Attached files
May 3, 2010
First Quarter 2010 Review
Peter S. Kraus
Chairman & Chief Executive Officer
David A. Steyn
Chief Operating Officer
John B. Howard
Chief Financial Officer
1Q10 Earnings Call Presentation
2
AllianceBernstein.com
Certain statements provided by management in this presentation are “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that
could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most
significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment
performance of sponsored investment products and separately-managed accounts, general economic conditions, industry trends,
future acquisitions, competitive conditions, and current and proposed government regulations, including changes in tax regulations
and rates and the manner in which the earnings of publicly-traded partnerships are taxed. AllianceBernstein cautions readers to
carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are
made; AllianceBernstein undertakes no obligation to update any forward-looking statements to reflect events or circumstances after
the date of such statements. For further information regarding these forward-looking statements and the factors that could cause
actual results to differ, see “Risk Factors” and “Cautions Regarding Forward-Looking Statements” in AllianceBernstein’s Form 10-K for
the year ended December 31, 2009. Any or all of the forward-looking statements made in this presentation, Form 10-K, other
documents AllianceBernstein files with or furnishes to the SEC, and any other public statements issued by AllianceBernstein, may turn
out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors” and “Cautions Regarding Forward
-Looking Statements”, and those listed below, could also adversely affect AllianceBernstein’s financial condition, results of operations
and business prospects.
Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that
could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most
significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment
performance of sponsored investment products and separately-managed accounts, general economic conditions, industry trends,
future acquisitions, competitive conditions, and current and proposed government regulations, including changes in tax regulations
and rates and the manner in which the earnings of publicly-traded partnerships are taxed. AllianceBernstein cautions readers to
carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are
made; AllianceBernstein undertakes no obligation to update any forward-looking statements to reflect events or circumstances after
the date of such statements. For further information regarding these forward-looking statements and the factors that could cause
actual results to differ, see “Risk Factors” and “Cautions Regarding Forward-Looking Statements” in AllianceBernstein’s Form 10-K for
the year ended December 31, 2009. Any or all of the forward-looking statements made in this presentation, Form 10-K, other
documents AllianceBernstein files with or furnishes to the SEC, and any other public statements issued by AllianceBernstein, may turn
out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors” and “Cautions Regarding Forward
-Looking Statements”, and those listed below, could also adversely affect AllianceBernstein’s financial condition, results of operations
and business prospects.
The forward-looking statements referred to in the preceding paragraph include statements regarding:
< The pipeline of new institutional mandates not yet funded: Before they are funded, institutional mandates do not represent
legally binding commitments to fund and, accordingly, the possibility exists that not all mandates will be funded in the amounts and at
the times currently anticipated.
legally binding commitments to fund and, accordingly, the possibility exists that not all mandates will be funded in the amounts and at
the times currently anticipated.
< The expectation that our current AUM level, coupled with a lower expense base sets the stage for improved financial
results: Unanticipated events and factors, including pursuit of strategic initiatives, may expand AllianceBernstein’s expense base,
thus limiting the extent to which it benefits from any positive leverage in future periods. Growth in revenues will depend on the level of
assets under management, which in turn depends on factors such as the actual performance of the capital markets, the performance
of AllianceBernstein’s investment products and other factors beyond its control.
results: Unanticipated events and factors, including pursuit of strategic initiatives, may expand AllianceBernstein’s expense base,
thus limiting the extent to which it benefits from any positive leverage in future periods. Growth in revenues will depend on the level of
assets under management, which in turn depends on factors such as the actual performance of the capital markets, the performance
of AllianceBernstein’s investment products and other factors beyond its control.
