenses
    
    
    18,434
    
    
    
    9,082
    
    
    
    26,107
    
    
    
    14,840Total operating expenses
    
    
    119,481
    
    
    
    92,004
    
    
    
    225,253
    
    
    
    172,590Other income/(expense)
    
    
    2,054
    
    
    
    3,286
    
    
    
    3,368
    
    
    
    5,614Net interest expense
    
    
    (6,536
    )
    
    
    (7,389
    )
    
    
    (12,442
    )
    
    
    (15,735
    )Income before taxes
    
    
    80,303
    
    
    
    76,068
    
    
    
    166,766
    
    
    
    149,610Income taxes
    
    
    31,720
    
    
    
    29,666
    
    
    
    65,873
    
    
    
    58,348Net income
    
    $
    48,583
    
    
    $
    46,402
    
    
    $
    100,893
    
    
    $
    91,262Average common and common equivalent shares outstanding:Basic
    
    
    78,306
    
    
    
    78,028
    
    
    
    78,137
    
    
    
    77,916Diluted
    
    
    83,935
    
    
    
    83,069
    
    
    
    83,659
    
    
    
    83,043Earnings per common share:Basic
    
    $
    0.62
    
    
    $
    0.59
    
    
    $
    1.29
    
    
    $
    1.17Diluted
    
    $
    0.58
    
    
    $
    0.56
    
    
    $
    1.21
    
    
    $
    1.10
 See accompanying notes to consolidated financial statements.
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NUVEEN INVESTMENTS, INC.
Consolidated Statement of Changes in Common Stockholders Equity
Unaudited
(in thousands)
 Unamortized
    
    
    AccumulatedClass A
    
    
    Additional
    
    
    
    
    
    
    Cost of
    
    
    OtherCommon
    
    
    Paid-In
    
    
    Retained
    
    
    Restricted
    
    
    Comprehensive
    
    
    TreasuryStock
    
    
    Capital
    
    
    Earnings
    
    
    Stock Awards
    
    
    Income/(Loss)
    
    
    Stock
    
    
    TotalBalance at December 31, 2006
    
    $
    1,209
    
    
    $
    276,479
    
    
    $
    1,091,136
    
    
    $
    (21,796
    )
    
    $
    (1,141
    )
    
    $
    (1,055,168
    )
    
    $
    290,719Change in accounting principle
(see Note 1)
    
    
    
    
    
    
    
    
    
    
    (903
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (903
    )Balance at December 31, 2006, as restated
    
    
    1,209
    
    
    
    276,479
    
    
    
    1,090,233
    
    
    
    (21,796
    )
    
    
    (1,141
    )
    
    
    (1,055,168
    )
    
    
    289,816Net income
    
    
    
    
    
    
    
    
    
    
    100,893
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,893Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    (38,073
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,073
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,448
    )
    
    
    (40,448
    )Compensation expense on options
    
    
    
    
    
    
    7,094
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,094Exercise of stock options
    
    
    
    
    
    
    (4,783
    )
    
    
    1,362
    
    
    
    
    
    
    
    
    
    
    
    35,739
    
    
    
    32,318Grant of restricted stock
    
    
    
    
    
    
    11,438
    
    
    
    2,117
    
    
    
    (18,235
    )
    
    
    
    
    
    
    12,841
    
    
    
    8,161Forfeit of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,170
    
    
    
    
    
    
    
    (1,170
    )
    
    
    Amortization of restricted
stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,886
    
    
    
    
    
    
    
    
    
    
    
    7,886Tax effect of options exercised
and vested restricted stock
    
    
    
    
    
    
    13,915
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,915Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    660
    
    
    
    
    
    
    
    660Balance at June 30, 2007
    
    $
    1,209
    
    
    $
    304,143
    
    
    $
    1,156,532
    
    
    $
    (30,975
    )
    
    $
    (481
    )
    
    $
    (1,048,206
    )
    
    $
    382,222
 Six MonthsEnding 6/30/07Comprehensive Income (in 000s):Net income
    
    $
    100,893Other comprehensive income:Unrealized gains/(losses) on marketable equity securities, net of tax
    
