NEW YORK, May 3 /PRNewswire-FirstCall/ -- AllianceBernstein
Holding L.P. ("AllianceBernstein Holding") (NYSE: AB) and
AllianceBernstein L.P. ("AllianceBernstein") today reported
financial and operating results for the quarter ended March 31, 2010.
Assets Under Management
($
billions)
|
Institutions
|
|
Retail
|
|
Private
Client
|
|
Total
|
|
Ending Assets Under
Management
|
$297.0
|
|
$127.8
|
|
$76.5
|
|
$501.3
|
|
Net Flows for Three Months Ended
3/31/10
|
($8.6)
|
|
$2.5
|
|
($0.3)
|
|
($6.4)
|
|
|
|
|
|
|
|
|
|
Financial Results
|
1Q
2010
|
1Q
2009
|
1Q 2010 vs 1Q
2009
|
4Q
2009
|
1Q 2010 vs 4Q 2009
|
|
($ millions except per Unit
amounts)
|
|
|
|
|
|
|
AllianceBernstein L.P.
|
|
|
|
|
|
|
Net Revenues
|
$725
|
$598
|
21%
|
$782
|
-7%
|
|
Net Income Attributable to
|
$148
|
$37
|
302%
|
$192
|
-23%
|
|
AllianceBernstein
Unitholders*
|
|
Operating Margin
|
21.6%
|
6.5%
|
|
25.7%
|
|
|
AllianceBernstein Holding
L.P.
|
|
|
|
|
|
|
Diluted Net Income per
Unit*
|
$0.46
|
$0.07
|
557%
|
$0.62
|
-26%
|
|
Distribution per Unit*
|
$0.46
|
$0.07
|
557%
|
$0.62
|
-26%
|
|
|
|
|
|
|
|
|
*1Q 2010 GAAP
results include a
real estate sublease charge of $12 million, or $0.04 per
Unit.
|
|
|
|
|
|
|
|
The distribution is payable on May 27,
2010 to holders of record of AllianceBernstein Holding Units
at the close of business on May 13,
2010.
Performance
For the first quarter of 2010, the performance of
AllianceBernstein's investment services relative to benchmarks or
peer averages was mixed. Fixed Income services again outperformed,
substantially so in some non-US services. In Equities, US
Value services outperformed, but non-US Value services generally
underperformed. It was a difficult quarter for Growth
services, most of which underperformed.
Assets Under Management
Total assets under management as of March
31, 2010 were $501 billion, up
$5 billion, or 1%, from December 31, 2009, and up $90 billion, or 22%, compared to March 31, 2009. During the first quarter of
2010, assets under management increased as a result of positive
investment performance, partially offset by net outflows.
Total net outflows of $6.4
billion in the first quarter of 2010 were 62% lower than in
the fourth quarter of 2009 and 68% lower than the first quarter of
2009. The Retail channel experienced net inflows of
$2.5 billion, due principally to
strong non-US sales. Net outflows in the Private Client
channel improved from $0.8 billion in
the fourth quarter of 2009 to $0.3
billion in the first quarter of 2010, as gross outflows
improved by 25%. Net outflows in the Institutions channel
improved to $8.6 billion, or 45%
lower than the fourth quarter of 2009, due to lower gross outflows.
The pipeline of awarded but unfunded institutional mandates
increased by 42% to $5.2 billion from
$3.6 billion at the end of 2009.
Financial Results: First Quarter 2010 Compared to First
Quarter 2009
Net Income Attributable to AllianceBernstein Unitholders for the
first quarter 2010 of $148 million
was four times greater than in the first quarter 2009 and operating
margin increased three-fold to 21.6% from 6.5%. Diluted net
income per Unit and the cash distribution per Unit for the
publicly-traded partnership increased more than six-fold to
$0.46 from $0.07.
Base fee revenues increased by $76
million, or 18%, due principally to higher revenue in the
Retail and Private Client channels. This increase was
slightly higher than the year-over-year increase in average assets
under management due to a change in our product mix. Bernstein
Research Services revenues increased 5%, as higher European
revenues were partially offset by modest declines in the US.
Investment losses of $8 million were
primarily due to losses of $19
million in the Venture Capital Fund (90% of which are offset
in net (income) loss attributable to non-controlling interest)
which were partially offset by gains of $11
million on deferred compensation-related investments.
