Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Alliance Capital Management Holding — Q1 2003 Earnings Presentation
56 slides from Alliancebernstein Holding L.p's earnings presentation, May 5, 2003
Slide 1: Alliance Capital and Alliance Holding First Quarter 2003 Review
Alliance Capital and Alliance Holding First Quarter 2003 Review Bruce W. Calvert John D. Carifa Lewis A. Sanders Chairman and CEQ = Presidentand COO ‘Vice Chairman and CiO April 29, 2003
Slide 2: Introduction and Forward-Looking Statements
Introduction The SEC adopted Regulation FD in October 2000. In light of Regulation FD, Management will be limited in responding to inquiries from investors or analysts in a non-public forum ‘You are encouraged ta ask all questions of a material nature an this canference call Forward-Looking Statemen
Slide 3: First Quarter Financial Overview
First Quarter Financial Overview Alliance Capital 1Q03 vs. 1Q02 = End of Period AUM $386 bn vs. $482 bn, down 14.6% = Market Environment S&P 500 down 24.8% (12 Months) Russell 1000 Growth dawn 26.8% Russell 1000 Value dawn 22.8% MSCIEAFE down 23.2% Lehman Agar. Bond up 11.7% = Annualized Fee Baset")
Slide 4: Alliance Capital First Quarter Financial Overview
Alliance Capital First Quarter Financial Overview (in mithons, except AUM in $ billions) 1Q03 1902 % chg = Average AUM (Sbn) “14 = Revenues Base Fee & Other $441 $514 -14 Performance Fee 4 6 -35 Distribution 100 129 -23 Institutional Research Svcs 58 72 -19 603 721 “16 = Expenses Compensation 218 23
Slide 5: First Quarter Revenues by Distribution Channel
# First Quarter Revenues — by Distribution Channel (in $ mitions) Retail Institutional Inv. Mgmt Private Client Institutional Research Svcs. Other Total 1Q03 $295 144 oF 58 6 1Q02 $370 167 103 72 % chg -20 -14 5 -19 Comments = Base advisory fees and distribution revenues declined inline with avg AUM
Slide 6: Expense Detail 1Q03 vs. 1Q02
Expense Detail — 1Q03 vs. 1002 (in $ mitions) 1Q03 1Q02 % chg = Employee Comp. & Benefits Base Compensation” $73 $74 2 Incentive Compensation Cash® 45 58 -22 Deferred 36 26 +36 Commissions 2B 55 -22 Fringes & Other 21 24 -10 = Total 218 237 8 (1) Lower headcount offset by severance payments (2) Lowe
Slide 7: Expense Detail 1Q03 vs. 1Q02
Expense Detail — 1Q03 vs. 1002 (in $ millions) 1003 1002 %chg Comments = Employee Comp. & Benefits $218 $287 8 = Promotion & Servicing Distribution Plan Pmts © 89 108 275, 2 Lowehaversge retal Am, Amort of Def Sales Comm 63 87 7 TRE ) 12 -40 Printing/Mailing 5 1 37 Other ® 26 28 “43. } + Ongoing red
Slide 8: Expense Detail 1Q03 vs. 4Q02
Expense Detail — 1Q03 vs. 4Q02 (in $ mitions) 1Q03 4Q02 % chg = Employee Comp. & Benefits Base Compensation” $73 $75 “3 Incentive Compensation Cash® 45 66 “32 Deferred 36 28 +29 Commissions 2B 29 +49 Fringes & Other 21 18 HI? = Total 218 216 4 (1) Lower headcount (2) Lower operating earnings and per
Slide 9: Expense Detail 1Q03 vs. 4Q02
Expense Detail — 1Q03 vs. 4Q02 (in $ millions) 1003 4002 %chg Comments Employee Comp. & Benefits $218 $218 +f Promotion & Servicing Distribution Plan Pmts © ag ag = Amort of Def Sales Comm 63 55 -4 TRE 7 12 41 Printing/Mailing 5 2 +98 Other ® 25 5 -2 b= Ongoing reductions in aise Ts “3 | controlabie
Slide 10: Net Distribution Expense
