41 slides from Alliancebernstein Holding L.p's earnings presentation, May 4, 2010
Slide 1: First Quarter 2010 Review
May 3, 2010 First Quarter 2010 Review 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
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: Restoring Competitive Performance
Restoring Competitive Performance Lipper Percentile Ranks 11 20 34 87 97 94 (MSCI (MSCI (Russell 1000 Value) Cumulative World) EAFE) Premium vs. Peer Average Peak-to-Trough (9.4)% (8.5)% (6.3)% Trough-to-Present 18.8% 11.8% 3.3% Cumulative Premium vs. Benchmarks Peak-to-Trough (12.1)% (10.3)% (3.7)%
Slide 4: Restoring Competitive Performance
Restoring Competitive Performance Lipper Percentile Ranks 16 25 39 79 89 97 (MSCI (MSCI AC World ex US) (Russell 2500 Cumulative World) Growth) Premium vs. Peer Average Peak-to-Trough (8.1)% (4.0)% (4.9)% Trough-to-Present (0.2)% 8.3% 7.5% Cumulative Premium vs. Benchmarks Peak-to-Trough (7.8)% (4.4
Slide 5: Restoring Competitive Performance
Restoring Competitive Performance Lipper Percentile Ranks 5 14 21 52 70 88 (Barclays Global Aggregate (Composite Benchmark*) (Barclays 5Yr GO Municipal Bond Index) (USD hedged) Index) Cumulative Premium vs. Peer Average Peak-to-Trough (4.6)% 0.7% 3.2% Trough-to-Present 9.7% 20.0% (2.8)% Cumulative P
Slide 6: Net Flows By Investment Service
Net Flows By Investment Service(1) In US dollars billions Total: ($20.2) ($24.0) ($12.9) ($16.8) ($6.4) (2) (1) Approximately $86 billion of Blend Strategies AUM are reported in their respective services. (2) Includes index, structured, asset allocation services and other non-actively managed AUM. A
Slide 7: Net Flows By Distribution Channel
Net Flows By Distribution Channel In US dollars billions Total: ($20.2) ($24.0) ($12.9) ($16.8) ($6.4) AllianceBernstein.com 1Q10 Earnings Call 7 Presentation
Slide 8: Private Client Highlights
Private Client Highlights < Net outflows improved by 59% sequentially due to a 25% decline in gross outflows < Sales activity continued to rebound— second consecutive quarter with increased client relationships < Risk-aversion continued to abate, based on new-account asset mix < Launched a dynamic a
Slide 9: Retail Highlights
Retail Highlights < Net flows were positive, improving by $2.9 billion sequentially < Gross sales were up 34% sequentially < Mutual fund net inflows for 4th consecutive quarter, fueled primarily by non-US sales and new product launches =1Q10 included two significant fund launches with a major Asian
Slide 10: Institutions Highlights
Institutions Highlights < Net outflows improved by 45% compared to 4Q09 and 36% compared to 1Q09 due to decreased gross outflows < Pipeline of awarded but unfunded mandates increased by 42% sequentially to $5.2 billion from $3.6 billion < Consultant relations improving; e.g. consultant advocacy key
Slide 11: Bernstein Research Services Highlights
Bernstein Research Services Highlights < 1Q10 revenue up 5% year-over-year and 2% sequentially; Europe up strong double-digits and U.S. down slightly year-over-year < Although the industry backdrop remains sluggish, we believe SCB continued to gain share*, driven by investments in research, new trad
Slide 12: Five Quarter Headcount Trend
Five Quarter Headcount Trend 4,761 4,654 4,544 4,369 4,276 AllianceBernstein.com 1Q10 Earnings Call 12 Presentation
Slide 13: First Quarter 2010 Net Income
First Quarter 2010 Net Income In US dollars millions (excluding per-Unit amounts) 1Q 1Q Percent 4Q Percent 2010 2009 Change 2009 Change Net Revenues $725 $598 21% $782 -7% Operating Expenses 585 564 4% 582 1% Operating Income 140 34 314% 200 -30% Non-Operating Income(1) 4 6 -28% 5 -1% Income Before
Slide 14: First Quarter 2010 Revenues
First Quarter 2010 Revenues In US dollars millions 1Q 1Q Percent 4Q Percent Revenues 2010 2009 Change 2009 Change Base Fees $509 $433 18% $527 -3% Performance Fees 3 12 -78% 16 -84% Bernstein Research 111 106 5% 109 2% Distribution 80 58 38% 81 -1% Investment Gains (Losses)(1) -8 -41 -81% 14 n/m Oth
Slide 15: First Quarter 2010 Advisory Fees
