Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q1 2015 Earnings Presentation
34 slides from Alliancebernstein Holding L.p's earnings presentation, May 1, 2015
Slide 1: First Quarter 2015 Review
April 30, 2015 FIRST QUARTER 2015 REVIEW Peter S. Kraus Chairman & Chief Executive Officer John C. Weisenseel Chief Financial Officer
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 fac
Slide 3: Peter S. Kraus, Chairman & Chief Executive Officer
Peter S. Kraus Chairman & Chief Executive Officer 18 Fre Quer 2016 Reve | 2
Slide 4: Firmwide Overview: First Quarter 2015
Firmwide Overview: First Quarter 2015 In US $ Billions $19.5 GBA $19.5 _ | | | C1 1015 4Q14 1Q15 1014 $6.0 $6.0 Net Flows = = GH) (4.4) 1015 4Q14 1015 1014 $485.9 $474.0 $485.9 S544 End of Period AUM a | a | 1015 4Q14 1015 1014 ‘$481.0 $476.0 ‘$481.0 $452.0 Average AUM a | 1015 4Q14 1015 1014 First
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend Firmwide: Net Flows Up Sequentially and Year-over-Year 23.6 188 13:5) 15.3) 093) (15.3) (16.0) (16.8) 1014 2014 3014 aaa 1015 Retail: Net Flows Returned to Positive Territory 14 16 99 on 10.8 (11.0) OA) (11.7) (10.4) (10.3) 1014 2014 314 4a14 1015
Slide 6: Fixed Income Investment Performance
Fixed Income Investment Performance 5 . . % Of Assets in Services Relative Performance Through 3/34/15 (%) Outperforming Benchmark 1015 4Year 3Year 5 Year US Strategic Core Plus 03 09 1.1 One-Year US Core Fixed Income 0.1 0.2 0.6 0.5 US Investment Grade Corporates 0.2 Ti 09 09 TIPS Plus 0.4 0.8 1.3
Slide 7: Equities Investment Performance
Equities Investment Performance % of Assets in Services Outperforming Benchmark Relative Performance Through 3/31/15 (%) 1015 1Year _3Year _5 Year ‘Unique Alphi Concentrated US Growth 14 7A 19 28 One-Year Concentrated Global Growth 33 13.0 0.8 3.0 US Thematic Research 5.3 3.3 Ghee 0.9 Global Themati
Slide 8: Institutional Highlights
Institutional Highlights Sequential and Year-over-Year Gross Sales Increases Across Regions % Change 569 196 161 83 42 42 oe = = ‘Americas Asia Pacific EMEA Total 1Q15/4Q14 = 1Q151Q14 “tAssots avarded and pending funding as of quarter-end +tRepresents significant pipeline activity; not comprehensive
Slide 9: Retail Highlights
Retail Highlights Top 10 Selling Services Are a Diverse Mix Services ranked by total 1Q15 gross sales QQ % Ain REG Q/Q Net Flow Gross Sales | _ Po: Trend Global High Yield (16) European income 162 v » American Income 39 v a AB High Income 17 v na US Large Cap 46 v ay Growth Select Equity* 27 v Vv Se
Slide 10: Private Wealth Management Highlights
Private Wealth Management Highlights Strategic Equities Beat Benchmark and Peers in 1Q15... Strategic Equities S&P 500 ...And Since Inception (June 2012) 115 bps 20.05% _Outperformance | | 39" Percentile S&P 500 Ranking" Strategic Equities ‘As of March 31, 2015 Performance for Strategic Equities is
Slide 11: Bernstein Research Highlights
Bernstein Research Highlights Revenues Higher Year-over-Year... ar % Change 1Q15/1Q14: +2% 1015/4Q14: -2% 126 + Bernstein’s Trading Platform: Unique and Unconflicted ++ Global Equity Platform Global cash, algorithmic and portfolio trading desks Execution capabilities in 160 venues and 49 markets nt-
Slide 12: Progress on Our Strategy
