NEW YORK, Feb. 10, 2011 /PRNewswire/ -- AllianceBernstein
L.P. ("AllianceBernstein") and AllianceBernstein Holding L.P.
("AllianceBernstein Holding") (NYSE: AB) today reported financial
and operating results for the quarter ended December 31, 2010.
"2010 marked significant progress in the continued growth of
AllianceBernstein, with improvement in gross sales, increased
average AUM, higher adjusted margins and positive financial
results on many fronts," said Peter S.
Kraus, Chairman and Chief Executive Officer. "In the
fourth quarter we outperformed benchmarks and peers in most of our
equity and fixed income services. However, we did see an
acceleration in outflows, concentrated for the most part in equity
mandates in the Institutions channel. We are confident that we will
extend our track record of outperformance in equities in the months
ahead, which, combined with an improved risk appetite on the part
of investors, should lead to an improvement in flows."
Financial Results
|
4Q
2010
|
3Q
2010
|
4Q 2010 vs
3Q 2010
|
4Q
2009
|
4Q 2010 vs
4Q 2009
|
|
($ millions except per Unit
amounts)
|
|
|
|
|
|
|
AllianceBernstein
L.P.
|
|
|
|
|
|
|
GAAP basis:
|
|
|
|
|
|
|
Net Revenues
|
$778
|
$758
|
3%
|
$782
|
(1%)
|
|
Operating Income
|
$154
|
$58
|
167%
|
$200
|
(23%)
|
|
Operating Margin, incl.
non-controlling interests
|
18.8%
|
7.2%
|
|
25.7%
|
|
|
Adjusted basis: (1)
|
|
|
|
|
|
|
Net Revenues (2)
|
$662
|
$634
|
4%
|
$682
|
(3%)
|
|
Operating Income (3)
|
$139
|
$122
|
14%
|
$190
|
(27%)
|
|
Operating Margin
|
21.0%
|
19.3%
|
|
27.8%
|
|
|
AllianceBernstein Holding
L.P.
|
|
|
|
|
|
|
GAAP Diluted Net Income per
Unit
|
$0.42
|
$0.12
|
250%
|
$0.62
|
(32%)
|
|
Distribution per Unit
|
$0.42
|
$0.12
|
250%
|
$0.62
|
(32%)
|
|
Adjusted Diluted Net Income per
Unit (1)
|
$0.40
|
$0.36
|
11%
|
$0.59
|
(32%)
|
|
|
|
|
|
|
|
|
(1) See pages 8-10 for
reconciliations of GAAP Financial Results to Adjusted Financial
Results
|
|
(2) Adjusted net revenues
exclude investment gains and losses and dividends and interest on
deferred compensation-related investments, and 90% of the
investment gains and losses of our consolidated venture capital
fund attributable to non-controlling interests. In addition,
adjusted net revenues offset distribution-related payments to third
parties as well as amortization of deferred sales commissions
against distribution revenues.
|
|
(3) Adjusted operating income
represents operating income on a GAAP basis (1) excluding the
impact on net revenues and compensation expense of the
mark-to-market gains and losses (as well as the dividends and
interest) associated with employee deferred compensation-related
investments, (2) excluding real estate charges, and (3) including
the net loss or income of consolidated entities attributable to
non-controlling interests.
|
|
|
|
|
|
|
|
Kraus continued: "On the innovation front, in the fourth quarter
we launched Secure Retirement Strategies (SRS) in the defined
contribution space, a unique, turnkey target-date product with a
lifetime income guarantee backed by multiple insurers. Recently we
introduced Alternative Investment Strategies (AIS), a new
alternatives platform for the Private Client channel that
incorporates our recent alternatives investments group acquisition
from SunAmerica. We also continued the expansion in Asia of our industry-leading sell-side
research and trading services. With our stable financial base, the
balance across our mix of businesses and our global research brand,
we are confident we will deliver consistent, long-term value to all
of our stakeholders."
The distribution is payable on March 3,
2011, to holders of record of AllianceBernstein Holding
Units at the close of business on February
22, 2011.
Market Performance
After a strong third quarter, the global markets continued to
rally in the fourth quarter, led by solid gains in December. The
S&P 500 gained 10.8% for the quarter and the MSCI World gained
9.0%, which helped generate positive returns in both US and global
stocks for 2010 as a whole.