First Quarter 2010 Advisory Fees In US dollars 1Q 1Q Percent 4Q Percent 2010 2009 Change 2009 Change Ending AUM ($ Billions) $501 $411 22% $496 1% Average AUM ($ Billions) $490 $424 16% $494 -1% By Fee Type ($ Millions): Base Fees $509 $433 18% $527 -3% Performance Fees(1) 3 12 -78% 16 -84% Total $5
Slide 16: First Quarter 2010 Operating Expenses
First Quarter 2010 Operating Expenses In US dollars millions 1Q 1Q Percent 4Q Percent Expenses 2010 2009 Change 2009 Change Compensation & $319 $314 2% < Slide 17 $323 -1% < Slide 17 Benefits Promotion & < Higher distribution plan < Lower distribution plan and 122 105 16% expenses 128 -5% travel-rel
Slide 17: First Quarter 2010 Compensation & Benefits
First Quarter 2010 Compensation & Benefits In US dollars millions 1Q 1Q Percent 4Q Percent 2010 2009 Change 2009 Change Base Compensation(1) $105 $127 -17% $115 -9% Incentive Compensation Cash 68 69 -1% 71 -4% Deferred Compensation(2) 58 33 76% 62 -7% Total 126 102 24% 133 -5% Commissions 52 52 - 47
Slide 18: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In US dollars millions (except per Unit amounts) 1Q 1Q Percent 4Q Percent 2010 2009 Change 2009 Change AllianceBernstein Net Income Attributable to AllianceBernstein $148 $37 302% $192 -23% Weighted Average Equity Ownership Interest 36.6% 34.2% 35.0% Allia
Slide 19: Q&A
Q&A AllianceBernstein.com 1Q10 Earnings Call 19 Presentation
Slide 20: Appendix
Appendix AllianceBernstein.com 1Q10 Earnings Call 20 Presentation
Slide 21: Value Equity: Relative Performance
Value Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Percent International Value US Diversified Value 1Q10 CY2009 CY2008 CY2007 CY2006 CY2005 Benchmark MSCI World (Cap, UH, net) MSCI EAFE (Cap, UH, net) Russell 1000 Value Performance is preliminary. The information in th
Slide 22: Growth Equity: Relative Performance
Growth Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Percent International Large Cap Growth 1Q10 CY2009 CY2008 CY2007 CY2006 CY2005 Benchmark Russell 1000 Growth MSCI World (Cap, UH, net) MSCI EAFE (Cap, UH, net) Performance is preliminary. The information in this table
Slide 23: Blend Strategies: Relative Performance
Blend Strategies: Relative Performance Institutional Blend Strategies Composites vs. Benchmarks Percent Global International Blend Blend 1Q10 CY2009 CY2008 CY2007 CY2006 CY2005 Benchmark MSCI World (Cap, UH, net) MSCI EAFE (Cap, UH, net) MSCI EM (Cap, UH, net) Performance is preliminary. The informa
Slide 24: Fixed Income: Relative Performance
Fixed Income: Relative Performance Institutional Fixed Income Composites vs. Benchmarks Percent Emerging Market Debt 1Q10 CY2009 CY2008 CY2007 CY2006 CY2005 Bond Index (Unhedged) Performance is preliminary. The information in this table is provided solely for use in connection with this presentation
Slide 25: Institutional Value Equity: Relative Performance
Institutional Value Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Performance is preliminary. As of March 31, 2010 Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized. The information in this t
Slide 26: Institutional Growth Equity: Relative Performance
Institutional Growth Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Performance is preliminary. As of March 31, 2010 Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized. The information in this
Slide 27: Institutional Blend Strategies: Relative Performance
Institutional Blend Strategies: Relative Performance Institutional Blend Strategies Equity Composites vs. Benchmarks Periods Ended March 31, 2010 1Q One Three Five 10 Service 2010 Year Years Years Years Benchmark Global Blend Strategies (1.4) 0.6 (5.8) (2.8) N/A MSCI World International Blend Strate
Slide 28: Institutional Fixed Income: Relative Performance
Institutional Fixed Income: Relative Performance Institutional Fixed Income Composites vs. Benchmarks* Performance is preliminary. As of March 31, 2010 Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized. *The benchmarks li
Slide 29: Private Client: Absolute Performance
Private Client: Absolute Performance Periods Ended March 31, 2010 1Q One Three Five 10 Service 2010 Year Years Years Years Fully Diversified Simulation* 2.7 32.0 (3.3) 2.8 3.3 S&P 500 5.4 49.8 (4.2) 1.9 (0.7) MSCI World (net) 3.2 52.4 (5.4) 2.9 (0.0) Lipper Short/Int Blended Muni Fund 0.7 6.2 3.4 3.
