52 slides from Alliancebernstein Holding L.p's earnings presentation, Feb 11, 2011
Slide 1: Fourth Quarter 2010 Review
Fourth Quarter 2010 Review February 10, 2011 John B. Howard Departing Chief Financial Officer Edward J. Farrell Interim Chief Financial Officer Peter S. Kraus Chairman & Chief Executive Officer David A. Steyn Chief Operating Officer
Slide 2: Cautions Regarding Forward-Looking Statements
AllianceBernstein.com 1 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, unce
Slide 3: Perspective on 2010: Progress amid Headwinds
AllianceBernstein.com 2 Perspective on 2010: Progress amid Headwinds Assets and Flows* Operating Results Capital Management < Average AUM $446 $475 6 < Gross Sales 47 60 29 < Net Flows (69.7) (56.2) 19 < Base Fees 1,890 2,031 7 < Adjusted Margins 18.4% 21.3% 16 < Adjusted Operating Inc. 453 554 22 <
Slide 4: 2010 Like 2009: Continued Shift from Equities to Fixed Income
AllianceBernstein.com 3 2010 Like 2009: Continued Shift from Equities to Fixed Income *Taxable only Source: Strategic Insight. Includes all open-end mutual funds Retail Industry Mutual Fund Net Flow Trends In US $ Billions
Slide 5: Our World-Class Fixed Income Franchise Benefited
4 Our World-Class Fixed Income Franchise Benefited Benchmark: Strategic Core Plus Emerging Market Debt Global Plus Barclays Global Aggregate Bond Index (Unhedged) JPM EMBI Global 2009 2010 Custom Index 2008 US Fixed Income: $117 Billion Non-US Fixed Income: $89 Billion Performance as of December 31,
Slide 6: Shift in AUM Mix Improves Average Fee Realization
AllianceBernstein.com 5 Shift in AUM Mix Improves Average Fee Realization $184 38% $265 54% $219 46% $206 43% Year-over-Year Change in AUM Mix US$ Billions Fixed Income Equity Other* 8% $37 2009 Average Fee Realization 42.4 bps 2010 Average Fee Realization Equity Other* 11% $53 *Includes index, stru
Slide 7: AllianceBernstein: Breadth and Balance
AllianceBernstein.com 6 AllianceBernstein: Breadth and Balance By Strategy Firm-Wide Diversification On Annualized Fee Base of $2.1 Billion Value Growth Fixed 3% Other By Channel Institutions* AUM (6)% Rev. (6)% Retail* AUM +5% Rev. +22% Private Client* AUM +4% Rev. +12% As of December 31, 2010 *Yea
Slide 8: A Closer Look at Performance Since the Bottom
AllianceBernstein.com 7 A Closer Look at Performance Since the Bottom *All Lipper Global Large Cap Value Mutual Fund share classes with a front-end sales charge Performance net of expenses, but before sales charges Source: Lipper and AllianceBernstein Cumulative Returns vs. Peers (1/13) (1/13) (1/13
Slide 9: Green Shoots: Investment Performance in Fourth Quarter
AllianceBernstein.com 8 Green Shoots: Investment Performance in Fourth Quarter Percent of Long-Term Fund Assets Beating Lipper Category Average* *On an asset-weighted basis, including US and Offshore Funds AB's Offshore Funds are ranked based on Lipper's Global Fund universe focusing on primary shar
Slide 10: Asset Flows by Distribution Channel: Quarterly Trend
AllianceBernstein.com 9 Asset Flows by Distribution Channel: Quarterly Trend In US $ Billions Net Totals: $(11.8) $(6.6) $(4.7) $(15.6) $(29.3) 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 *Previously reported preliminary assets under management for December 31, 2010, and prior periods have been adjusted by removi
Slide 11: Institutional Flows: Annual Trends
10 Institutional Flows:* Annual Trends *Previously reported preliminary assets under management for December 31, 2010, and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which we serve in an advisory capacity and do not have discretionary trading au
Slide 12: Retail Flows: Annual Trends
11 Retail Flows: Annual Trends In US $ Billions
Slide 13: Retail Annual Gross Sales
12 Retail Annual Gross Sales Retail Fixed Income Global High Yield $7.3 $11.1 52% American Income 1.7 3.3 94% US Municipal Bond Funds 0.8 1.8 125% Emerging Markets Debt 0.0 0.5 — < 90% increase in fixed income sales; 11% and 8% in value and growth < Retail average AUM up 17% year-over-year < Asia an
Slide 14: Private Client Flows: Annual Trends
13 Private Client Flows: Annual Trends In US $ Billions
Slide 15: A Year in the Life of DAA
AllianceBernstein.com 14 A Year in the Life of DAA Launch date was Monday, February 22 , 2010 Private Client AUM with DAA Overlay In US $ Millions
Slide 16: A History of Alpha: The Launch of Our Alternatives Platform
AllianceBernstein.com 15 A History of Alpha: The Launch of Our Alternatives Platform 1997 2001 2002 US Equity Long/Short Fixed Income Long/Short Global Equity and Currency Long/Short 2006 Distressed Investing 2008 Government Assets (TALF & PPIP) 2009 2010 Diversified Alternative Fund of Funds Ventur