Cautions Regarding Forward-Looking Statements
1Q10 Earnings Call Presentation
3
AllianceBernstein.com
Cumulative Premium
vs. Benchmarks
vs. Benchmarks
As of March 31, 2010
Past Performance is no guarantee of future results. The returns and rankings presented are net of mutual fund A-share expense ratios. Peak-to-Trough time period is defined as October 9, 2007
through March 9, 2009. Trough-to-Present is defined as March 9, 2009 through March 31, 2010. The Value Fund is part of the Bernstein Diversified Value (Russell 1000 Value). Global Value Fund
is in the Lipper Global Large-Cap Value Universe; International Value Fund is in the International Large Cap Value Funds Universe; Value Fund is in the Lipper Large Cap Value Funds Universe
through March 9, 2009. Trough-to-Present is defined as March 9, 2009 through March 31, 2010. The Value Fund is part of the Bernstein Diversified Value (Russell 1000 Value). Global Value Fund
is in the Lipper Global Large-Cap Value Universe; International Value Fund is in the International Large Cap Value Funds Universe; Value Fund is in the Lipper Large Cap Value Funds Universe
Composite. Source: Lipper and AllianceBernstein
Lipper Percentile Ranks
Peak-to-Trough (12.1)% (10.3)% (3.7)%
Trough-to-Present 14.4% 12.4% (2.5)%
(MSCI World)
(MSCI EAFE)
(Russell 1000 Value)
Cumulative Premium
vs. Peer Average
vs. Peer Average
Peak-to-Trough (9.4)% (8.5)% (6.3)%
Trough-to-Present 18.8% 11.8% 3.3%
87
97
94
11
20
34
Restoring Competitive Performance
1Q10 Earnings Call Presentation
4
AllianceBernstein.com
As of March 31, 2010
Past Performance is no guarantee of future results. The returns and rankings presented are net of mutual fund A-share total expense ratios. Peak-to-Trough time period is defined as October 9,
2007 through March 9, 2009. Trough-to-Present is defined as March 9, 2009 through March 31, 2010. Global Growth Fund is part of the Alliance Global Research Growth composite and is
measured against the Lipper Global Large Cap Growth Category; International Growth Fund is part of the Alliance International Research Growth All Country composite and is part of the Lipper
International Large Cap Growth Category. Small/Mid Cap Growth Fund is part of the Mid Cap Growth Category. Source: Lipper and AllianceBernstein
2007 through March 9, 2009. Trough-to-Present is defined as March 9, 2009 through March 31, 2010. Global Growth Fund is part of the Alliance Global Research Growth composite and is
measured against the Lipper Global Large Cap Growth Category; International Growth Fund is part of the Alliance International Research Growth All Country composite and is part of the Lipper
International Large Cap Growth Category. Small/Mid Cap Growth Fund is part of the Mid Cap Growth Category. Source: Lipper and AllianceBernstein
Lipper Percentile Ranks
Cumulative Premium
vs. Benchmarks
vs. Benchmarks
Peak-to-Trough (7.8)% (4.4)% (4.3)%
Trough-to-Present (5.0)% 5.0% (5.7)%
Cumulative Premium
vs. Peer Average
vs. Peer Average
Peak-to-Trough (8.1)% (4.0)% (4.9)%
Trough-to-Present (0.2)% 8.3% 7.5%
(MSCI World)
(MSCI AC World ex US)
(Russell 2500 Growth)
97
79
89
39
16
25
Restoring Competitive Performance
1Q10 Earnings Call Presentation
5
AllianceBernstein.com
As of March 31, 2010
*33% Barclays Capital US High Yield 2% Constrained Index, 33% JPMorgan EMBI Global, 33% JPMorgan GBI-EM
Past Performance is no guarantee of future results. The returns and rankings presented are net of mutual fund A-share total expense ratios. Peak-to-Trough time period is defined as October 9,
2007 through March 9, 2009. Trough-to-Present is defined as March 9, 2009 through March 31, 2010. Global Bond Fund is part of Lipper Global Income Funds Category; High Income Fund is part
of Lipper High-Current Yield Funds Category; Intermediate Diversified Municipal Bond Fund is part of Lipper Intermediate Municipal Debt Funds Category. Source: Lipper and AllianceBernstein
2007 through March 9, 2009. Trough-to-Present is defined as March 9, 2009 through March 31, 2010. Global Bond Fund is part of Lipper Global Income Funds Category; High Income Fund is part
of Lipper High-Current Yield Funds Category; Intermediate Diversified Municipal Bond Fund is part of Lipper Intermediate Municipal Debt Funds Category. Source: Lipper and AllianceBernstein
Lipper Percentile Ranks
Cumulative Premium
vs. Benchmarks
vs. Benchmarks
Peak-to-Trough (19.9)% (8.8)% (4.2)%
Trough-to-Present 24.3% 21.7% (0.3)%
Cumulative Premium
vs. Peer Average
vs. Peer Average
Peak-to-Trough (4.6)% 0.7% 3.2%
Trough-to-Present 9.7% 20.0% (2.8)%
(Barclays Global Aggregate
(USD hedged) Index)
(Composite Benchmark*)
(Barclays 5Yr GO Municipal Bond Index)
70
52
88
21
5
14
Restoring Competitive Performance
1Q10 Earnings Call Presentation
6
AllianceBernstein.com
(1) Approximately $86 billion of Blend Strategies AUM are reported in their respective services.
(2) Includes index, structured, asset allocation services and other non-actively managed AUM.
In US dollars billions
Total: ($20.2) ($24.0) ($12.9) ($16.8) ($6.4)
(2)
Net Flows By Investment Service(1)
1Q10 Earnings Call Presentation
7
AllianceBernstein.com
In US dollars billions
Total: ($20.2) ($24.0) ($12.9) ($16.8) ($6.4)
Net Flows By Distribution Channel
1Q10 Earnings Call Presentation
8
AllianceBernstein.com
Billions
< Net outflows improved by 59% sequentially due to a 25% decline in gross outflows
< Sales activity continued to rebound— second consecutive quarter with increased client relationships
< Risk-aversion continued to abate, based on new-account asset mix
< Launched a dynamic approach to managing portfolio risk: adopted by over 2,000 clients since late February
Percentages are calculated using AUM rounded to the nearest million.