Slide 30: Retail Value Equity: Relative Performance
Retail Value Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein. Investment perform
Slide 31: Retail Growth Equity: Relative Performance
Retail Growth Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein. Investment perfor
Slide 32: Retail Fixed Income: Relative Performance
Retail Fixed Income: Relative Performance Retail Fixed Income Funds vs. Peer Group Averages NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein. Investme
Slide 33: Wealth Strategies: Relative Performance
Wealth Strategies: Relative Performance Retail Mutual Funds vs. Morningstar Averages NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein. Investment perf
Slide 34: Six-Quarter Deferred Compensation Net P&L Trend
Six-Quarter Deferred Compensation Net P&L Trend In US dollars millions 4Q 1Q 2Q 3Q 4Q 1Q 2008 2009 2009 2009 2009 2010 Revenues Investment Gains (Losses) ($131) ($28) $63 $71 $15 $11 Dividends 7 1 2 1 4 1 Total Revenues ($124) ($27) $65 $72 $19 $12 Expenses Amortization of Original Awards $59 $45 $3
Slide 35: Consolidated Balance Sheet
Consolidated Balance Sheet In US dollars millions Assets Mar 31, 2010 Dec 31, 2009 Cash and cash equivalents $584 $614 Cash and securities, segregated 1,005 985 Receivables, net 1,185 1,099 Investments: Deferred compensation - related 372 401 Other 407 374 Goodwill, net 2,893 2,893 Intangible assets
Slide 36: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US dollars millions Three Months Ended Mar 31, 2010 Mar 31, 2009 Cash Flows From Operating Activities: Net Income $131 $32 Non-cash items: Amortization of deferred sales commissions 12 15 Amortization of non-cash deferred compensation 26 16 Depreciation and ot
Slide 37: Three-months ended 3/31/10 AUM Rollforward by Distribution Channel
Three-months ended 3/31/10 AUM Rollforward by Distribution Channel In US dollars billions Institutions Retail Private Client Total Beginning of Period $300.0 $120.7 $74.8 $495.5 Sales/New accounts 3.5 10.5 2.1 16.1 Redemptions/Terminations (9.9) (6.3) (1.5) (17.7) Cash flow (2.2) (1.4) (0.8) (4.4) U
Slide 38: Three-months ended 3/31/10 AUM Rollforward by Investment Service
Three-months ended 3/31/10 AUM Rollforward by Investment Service In US dollars billions Value Growth Fixed Equity Equity Income Other (1) Total Beginning of Period $171.2 $94.1 $184.3 $45.9 $495.5 Sales/New accounts 2.3 2.5 10.4 0.9 16.1 Redemptions/Terminations (6.7) (6.0) (4.9) (0.1) (17.7) Cash f
Slide 39: AUM by Region
AUM by Region In US dollars billions As of March 31, 2010 Retail Private Client $297.0 $127.8 $76.5 AllianceBernstein.com 1Q10 Earnings Call 39 Presentation
Slide 40: ALLIANCEBERNSTEIN
/B ALLIANCEBERNSTEIN
Slide 41: Slide 41