Net Distribution Expense (in $ mitions) 1Q03 1Q02 % chg Distribution Revenues $100 $129 -23 Distribution Expenses Distribution Plan Payments 89 105, 15 Amort of Def Sales Comm 53 ST 7 142 162 +12 = Net Distribution Expense $42 33 +27 Lower distribution revenues and distribution plan payments tram lo
Slide 11: Alliance Capital Pre-tax Margin
Alliance Capital Pre-tax Margin (in $ mitions) % of % of 1Q03 Rev) 1Q02__ Rev « Base Fee Earnings, Net $145 28.9% $199 33.6% «= Distribution Expense, Net © (33) 66 (26) 44 = Performance Fee Earnings, Net 3 0.6 —_ 4 _07_ = Pre-tax Margin (Non-GAAP) “ 115. 22.9% $177 = 29.9% = Pre-tax Margin (GAAP) 19
Slide 12: Alliance Holding Financial Highlights
# Alliance Holding Financial Highlights 1Q03 1Q02 % chg in $miltions) = Equity in Earnings $33 $50 34% = Income Taxes 5 5 13 = Net Income $28 $45 -37% (Per Unit amounts) = Base Fee Earnings $0.36 $0.57 37% = Performance Fee Earnings 0.01 0.01 = = Diluted Net Income $0.37 $0.58 -36% «= Distribution $
Slide 13: Challenging Market Environment
# Challenging Market Environment Annuaized_ Cumulative 1903 1¥r 3Yr S&P 500 32% 24.8% 16.1% 40.9% Russell 1000 Growth AMG 26.8% 25.6% 58.9% Russell 1000 Value A9% 228% 69% 19.2% NASDAQ Composite 04% 27.3% 33.6% 70.7% MSCI EAFE 82% 23.2% 19.5% ATI% Lehman Aggregate Bond 14% N7% 9.8% 324% Fetus tough
Slide 14: Relative Performance - Institutional Growth Equity
Relative Performance “) — Institutional Growth Equity Institutional Equity Composites vs. Benchmarks Emerging LargeCap Disciplined Multi Cap Small Cap Intl Lg Cap Market Growth?) Growth?) Growth®) Growth!) Growth) Growth’) aR = 02 +07 7 15 +02 ea we 068 AA 428 +02 +06 +34 yn 16 +03 433 +76 44 AB Sy
Slide 15: Relative Performance - Institutional Value Equity
Relative Performance “) — Institutional Value Equity Institutional Equity Composites vs. Benchmarks ‘Small. Emerging Strategic Diversified Relative Mid Cap International Market Value?) Value) Value®) Value) Value() Value QR +45 +06 429 Ag +03 +34 we oo 423 EF) AZ +96 10.4 ayn +79 474 13 Es +48 477 S
Slide 16: Relative Performance - Institutional Fixed Income
Relative Performance “) — Institutional Fixed Income Institutional Fixed Income Composites vs. Benchmarks Enhanced High Grade Sector Emerging Aggregate® — Insurance) ——Rotation® High Yield) Global) Market) QR +04 +03 +03 20 +04 42.6 we 0.4 +04 aa 06 +37 yn oo +04 09 ai 04 43 oy 02 +03 08 0.4 05 425
Slide 17: Relative Performance - Retail Growth Equity
Relative Performance — Retail Growth Equity Retail Mutual Funds vs. Lipper Averages Global Premier Mid Cap Growth Growth") Growth? Growth) —_ Quasar) Tech'®) Trend) IR 07 +07 +56 10 16 A we 24 44 +09 20 20 09 ay 29 424 +34 42.9 a7 433 oy 22 4A 67 4 +07 +62 Oy +40 2 22 EH +03 +67 (Qs large Cap Groth
Slide 18: Relative Performance - Retail Value Equity
Relative Performance — Retail Value Equity Retail Mutual Funds vs. Lipper Averages ‘Small AB Growth & Cap Intl Global Valuett! — Income® Value) Value(*) Value! Balanced IR +02 424 ean 16 +07 +06 we +30 34 +05 49.3 426 +16 an +07 ss +59 oy - 432 ss 432 10yr - 19 - - 1S () vs Mati Cap Vale average 2)
Slide 19: Private Client Portfolio Performance
Private Client Portfolio Performance « Representative client account allocation: 40% fixed incame { 40% | Diversified Muni 34% — Strategic Value { 42% U.S. equities _ 8% Strategic Growth 60% equities 3% Emerg Mkts Value 18% Non-U.S. equities 100% 15% Intl Value = Representative performance: 1003 21%
