Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q3 2010 Earnings Presentation
38 slides from Alliancebernstein Holding L.p's earnings presentation, Oct 28, 2010
Slide 1: Third Quarter 2010 Review
3Q10 Earnings Presentation AllianceBernstein.com Third Quarter 2010 Review Oct 28, 2010 Peter S. Kraus Chairman & Chief Executive Officer David A. Steyn Chief Operating Officer John B. Howard Chief Financial Officer
Slide 2: Cautions Regarding Forward-Looking Statements
3Q10 Earnings Presentation 2 AllianceBernstein.com 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
Slide 3: Relative Investment Performance
3Q10 Earnings Presentation 3 AllianceBernstein.com Relative Investment Performance Benchmark Russell 1000 Value MSCI EAFE (Cap, UH, net) MSCI World (Cap, UH, net) Institutional Equity Composites vs. Benchmarks (Percent) Performance is preliminary as of Sept 30, 2010. The information in this table is
Slide 4: Net Flows By Distribution Channel
3Q10 Earnings Presentation 4 AllianceBernstein.com Net Flows By Distribution Channel In U.S. dollars billions Total: (12.9) (16.8) (6.4) (4.7) (18.9) (0.5)
Slide 5: Institutional Flow Trends
3Q10 Earnings Presentation 5 AllianceBernstein.com Institutional Flow Trends Gross Inflows Net Flows Gross Outflows *YTD numbers annualized {Gross Inflows, $15.8, Gross Outflows, ($43.3), Net Flows, ($27.5)} Quarterly View Annual Trend In U.S. dollar billions
Slide 6: Retail Flow Trends
3Q10 Earnings Presentation 6 AllianceBernstein.com Retail Flow Trends Gross Inflows Net Flows Gross Outflows *YTD numbers annualized {Gross Inflows, $26.5, Gross Outflows, ($28.0), Net Flows, ($1.5)} Quarterly View Annual Trend In U.S. dollar billions
Slide 7: Private Client Flow Trends
3Q10 Earnings Presentation 7 AllianceBernstein.com Private Client Flow Trends Gross Inflows Net Flows Gross Outflows * YTD numbers annualized {Gross Inflows, $5.7, Gross Outflows, ($6.7), Net Flows, ($1.0)} Quarterly View Annual Trend In U.S. dollar billions
Slide 8: Bernstein Research Services
3Q10 Earnings Presentation 8 AllianceBernstein.com Bernstein Research Services < Revenue down 18% versus prior quarter, with both U.S. and Europe impacted by weak market volumes < Sustained investment despite market deceleration < 4 new analysts added in the U.S. < Expect 25+ staff in Hong Kong/Sing
Slide 9: Financial Highlights: Third Quarter 2010
3Q10 Earnings Presentation 9 AllianceBernstein.com Financial Highlights: Third Quarter 2010 < Adjusted EPU for 3Q of 36 cents (versus 2Q adjusted EPU of 37 cents) < Adjusted Revenues were down $16m (2%) from 2Q < Adjusted Operating Margin of 19.3% for 3Q, down from 20.7% in 2Q < 2010 full year effec
Slide 10: Third Quarter 2010 Income Statement
3Q10 Earnings Presentation 10 AllianceBernstein.com 3Q 2010 2Q 2010 Percent Change 3Q 2009 Percent Change Net Revenues $758 $688 10% $806 (6%) Operating Expenses (excluding real estate charge) 610 580 5% 583 5% Real Estate Charge 90 0 n/m 0 n/m Operating Income 58 108 (47%) 223 (74%) Non-Operating I
Slide 11: Third Quarter 2010 Revenues
3Q10 Earnings Presentation 11 AllianceBernstein.com Revenues (in U.S. dollar millions) 3Q 2010 2Q 2010 Percent Change 3Q 2009 Percent Change Base Fees $498 $510 (2%) $484 3% Performance Fees 6 3 92% 0 n/m Bernstein Research 96 117 (18%) 109 (12%) Distribution 85 83 2% 74 16% Investment Gains (Losses
Slide 12: Third Quarter 2010 Operating Expenses
3Q10 Earnings Presentation 12 AllianceBernstein.com Operating Expenses (in U.S. dollar millions) 3Q 2010 2Q 2010 Percent Change 3Q 2009 Percent Change Compensation & Benefits Base Compensation $110 $110 (1%) $112 (2%) Incentive Compensation 148 115 29% 144 3% Commissions, Fringes & Other 85 88 (3%)
Slide 13: Third Quarter 2010 GAAP to Adjusted Reconciliation