Assets Under Management ($ Billions)
Note that previously reported preliminary assets under
management for December 31, 2010, and
prior periods have been adjusted by removing from
our AUM an affiliated account (representing approximately
$8 billion of assets as of
December 31, 2010, and which has
traditionally been classified as "Other AUM" within the
Institutions channel) for which we serve in an advisory
capacity and do not have discretionary trading authority.
The large size of the account and the frequency of material monthly
inflows and outflows over the past year had the potential to
distort observable trends in our overall assets under management.
In addition, the fees associated with the account are quite low. We
will continue to provide services to this account but will not
reflect the assets in future measures of our assets under
management. Our originally released preliminary assets under
management as of December 31, 2010,
inclusive of this account, stood at $486
billion.
|
Institutions
|
|
Retail
|
|
Private
Client
|
|
Total
|
|
Assets Under Management
12/31/10
|
$272.9
|
|
$127.0
|
|
$78.1
|
|
$478.0
|
|
Net Flows for Three Months Ended
12/31/10
|
($22.4)
|
|
($6.0)
|
|
($0.9)
|
|
($29.3)
|
|
|
|
|
|
|
|
|
|
Total assets under management as of December 31, 2010 were $478 billion, essentially flat from September 30, 2010, and down $9 billion, or 2%, compared to December 31, 2009.
Net outflows in the Institutions channel were $22.4 billion, compared to net outflows of
$11.9 billion in the third quarter of
2010. Gross sales fell sequentially from $4.2 billion to $3.5 billion during the fourth
quarter of 2010. The pipeline of awarded but unfunded institutional
mandates increased $0.2 billion to $6.4
billion at December 31, 2010.
The Retail channel experienced net outflows of $6.0 billion, compared to net outflows of
$3.2 billion in the third quarter of
2010. Gross sales declined sequentially from $7.3 billion to $6.7 billion during the fourth
quarter of 2010. Net outflows in the Private Client channel were
$0.9 billion compared to net outflows
of $0.5 billion in the third quarter
of 2010 while gross sales remained relatively flat.
Financial Results: GAAP
Operating income for the fourth quarter of 2010 declined 23% to
$154 million, and operating margin
decreased to 18.8% from 25.7%, compared to the fourth quarter of
2009. Sequentially, operating income increased by 167% from
$58 million and operating margin
increased from 7.2%. The decline in year-over-year operating income
and operating margin is mainly due to higher incentive compensation
expense and lower investment advisory fees in the fourth quarter of
2010. Diluted net income per Unit and the cash distribution per
Unit for the publicly-traded partnership each declined 32% to
$0.42, from $0.62, compared to the fourth quarter of 2009 and
increased 250%, from $0.12,
sequentially.
Net revenues decreased slightly compared to the fourth quarter
of 2009 as lower investment advisory fees were offset by higher
distribution revenues and investment gains. Sequentially, net
revenues increased 3% from the third quarter of 2010 mainly due to
higher investment advisory fees and higher Bernstein Research
Services revenue slightly offset by lower investment gains.
Bernstein Research Services revenue declined 2% versus the fourth
quarter of 2009 but increased 11% sequentially due to higher
customer activity during the fourth quarter of 2010.
Operating expenses were $624
million for the quarter, a year-over-year increase of 7%,
due to higher promotion and servicing expense and higher incentive
compensation expense. Operating expenses decreased 11%
sequentially, mainly the result of lower general and administrative
expense, the result of a prior quarter real estate charge; offset
by higher incentive compensation expense and promotion and
servicing costs. Compensation and benefits expenses increased 7%
and 1% compared to the fourth quarter of 2009 and the third quarter
of 2010, respectively, primarily due to higher incentive
compensation. Promotion and servicing expenses increased 10%,
compared to the fourth quarter of 2009 and 8% sequentially, mainly
due to higher distribution plan payments, commensurate with
increased distribution revenues, and higher travel and
entertainment expenses. G&A expenses increased 5%
year-over-year, mainly the result of the prior year quarter
reflecting an insurance reimbursement, offset by lower office and
related expenses. G&A expenses decreased 41% sequentially,
mainly the result of a prior quarter real estate charge.