    
    759Reclassification adjustments for realized (gains)/losses
    
    
    (81
    )Amortization of terminated cash flow hedge, net of tax
    
    
    (76
    )Funded status of pension & OPEB plans, net of tax
    
    
    47Foreign currency translation adjustment
    
    
    11Subtotal: other comprehensive income
    
    
    660Comprehensive Income
    
    $
    101,553
 Six MonthsEnding 6/30/07Change in Shares Outstanding (in 000s):Shares outstanding at the beginning of the year
    
    
    78,815Shares issued under equity incentive plans
    
    
    1,913Shares acquired
    
    
    (804
    )Forfeit of restricted stock
    
    
    (22
    )Shares outstanding at June 30, 2007
    
    
    79,902
 See accompanying notes to consolidated financial statements.
 5




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NUVEEN INVESTMENTS, INC.
 Consolidated Statements of Cash Flows
Unaudited
(in thousands)
 Six Months Ended June 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    100,893
    
    
    $
    91,262Adjustments to reconcile net income to net cash
provided from operating activities:Deferred income taxes
    
    
    (3,503
    )
    
    
    2,578Depreciation of office property and equipment
    
    
    4,927
    
    
    
    4,666Loss on sale of fixed assets
    
    
    60
    
    
    
    171Amortization of intangible assets
    
    
    4,003
    
    
    
    4,471Amortization of debt related costs, net
    
    
    285
    
    
    
    262Compensation expense for equity plans
    
    
    22,174
    
    
    
    16,374Net (increase) decrease in assets:Management and distribution fees receivable
    
    
    (1,074
    )
    
    
    (3,912
    )Other receivables
    
    
    (697
    )
    
    
    8,855Other assets
    
    
    4,359
    
    
    
    (3,986
    )Net increase (decrease) in liabilities:Accrued compensation and other expenses
    
    
    (35,484
    )
    
    
    (29,398
    )Deferred compensation
    
    
    3,881
    
    
    
    3,477Accounts payable
    
    
    1,322
    
    
    
    (2,062
    )Current taxes payable
    
    
    (10,418
    )
    
    
    191Other liabilities
    
    
    (1,530
    )
    
    
    (5,961
    )Other
    
    
    (2,538
    )
    
    
    (2,961
    )Net cash provided from operating
activities
    
    
    86,660
    
    
    
    84,027Cash flows from financing activities:Repayment of notes payable
    
    
    (50,000
    )
    
    
    (50,000
    )Dividends paid
    
    
    (38,073
    )
    
    
    (35,412
    )Proceeds from stock options exercised
    
    
    32,318
    
    
    
    33,445Acquisition of treasury stock
    
    
    (40,448
    )
    
    
    (48,328
    )Net deferred debt issuance related items
    
    
    
    
    
    
    50Tax effect of options and restricted stock
    
    
    13,915
    
    
    
    10,341Net cash used for financing activities
    
    
    (82,288
    )
    
    
    (89,904
    )Cash flows from investing activities:HydePark acquisition, net of cash acquired
    
    
    (9,706
    )
    
    
    Purchase of office property and equipment
    
    
    (10,590
    )
    
    
    (3,826
    )Proceeds from sales of investment securities
    
    
    814
    
    
    
    41,381Purchases of investment securities
    
    
    (25,547
    )
    
    
    (16,651
    )Repurchase of NWQ minority members interests
    
    
    (22,500
    )
    
    
    (22,503
    )Net change in consolidated mutual funds
    
    
    209
    
    
    
    377Other
    
    
    (279
    )
    
    
    (64
    )Net cash used for investing activities
    
    
    (67,599
    )
    
    
    (1,286
    )Effect of exchange rates on cash and cash equivalents
    
    
    11
    
    
    
    9Decrease in cash and cash equivalents
    
    
    (63,216
    )
    
    
    (7,154
    )Cash and cash equivalents:Beginning of year
    
    
    223,168
    
    
    
    128,933End of period
    
    $
    159,952
    
    
    $
    121,779Supplemental Information:Taxes paid
    
    $
    65,878
    
    
    $
    47,124Interest paid
    
    $
    17,175
    
    
    $
    19,215
 See accompanying notes to consolidated financial statements.
 6




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NUVEEN INVESTMENTS, INC.
 