Slide 17: Bernstein Research Services
AllianceBernstein.com 16 Bernstein Research Services < Fourth quarter revenue up 11% versus prior quarter, driven by both US and Europe. Market volumes, however, remained sluggish < Full year revenue down 1%, with US down slightly and Europe up modestly < Best-ever recognition in annual Institutiona
Slide 18: Financial Highlights: Fourth Quarter and Full Year 2010
AllianceBernstein.com 17 Financial Highlights: Fourth Quarter and Full Year 2010 Adjusted EPU Adjusted Operating Margins Adjusted Revenue/ Expense Trends Share Repurchases ($ Millions) 36¢ 40¢ 19.3% 21.0% 18.4% 21.3% 4% 2% 5% 1% Adjusted Revenues Adjusted Expenses % Change Q4 vs. Q3 % Change 2010 vs
Slide 19: Fourth Quarter and Full Year 2010 Income Statement
AllianceBernstein.com 18 Fourth Quarter and Full Year 2010 Income Statement Percentages are calculated using expenses rounded to the nearest thousand. Please refer to pages 46-50 for additional information on the reconciliation of GAAP financial results to adjusted financial results. < GAAP revenues
Slide 20: Fourth Quarter and Full Year 2010 Revenues
AllianceBernstein.com 19 Fourth Quarter and Full Year 2010 Revenues Percentages are calculated using revenues and expenses rounded to the nearest thousand. (1) Includes investment (gains) losses and dividends and interest on deferred compensation-related investments and 90% of the investment (gains)
Slide 21: Fourth Quarter and Full Year 2010 Operating Expenses
AllianceBernstein.com 20 Fourth Quarter and Full Year 2010 Operating Expenses Percentages are calculated using expenses rounded to the nearest thousand (1) Please refer to page 42 for additional information on the deferred compensation net P&L trends < Q4 adjusted operating expenses up 2% versus Q3
Slide 22: Fourth Quarter and Full Year 2010 GAAP to Adjusted Reconciliation
AllianceBernstein.com 21 Fourth Quarter and Full Year 2010 GAAP to Adjusted Reconciliation Please refer to pages 46-50 for additional information on the reconciliation of GAAP financial results to adjusted financial results Percentages are calculated using revenues and expenses rounded to the neares
Slide 23: Adjusted Operating Income: 4Q 2010 vs. 3Q 2010
AllianceBernstein.com 22 Adjusted Operating Income: 4Q 2010 vs. 3Q 2010 $122 $139 $20 $11 $(6) $(4) *3Q included $5 million seed capital gains, which are flat in 4Q $(7) $3 US$ Millions
Slide 24: Adjusted Operating Income: 2010 vs. 2009
AllianceBernstein.com 23 Adjusted Operating Income: 2010 vs. 2009 $453 $554 $141 $(9) $16 $(15) $(19) $2 $(15) US$ Millions
Slide 25: AllianceBernstein Fourth Quarter 2010 Review - Q & A
AllianceBernstein.com 24 AllianceBernstein Fourth Quarter 2010 Review Q & A
Slide 26: Appendix
AllianceBernstein.com 25 Appendix
Slide 27: Performance Since the Market Bottom
AllianceBernstein.com 26 Performance Since the Market Bottom Mid Cap Small Cap Source: Lipper and AllianceBernstein. Performance net of expenses, but before sales charges. Peer groups shown include all fund share classes with a front-end sales charge. Performance of mutual funds may vary from instit
Slide 28: Institutional Value Equity: Relative Performance
AllianceBernstein.com 27 Institutional Value Equity: Relative Performance Periods Ended December 31, 2010 Service 4Q 2010 One Year Three Years Five Years 10 Years Benchmark US Diversified Value 0.4 (2.9) (2.6) (2.3) (0.1) Russell 1000 Value US Strategic Value 0.8 (3.8) (5.9) (4.4) 1.5 S&P 500 US Str
Slide 29: Institutional Growth Equity: Relative Performance
AllianceBernstein.com 28 Institutional Growth Equity: Relative Performance Periods Ended December 31, 2010 Service 4Q 2010 One Year Three Years Five Years 10 Years Benchmark Global Research Growth (0.0) (3.0) (7.3) (4.8) (1.4) MSCI World (Cap, UH, net) US Large Cap Growth 1.8 (6.9) (2.9) (2.9) (0.7)
Slide 30: Institutional Blend Strategies: Relative Performance
AllianceBernstein.com 29 Institutional Blend Strategies: Relative Performance Periods Ended December 31, 2010 Service 4Q 2010 One Year Three Years Five Years 10 Years Benchmark Global Blend Strategies (0.4) (4.6) (6.7) (4.3) N/A MSCI World (Cap, UH, net) International Blend Strategies (1.0) (3.5) (4
Slide 31: Institutional Fixed Income: Relative Performance
AllianceBernstein.com 30 Institutional Fixed Income: Relative Performance Periods Ended December 31, 2010 Service 4Q 2010 One Year Three Years Five Years 10 Years Benchmark Corporate Bonds 0.2 0.6 0.2 0.0 0.1 Custom Corporate Index Strategic Core Plus 0.5 2.9 1.3 0.6 N/A Custom Index Global Plus (0.