Financial Results: As Adjusted
Adjusted Net Revenues decreased $20
million to $662 million compared to the fourth quarter of
2009 and increased $28 million
sequentially. The decrease compared to the fourth quarter of 2009
is due primarily to lower investment advisory fees. The
sequential increase is primarily due to higher investment advisory
fees and Bernstein Research Services revenues, slightly offset by
lower seed capital investment gains. Compared to the fourth quarter
of 2009, Adjusted Operating Income decreased by $51 million, or 27%, to $139 million and Adjusted Operating Margin
decreased to 21.0% from 27.8%. Compared to the third quarter of
2010, Adjusted Operating Income increased 14% from $122 million and Adjusted Operating Margin
increased from 19.3%.
Adjusted Diluted Net Income per Unit for the publicly-traded
partnership decreased to $0.40 from
$0.59 in the fourth quarter of 2009
and increased from $0.36
sequentially.
Unit Repurchases
We engage in open-market purchases of Holding Units to help fund
anticipated obligations under our incentive compensation award
program and purchase Holding Units from employees to allow them to
fulfill statutory tax requirements at the time of distribution of
long-term incentive compensation awards. During 2010, we purchased
8.8 million Holding Units for $226.4
million, reflecting open-market purchases of 7.4 million
Holding Units for $195.3 million and
the remainder primarily relating to employee tax withholding
purchases. We intend to continue to engage in open-market purchases
of Holding Units, from time to time, to help fund anticipated
obligations under our incentive compensation award program.
Fourth Quarter 2010 Earnings Conference Call
Information
Management will review fourth quarter 2010 financial and
operating results during a conference call beginning at
5:00 p.m. (EST) on Thursday, February 10, 2011. The conference call
will be hosted by Peter S. Kraus,
Chairman and Chief Executive Officer, David
A. Steyn, Chief Operating Officer, John B. Howard, departing Chief Financial
Officer, and Edward J. Farrell,
Interim 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 scheduled
start time. The conference ID# is 35941717.
The presentation that will be reviewed during the conference
call will be available on AllianceBernstein's Investor Relations
website at approximately 4:00 p.m.
(EST) on February 10,
2011.
A replay of the webcast will be made available beginning
approximately one hour after the conclusion of the conference call
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# 35941717.
Availability of 2010 Form 10-K
Unitholders may obtain a copy of our Form 10-K for the year
ended December 31, 2010 in either
electronic format or hard copy on www.alliancebernstein.com:
- Download Electronic Copy: Unitholders with internet access can
download an electronic version of the report by visiting
www.alliancebernstein.com and clicking on "AllianceBernstein 2010
Form 10-K". The report is also accessible in the "Featured
Documents" section of the "Investor & Media Relations" page at
www.alliancebernstein.com/investorrelations.
- Order Hard Copy Electronically or by Phone: Unitholders may
also order a hard copy of the report, which is expected to be
available for mailing in approximately eight weeks, free of charge.
Unitholders with internet access can follow the above
instructions to order a hard copy electronically. Unitholders
without internet access, or who would prefer to order by phone, can
call 800-227-4618.
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, 2010. 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.
- Our confidence that we will outperform in equities in the
months ahead which, combined with an improved risk appetite on the
part of investors, should lead to improved flows: We
cannot predict the timing or degree of global market growth, nor
our absolute or relative investment performance for our clients.
The actual performance of the capital markets and other
factors beyond our control will affect our investment success for
clients and asset flows. Furthermore, improved flows depend
on a number of factors, including our ability to deliver
consistent, competitive investment performance, which cannot be
assured, conditions of financial markets, changes and volatility in
political, economic, capital market or industry conditions,
consultant recommendations, and changes in our clients' investment
preferences, risk tolerances and liquidity needs.
- Our intention to continue to engage in open market
purchases of Holding Units, from time to time, to help fund
anticipated obligations under our incentive compensation award
program: The number of Holding Units needed in future
periods to make incentive compensation awards is dependent upon
various factors, some of which are beyond our control, including
the fluctuation in the price of a Holding Unit.
- Our confidence that we will deliver consistent, long-term
value to all of our stakeholders: Changes and
volatility in political, economic, capital market or industry
conditions can result in changes in demand for our products and
services or impact the value of our assets under management, all of
which may significantly hinder our ability to execute on our
strategy.
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 investors, individuals and private
clients in major world markets.
At December 31, 2010,
AllianceBernstein Holding L.P. owned approximately 37.8% of the
issued and outstanding AllianceBernstein Units and AXA, one of the
largest global financial services organizations, owned an
approximate 61.4% economic interest in AllianceBernstein.
Additional information about AllianceBernstein may be found on
our internet site, www.alliancebernstein.com.