 Notes to Consolidated Financial Statements
(Unaudited)
June 30, 2007
 Note 1 Basis of Presentation
      7




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##### Table of Contents



Note 2 Earnings Per Common Share
  In thousands,
    
    
    For the three months endedexcept per share data
    
    
    June 30, 2007
    
    
    June 30, 2006Netincome
    
    Shares
    
    Per-share amount
    
    
    Net income
    
    Shares
    
    Per-share amountBasic EPS
    
    
    $
    48,583
    
    
    
    78,306
    
    
    $
    0.62
    
    
    
    $
    46,402
    
    
    
    78,028
    
    
    $
    0.59Dilutive effect of:Restricted stock
    
    
    
    
    
    
    
    1,008
    
    
    
    
    
    
    
    
    
    
    
    
    513Employee stock
options
    
    
    
    
    
    
    
    4,621
    
    
    
    
    
    
    
    
    
    
    
    
    4,528Diluted EPS
    
    
    $
    48,583
    
    
    
    83,935
    
    
    $
    0.58
    
    
    
    $
    46,402
    
    
    
    83,069
    
    
    $
    0.56
 In thousands,
    
    
    For the six months endedexcept per share data
    
    
    June 30, 2007
    
    
    June 30, 2006Netincome
    
    Shares
    
    Per-share amount
    
    
    Net income
    
    Shares
    
    Per-share amountBasic EPS
    
    
    $
    100,893
    
    
    
    78,137
    
    
    $
    1.29
    
    
    
    $
    91,262
    
    
    
    77,916
    
    
    $
    1.17Dilutive effect of:Restricted stock
    
    
    
    
    
    
    
    951
    
    
    
    
    
    
    
    
    
    
    
    
    472Employee stock
options
    
    
    
    
    
    
    
    4,571
    
    
    
    
    
    
    
    
    
    
    
    
    4,655Diluted EPS
    
    
    $
    100,893
    
    
    
    83,659
    
    
    $
    1.21
    
    
    
    $
    91,262
    
    
    
    83,043
    
    
    $
    1.10
  Note 3 Net Capital Requirement
  8




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Note 4 Goodwill and Intangible Assets
  Balance at December 31, 2006
    
    $
    634,290Repurchase of NWQ minority interests
    
    
    22,500Santa Barbara acquisition costs
    
    
    (5
    )HydePark acquisition
    
    
    13,263Balance at June 30, 2007
    
    $
    670,048
     At June 30, 2007
    
    
    At December 31, 2006Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmortizable Intangible Assets
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationSymphony customer relationships
    
    $
    43,800
    
    
    $
    13,225
    
    
    $
    43,800
    
    
    $
    12,113NWQ customer relationships
    
    
    22,900
    
    
    
    12,510
    
    
    
    22,900
    
    
    
    11,238Santa Barbara Customer relationships
    
    
    26,200
    
    
    
    5,095
    
    
    
    26,200
    
    
    
    3,639Trademark / tradename
    
    
    1,700
    
    
    
    331
    
    
    
    1,700
    
    
    
    236HydePark (estimate)
    
    
    4,163
    
    
    
    69
    
    
    
    
    
    
    
    Total
    
    $
    98,763
    
    
    $
    31,230
    
    
    $
    94,600
    
    
    $
    27,226
 9




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Note 5 Debt
  June 30, 2007
    
    December 31, 2006Short-Term Obligations:Notes payable
    
    $
    50,000
    
    
    $
    100,000Long-Term Obligations:Senior Term Notes:Senior term notes  5 Year
    
    $
    250,000
    
    
    $
    250,000Net unamortized discount  5 year notes
    
    
    (462
    )
    
    
    (528
    )Senior term notes  10 Year
    
    
    300,000
    
    
    
    300,000Net unamortized discount  10 year notes
    
    
    (1,293
    )
    
    
    (1,354
    )Net unamortized debt issuance costs
    
    
    (3,330
    )
    
    
    (3,614
    )subtotal
    
    $
    544,915
    
    
    $
    544,504Total
    
    $
    594,915
    
    
    $
    644,504
 Senior Term Notes
  Senior Revolving Credit Facility
  Other
  10




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Note 6 Derivative Financial Instruments
   11