3Q10 Earnings Presentation 13 AllianceBernstein.com 3Q 2010 2Q 2010 Percent Change 3Q 2009 Percent Change AllianceBernstein L.P. GAAP Operating Income $58 $108 (47%) $223 (74%) Net P&L impact of MTM of deferred compensation (1) (23) 18 n/m (54) (60%) Real estate charge 90 0 n/m 0 n/m Net (Income) Lo
Slide 14: Q & A
3Q10 Earnings Presentation 14 AllianceBernstein.com AllianceBernstein Third Quarter 2010 Review Q & A
Slide 15: Appendix
3Q10 Earnings Presentation 15 AllianceBernstein.com AllianceBernstein Third Quarter 2010 Review Appendix
Slide 16: Institutional Value Equity: Relative Performance
3Q10 Earnings Presentation 16 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years 10 Years Benchmark US Diversified Value (1.1) (3.3) (3.2) (2.4) 0.5 Russell 1000 Value US Strategic Value (2.8) (6.1) (6.8) (4.5) 3.7 S&P 500 US Strategic Value (1.6)
Slide 17: Institutional Growth Equity: Relative Performance
3Q10 Earnings Presentation 17 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years 10 Years Benchmark Global Research Growth 0.5 (1.1) (6.3) (4.5) (1.9) MSCI World (Cap, UH, net) US Large Cap Growth (2.9) (10.1) (2.8) (2.5) 0.0 Russell 1000 Growth In
Slide 18: Institutional Blend Strategies: Relative Performance
3Q10 Earnings Presentation 18 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years 10 Years Benchmark Global Blend Strategies (0.1) (3.5) (6.7) (4.1) N/A MSCI World (Cap, UH, net) International Blend Strategies 0.7 (1.0) (4.1) (2.8) N/A MSCI EAFE (Ca
Slide 19: Institutional Fixed Income: Relative Performance
3Q10 Earnings Presentation 19 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years 10 Years Benchmark Corporate Bonds 0.2 1.0 (0.1) (0.0) 0.1 Custom Corporate Index Strategic Core Plus 1.3 4.0 0.8 0.5 N/A Custom Index Global Plus 1.3 4.1 (0.5) (0.0)
Slide 20: Private Client: Absolute Performance
3Q10 Earnings Presentation 20 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years 10 Years Fully Diversified Simulation* 7.5 5.4 (5.1) 1.1 3.4 S&P 500 11.3 10.2 (7.2) 0.6 (0.4) MSCI World (Cap, UH, net) 13.8 6.8 (8.3) 1.3 0.8 Lipper Short/Int Blende
Slide 21: Retail Value Equity: Relative Performance
3Q10 Earnings Presentation 21 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years Ten Years Lipper Average International Value 1.1 (2.7) (6.0) (3.1) N/A International Large Cap Value Growth & Income (1) 1.9 1.3 (1.3) (0.5) (1.8) Large Cap Value U.S.
Slide 22: Retail Growth Equity: Relative Performance
3Q10 Earnings Presentation 22 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years Ten Years Lipper Average Global Growth 0.2 (3.1) (5.0) N/A Global Large-Cap Growth Global Thematic Growth 1.3 (2.1) 1.8 (0.2) (3.9) Global Multi-Cap Growth Internation
Slide 23: Retail Fixed Income: Relative Performance
3Q10 Earnings Presentation 23 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years Ten Years Lipper Average Global High Yield Portfolio (4.2) 6.4 2.8 1.4 (0.2) Bond Global High Yield American Income Portfolio 2.6 6.1 2.1 1.8 2.3 Bond USD Global Bond
Slide 24: Wealth Strategies: Relative Performance
3Q10 Earnings Presentation 24 AllianceBernstein.com Periods Ended September 30, 2010 Service 3Q 2010 One Year Three Years Five Years 10 Years Lipper Average Conservative Wealth 0.4 (1.1) (1.1) (0.0) 0.1 Mixed-Asset Target Alloc Consv Balanced Wealth 2.1 (0.0) (1.6) (0.0) 0.4 Mixed-Asset Target Alloc
Slide 25: AUM Rollforward by Distribution Channel
3Q10 Earnings Presentation 25 AllianceBernstein.com Institutions Retail Private Client Total Client Domicile: US Non-US Total US Non-US Total US Non-US Total US Non-US Total Beginning of Period $143.6 $127.0 $270.6 $77.0 $39.2 $116.2 $69.0 $1.9 $70.9 $289.6 $168.1 $457.7 Sales/New Accounts 0.4 3.8 4
Slide 26: AUM Rollforward by Investment Service
3Q10 Earnings Presentation 26 AllianceBernstein.com Value Equity Growth Equity Fixed Income Other (1) Total Client Domicile: US Non-US Total US Non-US Total US Non-US Total US Non-US Total US Non-US Total Beginning of Period $87.2 $52.0 $139.2 $52.5 $22.0 $74.5 $116.4 $82.1 $198.5 $33.5 $12.0 $45.5