AllianceBernstein L.P. (The
Operating Partnership)
|
|
|
|
|
|
|
|
|
|
SUMMARY CONSOLIDATED STATEMENTS
OF INCOME | December 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
$ thousands,
unaudited
|
|
12/31/10
|
|
12/31/09
|
|
12/31/10
|
|
12/31/09
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Base fees
|
|
$514,163
|
|
$526,675
|
|
$2,031,162
|
|
$1,890,478
|
|
|
|
Performance fees
|
|
9,192
|
|
16,487
|
|
20,530
|
|
29,854
|
|
|
|
Bernstein research
services
|
|
106,806
|
|
108,775
|
|
430,521
|
|
434,605
|
|
|
|
Distribution revenues
|
|
89,393
|
|
80,891
|
|
338,597
|
|
277,328
|
|
|
|
Dividend and interest
income
|
|
9,039
|
|
7,386
|
|
22,902
|
|
26,730
|
|
|
|
Investment gains
(losses)
|
|
21,754
|
|
13,720
|
|
(1,410)
|
|
144,447
|
|
|
|
Other revenues
|
|
28,047
|
|
28,430
|
|
109,803
|
|
107,848
|
|
|
|
Total revenues
|
|
778,394
|
|
782,364
|
|
2,952,105
|
|
2,911,290
|
|
|
|
Less: Interest
expense
|
|
833
|
|
503
|
|
3,548
|
|
4,411
|
|
|
|
Net revenues
|
|
777,561
|
|
781,861
|
|
2,948,557
|
|
2,906,879
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation &
benefits
|
|
346,454
|
|
323,391
|
|
1,322,522
|
|
1,298,053
|
|
|
|
Promotion &
servicing
|
|
|
|
|
|
|
|
|
|
|
|
Distribution-related payments
|
|
76,411
|
|
69,401
|
|
286,676
|
|
234,203
|
|
|
|
Amortization of
deferred sales commissions
|
|
11,349
|
|
12,819
|
|
47,397
|
|
54,922
|
|
|
|
Other
|
|
53,023
|
|
45,836
|
|
192,096
|
|
176,703
|
|
|
|
General &
administrative
|
|
130,604
|
|
122,088
|
|
515,884
|
|
520,072
|
|
|
|
Real estate charge
|
|
116
|
|
2,548
|
|
101,698
|
|
8,276
|
|
|
|
Interest on
borrowings
|
|
623
|
|
566
|
|
2,078
|
|
2,696
|
|
|
|
Amortization of intangible
assets
|
|
5,230
|
|
4,956
|
|
21,344
|
|
21,126
|
|
|
|
Total expenses
|
|
623,810
|
|
581,605
|
|
2,489,695
|
|
2,316,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
153,751
|
|
200,256
|
|
458,862
|
|
590,828
|
|
|
Non-operating income
|
|
-
|
|
4,552
|
|
6,760
|
|
33,657
|
|
|
Income before income
taxes
|
|
153,751
|
|
204,808
|
|
465,622
|
|
624,485
|
|
|
Income taxes
|
|
9,359
|
|
13,901
|
|
38,523
|
|
45,977
|
|
|
Net income
|
|
144,392
|
|
190,907
|
|
427,099
|
|
578,508
|
|
|
Net (income) loss of
consolidated entities attributable to non-controlling
interests
|
(7,873)
|
|
733
|
|
15,320
|
|
(22,381)
|
|
|
Net Income Attributable to
AllianceBernstein Unitholders
|
$136,519
|
|
$191,640
|
|
$442,419
|
|
$556,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin(1)
|
|
18.8%
|
|
25.7%
|
|
16.1%
|
|
19.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Operating income
including net (income) loss attributable to non-controlling
interests as a percentage of net revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianceBernstein Holding L.P.
(The Publicly-Traded Partnership)
|
|
|
|
|
|
|
|
|
SUMMARY STATEMENTS OF
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
$ thousands except per Unit
amounts, unaudited
|
12/31/10
|
|
12/31/09
|
|
12/31/10
|
|
12/31/09
|
|
|
Equity in Net Income
Attributable to AllianceBernstein Unitholders
|
$50,168
|
|
$67,086
|
|
$162,217
|
|
$192,513
|
|
|
Income Taxes
|
|
7,243
|
|
7,415
|
|
28,059
|
|
25,324
|
|
|
Net Income
|
|
42,925
|
|
59,671
|
|
134,158
|
|
167,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Equity in Earnings of
Operating Partnership (1)
|
364
|
|
731
|
|
1,640
|
|
328
|
|
|
Net Income - Diluted
|
|
$43,289
|
|
$60,402
|
|
$135,798
|
|
$167,517
|
|
|
Diluted Net Income per
Unit
|
|
$0.42
|
|
$0.62
|
|
$1.32
|
|
$1.80
|
|
|
Distribution per
Unit
|
|
$0.42
|
|
$0.62
|
|
$1.31
|
|
$1.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) To reflect higher
ownership in the Operating Partnership resulting from application
of the treasury stock method to outstanding options.