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##### Table of Contents



Note 7 Retirement Plans
  Three Months
    
    
    Three MonthsEnded June 30, 2007
    
    
    Ended June 30, 2006Total
    
    
    Post-
    
    
    Total
    
    
    Post-Pension
    
    
    Retirement
    
    
    Pension
    
    
    RetirementService Cost
    
    $
    471,631
    
    
    $
    79,382
    
    
    $
    436,250
    
    
    $
    60,000Interest Cost
    
    
    570,673
    
    
    
    141,367
    
    
    
    522,250
    
    
    
    135,250Expected Return on Assets
    
    
    (573,318
    )
    
    
    
    
    
    
    (561,750
    )
    
    
    Amortization of:Unrecognized Prior
Service Cost
    
    
    (652
    )
    
    
    (66,308
    )
    
    
    
    
    
    
    (66,250
    )Unrecognized (Gain)/Loss
    
    
    68,900
    
    
    
    20,235
    
    
    
    106,250
    
    
    
    22,000Total
    
    $
    537,234
    
    
    $
    174,676
    
    
    $
    503,000
    
    
    $
    151,000
 Six Months
    
    
    Six MonthsEnded June 30, 2007
    
    
    Ended June 30, 2006Total
    
    
    Post-
    
    
    Total
    
    
    Post-Pension
    
    
    Retirement
    
    
    Pension
    
    
    RetirementService Cost
    
    $
    943,262
    
    
    $
    158,764
    
    
    $
    872,500
    
    
    $
    120,000Interest Cost
    
    
    1,141,346
    
    
    
    282,734
    
    
    
    1,044,500
    
    
    
    270,500Expected Return on Assets
    
    
    (1,146,636
    )
    
    
    
    
    
    
    (1,123,500
    )
    
    
    Amortization of:Unrecognized Prior
Service Cost
    
    
    (1,304
    )
    
    
    (132,616
    )
    
    
    
    
    
    
    (132,500
    )Unrecognized (Gain)/Loss
    
    
    137,800
    
    
    
    40,470
    
    
    
    212,500
    
    
    
    44,000Total
    
    $
    1,074,468
    
    
    $
    349,352
    
    
    $
    1,006,000
    
    
    $
    302,000
  12




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##### Table of Contents



Note 8 Structuring Fees
  Note 9 Investments in Collateralized Loan and Debt Obligations
   Note 10 Gain Contingency
  13




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##### Table of Contents



Part I. FINANCIAL INFORMATION
Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
 June 30, 2007
 Description of the Business
     
 14




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##### Table of Contents



Recent Events
   Summary of Operating Results
  Financial Results Summary
Company Operating Statistics  ($ in millions, except per share amounts)
 For the second quarter of
    
    
    For the first six months of2007
    
    2006
    
    % change
    
    
    2007
    
    2006
    
    % changeGross sales of investment products
    
    
    $
    7,827
    
    
    $
    9,187
    
    
    
    (15
    %)
    
    
    $
    15,961
    
    
    $
    19,296
    
    
    
    (17
    %)Net flows of investment products
    
    
    
    1,906
    
    
    
    5,072
    
    
    
    (62
    )
    
    
    
    4,939
    
    
    
    10,976
    
    
    
    (55
    )Assets under management(1)(2)
    
    
    
    171,602
    
    
    
    148,994
    
    
    
    15
    
    
    
    
    171,602
    
    
    
    148,994
    
    
    
    15Operating revenues
    
    
    
    204.2
    
    
    
    172.2
    
    
    
    19
    
    
    
    
    401.1
    
    
    
    332.3
    
    
    
    21Operating expenses
    
    
    
    119.5
    
    
    
    92.0
    
    
    
    30
    
    
    
    
    225.3
    
    
    
    172.6
    
    
    
    31Net interest expense
    
    
    
    6.5
    
    
    
    7.4
    
    
    
    (12
    )
    
    
    
    12.4
    
    
    
    15.7
    
    
    
    (21
    )Income taxes
    
    
    
    31.7
    
    
    
    29.7
    
    
    