Private Client Highlights
1Q10 Earnings Call Presentation
9
AllianceBernstein.com
Billions
< Net flows were positive, improving by $2.9 billion sequentially
< Gross sales were up 34% sequentially
< Mutual fund net inflows for 4th consecutive quarter, fueled primarily by non-US sales and new product launches
=1Q10 included two significant fund launches with a major Asian distributor
=Business in Asia experienced solid growth, driven by new products and distributor relationships
=Mutual fund net flows in US improved as sales increased, but still negative
< 66% of mutual funds (asset-weighted) were in top 50% of peer groups for 1Q10 and one year; 72% for 10 years
Percentages are calculated using AUM rounded to the nearest million.
Retail Highlights
1Q10 Earnings Call Presentation
10
AllianceBernstein.com
< Net outflows improved by 45% compared to 4Q09 and 36% compared to 1Q09 due to decreased gross outflows
< Pipeline of awarded but unfunded mandates increased by 42% sequentially to $5.2 billion from $3.6 billion
< Consultant relations improving; e.g. consultant advocacy key to recent large Global Fixed income mandate award
< Fixed Income success continues:
= Strong performance continued to drive sales of Global Fixed Income services to non-US clients
= Completed final round of PPIP capital raise, exceeding the $1.1 billion original capacity allocation
< Japan Strategic Value named Best Japan Equity service in AsianInvestor 2010 Investment Performance Awards
Billions
Percentages are calculated using AUM rounded to the nearest million.
Institutions Highlights
1Q10 Earnings Call Presentation
11
AllianceBernstein.com
*Source: Management estimate
< 1Q10 revenue up 5% year-over-year and 2% sequentially; Europe up strong double-digits and U.S. down
slightly year-over-year
slightly year-over-year
< Although the industry backdrop remains sluggish, we believe SCB continued to gain share*, driven by
investments in research, new trading services, and geographic footprint
investments in research, new trading services, and geographic footprint
< Research and trading capabilities received recognition:
= Bernstein was again ranked #1 on all key metrics of research quality in a leading independent survey of US
institutional investors
institutional investors
= Sanford C. Bernstein ranked #2 among North American brokers in obtaining the best prices for customers
in an independent, third-party survey of institutional clients
in an independent, third-party survey of institutional clients
< 2010 strategic initiatives remain on track:
= Maintain/expand research preeminence
= Grow US and European share
= Build out Asia research platform
= Expand and grow service set: equity derivatives, European electronic platform, ECM
= Increase collaboration between sellside and Private Client sales team
Bernstein Research Services Highlights
1Q10 Earnings Call Presentation
12
AllianceBernstein.com
4,369
4,761
4,654
4,544
4,276
Five Quarter Headcount Trend
1Q10 Earnings Call Presentation
13
AllianceBernstein.com
In US dollars millions (excluding per-Unit amounts)
*Operating Margin = (Operating Income less Net Income/plus Net Loss of Consolidated Entities Attributable to Non-Controlling Interests) / Net Revenues.
Percentages are calculated using revenues and expenses rounded to the nearest thousand.
(1) Final Federated trail payment to be recorded in second quarter of 2010 and is expected to be lower than in 1Q10
(2) Higher Venture Capital Fund losses in 1Q10
(3) 1Q10 GAAP results include a real estate sublease charge of $12 million, or $0.04 per Unit
|
|
1Q
2010 |
1Q
2009 |
Percent
Change |
|
4Q
2009 |
Percent
Change |
|
Net Revenues
|
$725
|
$598
|
21%
|
|
$782
|
-7%
|
|
Operating Expenses
|
585
|
564
|
4%
|
|
582
|
1%
|
|
Operating Income
|
140
|
34
|
314%
|
|
200
|
-30%
|
|
Non-Operating Income(1)
|
4
|
6
|
-28%
|
|
5
|
-1%
|
|
Income Before Income Taxes
|
144
|
40
|
261%
|
|
205
|
-29%
|
|
Income Taxes
|
13
|
8
|
52%
|
|
14
|
-6%
|
|
Net Income
|
131
|
32
|
317%
|
|
191
|
-31%
|
|
Net (Income) Loss of Consolidated Entities
Attributable to Non-Controlling Interests(2) |
17
|
5
|
214%
|
|
1
|
n/m
|
|
Net Income Attributable to AllianceBernstein Unitholders
|
$148
|
$37
|
302%
|
|
$192
|
-23%
|
|
AllianceBernstein L.P. Diluted Net Income per Unit(3)
|
$0.53
|
$0.14
|
279%
|
|
$0.70
|
-24%
|
|
Operating Margin*
|
21.6%
|
6.5%
|
|
|
25.7%
|
|
|
AllianceBernstein Holding L.P. Diluted Net Income per Unit(3)
|
$0.46
|
$0.07
|
557%
|
|
$0.62
|
-26%
|
First Quarter 2010 Net Income
1Q10 Earnings Call Presentation
14
AllianceBernstein.com
Percentages are calculated using revenues and expenses rounded to the nearest thousand.