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianceBernstein L.P. and
AllianceBernstein Holding L.P.
|
|
|
|
|
|
UNITS OUTSTANDING AND WEIGHTED
AVERAGE UNITS OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Units
|
|
Weighted
Average Units
|
|
|
|
|
Period
End
|
Three Months
Ended 12/31/10
|
|
Twelve
Months Ended 12/31/10
|
|
|
|
|
Units
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
|
AllianceBernstein
L.P.
|
278,115,232
|
275,635,188
|
|
276,812,622
|
|
275,415,175
|
|
277,054,595
|
|
|
AllianceBernstein Holding
L.P.
|
105,086,799
|
100,940,209
|
|
102,117,643
|
|
101,161,971
|
|
102,801,391
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianceBernstein
L.P.
|
|
|
|
|
|
|
|
|
ASSETS UNDER MANAGEMENT |
December 31, 2010
|
|
|
|
|
|
|
|
|
($ billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending and
Average
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
12/31/10
|
|
12/31/09
|
|
|
Ending Assets Under
Management(1)
|
|
|
|
|
|
|
$478.0
|
|
$486.7
|
|
|
Average Assets Under
Management(1)
|
|
|
|
|
|
|
$480.2
|
|
$483.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Changes By
Distribution Channel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutions(1)
|
|
Retail
|
|
Private
Client
|
|
Total
|
|
|
Beginning of
Period
|
|
|
$276.2
|
|
$125.6
|
|
$75.7
|
|
$477.5
|
|
|
Sales/New accounts
|
|
|
3.5
|
|
6.7
|
|
1.9
|
|
12.1
|
|
|
Redemptions/Terminations
|
|
|
(20.8)
|
|
(10.8)
|
|
(1.6)
|
|
(33.2)
|
|
|
Net Cash Flows
|
|
|
(5.1)
|
|
(1.9)
|
|
(1.2)
|
|
(8.2)
|
|
|
Net Flows
|
|
|
(22.4)
|
|
(6.0)
|
|
(0.9)
|
|
(29.3)
|
|
|
Acquisition(3)
|
|
|
8.0
|
|
-
|
|
-
|
|
8.0
|
|
|
Investment
Performance
|
|
|
11.1
|
|
7.4
|
|
3.3
|
|
21.8
|
|
|
End of Period
|
|
|
$272.9
|
|
$127.0
|
|
$78.1
|
|
$478.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Changes By
Investment Service
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
Growth
|
|
Fixed
Income
|
|
Other(1)(2)
|
|
Total
|
|
|
Beginning of
Period
|
$151.5
|
|
$77.2
|
|
$209.4
|
|
$39.4
|
|
$477.5
|
|
|
Sales/New accounts
|
1.5
|
|
1.0
|
|
8.0
|
|
1.6
|
|
12.1
|
|
|
Redemptions/Terminations
|
(17.8)
|
|
(9.3)
|
|
(5.9)
|
|
(0.2)
|
|
(33.2)
|
|
|
Net Cash Flows
|
(3.5)
|
|
(2.0)
|
|
(3.4)
|
|
0.7
|
|
(8.2)
|
|
|
Net Flows
|
(19.8)
|
|
(10.3)
|
|
(1.3)
|
|
2.1
|
|
(29.3)
|
|
|
Acquisition(3)
|
-
|
|
-
|
|
-
|
|
8.0
|
|
8.0
|
|
|
Investment
Performance
|
12.6
|
|
7.4
|
|
(1.9)
|
|
3.7
|
|
21.8
|
|
|
End of Period(4)
|
$144.3
|
|
$74.3
|
|
$206.2
|
|
$53.2
|
|
$478.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By Client
Domicile
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutions(1)
|
|
Retail
|
|
Private
Client
|
|
Total
|
|
|
U.S. Clients
|
|
|
$149.7
|
|
$ 83.6
|
|
$76.3
|
|
$309.6
|
|
|
Non-U.S. Clients
|
|
|
123.2
|
|
43.4
|
|
1.8
|
|
$168.4
|
|
|
Total
|
|
|
$272.9
|
|
$127.0
|
|
$78.1
|
|
$478.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Previously reported
preliminary assets under management for December 31, 2010 and prior
periods have been adjusted by removing from our AUM an affiliated
account for which we serve in an advisory capacity and do not have
discretionary trading authority.