Progress on Our Strategy Firmwide Initiative Progress Deliver for our clients with our investment performance + 89% of Fixed Income assets in outperforming services for 3-yr period; 87% for 1-yr and 93% for 5-yr + UK Core Plus, TIPS Plus and European High Yield top quartile performers for the 3-yr +
Slide 13: John C. Weisenseel, Chief Financial Officer
John C. Weisenseel Chief Financial Officer 3 Feuer 205 vow | 2
Slide 14: Financial Highlights: First Quarter 2015
Financial Highlights: First Quarter 2015 In US $ Millions $634 $655 Adjusted Revenues || | | 1015 4a14 $183 Adjusted Operating GER Income || 1015 4a14 Pr 27.9% Adjusted Operating Margin 1015 4014 0.57 Adjusted EPU $0.45 P] 1015 4a14 Please refer to pages 29-32 for additional information on the recon
Slide 15: First Quarter 2015 Adjusted Income Statement
First Quarter 2015 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 1015 4Q14 %A 1014 %A Base Fees $ 487 $ 486 0% $ 452 8% Performance Fees 4 28 (86%) 3 33% Bernstein Research Services 126 128 (2%) 123 2% Net Distribution Revenues (Expenses) @) (4) (25%) (ty 200% Investment Gai
Slide 16: First Quarter 2015 Adjusted Income Statement Highlights
First Quarter 2015 Adjusted Income Statement Highlights Revenues ++ Base fees increased year-on-year due to an increase in average AUM across all three channels (Institutional, Retail, Private Wealth). The sequential increase was due to higher average AUM in the Institutional and Private Wealth chan
Slide 17: Q&A
Q&A
Slide 18: Appendix
APPENDIX
Slide 19: Institutional Composite Relative Performance vs. Benchmarks
Institutional Composite Relative Performance vs. Benchmarks Periods Ended March 31, 2015 Service 1015 4-Yr 3-Yr 5-Yr 10-Yr Benchmark Equity Emerging Markets Value (0.7) 3.2 (1.5) (2.1) (1.4) MSCI EM Global Strategic Value 23 3.0 45 04 (1.8) MSCI ACW US Small & Mid Cap Value 04 40 24 05 20 Russell 25
Slide 20: Retail Mutual Funds Relative Performance vs. Lipper Average
Retail Mutual Funds Relative Performance vs. Lipper Average Periods Ended March 31, 2015 Service 115 4-¥r —3-Y¥r SY ——10-Yr Lipper Average Equity International Value 4.2 15 (0.5) (26) ~— (2.5) International Mulfi-Cap Value Growth & Income (0.2) (19) 0.4 16 (0.6) Large-Cap Core Discovery Value 1.0 54
Slide 21: Assets Under Management
Assets Under Management (US $ Billions) At March 31, 2015, At Dec 31, 2014 Institutions Retail Private Wealth Total Total Equity Actively Managed $ 2 $ 47 $ 3 115 $ 112 Passive “” 22 28 4 51 51 Total Equity 51 75 40 166 163 Fixed Income Taxable 154 61 10 (225 219 Tax-Exempt 2 " 20 3 32 Passive“? - 9
Slide 22: Three Months Ended 3/31/15: AUM Roll-Forward by Distribution Channel
Three Months Ended 3/31/15: AUM Roll-Forward by Distribution Channel In US $ Billions Beginning Sales/New Redemptions/ Net Cash Net Transfers Investment Net End Investment Service: of Period Accounts _Termrinations Flows Flows Performance Change _ of Period Institutions us 114.0 23 (1.3) 120 22 (0.3
Slide 23: Three Months Ended 3/31/15: AUM Roll-Forward by Investment Service
Three Months Ended 3/31/15: AUM Roll-Forward by Investment Service InUS $ Billons Beginning _SalesiNew Redemptions! Net Cash Net Investment Net End Investment Service: of Period Accounts Terminations Flows Flows Performance Change ___of Period Equity Active us Cr 22 a7) 7 (02) 24 19 63.8 ‘Global and
Slide 24: AUM by Region