In US dollars millions
(1) Y/Y: 1Q10 Deferred Comp gains vs. 1Q09 losses and higher Venture Capital Fund losses in 1Q10
Q/Q: Higher Venture Capital Fund losses and lower Deferred Comp gains in 1Q10
(2) Other Revenues primarily comprised of shareholder servicing fees and dividend and interest income
|
Revenues |
1Q
2010 |
1Q
2009 |
Percent
Change |
|
4Q
2009 |
Percent
Change |
|
Base Fees
|
$509
|
$433
|
18%
|
|
$527
|
-3%
|
|
Performance Fees
|
3
|
12
|
-78%
|
|
16
|
-84%
|
|
Bernstein Research
|
111
|
106
|
5%
|
|
109
|
2%
|
|
Distribution
|
80
|
58
|
38%
|
|
81
|
-1%
|
|
Investment Gains (Losses)(1)
|
-8
|
-41
|
-81%
|
|
14
|
n/m
|
|
Other Revenues(2)
|
31
|
32
|
-4%
|
|
36
|
-15%
|
|
Total Revenues
|
726
|
600
|
21%
|
|
783
|
-7%
|
|
Less: Interest Expense
|
1
|
2
|
-59%
|
|
1
|
43%
|
|
Net Revenues
|
$725
|
$598
|
21%
|
|
$782
|
-7%
|
First Quarter 2010 Revenues
1Q10 Earnings Call Presentation
15
AllianceBernstein.com
Percentages are calculated using AUM rounded to the nearest million and revenues to the nearest thousand.
In US dollars
(1) Y/Y: Fees from closed All Asset Deep Value Fund in 1Q09
Q/Q: Hedge Fund fees in 4Q09
|
|
1Q
2010 |
1Q
2009 |
Percent
Change |
|
4Q
2009 |
Percent
Change |
|
Ending AUM ($ Billions)
|
$501
|
$411
|
22%
|
|
$496
|
1%
|
|
Average AUM ($ Billions)
|
$490
|
$424
|
16%
|
|
$494
|
-1%
|
|
|
|
|
|
|
|
|
|
By Fee Type ($ Millions):
|
|
|
|
|
|
|
|
Base Fees
|
$509
|
$433
|
18%
|
|
$527
|
-3%
|
|
Performance Fees(1)
|
3
|
12
|
-78%
|
|
16
|
-84%
|
|
Total
|
$512
|
$445
|
15%
|
|
$543
|
-6%
|
|
|
|
|
|
|
|
|
|
Base Fees By Channel ($ Millions):
|
|
|
|
|
|
|
|
Institutions
|
$196
|
$185
|
7%
|
|
$212
|
-7%
|
|
Retail
|
$152
|
$111
|
37%
|
|
$154
|
-1%
|
|
Private Client
|
$161
|
$137
|
17%
|
|
$161
|
-
|
|
Total
|
$509
|
$433
|
18%
|
|
$527
|
-3%
|
First Quarter 2010 Advisory Fees
1Q10 Earnings Call Presentation
16
AllianceBernstein.com
*“Other” includes Interest and Amortization of Intangibles.
Percentages are calculated using expenses rounded to the nearest thousand.
In US dollars millions
(1) Approximately $8 million, $8 million and $6 million in Bernstein Research Services transaction costs were reclassified from General and Administrative to
Promotion and Servicing expenses for 1Q10, 1Q09 and 4Q09, respectively
Promotion and Servicing expenses for 1Q10, 1Q09 and 4Q09, respectively
(2) Y/Y: Improved Foreign Exchange P&L ($7M) offset by higher real estate sublease charges ($12M in 1Q10 vs. $7M in 1Q09)
Q/Q: 1Q10 includes $12M real estate sublease charge
|
Expenses |
1Q
2010 |
1Q
2009 |
Percent
Change |
|
|
4Q
2009 |
Percent
Change |
|
|
Compensation &
Benefits |
$319
|
$314
|
2%
|
< Slide 17
|
|
$323
|
-1%
|
< Slide 17
|
|
Promotion &
Servicing(1) |
122
|
105
|
16%
|
< Higher distribution plan
expenses |
|
128
|
-5%
|
< Lower distribution plan and
travel-related expenses |
|
General &
Administrative(1)(2) |
138
|
139
|
-1%
|
|
|
125
|
11%
|
|
|
Other*
|
6
|
6
|
-
|
|
|
6
|
-
|
|
|
Total
|
$585
|
$564
|
4%
|
|
|
$582
|
1%
|
|
First Quarter 2010 Operating Expenses
1Q10 Earnings Call Presentation
17
AllianceBernstein.com
Percentages are calculated using expenses rounded to the nearest thousand.