|
|
(2) Includes index,
structured, asset allocation services and other non-actively
managed AUM.
|
|
(3) In the fourth quarter
2010 AB acquired the alternative investment group of SunAmerica.
|
|
(4) Approximately $71
billion in Blend Strategies AUM are reported in their respective
services.
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianceBernstein
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP FINANCIAL
RESULTS TO ADJUSTED FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
$ thousands,
unaudited
|
12/31/10
|
|
9/30/10
|
|
6/30/10
|
|
3/31/10
|
|
12/31/09
|
|
9/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues, GAAP
basis
|
$
777,561
|
|
$
757,567
|
|
$
688,343
|
|
$
725,086
|
|
$
781,861
|
|
$
806,014
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
compensation-related investment (gains) losses
|
(16,677)
|
|
(36,013)
|
|
36,797
|
|
(11,159)
|
|
(14,763)
|
|
(70,873)
|
|
|
|
Deferred
compensation-related dividends and interest
|
(3,963)
|
|
(830)
|
|
(920)
|
|
(800)
|
|
(4,084)
|
|
(1,381)
|
|
|
|
90% of consolidated
venture capital fund investment (gains) losses
|
(7,570)
|
|
(2,056)
|
|
9,304
|
|
16,849
|
|
1,627
|
|
(27,155)
|
|
|
|
Distribution-related
payments
|
(76,411)
|
|
(72,501)
|
|
(71,015)
|
|
(66,750)
|
|
(69,400)
|
|
(61,842)
|
|
|
|
Amortization of deferred
sales commissions
|
(11,349)
|
|
(11,780)
|
|
(12,147)
|
|
(12,121)
|
|
(12,819)
|
|
(13,363)
|
|
|
Adjusted Net
Revenues
|
$
661,591
|
|
$
634,387
|
|
$
650,362
|
|
$
651,105
|
|
$
682,422
|
|
$
631,400
|
|
|
Operating Income, GAAP
basis
|
$
153,751
|
|
$
57,480
|
|
$
107,649
|
|
$
139,982
|
|
$
200,256
|
|
$
223,470
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
compensation-related investment (gains) losses
|
(16,677)
|
|
(36,013)
|
|
36,797
|
|
(11,159)
|
|
(14,763)
|
|
(70,873)
|
|
|
Deferred
compensation-related dividends and interest
|
(3,963)
|
|
(830)
|
|
(920)
|
|
(800)
|
|
(4,084)
|
|
(1,381)
|
|
|
|
Deferred
compensation-related mark-to-market vesting expense
(credit)
|
7,358
|
|
14,158
|
|
(19,082)
|
|
357
|
|
1,556
|
|
16,722
|
|
|
|
Deferred
compensation-related dividends and interest expense
|
6,317
|
|
731
|
|
810
|
|
682
|
|
3,760
|
|
1,240
|
|
|
|
Net impact
of deferred compensation-related investments
|
(6,965)
|
|
(21,954)
|
|
17,605
|
|
(10,920)
|
|
(13,531)
|
|
(54,292)
|
|
|
|
Real estate
charges
|
116
|
|
89,598
|
|
-
|
|
11,983
|
|
2,548
|
|
-
|
|
|
|
Total Exclusions:
|
(6,849)
|
|
67,644
|
|
17,605
|
|
1,063
|
|
(10,983)
|
|
(54,292)
|
|
|
|
Include:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss of
consolidated entities attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
non-controlling
interests
|
(7,873)
|
|
(2,919)
|
|
9,339
|
|
16,773
|
|
733
|
|
(27,154)
|
|
|
Adjusted Operating
Income
|
$
139,029
|
|
$
122,205
|
|
$
134,593
|
|
$
157,818
|
|
$
190,006
|
|
$
142,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin, GAAP basis
incl. non-controlling interests
|
18.8%
|
|
7.2%
|
|
17.0%
|
|
21.6%
|
|
25.7%
|
|
24.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Margin
|
21.0%
|
|
19.3%
|
|
20.7%
|
|
24.2%
|
|
27.8%
|
|
22.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianceBernstein Holding
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP EPU TO
ADJUSTED EPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
$ thousands except per Unit
amounts, unaudited
|
12/31/10
|
|
9/30/10
|
|
6/30/10
|
|
3/31/10
|
|
12/31/09
|
|
9/30/09
|
|
|
Diluted Net Income, GAAP
basis
|
$
43,289
|
|
$
12,384
|
|
$
32,256
|
|
$
47,858
|
|
$
60,402
|
|
$
62,836
|
|
|
Impact of AllianceBernstein L.P.
