Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q1 2013 Earnings Presentation
42 slides from Alliancebernstein Holding L.p's earnings presentation, May 2, 2013
Slide 1: First Quarter 2013 Review
May 1, 2013 First Quarter 2013 Review Peter S. Kraus Chairman & Chief Executive Officer John C. Weisenseel Chief Financial Officer ALLIANCEBERNSTEIN
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements 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 fa
Slide 3: Peter S. Kraus
Peter S. Kraus Chairman & Chief Executive Officer
Slide 4: Firmwide Overview: First Quarter 2013
Firmwide Overview: First Quarter 2013 In US $ Billions $237 $24.1 $237 $184 10:13 40:12 10:13 10:12 $26 $5.0 = = al | 32) 10:13 40:12 10:13 10:12 $443.2 $443.2 $430.0 $419.1 10:13 40:12 10:13 10:12 436.7 $436.7 piles $423.7 $417.4 Average AUM 10:13 40:12 10:13 10:12
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend In US $ Billions 129 Inst. Ret. P.C. 1012 Total Gross Sales $184 Gross Redemptions” $(30.2) Net Flows $(12.1) *Gross redemptions include $5.88 in redemptions for 1012 ($5.28 "Gross Sales Gross Redemptions @Net Flows 15.2 is 146 11.9 56 52 67 7.3 3
Slide 6: Institutional Highlights
Institutional Highlights Second Consecutive Net Flow Positive Quarter in 1013 Sales Strength in Americas and EMEA Regions $B % of Gross Sales, xe 56 52 Br: es ‘Asia ex-Japan Seq. Gross Sales Growth 5; pe nal "Americas: +21% + EMEA: +19% depan = Asia: (18)% BE (38) (4.0) + Total: +8% (9.3) (12.9) (16
Slide 7: Fixed Income Investment Performance
Fixed Income Investment Performance Relative Performance Through 3/31/13 (%) us: 1013 1 Year 3 Year 5 Year Strategic Core Plus 0.3 1.9 14 16 Core Fixed Income 0.1 1.4 07 bis! High Yield 01 1.8 0.1 0.9 Diversified Yield Plus 1.3 65 45 3.6 US Income 14 6.2 40 3.9 Insurance — US Bond 03 1.0 05 0.8 Unco
Slide 8: Equities Investment Performance
Equities Investment Performance Relative Performance Through 3/31/13 (%) us: 1013 4 Year 3 Year 5 Year US Small Cap Value 2.9 45 3.1 44 US SMID Cap Value 12 (1.2) (1.5) 07 US Strategic Value 12 (4.4) (4.6) (3.7) US Small Cap Growth (2.1) (4.6) 47 3.5 US SMID Cap Growth (0.5) (1.6) 5.9 44 US Large Ca
Slide 9: Equities: What's Been Working vs. Where We See Opportunity
Equities: What’s Been Working vs. Where We See Opportunity What's Been Working: Stability and Absolute Return Minimum Volatility Index vs. Broad Market, 1@13* Top Performing Global Stock Categories** in 1013 Oli Services: 5.3% bet jefensives 11.9% ati ae Low Volatility 23% Cyclical 7.9% Select US Eq
Slide 10: Retail Highlights
Retail Highlights Five Consecutive Net Flow Positive Quarters Redemption Rate* Higher in 1Q13 %8 152 164 148 % [2010:34% | go | 2011: 33% 53 2012: 36% I \ ie 1013: 40% 40 (10.6) 4 (10.2) (11.1) ° (14.4) 1012 2a12 3012 4aiz 1013 20 mmmrGross Sales mmmGross Redemptions +—*Net Flows 1012 2012 3012 4ai2
Slide 11: Private Client Highlights
Private Client Highlights Private Client Flows Improved Dramatically in 1Q13 DAA at Three Years: Same Return, Greater Consistency $B % Range of Returns for a 60/40 Portfolio Since Inception* 14 oa ‘ 10 e Best Periods eo] 5 coe (2.9) 0 (5) co) dion il Worst Periods 1012 2012 3012 4012 1013 Co I _peme
Slide 12: Bernstein Research Services Highlights
Bernstein Research Services Highlights Revenues Have Improved... ...As Global Trading Volumes* Have Stabilized SM % Change ] ‘% Change 45 1013 / 1012: +4% 1013/4012: +6% 33 es 25 106 104 110 2 | oa @ (9) us Europe Asia 1012 4Q12 1013 1013/1012 1013/4012 Successful Asia Build-out Another Strong Europ
Slide 13: Progress on Our Strategy in 1Q
Progress on Our Strategy in 1Q Firmwide Initiative Progress Diversify our business across channels, investment services and geographies Top honors in Lipper 2013 Fund Awards for 9 funds across 15 categories worldwide 16 awards in Asia, 13 awards in Europe and 3 awards in US. Multiple regional wins f
Slide 14: John C. Weisenseel
John C. Weisenseel Chief Financial Officer
Slide 15: Financial Highlights: First Quarter
Financial Highlights: First Quarter In US $ Millions $677 $578 $577 $562 10:13 40:12 10:13 10:12 $451 $459 $451 $461 Adjusted Expenses 10:13 40:12 10:13 10:12 4,99 21.9% 21.9% 20.6% aR 10:13 40:12 10:13 10:12 38¢ 40¢ 38¢ 29¢ Adjusted | 10:13, 40:12 10:13 19:12 jon of GAAP financial results to adjust