In US dollars millions
|
|
1Q
2010 |
1Q
2009 |
Percent
Change |
|
4Q
2009 |
Percent
Change |
|
Base Compensation(1)
|
$105
|
$127
|
-17%
|
|
$115
|
-9%
|
|
Incentive Compensation
|
|
|
|
|
|
|
|
Cash
|
68
|
69
|
-1%
|
|
71
|
-4%
|
|
Deferred Compensation(2)
|
58
|
33
|
76%
|
|
62
|
-7%
|
|
Total
|
126
|
102
|
24%
|
|
133
|
-5%
|
|
Commissions
|
52
|
52
|
-
|
|
47
|
12%
|
|
Fringes & Other(3)
|
36
|
33
|
8%
|
|
28
|
27%
|
|
Total
|
$319
|
$314
|
2%
|
|
$323
|
-1%
|
(1) Base compensation decreased due to lower severance and base salaries; severance charges were $5M, $21M and $12M for 1Q10, 1Q09 and 4Q09,
respectively
respectively
(2) Y/Y: Increase due to change in amortization of mark-to-market on deferred compensation mutual fund awards and higher amortization of
AllianceBernstein Unit awards (see slide 34 for detail)
AllianceBernstein Unit awards (see slide 34 for detail)
(3) Sequential increase in Fringes and Other due primarily to higher payroll taxes in 1Q10, resulting from annual reset of employer tax caps
First Quarter 2010 Compensation & Benefits
1Q10 Earnings Call Presentation
18
AllianceBernstein.com
Percentages are calculated using income, earnings and expenses rounded to the nearest thousand.
In US dollars millions (except per Unit amounts)
|
|
1Q
2010 |
1Q
2009 |
Percent
Change |
|
4Q
2009 |
Percent
Change |
|
AllianceBernstein
|
|
|
|
|
|
|
|
Net Income Attributable to AllianceBernstein
|
$148
|
$37
|
302%
|
|
$192
|
-23%
|
|
Weighted Average Equity Ownership Interest
|
36.6%
|
34.2%
|
|
|
35.0%
|
|
|
AllianceBernstein Holding
|
|
|
|
|
|
|
|
Equity in Net Income
Attributable to AllianceBernstein |
$54
|
$13
|
330%
|
|
$67
|
-19%
|
|
Income Taxes
|
7
|
6
|
18%
|
|
7
|
-
|
|
Net Income
|
$47
|
$7
|
601%
|
|
$60
|
-21%
|
|
Diluted Net Income Per Unit
|
$0.46
|
$0.07
|
557%
|
|
$0.62
|
-26%
|
|
Distributions Per Unit
|
$0.46
|
$0.07
|
557%
|
|
$0.62
|
-26%
|
AllianceBernstein Holding Financial Results
1Q10 Earnings Call Presentation
19
AllianceBernstein.com
Q & A
1Q10 Earnings Call Presentation
20
AllianceBernstein.com
Appendix
1Q10 Earnings Call Presentation
21
AllianceBernstein.com
International Value
US Diversified Value
Benchmark MSCI World (Cap, UH, net) MSCI EAFE (Cap, UH, net) Russell 1000 Value
1Q10
CY2009
CY2008
CY2007
CY2006
CY2005
Institutional Equity Composites vs. Benchmarks
Percent
Performance is preliminary.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of composites is presented after investment management fees.
Value Equity: Relative Performance
1Q10 Earnings Call Presentation
22
AllianceBernstein.com
International Large Cap Growth
Benchmark Russell 1000 Growth MSCI World (Cap, UH, net) MSCI EAFE (Cap, UH, net)
Institutional Equity Composites vs. Benchmarks
Percent
Performance is preliminary.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of composites is presented after investment management fees.
1Q10
CY2009
CY2008
CY2007
CY2006
CY2005
Growth Equity: Relative Performance
1Q10 Earnings Call Presentation
23
AllianceBernstein.com
International Blend
Global Blend
Institutional Blend Strategies Composites vs. Benchmarks
Percent
Benchmark MSCI World (Cap, UH, net) MSCI EAFE (Cap, UH, net) MSCI EM (Cap, UH, net)
Performance is preliminary.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of composites is presented after investment management fees.
Blend Strategies: Relative Performance
1Q10
CY2009
CY2008
CY2007
CY2006
CY2005
1Q10 Earnings Call Presentation
24
AllianceBernstein.com
Institutional Fixed Income Composites vs. Benchmarks
Percent
Bond Index (Unhedged)
Performance is preliminary.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of composites is presented after investment management fees.
Emerging Market Debt
1Q10
CY2009
CY2008
CY2007
CY2006
CY2005
Fixed Income: Relative Performance
1Q10 Earnings Call Presentation
25
AllianceBernstein.com
Performance is preliminary.
As of March 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Institutional Equity Composites vs. Benchmarks
Institutional Value Equity: Relative Performance
1Q10 Earnings Call Presentation
26
AllianceBernstein.com
Performance is preliminary.