non-GAAP adjustments
|
(2,451)
|
|
24,190
|
|
6,290
|
|
378
|
|
(3,746)
|
|
(18,230)
|
|
|
Adjusted Diluted Net
Income
|
$
40,838
|
|
$
36,574
|
|
$
38,546
|
|
$
48,236
|
|
$
56,656
|
|
$
44,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Net Income per Unit,
GAAP basis
|
$
0.42
|
|
$
0.12
|
|
$
0.31
|
|
$
0.46
|
|
$
0.62
|
|
$
0.67
|
|
|
Impact of AllianceBernstein L.P.
non-GAAP adjustments
|
(0.02)
|
|
0.24
|
|
0.06
|
|
0.01
|
|
(0.03)
|
|
(0.19)
|
|
|
Adjusted Diluted Net Income per
Unit
|
$
0.40
|
|
$
0.36
|
|
$
0.37
|
|
$
0.47
|
|
$
0.59
|
|
$
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianceBernstein
L.P.
|
|
|
|
|
RECONCILIATION OF GAAP FINANCIAL
RESULTS TO ADJUSTED FINANCIAL RESULTS
|
|
|
|
|
|
Twelve
Months Ended
|
|
|
December
31,
|
|
$ thousands,
unaudited
|
2010
|
|
2009
|
|
Net Revenues, GAAP
basis
|
$
2,948,557
|
|
$
2,906,879
|
|
Exclude:
|
|
|
|
|
Deferred
compensation-related investment (gains) losses
|
(27,053)
|
|
(120,501)
|
|
Deferred
compensation-related dividends and interest
|
(6,513)
|
|
(8,526)
|
|
90% of consolidated
venture capital fund investment losses (gains)
|
16,527
|
|
(20,630)
|
|
Distribution-related
payments
|
(286,676)
|
|
(234,203)
|
|
Amortization of deferred
sales commissions
|
(47,397)
|
|
(54,922)
|
|
Adjusted Net
Revenues
|
$
2,597,445
|
|
$
2,468,097
|
|
|
|
|
|
|
Operating Income, GAAP
basis
|
$
458,862
|
|
$
590,828
|
|
Exclude:
|
|
|
|
|
Deferred
compensation-related investment (gains) losses
|
(27,053)
|
|
(120,501)
|
|
Deferred
compensation-related dividends and interest
|
(6,513)
|
|
(8,526)
|
|
Deferred
compensation-related mark-to-market vesting expense
(credit)
|
2,791
|
|
(2,147)
|
|
Deferred
compensation-related dividends and interest expense
|
8,540
|
|
7,734
|
|
Net impact
of deferred compensation-related investments
|
(22,235)
|
|
(123,440)
|
|
Real estate
charges
|
101,698
|
|
8,276
|
|
Total
exclusions
|
79,463
|
|
(115,164)
|
|
Include:
|
|
|
|
|
Net loss (income) of
consolidated entities attributable to non-controlling
interests
|
15,320
|
|
(22,381)
|
|
Adjusted Operating
Income
|
$
553,645
|
|
$
453,283
|
|
Operating Margin, GAAP basis
incl. non-controlling interests
|
16.1%
|
|
19.6%
|
|
Adjusted Operating
Margin
|
21.3%
|
|
18.4%
|
|
|
|
|
|
|
AllianceBernstein Holding
L.P.
|
|
|
|
|
RECONCILIATION OF GAAP EPU TO
ADJUSTED EPU
|
|
|
|
|
|
Twelve
Months Ended
|
|
|
December
31,
|
|
$ thousands except per Unit
amounts, unaudited
|
2010
|
|
2009
|
|
|
|
|
|
|
Net Income - Diluted, GAAP
basis
|
$
135,798
|
|
$
167,517
|
|
Impact of AllianceBernstein L.P.