Slide 27: AUM by Region
3Q10 Earnings Presentation 27 AllianceBernstein.com AUM by Region In U.S. dollars billions As of Sept 30, 2010 Retail Institutions Private Client $283.0 $125.6 $75.7
Slide 28: Third Quarter 2010 Advisory Fees
3Q10 Earnings Presentation 28 AllianceBernstein.com 3Q 2010 2Q 2010 Percent Change 3Q 2009 Percent Change Ending AUM ($ Billions) $484 $458 6% $498 (3%) Average AUM ($ Billions) $473 $482 (2%) $474 0% By Fee Type ($ Millions): Base Fees $498 $510 (2%) $484 3% Performance Fees (1) 6 3 92% 0 n/m Total
Slide 29: Six-Quarter Deferred Compensation Net P&L Trend
3Q10 Earnings Presentation 29 AllianceBernstein.com 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 Revenues Investment Gains (Losses) $63 $71 $15 $11 ($37) $36 Dividends 2 1 4 1 - 1 Total Revenues $65 $72 $19 $12 ($37) $37 Expenses Amortization of Original Awards $39 $40 $36 $31 $31 $27 Amortizatio
Slide 30: Consolidated Balance Sheet
3Q10 Earnings Presentation 30 AllianceBernstein.com Assets Sept 30, 2010 Dec 31, 2009 Cash and cash equivalents $616 $614 Cash and securities, segregated 740 985 Receivables, net 1,320 1,099 Investments: Deferred compensation - related 358 401 Other 532 374 Goodwill 2,893 2,893 Intangible assets, ne
Slide 31: Consolidated Cash Flows
3Q10 Earnings Presentation 31 AllianceBernstein.com Nine Months Ended September 30, 2010 September 30, 2009 Cash Flows From Operating Activities: Net Income $283 $388 Non-cash items: Amortization of deferred sales commissions 36 42 Amortization of non-cash deferred compensation 86 52 Depreciation an
Slide 32: AllianceBernstein Holding Financial Results
3Q10 Earnings Presentation 32 AllianceBernstein.com 3Q 2010 2Q 2010 Percent Change 3Q 2009 Percent Change AllianceBernstein Net Income Attributable to AllianceBernstein $52 $106 (51%) $199 (74%) Weighted Average Equity Ownership Interest 36.7% 36.7% 34.5% AllianceBernstein Holding Equity in Net Inco
Slide 33: Adjusted Financial Results Reconciliation (Quarterly)
3Q10 Earnings Presentation 33 AllianceBernstein.com Three Months Ended $ thousands, unaudited 9/30/10 6/30/10 3/31/10 12/31/09 9/30/09 6/30/09 Net Revenues, GAAP basis $757,567 $688,343 $725,086 $781,861 $806,014 $721,440 Exclude : Deferred compensation-related investment (gains) losses (36,013) 36,
Slide 34: AllianceBernstein Holding Adjusted Earnings Reconciliation
3Q10 Earnings Presentation AllianceBernstein.com 34 AllianceBernstein Holding Adjusted Earnings Reconciliation Three Months Ended $ thousands except per unit amounts, unaudited 9/30/10 6/30/10 3/31/10 12/31/0 9 9/30/09 6/30/09 Diluted Net Income, GAAP basis $ 12,384 $ 32,256 $ 47,858 $ 60,402 $ 62,8
Slide 35: AllianceBernstein Adjusted Earnings Reconciliation, Nine Months
3Q10 Earnings Presentation AllianceBernstein.com 35 AllianceBernstein Adjusted Earnings Reconciliation Nine Months Ended $ thousands, unaudited 9/30/10 9/30/09 Net Revenues, GAAP basis $2,170,996 $2,125,018 Exclude : Deferred compensation-related investment (gains) losses (10,375) (105,738) Deferred
Slide 36: AllianceBernstein Holding Adjusted Earnings Reconciliation, Nine Months
3Q10 Earnings Presentation 36 AllianceBernstein.com Nine Months Ended $ thousands except per unit amounts, unaudited 9/30/10 9/30/09 Diluted Net Income, GAAP basis $ 92,461 $ 107,672 Impact on net income of AllianceBernstein L.P. non-GAAP adjustments 30,793 (34,919) Adjusted Diluted Net Income $ 123
Slide 37: AllianceBernstein Adjusted Financial Results Reconciliation
3Q10 Earnings Presentation 37 AllianceBernstein.com 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 excludes investment gains a
Slide 38: ALLIANCEBERNSTEIN
7B ALLIANCEBERNSTEIN
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