As of March 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Institutional Equity Composites vs. Benchmarks
Institutional Growth Equity: Relative Performance
1Q10 Earnings Call Presentation
27
AllianceBernstein.com
Performance is preliminary.
As of March 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Institutional Blend Strategies Equity Composites vs. Benchmarks
|
|
|
Periods Ended March 31, 2010
|
|
|||
|
Service
|
1Q
2010 |
One
Year |
Three
Years |
Five
Years |
10
Years |
Benchmark
|
|
Global Blend Strategies
|
(1.4)
|
0.6
|
(5.8)
|
(2.8)
|
N/A
|
MSCI World
|
|
International Blend Strategies
|
(0.6)
|
(1.9)
|
(3.0)
|
(2.1)
|
N/A
|
MSCI EAFE
|
|
US Blend Strategies
|
(0.5)
|
0.8
|
(1.8)
|
(0.8)
|
N/A
|
S&P 500
|
|
Emerging Markets Blend Strategies
|
(0.6)
|
7.5
|
(2.3)
|
(2.4)
|
N/A
|
MSCI EM
|
Institutional Blend Strategies: Relative Performance
1Q10 Earnings Call Presentation
28
AllianceBernstein.com
Performance is preliminary.
As of March 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
*The benchmarks listed are the current benchmarks for the investments service—certain benchmarks have evolved over time and therefore are time blended.
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Institutional Fixed Income Composites vs. Benchmarks*
Institutional Fixed Income: Relative Performance
1Q10 Earnings Call Presentation
29
AllianceBernstein.com
Performance is preliminary.
As of March 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
*The Fully Diversified 60% stocks/40% bonds (simulation) is meant to be illustrative of the value generated by the "total solution" approach AllianceBernstein encourages for most clients: a
diversified allocation across investment portfolios of varying types aimed at optimizing return and volatility over time. The Bernstein Fully Diversified Portfolio is composed of specific proportions of
each of the products that follow, which were included in the simulation as of the following dates: Strategic Value—January 1, 1983; Strategic Growth—January 1, 1983 (ACM Large Cap Growth
used as a proxy for Strategic Growth through January 1, 2001; Strategic Growth used thereafter); Intermediate Municipal Bond Composite—January 1, 1983; Bernstein Tax-Managed International
Fund—July 1, 1992; Emerging Markets Fund—January 1, 1996; AllianceBernstein Institutional REIT Fund—July 1, 2001. The AllianceBernstein Institutional REIT Fund was removed from the
simulation on December 31, 2008. The portfolio was rebalanced quarterly through December 31, 2005; monthly thereafter. Simulated performance results have certain inherent limitations. The
results may not reflect the impact that certain material economic and market factors might have had on actual decision making if they were reflective of a managed account. No representation is
being made that any account will, or is likely to, achieve profits or losses similar to those described herein.
diversified allocation across investment portfolios of varying types aimed at optimizing return and volatility over time. The Bernstein Fully Diversified Portfolio is composed of specific proportions of
each of the products that follow, which were included in the simulation as of the following dates: Strategic Value—January 1, 1983; Strategic Growth—January 1, 1983 (ACM Large Cap Growth
used as a proxy for Strategic Growth through January 1, 2001; Strategic Growth used thereafter); Intermediate Municipal Bond Composite—January 1, 1983; Bernstein Tax-Managed International
Fund—July 1, 1992; Emerging Markets Fund—January 1, 1996; AllianceBernstein Institutional REIT Fund—July 1, 2001. The AllianceBernstein Institutional REIT Fund was removed from the
simulation on December 31, 2008. The portfolio was rebalanced quarterly through December 31, 2005; monthly thereafter. Simulated performance results have certain inherent limitations. The
results may not reflect the impact that certain material economic and market factors might have had on actual decision making if they were reflective of a managed account. No representation is
being made that any account will, or is likely to, achieve profits or losses similar to those described herein.
Source: Standard and Poor’s, Morgan Stanley, Lipper and AllianceBernstein
|
|
|
Periods Ended March 31, 2010
|
|||
|
Service
|
1Q
2010 |
One
Year |
Three
Years |
Five
Years |
10
Years |
|
Fully Diversified Simulation*
|
2.7
|
32.0
|
(3.3)
|
2.8
|
3.3
|
|
S&P 500
|
5.4
|
49.8
|
(4.2)
|
1.9
|
(0.7)
|
|
|
|
|
|
|
|
|
MSCI World (net)
|
3.2
|
52.4
|
(5.4)
|
2.9
|
(0.0)
|
|
|
|
|
|
|
|
|
Lipper Short/Int Blended Muni Fund
Avg |
0.7
|
6.2
|
3.4
|
3.3
|
3.9
|
|
|
Private Client: Absolute Performance
1Q10 Earnings Call Presentation
30
AllianceBernstein.com
Retail Mutual Funds vs. Lipper Averages
NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of mutual funds is presented after investment management fees.