non-GAAP adjustments
|
28,378
|
|
(38,830)
|
|
Net Income - Diluted, as
adjusted
|
$
164,176
|
|
$
128,687
|
|
|
|
|
|
|
Diluted Net Income per Unit,
GAAP basis
|
$
1.32
|
|
$
1.80
|
|
Impact of AllianceBernstein L.P.
non-GAAP adjustments
|
0.28
|
|
(0.42)
|
|
Diluted Net Income per Unit, as
adjusted
|
$
1.60
|
|
$
1.38
|
|
|
|
|
|
AllianceBernstein L.P.
Notes to Condensed Consolidated Statements of Income and
Supplemental Information
(Unaudited)
Adjusted Net Revenues
Adjusted net revenues exclude investment gains and losses and
dividends and interest on deferred compensation-related
investments, and 90% of the investment gains and losses of our
consolidated venture capital fund attributable to non-controlling
interests. In addition, adjusted net revenues offset
distribution-related payments to third parties as well as
amortization of deferred sales commissions against distribution
revenues. We believe the offset of distribution-related payments
from net revenues is useful for our investors and other users of
our financial statements because such presentation appropriately
reflects the nature of these costs as pass-through payments to
third parties who perform functions on behalf of our sponsored
mutual funds and/or shareholders of these funds. Amortization of
deferred sales commissions is offset against net revenues because
such costs, over time, offset distribution revenues earned by the
company.
Adjusted Operating Income
Adjusted operating income represents operating income on a GAAP
basis (1) excluding the impact on net revenues and compensation
expense of the mark-to-market gains and losses (as well as the
dividends and interest) associated with employee deferred
compensation-related investments, (2) excluding real estate
charges, and (3) including the net loss or income of consolidated
entities attributable to non-controlling interests.
(1) Prior to 2009, a large proportion of employee compensation
was in the form of deferred awards that were notionally invested in
AllianceBernstein investment services and generally vested over a
period of four years. AllianceBernstein has economically hedged the
exposure to market movements by purchasing and holding these
investments on its balance sheet. The full value of the
investments' appreciation (depreciation) is recorded within
investment gains and losses on the income statement in the current
period. U.S. GAAP requires the appreciation (depreciation) in the
compensation liability to be expensed over the award vesting period
in proportion to the vested amount of the award as part of
compensation expense. This creates a timing difference between the
recognition of the compensation expense and the investment gain or
loss impacting operating income, which will fluctuate over the life
of the award and net to zero at the end of the multi-year vesting
period. Although during periods of high market volatility these
timing differences have an impact on operating income and operating
margin, over the life of the award any impact is ultimately offset.
Because these plans are economically hedged, management believes it
is useful to reflect the offset ultimately achieved from hedging
the investments' market exposure in the calculation of adjusted
operating income, adjusted operating margin and adjusted diluted
net income per Holding Unit, which will produce core operating
results from period to period. The non-GAAP measures exclude gains
and losses and dividends and interest on deferred
compensation-related investments included in revenues and
compensation expense, thus eliminating the timing differences
created by different treatment under U.S. GAAP of the market
movement on the expense and the investments.
(2) Real estate charges have been excluded because they are not
considered part of our core operating results when comparing
financial results from period to period and to industry peers.
(3) Most of the net income or loss of consolidated entities
attributable to non-controlling interests relates to the 90%
limited partner interests held by third parties in our consolidated
venture capital fund. We own a 10% limited partner interest in the
fund. Because we are the general partner of the venture capital
fund and are deemed to have a controlling interest, U.S. GAAP
requires us to consolidate the financial results of the fund.
However, recognizing 100% of the gains or losses in operating
income while only retaining 10% is not reflective of our underlying
financial results at the operating income level. As a result, we
are excluding the 90% limited partner interests we do not own from
our adjusted operating income. Similarly, net income of joint
ventures attributable to non-controlling interests, although not
significant, is excluded because it does not reflect the economic
interest attributable to AllianceBernstein.
Adjusted Operating Margin
Adjusted operating margin allows us to monitor our financial
performance and efficiency from period to period and to compare our
performance to industry peers without the volatility noted above in
our discussion of adjusted operating income. Adjusted operating
margin is derived by dividing adjusted operating income by adjusted
net revenues.
SOURCE AllianceBernstein L.P.