Slide 32: Private Client: Absolute Performance
AllianceBernstein.com 31 Private Client: Absolute Performance Periods Ended December 31, 2010 Service 4Q 2010 One Year Three Years Five Years 10 Years Fully Diversified Simulation* 5.8 8.3 (2.7) 1.7 3.9 S&P 500 10.8 15.1 (2.9) 2.3 1.4 MSCI World (Cap, UH, net) 9.0 11.8 (4.9) 2.4 2.3 Lipper Short/Int
Slide 33: Retail Value Equity: Relative Performance
AllianceBernstein.com 32 Retail Value Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages Mutual fund and Lipper performance data through December 31, 2010. NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed towar
Slide 34: Retail Growth Equity: Relative Performance
AllianceBernstein.com 33 Retail Growth Equity: Relative Performance (1) Performance figures other than 4Q10 and One Year positively affected by class action settlement proceeds NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed to
Slide 35: Retail Fixed Income: Relative Performance
AllianceBernstein.com 34 Retail Fixed Income: Relative Performance Retail Fixed Income Funds vs. Lipper Averages (1) Performance figures other than 4Q10 and One Year positively affected by class action settlement proceeds NOTE: The information in this table is provided solely for use in connection w
Slide 36: Wealth Strategies: Relative Performance
AllianceBernstein.com 35 Wealth Strategies: Relative Performance Retail Mutual Funds vs. Lipper Averages (1) Performance figures other than 4Q10 and One Year positively affected by class action settlement proceeds NOTE: The information in this table is provided solely for use in connection with this
Slide 37: Three Months Ended 12/31/10: AUM Roll-Forward by Distribution Channel
AllianceBernstein.com 36 Three Months Ended 12/31/10: AUM Roll-Forward by Distribution Channel In US $ Billions (1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for whic
Slide 38: Three Months Ended 12/31/10: AUM Roll-Forward by Investment Service
AllianceBernstein.com 37 Three Months Ended 12/31/10: AUM Roll-Forward by Investment Service (1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which we serve in an ad
Slide 39: Twelve Months Ended 12/31/10: AUM Roll-Forward by Distribution Channel
AllianceBernstein.com 38 Twelve Months Ended 12/31/10: AUM Roll-Forward by Distribution Channel In US $ Billions (1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for whi
Slide 40: Twelve Months Ended 12/31/10: AUM Roll-Forward by Investment Service
AllianceBernstein.com 39 Twelve Months Ended 12/31/10: AUM Roll-Forward by Investment Service (1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which we serve in an a
Slide 41: AUM by Region
AllianceBernstein.com 40 AUM by Region Retail Institutions Private Client $272.9 $127.0 $78.1 In US $ Billions As of December 31, 2010
Slide 42: Fourth Quarter 2010 Advisory Fees
AllianceBernstein.com 41 Fourth Quarter 2010 Advisory Fees (1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which we serve in an advisory capacity and do not have di
Slide 43: Six-Quarter Deferred Compensation Net P&L Trend
AllianceBernstein.com 42 Six-Quarter Deferred Compensation Net P&L Trend In US $ Millions
Slide 44: Consolidated Balance Sheet
AllianceBernstein.com 43 Consolidated Balance Sheet In US $ Millions
Slide 45: Consolidated Statement of Cash Flows
AllianceBernstein.com 44 Consolidated Statement of Cash Flows
Slide 46: AllianceBernstein Holding Financial Results
AllianceBernstein.com 45 AllianceBernstein Holding Financial Results Percentages are calculated using income, earnings and expenses rounded to the nearest thousand Please refer to pages 46-50 for additional information on the reconciliation of GAAP financial results to adjusted financial results In
Slide 47: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein.com 46 AllianceBernstein Adjusted Earnings Reconciliation
Slide 48: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein.com 47 AllianceBernstein Holding Adjusted Earnings Reconciliation
Slide 49: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein.com 48 AllianceBernstein Adjusted Earnings Reconciliation
Slide 50: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein.com 49 AllianceBernstein Holding Adjusted Earnings Reconciliation
Slide 51: AllianceBernstein Adjusted Financial Results Reconciliation
AllianceBernstein.com 50 AllianceBernstein Adjusted Financial Results Reconciliation 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
Slide 52: ALLIANCEBERNSTEIN
45) ALLIANCEBERNSTEIN