Slide 20: AUM by Investment Orientation - Three Months
f AUM by Investment Orientation Three Months Ended March 31, 2003 (in $ billons) Growth Value Fixed Equity Equity Income Dec 31, 2002 AUM $109 $99 $156 Net Long-Term Flows (4) 2 8 a) 4 Cash Management, Net = = 4 na _ = Net New Business/(Qutflows) (4) 2 6 0) 4 «= Appreci(Deprec) a) (4) 1 a) (6) = Mar
Slide 21: AUM by Investment Orientation - Twelve Months
AUM by Investment Orientation ‘Twelve Months Ended March 31,2003 (in $ bilions) Growth Value Fixed Equity Equity Income = March 31, 2002 AUM $185 $108 $147 = Net Long-Term Flows (19) 7 15 @ - = Cash Management, Net - = (5) iat (5) = Net New Business/(Qutflows) (19) 7 10 @ ) = Transfers (6) 4 1 = = =
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Slide 23: AUM by Channel
7 AUM by Channel ‘Twelve Months Ended March 31,2003 (ing billions) Institutional Private etal Inv Mgmt Client [i Total = March 31, 2002 AUM $163 $242 $41 $452 = Net Long-Term Flaws @ 5 4 2 = Cash Management, Net (5) = = (5) = Net New Business/(Outflows) (14) 5 4 @ = Transfers 1 oO) - = = Depreciatio
Slide 24: Annualized Fee Base by Channel
Annualized Fee Base () By Channel and ns eters. $1,547 mm $1,850 mm 33103 391/02 Retail 319 536 Institutional §— 24.7 25.4 Private Client 62.3825 Total 400 408 AAUM A AFB $607 Retail 20.9% 23.45% $524 Institutional 12.2% -13.6% Private Client -2.1% — -2.3% ; : | 3131103 3/31/02 3131103 3/31/02 3I310
Slide 25: 1Q03 Business Channel Highlights
1Q03 Business Channel Highlights Retail = Rebranded business to AllianceBemstein Investment Research and Management » Reflects complete product array: growth, value, fixed income and blends » Signals shift toward consultative selling with focus on client solutions as well as product sales = Two year
Slide 26: 1Q03 Business Channel Highlights
1Q03 Business Channel Highlights Private Client = Organic growth consistent at approximately 10% = Trend to larger account size is intact > Approximately 50% of wins in $10 million + accounts = Portfolio exposures to growth and hedge funds continue to build = Remain facused on productivity Instituti
Slide 27: Total Return - Alliance Holding Units
7 Total Return — Alliance Holding Units Total Annualized Return* 30% me 20% 10% 0% Since Inception * 10% 20% 30% as cay} Be mAC wS&P500 ‘moreso sce erg rd Es ee neste PONISI HSB ar
Slide 28: Positioned For Growth
ned For Growth = Worldwide research and investment capabilities = Unique with strengths in both growth and value equity investing = Broad array of fixed income services = Generally competitive long-term investment results = Highly regarded marketing and client service teams = Wel-positioned in retai
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Slide 30: Reconciliation of Net Operating Earnings from Net Income
Reconciliation of Net Operating Earnings from Net Income (in milions, except per unit amounts) Alliance Capital 1Q03 1Q02 = Net Income $109 $168 = Amortization of Intangible Assets . of 5 = Net Operating Earnings $114 $173 Alliance Holding ene = Diluted Net Income $0.37 $0.58 = Amortization of Intan
Slide 31: Analysis of Pre-Tax Margin
Analysis of Pre-Tax Margin“) ( thousands) Three Months Ended Total Revenues $602,614 $720,523 Less: Distribution Revenues (100,024) (129,179) Net Revenues 591,344 Total Expenses 487,510 543,798 Less: Distribution Revenues (100.024) (129,179) Net Expenses 387 406 a4 619 Pre-tax Income $115,104 $176,7