(1) Performance figures other than 1Q2010 and One Year are positively affected by class action settlement proceeds.
Source: AllianceBernstein and Lipper. Mutual Fund and Lipper performance data through 3/31/10.
Retail Value Equity: Relative Performance
1Q10 Earnings Call Presentation
31
AllianceBernstein.com
Retail Mutual Funds vs. Lipper Averages
NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of mutual funds is presented after investment management fees.
Investment performance of mutual funds is presented after investment management fees.
(1) Performance figures other than 1Q2010 and One Year are positively affected by class action settlement proceeds.
Source: AllianceBernstein, Morningstar, and Lipper. Mutual Fund, Morningstar, and Lipper performance data through 3/31/10.
Retail Growth Equity: Relative Performance
1Q10 Earnings Call Presentation
32
AllianceBernstein.com
Retail Fixed Income Funds vs. Peer Group Averages
NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of mutual funds is presented after investment management fees.
Source: AllianceBernstein, Morningstar, and Lipper. Mutual Fund, Morningstar, and Lipper performance data through 3/31/10.
Retail Fixed Income: Relative Performance
1Q10 Earnings Call Presentation
33
AllianceBernstein.com
Retail Mutual Funds vs. Morningstar Averages
NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of mutual funds is presented after investment management fees.
Source: AllianceBernstein and Morningstar. Mutual fund and Morningstar performance data through 3/31/10.
Wealth Strategies: Relative Performance
1Q10 Earnings Call Presentation
34
AllianceBernstein.com
In US dollars millions
|
|
4Q
2008 |
1Q
2009 |
2Q
2009 |
3Q
2009 |
4Q
2009 |
1Q
2010 |
|
Revenues
|
|
|
|
|
|
|
|
Investment Gains (Losses)
|
($131)
|
($28)
|
$63
|
$71
|
$15
|
$11
|
|
Dividends
|
7
|
1
|
2
|
1
|
4
|
1
|
|
Total Revenues
|
($124)
|
($27)
|
$65
|
$72
|
$19
|
$12
|
|
Expenses
|
|
|
|
|
|
|
|
Amortization of Original Awards
|
$59
|
$45
|
$39
|
$40
|
$36
|
$31
|
|
Amortization of MTM - Prior Periods
|
(20)
|
(17)
|
(16)
|
(11)
|
(6)
|
(4)
|
|
Amortization of MTM - Current Quarter
|
(60)
|
(12)
|
25
|
28
|
8
|
4
|
|
% of Investment Gains (Losses)
|
46%
|
43%
|
40%
|
39%
|
53%
|
36%
|
|
Dividends
|
7
|
1
|
1
|
1
|
4
|
1
|
|
Sub-Total of Mutual Fund Expenses
|
(14)
|
17
|
49
|
58
|
42
|
32
|
|
Amortization of AB Units
|
16
|
11
|
10
|
11
|
19
|
23
|
|
Other
|
2
|
5
|
3
|
4
|
1
|
3
|
|
Total expenses
|
$4
|
$33
|
$62
|
$73
|
$62
|
$58
|
|
Net P&L impact of Mutual Fund Grants
|
($110)
|
($44)
|
$16
|
$14
|
($23)
|
($20)
|
Six-Quarter Deferred Compensation Net P&L Trend
1Q10 Earnings Call Presentation
35
AllianceBernstein.com
In US dollars millions
|
Assets
|
Mar 31, 2010
|
Dec 31, 2009
|
|
Cash and cash equivalents
|
$584
|
$614
|
|
Cash and securities, segregated
|
1,005
|
985
|
|
Receivables, net
|
1,185
|
1,099
|
|
Investments:
|
|
|
|
Deferred compensation - related
|
372
|
401
|
|
Other
|
407
|
374
|
|
Goodwill, net
|
2,893
|
2,893
|
|
Intangible assets, net
|
219
|
224
|
|
Deferred sales commissions, net
|
87
|
90
|
|
Other (incl. furniture & equipment, net)
|
534
|
535
|
|
Total Assets
|
$7,286
|
$7,215
|
|
|
|
|
|
Liabilities and Capital
|
|
|
|
Liabilities:
|
|
|
|
Payables
|
$1,776
|
$1,670
|
|
Accounts payable and accrued expenses
|
335
|
278
|
|
Accrued compensation and benefits
|
341
|
316
|
|
Debt
|
206
|
249
|
|
Total Liabilities
|
2,658
|
2,513
|
|
|
|
|
|
Partners' capital attributable to AllianceBernstein Unitholders
|
4,474
|
4,530
|
|
Non-controlling interests in consolidated entities
|
154
|
172
|
|
Total Capital
|
4,628
|
4,702