This compares favorably to investment losses of $41 million in the first quarter of 2009, which
included $28 million of losses on
deferred compensation-related investments.
Operating expenses for the first quarter of 2010 were
$585 million, an increase of
$21 million, or 4%, due principally
to a $17 million increase in
distribution plan expenses associated with higher average Retail
AUM. Compensation and benefits increased 2%, as higher deferred
compensation expenses, resulting from higher mark-to-market gains
on related investments, more than offset lower base compensation,
which declined due to lower severance and base salaries. Promotion
and servicing expenses increased by $17
million, or 16%, due primarily to the previously mentioned
increase in distribution plan expenses, which is in-line with
increased distribution revenues. G&A expenses declined slightly
compared to the first quarter of 2009. The current quarter
includes a $12 million, or
$0.04 per Unit, real estate sublease
charge while the prior-year quarter included a $7 million real estate charge and foreign
exchange losses.
Financial Results: First Quarter 2010 Compared to Fourth
Quarter 2009
Net Income Attributable to AllianceBernstein Unitholders for the
first quarter 2010 was 23% lower than in the fourth quarter 2009
and operating margin declined to 21.6% from 25.7%. Diluted net
income and the cash distribution per Unit for the publicly-traded
partnership decreased by 26% from $0.62.
Base fee revenues decreased by $18
million, or 3%, the result of lower average assets under
management, a change in our product mix and two fewer calendar days
in the first quarter of 2010. Performance fees declined from
$16 million to $3 million, reflecting
the recognition of full-year hedge fund performance fees in the
fourth quarter of 2009. The $22
million negative variance in investment gains and losses is
due to greater losses in the Venture Capital Fund as well as lower
gains in deferred compensation-related investments. Bernstein
Research Services revenues increased 2%, due to higher European
operations' revenue.
Operating expenses increased slightly compared to the fourth
quarter of 2009. Compensation and benefits declined 1%, as lower
base compensation, the result of lower severance and base salaries,
and lower incentive compensation, was mostly offset by higher
commissions and fringes, the latter principally due to higher
payroll tax accruals, the result of the annual reset of employer
tax caps. Promotion and servicing expenses declined by
$6 million, or 5%, due to lower
distribution plan expenses and travel-related expenses. General and
Administrative expenses increased $13
million, or 11%, principally due to the $12 million real estate sublease charge.
Management Commentary
"Overall, the first quarter of 2010 reflected continued
improvement for our firm. While total AUM grew by only 1%
sequentially, outflows decreased substantially, with Retail flows
turning positive and net outflows declining in our other two
channels. Bernstein Research, which recently garnered a #1
and #2 ranking in two separate, independent surveys of
institutional clients for research and trading, respectively,
continued to gain market share while funding growth initiatives in
electronic trading, derivatives, Equity Capital Markets and
Asia. We continued our
efforts to develop and launch innovative new services that we
believe will better serve client needs and generate incremental
revenue for the firm," said Peter S.
Kraus, Chairman and Chief Executive Officer.
"We remain committed to delivering strong investment performance
over the long-term to our clients, developing innovative services
to meet their evolving needs, expanding our client base, motivating
our employees and improving returns for our Unitholders. After a
year of transition, our central theme in 2010 is executing on this
strategy – and the first quarter was a good start. We ended
the quarter with greater than $500
billion in assets under management for the first time since
September of 2008, yet with a lower expense base, setting the stage
for improved financial results. Our success, and that of all
AllianceBernstein stakeholders, remains contingent on the continued
focus and dedication of our employees, of which I am most
confident," concluded Mr. Kraus.
First Quarter 2010 Earnings Conference Call
Information
AllianceBernstein's management will review first quarter 2010
financial and operating results on Monday,
May 3, 2010 during a conference call beginning at
5:00 p.m. (EDT), following the
release of its financial results after the close of trading on the
New York Stock Exchange. The conference call will be hosted by
Peter S. Kraus, Chairman and Chief
Executive Officer, David A. Steyn,
Chief Operating Officer, and John B.
Howard, Chief Financial Officer.
Parties may access the conference call by either webcast or
telephone:
- To listen by webcast, please visit AllianceBernstein's Investor
Relations website at
http://ir.alliancebernstein.com/investorrelations at least 15
minutes prior to the call to download and install any necessary
audio software.