    7
    
    
    
    
    65.9
    
    
    
    58.3
    
    
    
    13Net income
    
    
    
    48.6
    
    
    
    46.4
    
    
    
    5
    
    
    
    
    100.9
    
    
    
    91.3
    
    
    
    11Basic earnings per share
    
    
    
    0.62
    
    
    
    0.59
    
    
    
    5
    
    
    
    
    1.29
    
    
    
    1.17
    
    
    
    10Diluted earnings per share
    
    
    
    0.58
    
    
    
    0.56
    
    
    
    4
    
    
    
    
    1.21
    
    
    
    1.10
    
    
    
    10Dividends per share
    
    
    
    0.24
    
    
    
    0.24
    
    
    
    
    
    
    
    
    0.48
    
    
    
    0.45
    
    
    
    7
 
 (1)
    
    At period end.(2)
    
    Excludes defined portfolio assets under surveillance. 15




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##### Table of Contents



Results of Operations
    Gross Investment Product Sales(in millions)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Closed-End Funds
    
    $
    1,133
    
    
    $
    226
    
    
    $
    1,429
    
    
    $
    226Mutual Funds
    
    
    1,859
    
    
    
    1,505
    
    
    
    3,540
    
    
    
    2,852Retail Managed Accounts
    
    
    2,259
    
    
    
    4,875
    
    
    
    5,019
    
    
    
    12,105Institutional Managed Accounts
    
    
    2,576
    
    
    
    2,581
    
    
    
    5,973
    
    
    
    4,113Total
    
    $
    7,827
    
    
    $
    9,187
    
    
    $
    15,961
    
    
    $
    19,296
   16




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##### Table of Contents



Net Flows(in millions)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Closed-End Funds
    
    $
    1,147
    
    
    $
    228
    
    
    $
    1,463
    
    
    $
    222Mutual Funds
    
    
    621
    
    
    
    856
    
    
    
    1,636
    
    
    
    1,720Retail Managed Accounts
    
    
    (1,252
    )
    
    
    2,177
    
    
    
    (1,800
    )
    
    
    6,292Institutional Managed Accounts
    
    
    1,390
    
    
    
    1,811
    
    
    
    3,640
    
    
    
    2,742Total
    
    $
    1,906
    
    
    $
    5,072
    
    
    $
    4,939
    
    
    $
    10,976
    Net Assets Under Management(1)(in millions)June 30,
    
    
    December 31,
    
    
    June 30,2007
    
    
    2006
    
    
    2006Closed-End Funds
    
    $
    53,423
    
    
    $
    52,958
    
    
    $
    51,388Mutual Funds
    
    
    20,160
    
    
    
    18,532
    
    
    
    16,133Retail Managed Accounts
    
    
    59,495
    
    
    
    58,556
    
    
    
    55,277Institutional Managed
Accounts
    
    
    38,524
    
    
    
    31,563
    
    
    
    26,196Total
    
    $
    171,602
    
    
    $
    161,609
    
    
    $
    148,994 
 (1)
    
    Excludes defined portfolio product assets under surveillance
  17




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##### Table of Contents



Change in Net Assets Under Management(in millions)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Gross Sales
    
    $
    7,827
    
    
    $
    9,187
    
    
    $
    15,961
    
    
    $
    19,296Reinvested Dividends
    
    
    108
    
    
    
    85
    
    
    
    211
    
    
    
    150Redemptions
    
    
    (6,029
    )
    
    
    (4,200
    )
    
    
    (11,233
    )
    
    
    (8,470
    )Net Flows
    
    
    1,906
    
    
    
    5,072
    
    
    
    4,939
    
    
    
    10,976Acquisition
    
    
    363
    
    
    
    
    
    
    
    363
    
    
    
    Appreciation/(Depreciation)
    
    
    3,238
    
    
    
    (1,096
    )
    
    
    4,691
    
    
    
    1,901Increase in Assets
    
    $
    5,507
    
    
    $
    3,976
    
    
    $
    9,993
    
    
    $
    12,877
     Investment Advisory Fees(1)(in thousands)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Closed-End Funds
    