Slide 32: Diverse Group of Clients
Diverse Group of Clients As of March 31, 2003 Wholesale Direct Sales « Instintional snstintional Investment Mgmt Private Client Research Services ABAuianceBeenstein FY EBER Sanford C. Bernstein a ee eh meee +73 million accounts + 2,200+ client + 19,900+ client + 1,000 client 165US. mutual funds —_‘l
Slide 33: Changes in AUM by Investment Orientation
Changes in AUM by Investment Orientation Three Months Ended March 31, 2003 (in $ billions) Growth Value Fined Equity Equity Income __Passive Total Begiming of Period $108,799 $98,635 $455,762 $23,382 $386,579 SalesNew accounts 2art 3120 8288 00 14387 Redemptions/Terminations (6538) 1552) @o77) 273)
Slide 34: Changes in AUM by Investment Orientation
Changes in AUM by Investment Orientation ‘Twelve Months Ended March 31,2003 (in $ bilions) Growth Value Fined Equity Equity Income _Passive Total Beginning of Period $165,858 $108,207 $146,889 $31,442 $452,196 Sales Newaccaunts 12,814 14,598 23477 1820 52,210 Redemptions erminations 5,710) 588) (140
Slide 35: Changes in Retail AUM by Investment Orientation
Changes in Retail AUM by Investment Orientation ‘Twelve Months Ended March 31,2003 (in $ bilions) Beginning Of Period sales Redemptions Net cash management sales Cash flow Unveinvested dividends Het new business/(Outflows) Transfers Market appreciationi(depreciation) End Of Period Growth value Fixed
Slide 36: Changes in Retail AUM by Product
Changes in Retail AUM by Product ‘Twelve Months Ended March 31,2003 (in $ bilions) us. Non-US. Variable Managed Funds Funds _Annuity Accounts _Total Begining Of Period $94,193, $21,950 $43,468 $0,344 $469,455 Sales eat 8,762 6852 4,145 24,870 Redemptions (11,788) @s87) 100) (3.035) (30.538) Net cash
Slide 37: Changes in Institutional Investment Management AUM
Changes in Institutional Investment Management AUM by Investment Orientation ‘Twelve Months Ended March 31,2003 (in $ bilions) Beginning Of Period SalesNewaccourts Retlemptions/Term nations Cash Management Sales, Net Cash flow Unveinvested dividends Het new business(Outflows) Transters Market apprec
Slide 38: Alliance Capital Consolidated Balance Sheet
si" Alliance Capital (the Operating Partnership) Consolidated Balance Sheet (in $ thousands. Unauetited) Asote Cath and Investments Cash ands ecurtie, segregated Receivables Brokers and Dealers Brokerage Clients Fees Furniture, equipment and leasehold improvements, net Good, net Intangible assets, n
Slide 39: Alliance Capital Consolidated Cash Flow
si" Alliance Capital (The Operating Partnership) Consolidated Cash Flow (in $ thousands. Unauetited) ‘Three Monthe Ended ERIE] 38102 Cash Floves From Operating Activities Net income 5 103.064 5 terse Nonoath tam: ‘Amertzation and depreciation re Other, net 2egra Changes in assets and labiltes 2 179,
Slide 40: Performance Disclosure
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Searchable text section of graphics shown above Exhibit 99.09 Alliance Capital and Alliance Holding First Quarter 2003 Review Bruce W. Calvert John D. Carifa Lewis A. Sanders Chairman and CEO President and COO Vice Chairman and CIO April 29, 2003 [LOGO] Introduction The SEC adopted Regulation FD in
Alliance Capital Management Holding — Q1 2003 Earnings Presentation on 6ix