Slide 16: First Quarter 2013 GAAP to Adjusted Reconciliation
First Quarter 2013 GAAP to Adjusted Reconciliation In US dollar milions Adjustments istribution. Pass _Long-Terminc. Venture Real Related Through Compensation Capital Estate Adjusted GAAP Payments Expenses MIM Fund Charges (Non-GAAP) Net Revenues $ 709 $ (120) $ @ $ © $ 1 $ - $§ 877 Operating Expens
Slide 17: First Quarter 2013 Adjusted Income Statement
First Quarter 2013 Adjusted Income Statement ® Adjusted Operating Income increased 6% sequentially and 25% versus the prior year quarter ® Margin improvement versus both prior periods resulted primarily from expense reductions. Higher revenues also contributed to the margin improvement versus the pr
Slide 18: First Quarter 2013 Adjusted Revenues
First Quarter 2013 Adjusted Revenues m Base Fees sequential increase is due primarily to Retail & Institutional average AUM growth; the 5% increase versus the prior year quarter is due primarily to increased Retail average AUM ® 4Q12 included performance fees related to Fund-of-Fund offerings = Bern
Slide 19: First Quarter 2013 Adjusted Operating Expenses
First Quarter 2013 Adjusted Operating Expenses m= Compensation Ratio was 50.0% for 1Q13 versus 49.0% for 4Q12 and 50.0% for 1Q12 ® Total Compensation & Benefits increased 2% sequentially due primarily to a higher compensation ratio; the 2% increase versus the prior year quarter is due to increased a
Slide 20: First Quarter 2013 Adjusted Operating Results
First Quarter 2013 Adjusted Operating Results = Adjusted Operating Income improved by 6% sequentially on lower expenses and 25% versus 1Q12 on reduced expenses and improved revenues = Adjusted Margin increased to 21.9%, from 20.6% in 4Q12 and 18.0% in 1Q12 1Q 4Q 1Q In US dollar millions (except EPU)
Slide 21: AllianceBernstein.com
AllianceBernstein.com
Slide 22: AllianceBernstein.com
AllianceBernstein.com
Slide 23: Institutional Equity: Relative Performance
Institutional Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Periods Ended March 31, 2013 1Q One Three Five Ten Service 2013 Year _Years_ ‘Years _Years Benchmark Value Emerging Markets Value (25) (7.1) 64) (27) (04) MSCIEM Global Value 07 (1.9) 7) (6.0) (2.1) MSCI World
Slide 24: Institutional Fixed Income: Relative Performance
ional Fixed Income: Relative Performance Institutional Fixed Income Composites vs. Benchmarks* Periods Ended March 31, 2013 1Q One Three — Five Ten Service 2013 Year _—‘Years ‘Years _Years Benchmark 33% Barclays High Yield, 33% JPM EMBI Global High Income 26 35 17 2.0 18 Gibbet and S060 GOLEM Global
Slide 25: Retail Equity: Relative Performance
Retail Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended March 31, 2013 1Q One Three Five = Ten Service 2013 Year _Years Years _Years Lipper Average Value International Value 04 (26) (36) (62) (2.1) International Large Cap Value Growth & Income (0.2) 18 3.0 (0.0) = (
Slide 26: Retail Fixed Income: Relative Performance
Retail Fixed Income: Relative Performance Retail Fixed Income Funds vs. Lipper Averages Periods Ended March 31, 2013 1Q One Three Five Ten Service 2013 Year _‘Years Years _Years Lipper Average Global High Yield Portfolio 18 34 12 34 24 Bond Global High Yield American Income Portfolio 05 44 3.0 32 29
Slide 27: Private Client: Absolute Performance
Private Client: Absolute Performance Periods Ended March 31, 2013 1Q One Three Five Ten Service 2013 Year Years Years Years Fully Diversified Simulation* 5.36 5.02 5.03 1.55 6.02 S&P 500 10.61 13.96 12.67 5.81 8.53 MSCI World index - Net 7.73 11.85 8.46 2.23 8.88 Lipper Short/int Blended Muni Fund A
Slide 28: Assets Under Management — 1Q
Assets Under Management — 1Q billions) ‘AtMarch 34, 2013 ‘At December 31, ‘AtMarch 31, 2012 2012 Private Institutions __ Retail Client Total Total Total Equity Equity Active $ as 3 S$ 2 $ 9 § 5 § 125 Equity Passive” 20 24 - 44 40 36. Total Equity 51 60 32 143 135 161 Fixed Income Fixed income - Taxa
Slide 29: AUM by Distribution Channel and Investment Service — History