    $
    66,397
    
    
    $
    61,675
    
    
    $
    130,270
    
    
    $
    123,518Mutual Funds
    
    
    28,234
    
    
    
    21,397
    
    
    
    54,616
    
    
    
    41,216Managed Accounts
    
    
    103,350
    
    
    
    85,851
    
    
    
    202,811
    
    
    
    160,464Total
    
    $
    197,981
    
    
    $
    168,923
    
    
    $
    387,697
    
    
    $
    325,198 
 (1)
    
    Sub-advisory fee expense for the three month and six month
periods ended June 30, 2007 and 2006 was $7.9 million, $6.3 million, $15.8 million
and $13.3 million, respectively.
  18




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Product Distribution(in thousands)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Closed-End Funds
    
    $
    1,256
    
    
    $
    297
    
    
    $
    1,667
    
    
    $
    287Muni/Fund Preferred®
    
    
    1,086
    
    
    
    1,203
    
    
    
    2,117
    
    
    
    2,377Mutual Funds
    
    
    (190
    )
    
    
    (767
    )
    
    
    (209
    )
    
    
    (694
    )Total
    
    $
    2,152
    
    
    $
    733
    
    
    $
    3,575
    
    
    $
    1,970
  Performance Fees/Other Revenue
  19




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##### Table of Contents



Operating Expenses
   Operating Expenses(in thousands)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Compensation and benefits
    
    $
    75,009
    
    
    $
    59,646
    
    
    $
    148,485
    
    
    $
    113,467Advertising and promotional costs
    
    
    4,258
    
    
    
    2,676
    
    
    
    7,648
    
    
    
    5,346Occupancy and equipment costs
    
    
    6,638
    
    
    
    5,975
    
    
    
    13,379
    
    
    
    11,906Amortization of intangible assets
    
    
    2,036
    
    
    
    2,798
    
    
    
    4,003
    
    
    
    4,471Travel and entertainment
    
    
    2,676
    
    
    
    2,677
    
    
    
    4,861
    
    
    
    4,786Outside and professional services
    
    
    8,387
    
    
    
    7,543
    
    
    
    16,393
    
    
    
    14,687Minority interest expense
    
    
    2,043
    
    
    
    1,607
    
    
    
    4,377
    
    
    
    3,087Other operating expenses
    
    
    18,434
    
    
    
    9,082
    
    
    
    26,107
    
    
    
    14,840Total
    
    $
    119,481
    
    
    $
    92,004
    
    
    $
    225,253
    
    
    $
    172,590% of Operating Revenue
    
    
    58.5
    %
    
    
    53.4
    %
    
    
    56.2
    %
    
    
    51.9
    %
 Summary
  Compensation and Benefits
  Occupancy and Equipment Costs
  Amortization of Intangibles
  Outside and Professional Services
  20




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##### Table of Contents



Minority Interest Expense
  All Other Operating Expenses
  Other Income/(Expense)
    Other Income/(Expense)(in thousands)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Gains/(Losses) on Investments
    
    $
    1,771
    
    
    $
    3,287
    
    
    $
    3,162
    
    
    $
    5,844Gains/(Losses) on Fixed Assets
    
    
    (3
    )
    
    
    (1
    )
    
    
    (61
    )
    
    
    (171
    )Miscellaneous Income/(Expense)
    
    
    286
    
    
    
    
    
    
    
    267
    
    
    
    (59
    )Total
    
    $
    2,054
    
    
    $
    3,286
    
    
    $
    3,368
    
    
    $
    5,614
   21




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##### Table of Contents



Net Interest Expense
   Net Interest Expense(in thousands)Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Dividend and Interest Revenue
    
    $
    2,829
    
    
    $
    2,339
    
    
    $
    5,953
    
    
    $
    4,191Interest Expense
    
    
    (9,365
    )
    
    
    (9,728
    )
    
    
    (18,395
    )
    
    
    (19,926
    )Total
    
    $
    (6,536
    )
    
    $
    (7,389
    )
    
    $
    (12,442
    )
    
    $
    (15,735
    )
  Recent Accounting Pronouncements
 SFAS No. 157
    22




---



##### Table of Contents



SFAS No. 159
  Capital Resources, Liquidity and Financial Condition
  Senior Term Notes
  Senior Revolving Credit Facility
  Other
  23