- To listen by telephone, please dial (866) 556-2265 in the U.S.
or (973) 935-8521 outside the U.S., 10 minutes before the
5:00 p.m. (EDT) scheduled start time.
The conference ID# is 67440215.
The presentation that will be reviewed during the conference
call will be available on AllianceBernstein's Investor Relations
website shortly after the release of its financial results.
A replay of the webcast will be made available beginning at
approximately 7:00 p.m. (EDT) on
May 3, 2010 and will be available on
AllianceBernstein's website for one week. An audio replay of the
conference call will also be available for one week. To access the
audio replay, please call (800) 642-1687 from the U.S., or outside
the U.S. call (706) 645-9291, and provide conference ID#
67440215.
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this news release
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 news release, 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.
- 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.
Qualified Tax Notice
This announcement is intended to be a qualified notice under
Treasury Regulation section 1.1446-4(b). Please note that 100% of
AllianceBernstein Holding's distributions to foreign investors is
attributable to income that is effectively connected with a
United States trade or business.
Accordingly, AllianceBernstein Holding's distributions to foreign
investors are subject to federal income tax withholding at the
highest applicable tax rate, currently 35%.
About AllianceBernstein
AllianceBernstein is a leading global investment management firm
that offers high-quality research and diversified investment
services to institutional clients, individuals and private clients
in major markets around the world. AllianceBernstein employs more
than 500 investment professionals with expertise in growth
equities, value equities, fixed income securities, blend strategies
and alternative investments and, through its subsidiaries and joint
venture, operates in more than 20 countries. AllianceBernstein's
research disciplines include fundamental research, quantitative
research, economic research and currency forecasting capabilities.
Through its integrated global platform, AllianceBernstein is
well-positioned to tailor investment solutions for its clients.
AllianceBernstein also offers high-quality, in-depth research,
portfolio strategy and brokerage-related services to institutional
investors, and equity capital markets services to issuers of
publicly-traded securities.
At March 31, 2010,
AllianceBernstein Holding L.P. owned approximately 36.6% of the
issued and outstanding AllianceBernstein Units and AXA, one of the
largest global financial services organizations, owned an
approximate 62.3% economic interest in AllianceBernstein.
AllianceBernstein L.P. (The Operating
Partnership)
|
|
SUMMARY CONSOLIDATED STATEMENTS OF
INCOME | March 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
$ thousands, unaudited
|
3/31/10
|
|
3/31/09
|
|
12/31/09
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Base Fees
|
$509,578
|
|
$432,632
|
|
$526,675
|
|
|
|
Performance Fees
|
2,674
|
|
12,330
|
|
16,487
|
|
|
|
Bernstein Research Services
|
110,752
|
|
105,642
|
|
108,775
|
|
|
|
Distribution Revenues
|
80,349
|
|
58,076
|
|
80,891
|
|
|
|
Dividend and Interest
Income
|
3,911
|
|
7,801
|
|
7,386
|
|
|
|
Investment Gains (Losses)
|
(8,020)
|
|
(41,237)
|
|
13,720
|
|
|
|
Other Revenues
|
26,562
|
|
24,072
|
|
28,430
|
|
|
|
Total Revenues
|
725,806
|
|
599,316
|
|
782,364
|
|
|
|
Less: Interest Expense
|
720
|
|
1,752
|
|
503
|
|
|
|
Net Revenues
|
725,086
|
|
597,564
|
|
781,861
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Employee Compensation &
Benefits
|
319,425
|
|
313,803
|
|
323,391
|
|
|
|
Promotion & Servicing
|
|
|
|
|
|
|
|
|
Distribution Plan
Payments
|
58,566
|
|
42,441
|
|
61,261
|
|
|
|
Amortization of Deferred Sales Commissions
|
12,121
|
|
14,897
|
|
12,819
|
|
|
|
Other
|
51,012
|
|
47,292
|
|
53,977
|
|
|
|
General &
Administrative(1)
|
138,048
|
|
139,198
|
|
124,635
|
|
|
|
Interest on Borrowings
|
555
|
|
964
|
|
566
|
|
|
|
Amortization of Intangible
Assets
|
5,377
|
|
5,179
|
|
4,956
|
|
|
|
Total Expenses
|
585,104
|
|
563,774
|
|
581,605
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
139,982
|
|
33,790
|
|
200,256
|
|
|
Non-Operating Income
|
4,515
|
|
6,285
|
|
4,552
|
|
|
Income Before Income Taxes
|
144,497
|
|
40,075
|
|
204,808
|
|
|
Income Taxes
|
13,004
|
|
8,564
|
|
13,901
|
|
|
Net Income
|
131,493
|
|
31,511
|
|
190,907
|
|
|
Net
(Income) Loss of Consolidated Entities Attributable to
Non-Controlling Interests
|
16,773
|
|
5,340
|
|
733
|
|
|
Net
Income Attributable to AllianceBernstein Unitholders
|
$148,266
|
|
$36,851
|
|
$191,640
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin(2)
|
21.6%
|
|
6.5%
|
|
25.7%
|
|
|
|
|
|
|
|
|
|
|
(1) General and Administrative
expenses for the three months ended 3/31/10 include a $12 million
real estate sublease charge.