AUM by Distribution Channel and Investment Service — History AllianceBernstein L.P. AUM by Distribution Channel and Investment Service ($ in billions): 38112013 1e1012 __ 9302012 63072012 3131/2012 By Distribution Channel Institions 2254 2198 2144 2149 2223 Retail 1504 144.4 1964 1248 1262 Private C
Slide 30: Net Flows by Distribution Channel and Investment Service — History
Net Flows by Distribution Channel and Investment Service — History AlianceBernstoin LP. Not Change by Distribution Channel and Not Flows by Investment Service ($ in billions): sei2o13 _taeino12 __9gono12 613072012 srs12012 Not Change by Distribution Channet stitutions 33 29 a 67 (129) Retail 02 53 5
Slide 31: AUM Roll-Forward by Distribution Channel
is Ended 3/31/13: AUM Roll-Forward by Distribution Channel InUS $ Billions Beginning Sales/New Redemptions). Net Cash. Net Investment Net End Investment Service: of Period ‘Accounts Terminations Flows Flows Performance Change of Period Institutions us 109.9 24 (02) (05) 17 0s 22 124 Global and Non-U
Slide 32: AUM Roll-Forward by Investment Service
Three Months Ended 3/31/13: AUM Roll-Forward by Investment Service In US $ Billons Beginning _—SalesNew —-Redemptions/ Net Cash Net Investment Net End Investment Service: ofPeriod Accounts Terminations Flows Flows Performance Change of Period Equity Active us 400 32 (18) 4) 12 44 56 456 Global and N
Slide 33: AUM by Region
AUM by Region As of March 31, 2013 Institutions Retail NAexUS 4% Other 1% Other 4% United Kingdom 4% Japan 6% Asia Pac 6% EMEA 10% Japan 12% US 60% US 56% EMEA 13% Asia ex Japan 24% $225.1B $150.4B By cient domicile
Slide 34: First Quarter 2013 Adjusted Advisory Fees
First Quarter 2013 Adjusted Advisory Fees In US Dollars 1a 4Q 10 2013 2012 %A 2012 %A Ending AUM ($ Billions) $443 $430 3% $419 6% Average AUM ($ Billions) $437 $424 3% $417 5% By Fee Type ($ Millions): Adjusted Base Fees $440 $432 2% $420 5% Adjusted Performance Fees 4 19 (79%) 4 0% Total $444 $451
Slide 35: First Quarter 2013 GAAP Income Statement
First Quarter 2013 GAAP Income Statement 1Q 4Q 1Q In US dollar millions (except EPU) 2013 2012 %A 2012 %A Net Revenues $ 709 $ 705 1% $ 682 4% Operating Expenses 585 627 (7%) 581 1% Operating Income 124 78 59% 101 23% Net Income Attributable to AB Unitholders: 115 72 60% 87 32% AB Holding GAAP Dilut
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet In US §$ Millions Assets March 31, 2013 December 31, 2012 Cash and cash equnaients so ~~CS ear Cash and securities, segregated 4,072 1,551 Receivables, net 1,663 1,616 Investments: Long-term incentive compensation-related 109 123 Other 635, 610 Goodwill 2,954 2,954 Intangi
Slide 37: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Three Months Ended March 31, 2013, March 31, 2012 Net Income $ 3S & Non-cash items: Amortization of deferred sales commissions 4 8 ‘Amortization of non-cash long-term incentive compensation 7 5 Depreciation and other amortization 18 20 Unrealized
Slide 38: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In US § Millions (excluding per unit amounts) 1a 4a 1a 2013 2012 %A 2012 %A AllianceBernstein Net Income Attributable to AllianceBemstein $115 $72 60% $87 32% Weighted Average Equity Ownership Interest 375% 375% 37.5% AllianceBernstein Holding Abbie to Aan
Slide 39: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein Adjusted Earnings Reconciliation Three Months Ended thousands, unaudited wens Wass ewone ——ersat2 SiS __-FasAT Net Revenues, GAAP basis '$ 709,122 $ 704,607 $ 708,158 $ 642,163 $ 681,809 $ 624,978 Exclude: ‘Long-term incentive compensation-related investment (gains) losses (6.028)
Slide 40: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein Holding Adjusted Earnings Reconciliation Three Months Ended $ thousands except per Unit amounts, unaudited ass —-1asIn2 «9302 —«GISONZ —«SIBANZ —«ADIBAMAA Net income (Loss) - Diluted, GAAP basis $ 38474 § 26,192 § (23,142) § 24,339 § 26,699 $ (199,463) Impact on net income of Allan
Slide 41: AllianceBernstein Adjusted Financial Results Reconciliation
AllianceBernstein Adjusted Financial Results Reconciliation AllianceBemstein 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 long-term co
Slide 42: AllianceBernstein.com 212-756-4542
AllianceBernstein.com 212-756-4542
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