---



##### Table of Contents



Equity and Dividends
   th
   Broker/Dealer
  24




---



##### Table of Contents



Adequacy of Liquidity
  Inflation
  Forward-Looking Information and Risks
   25




---



##### Table of Contents



26




---



##### Table of Contents



Part I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
 June 30, 2007
 Market Risk
  Interest Rate Sensitivity
    27




---



##### Table of Contents



Equity Market Sensitivity
  
 Item 4. Controls and Procedures
  28




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
      Item 1A. Risk Factors
  Failure to complete the merger could negatively impact the market price of our common stock.
  
    
    the market price of our common stock may decline substantially to the extent that the
current market price of our common stock reflects a market assumption that the merger will
be completed;
    
    costs relating to the merger agreement, such as legal, accounting and financial
advisory fees, and in specified circumstances, termination and expense reimbursement fees,
must be paid by us even if the merger is not completed and our ability to recover from
the purchaser and certain guarantors of the purchaser will be limited and subject to certain
conditions; and
    
    the diversion of our managements attention from the day-to-day business of Nuveen
Investments and the potential disruption to our employees and our relationships with
customers, clients, investment teams and distributors during the period before the
completion of the merger may make it difficult for us to achieve our strategic plan if the
merger does not occur.
   Uncertainties associated with the merger may cause us to lose key personnel.
  29




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 ISSUER PURCHASES OF EQUITY SECURITIES
 (c) Total
    
    
    (d) MaximumNumber
    
    
    Numberof Shares
    
    
    of SharesPurchased
    
    
    that May(a) Total
    
    
    
    
    
    
    as Part of
    
    
    Yet BeNumber
    
    
    (b) Average
    
    
    a Publicly
    
    
    Purchasedof Shares
    
    
    Price Paid
    
    
    Announced
    
    
    Under thePeriod
    
    Purchased
    
    
    per Share
    
    
    Program
    
    
    ProgramShare purchases prior to April
1, 2007 under current
repurchase program:
    
    
    1,502,001
    
    
    $
    49.49
    
    
    
    1,502,001
    
    
    
    5,922,183April 1, 2007  April 30, 2007
    
    
    8,216
    
    
    
    49.15
    
    
    
    8,216
    
    
    
    5,913,967May 1, 2007  May 31, 2007
    
    
    155,000
    
    
    
    52.96
    
    
    
    155,000
    
    
    
    5,758,967June 1, 2007  June 30, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,758,967Total
    
    
    1,665,217
    
    
    $
    50.30
    
    
    
    1,665,217
    
    
    
    5,758,967
 
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
   Director
    
    For
    
    Withheld
    
    Broker Non-VoteJohn P. Amboian
    
    
    58,928,855
    
    
    
    611,294
    
    
    
    0Willard L. Boyd
    
    
    58,907,588
    
    
    
    632,561
    
    
    
    0
   30




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##### Table of Contents



Item 5. Other Information
  Item 6. Exhibits
  2.1
    
    Agreement and Plan of Merger dated as of June 19, 2007, among Windy City Investments,
Inc., Windy City Acquisition Corp. and Nuveen Investments, Inc., incorporated by reference
to Exhibit 2.1 to the Companys Form 8-K filed on June 20, 2007.31.1*
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.31.2*
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934.32.1*
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith 31




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##### Table of Contents



SIGNATURE
  NUVEEN INVESTMENTS, INC.
(Registrant)Date:August 8, 2007
    By
    /s/ Glenn R. RichterGlenn R. RichterExecutive Vice President and Chief Administrative Officer
Principal Financial Officer Date:August 8, 2007
    By
    /s/ Sherri A. HlavacekSherri A. HlavacekVice President and Corporate Controller
Principal Accounting Officer 32




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description2.1
    
    Agreement and Plan of Merger dated as of June 19, 2007, among Windy City Investments,
Inc., Windy City Acquisition Corp. and Nuveen Investments, Inc., incorporated by reference
to Exhibit 2.1 to the Companys Form 8-K filed on June 20, 2007.31.1*
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.31.2*
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934.32.1*
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith E-1