AUM by Region Institutional Retail Other 3% Japan 5% UK 5% Asia ex Japan 6% res 13% EMEA ex UK 15% $243.7B $164.3B ‘As of March 31, 2015 By client domicile 18 Fre Qurr2016 Revo | 23
Slide 25: First Quarter 2015 Adjusted Advisory Fees
First Quarter 2015 Adjusted Advisory Fees 1a 4Q 1a 2015 2014 %A 2014 %A Ending AUM ($ Billions) $486 $474 3% $454 7% Average AUM ($ ions) $481 $476 1% $452 6% By Fee Type ($ Millions): Adjusted Base Fees $487 $486 0% $452 8% Adjusted Performance Fees 4 28 (86%) 3 33% Total $491 $514 (4%) $455 8% Adj
Slide 26: First Quarter 2015 GAAP Income Statement
First Quarter 2015 GAAP Income Statement 1Q 4Q 1Q In US § Millions (except EPU) 2015 2014 %A 2014 %A Net Revenues $ 762 $ 787 (3%) $ 715 7% Operating Expenses 609 596 2% 585, 4% Operating Income 153 191 (20%) 130 18% Net Income Attributable to AB Unitholders 141 177 (20%) 117 21% 'AB Holding GAAP Di
Slide 27: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets March 31,2015 December 31, 2014 ‘Cash and cash equivalents or $ 556 Cash and securities, segregated 520 476 Receivables, net 2,011 1,915, Investments: Long-term incentive compensation-related 81 99 Other 648 664 Goodwill 3,045 3,045 Intangible asset
Slide 28: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Milions ‘Three Months Ended March 31, 2015 March 31, 2014 Net Income $ 23S 119 Non-cash items: Amortization of deferred sales commissions 2 9 ‘Amortization of non-cash long-term incentive compensation 3 6 Depreciation and other amortization 4 16 Unrealize
Slide 29: AB Holding Financial Results
AB Holding Financial Results 1Q 4Q 1Q InUS $ Milfions (exkcuding per Unit amounts) 2015 2014 %A 2014 %A AB Net Income Attributable to AllanceBernstein $141 $177 (20%) $117 21% Weighted Average Equity Ownership Interest ses. sae 5406 AB Holding Fitter” $52 $64 (19%) $41 27% Income Taxes 6 6 “ 5 20% N
Slide 30: First Quarter 2015 GAAP to Non-GAAP Reconciliation
First Quarter 2015 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distibition Pass —Defewrod Venture Real Contingent Aaquiston- Related Through Comp, Captal Estate Payment ——Rlatod GAP Payments _ Expenses _iv. Fund _Charges__Adust.__Expenses__Other Non-GAAP, a ® © o) © a @ i) Investme
Slide 31: Fourth Quarter 2014 GAAP to Non-GAAP Reconciliation
Fourth Quarter 2014 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distibaion Pave Detered Venture Real Contingent Acquisiion- Related Trough Comp. Captal stato © Payment «Related ome Payments _ Expenses. ow Fund _Charges__Adust.__Emenses__Other Non-GAAP. (a) ® ( (0) © ) @ ® Investmen
Slide 32: First Quarter 2014 GAAP to Non-GAAP Reconciliation
First Quarter 2014 GAAP to Non-GAAP Reconciliation In US $ Thousands. Investment advisory and services fees, Bernstein research services Distribution revenues Dividend and interest income Investment gains (losses) ‘Other revenues, Total revenues Less: interest expense Net revenues Employee compensat
Slide 33: AB Adjusted Financial Results Reconciliation
AB Adjusted Financial Results Reconciliation AB Notes to Consolidated Statements of Income and Supplemental Information (Unaudited) A. Adjusted net revenues exclude distribution-related payments to third parties as well as amortization of deferred sales commissions against distribution revenues, We
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AllianceBernstein Holding — Q1 2015 Earnings Presentation on 6ix