Nationwide Financial Reports Fourth Quarter Results
Announces Outlook For 2006
February 9, 2006
Vice President, Investor Relations
Corporate Communications Officer
COLUMBUS, Ohio — Nationwide Financial Services, Inc. (NYSE: NFS), a leading provider of long-term savings and retirement products, today reported fourth quarter 2005 net income of $130.3 million, or $0.85 per diluted share, compared with fourth quarter 2004 net income of $141.8 million, or $0.93 per diluted share. The decrease was primarily driven by the disposition of underperforming businesses which resulted in a non-cash charge in the current quarter. Full-year 2005 net income increased 19 percent to $598.7 million, or $3.90 per diluted share, compared to $502.0 million, or $3.28 per diluted share, for the full-year 2004.
“We continued to make progress improving our bottom line performance during 2005. However, we did not make satisfactory progress in restoring sales momentum, a necessary step in our efforts to accelerate growth and improve returns,” said Jerry Jurgensen, chief executive officer.
“During 2006, it is imperative that we improve our core business performance with a priority focus on restoring sales momentum,” Jurgensen added. “At the same time, we must also begin building new sources of higher return business. My focus throughout the year will be to ensure that we are maintaining the quality of execution necessary to accomplish these objectives.”
Nationwide Financial analyzes operating performance using a non-GAAP financial measure called “net operating earnings,” which the Company believes enhances understanding and comparability of its performance by highlighting its results from continuing operations and the underlying profitability drivers. See Exhibit 3 for a description of non-GAAP financial measures included in this earnings announcement, a reconciliation of non-GAAP financial measures to GAAP financial measures and the substantive reasons why the Company believes presentation of these non-GAAP financial measures provides useful information to investors regarding its financial condition and results of operations. The table on the following page reconciles net operating earnings to net income, including the related diluted per share amounts, for the periods indicated.
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