|
|
Total Liabilities and Capital
|
$7,286
|
$7,215
|
Consolidated Balance Sheet
1Q10 Earnings Call Presentation
36
AllianceBernstein.com
In US dollars millions
|
|
Three Months Ended
|
|
|
|
Mar 31, 2010
|
Mar 31, 2009
|
|
Cash Flows From Operating Activities:
|
|
|
|
Net Income
|
$131
|
$32
|
|
Non-cash items:
|
|
|
|
Amortization of deferred sales commissions
|
12
|
15
|
|
Amortization of non-cash deferred compensation
|
26
|
16
|
|
Depreciation and other amortization
|
21
|
21
|
|
Unrealized gains on deferred compensation - related investments
|
(24)
|
(16)
|
|
Unrealized loss on consolidated venture capital fund
|
21
|
6
|
|
Other
|
5
|
2
|
|
Changes in assets and liabilities
|
26
|
(29)
|
|
Net cash provided by operating activities
|
218
|
47
|
|
Cash Flows From Investing Activities:
|
|
|
|
Purchases of investments
|
-
|
(2)
|
|
Proceeds from sales of investments
|
-
|
2
|
|
Additions to furniture, equipment and leasehold improvements
|
(1)
|
(29)
|
|
Net cash used in investing activities
|
(1)
|
(29)
|
|
Cash Flows From Financing Activities:
|
|
|
|
(Repayment) issuance of commercial paper, net
|
(43)
|
11
|
|
Proceeds from bank loans, net
|
-
|
66
|
|
Increase (decrease) in overdrafts payable
|
24
|
(14)
|
|
Distributions to General Partner and unitholders
|
(194)
|
(99)
|
|
Purchases of Holding Units to fund deferred compensation awards, net
|
(24)
|
(1)
|
|
Other
|
5
|
7
|
|
Net cash used in financing activities
|
(232)
|
(30)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(15)
|
(2)
|
|
Net decrease in cash and cash equivalents
|
(30)
|
(14)
|
|
Cash and cash equivalents at the beginning of period
|
614
|
553
|
|
Cash and cash equivalents at the end of period
|
$584
|
$539
|
Consolidated Statement of Cash Flows
1Q10 Earnings Call Presentation
37
AllianceBernstein.com
In US dollars billions
|
|
Institutions
|
Retail
|
Private Client
|
Total
|
|
Beginning of Period
|
$300.0
|
$120.7
|
$74.8
|
$495.5
|
|
Sales/New accounts
|
3.5
|
10.5
|
2.1
|
16.1
|
|
Redemptions/Terminations
|
(9.9)
|
(6.3)
|
(1.5)
|
(17.7)
|
|
Cash flow
|
(2.2)
|
(1.4)
|
(0.8)
|
(4.4)
|
|
Unreinvested dividends
|
-
|
(0.3)
|
(0.1)
|
(0.4)
|
|
Net Flows
|
(8.6)
|
2.5
|
(0.3)
|
(6.4)
|
|
Investment Performance
|
5.6
|
4.6
|
2.0
|
12.2
|
|
End of Period
|
$297.0
|
$127.8
|
$76.5
|
$501.3
|
|
% Total at end of period
|
59%
|
26%
|
15%
|
100%
|
|
% Change from beg of period
|
-1%
|
6%
|
2%
|
1%
|
Three-months ended 3/31/10 AUM Rollforward by Distribution Channel
1Q10 Earnings Call Presentation
38
AllianceBernstein.com
In US dollars billions
|
|
Value
Equity |
Growth
Equity |
Fixed
Income |
Other
|
Total
|
|
Beginning of Period
|
$171.2
|
$94.1
|
$184.3
|
$45.9
|
$495.5
|
|
Sales/New accounts
|
2.3
|
2.5
|
10.4
|
0.9
|
16.1
|
|
Redemptions/Terminations
|
(6.7)
|
(6.0)
|
(4.9)
|
(0.1)
|
(17.7)
|
|
Cash flow
|
(2.9)
|
(1.4)
|
0.1
|
(0.2)
|
(4.4)
|
|
Unreinvested dividends
|
-
|
-
|
(0.4)
|
-
|
(0.4)
|
|
Net Flows
|
(7.3)
|
(4.9)
|
5.2
|
0.6
|
(6.4)
|
|
Investment Performance
|
5.5
|
2.0
|
2.8
|
1.9
|
12.2
|
|
End of Period(2)
|
$169.4
|
$91.2
|
$192.3
|
$48.4
|
$501.3
|
|
% Total at end of period
|
34%
|
18%
|
38%
|
10%
|
100%
|
|
% Change from beg of period
|
-1%
|
-3%
|
4%
|
5%
|
1%
|
(1) Includes index, structured, asset allocation services and other non-actively managed AUM.
(2) Approximately $86 billion in Blend Strategies AUM are reported in their respective services.
(1)
Three-months ended 3/31/10 AUM Rollforward by Investment Service
1Q10 Earnings Call Presentation
39
AllianceBernstein.com
In US dollars billions
As of March 31, 2010
Retail
Private Client
$297.0 $127.8 $76.5
AUM by Region