(2) Operating Margin =
(Operating Income less Net Income/plus Net Loss of Consolidated
Entities Attributable to Non-Controlling Interests / Net
Revenues).
|
|
|
|
|
|
|
|
|
|
AllianceBernstein Holding L.P. (The
Publicly-Traded Partnership)
|
|
SUMMARY STATEMENTS OF
INCOME
|
|
|
|
|
Three Months
Ended
|
|
|
$
thousands except per Unit amounts, unaudited
|
3/31/10
|
|
3/31/09
|
|
12/31/09
|
|
|
Equity
in Net Income Attributable to AllianceBernstein
Unitholders
|
$54,210
|
|
$12,612
|
|
$67,086
|
|
|
Income Taxes
|
6,964
|
|
5,877
|
|
7,415
|
|
|
Net Income
|
47,246
|
|
6,735
|
|
59,671
|
|
|
|
|
|
|
|
|
|
|
|
Additional Equity in Earnings of
Operating Partnership (1)
|
612
|
|
-
|
|
731
|
|
|
Net Income - Diluted
|
$47,858
|
|
$6,735
|
|
$60,402
|
|
|
Diluted Net Income per
Unit(2)
|
$0.46
|
|
$0.07
|
|
$0.62
|
|
|
Distribution per
Unit(2)
|
$0.46
|
|
$0.07
|
|
$0.62
|
|
|
|
|
|
|
|
|
|
|
(1) To reflect higher ownership
in the Operating Partnership resulting from application of the
treasury stock method to outstanding options.
(2) GAAP results for the three
months ended 3/31/2010 include a real estate sublease charge of $12
million, or $0.04 per Unit.
|
|
|
|
|
|
|
|
|
|
AllianceBernstein L.P. and
AllianceBernstein Holding L.P.
|
|
UNITS OUTSTANDING AND WEIGHTED AVERAGE
UNITS OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Units
|
|
|
|
|
Period
End
|
|
Three Months Ended
3/31/10
|
|
|
|
|
Units
|
|
Basic
|
|
Diluted
|
|
|
AllianceBernstein L.P.
|
275,198,437
|
|
274,907,643
|
|
276,736,109
|
|
|
AllianceBernstein Holding
L.P
|
101,804,594
|
|
101,513,800
|
|
103,342,266
|
|
|
|
|
|
|
|
|
|
AllianceBernstein
L.P.
ASSETS UNDER MANAGEMENT
| March 31, 2010
($ billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending and
Average
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
3/31/10
|
|
3/31/09
|
|
12/31/09
|
|
|
Ending
Assets Under Management
|
|
|
|
|
|
$501.3
|
|
$410.7
|
|
$495.5
|
|
|
Average Assets Under
Management
|
|
|
|
|
|
$490.1
|
|
$423.9
|
|
$494.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Changes By Distribution
Channel
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Changes By Investment
Service
|
|
|
|
|
Value
|
|
Growth
|
|
Fixed
Income
|
|
Other
|
(1)
|
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
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By Client
Domicile
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private
Client
|
|
Total
|
|
|
U.S. Clients
|
|
|
|
$159.0
|
|
$ 86.7
|
|
$74.4
|
|
$320.1
|
|
|
Non-U.S. Clients
|
|
|
|
138.0
|
|
41.1
|
|
2.1
|
|
181.2
|
|
|
Total
|
|
|
|
$297.0
|
|
$127.8
|
|
$76.5
|
|
$501.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE AllianceBernstein