Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q2 2006 Earnings Presentation
39 slides from Alliancebernstein Holding L.p's earnings presentation, Jul 27, 2006
Slide 1: Second Quarter 2006 Review
Second Quarter 2006 Review July 26, 2006 Lewis A. Sanders Gerald M. Lieberman Chairman & Chief Executive Officer President & Chief Operating Officer Any forecasts in this material may not be realized. Information or opinions should not be construed as investment advice.
Slide 2: Introduction and Forward-Looking Statements
Introduction In light of Regulation FD, management will be limited in responding to inquiries from investors or analysts in a non-public forum. Forward-Looking Statements Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation
Slide 3: AllianceBernstein – Second Quarter Highlights
AllianceBernstein – Second Quarter Highlights < Equity markets weak in almost all geographies < Relative performance disappointing < Net AUM flows at record highs < Financial performance very strong = AllianceBernstein (Operating) Ø Net Revenues up 23.4% Ø Net Income up 31.9% = AllianceBernstein Hol
Slide 4: Market Performance - Non-U.S.
Market Performance - Non-U.S. *12 months ending June 30, 2006. Source: MSCI (Morgan Stanley Capital International).
Slide 5: Market Performance - U.S.
Market Performance - U.S. *12 months ending June 30, 2006. Source: Frank Russell Company, Standard & Poor’s, and Lehman Brothers.
Slide 6: Relative Performance Summary
Relative Performance Summary < Relative investment performance disappointing in quarter = Weak relative returns in Growth and Emerging Markets = No “out-performance” in Value Equities or Fixed income < Competitive or better longer-term performance vs. benchmarks = Global and International Value Equi
Slide 7: Changes in Assets Under Management By Channel
Changes in Assets Under Management By Channel Three Months Ended June 30, 2006 In $ Millions (1)Hong Kong joint venture interest.
Slide 8: Changes In Assets Under Management By Channel
Changes In Assets Under Management By Channel Twelve Months Ended June 30, 2006 In $ Millions (1)Acquisition of Hong Kong joint venture interest; disposition of South African joint venture interest and Indian mutual funds. (2)Transfers of certain client accounts were made among distribution channels
Slide 9: Changes in Assets Under Management By Investment Service
Changes in Assets Under Management By Investment Service Three Months Ended June 30, 2006 In $ Millions (1) Includes Blend style services combining growth and value equity components. (2) Hong Kong joint venture interest.
Slide 10: Changes In Assets Under Management By Investment Service
Changes In Assets Under Management By Investment Service Twelve Months Ended June 30, 2006 In $ Millions (1) Includes Blend style services combining growth and value equity components. (2) Acquisition of Hong Kong joint venture interest; disposition of South African joint venture interest and Indian
Slide 11: Institutional Investments— Second Quarter Highlights
Institutional Investments— Second Quarter Highlights < Continuing strong net inflows into Core/Blend and Global and International services < Core/Blend Equity services accounted for approximately 1/3 of all new assets < Approximately 80% of new fundings attributable to Global and International servi
Slide 12: Retail— Second Quarter Highlights
Retail— Second Quarter Highlights < Positive net flows for fourth consecutive quarter with all market segments contributing to growth < Wealth Strategies services reached nearly $6.5 billion in assets (2) = Wealth Strategies - $4.3 billion = Global Wealth Strategies - $2.2 billion < CollegeBound Fun
Slide 13: Private Client— Second Quarter Highlights
Private Client— Second Quarter Highlights < Continued strong net inflows < Financial Advisors up 50 (22%) from 2Q05 to 280 < UK office opened in July (1) Transfers of certain client accounts were made among distribution channels resulting from changes in how these accounts are serviced by the firm.
Slide 14: Institutional Research Services— Second Quarter Highlights
Institutional Research Services— Second Quarter Highlights < Record revenues of $103 million in quarter < Double-digit organic revenue growth in both the U.S. and U.K. offices < Higher market share and volume, partially offset by industry-wide pricing declines < Received high marks for research qual
Slide 15: Growth in Global Assets
Growth in Global Assets In $ Billions $625 Billion By Service By Client Domicile at June 30, 2006 F/I $166 Equity 27% $459 73% Non-U.S. Global & UP 42% Int’l UP 54% $516 Billion at June 30, 2005 F/I $162 Equity 31% $354 69%
Slide 16: AllianceBernstein Second Quarter Revenues
AllianceBernstein Second Quarter Revenues In $ Millions Percent 2Q 2006 2Q 2005 Change Revenues: Advisory Fees $ 690 $ 529 30.5% Distribution 104 98 6.9% (1) Institutional Research Services 103 80 27.5% Dividend and Interest Income 62 30 100.6% (2) Other 20 39 -47.3% Total Revenues 979 776 26.1% Les
Slide 17: AllianceBernstein Second Quarter Advisory Fees
AllianceBernstein Second Quarter Advisory Fees Percent 2Q 2006 2Q 2005 Change Ending AUM (In $ Billions) $ 625 $ 516 21.2% Average AUM (In $ Billions) $ 625 $ 522 19.7% By Fee Type (In $ Millions): Base Fees $ 653 $ 505 29.5% < Higher AUM and favorable mix Performance Fees 37 24 52.2% n Anniversary
Slide 18: AllianceBernstein Second Quarter Revenues
AllianceBernstein Second Quarter Revenues In $ Millions Percent 2Q 2006 2Q 2005 Change Revenues: Advisory Fees $ 690 $ 529 30.5% Distribution 104 98 6.9% Institutional Research Services 103 80 (1) 27.5% n Higher NYSE volume and market share; lower pricing Dividend and Interest Income 62 30 100.6% n
Slide 19: AllianceBernstein Second Quarter Expenses
AllianceBernstein Second Quarter Expenses In $ Millions Percent 2Q 2006 2Q 2005 Change Employee Comp & Benefits $ 374 $ 309 21.1% Promotion & Servicing 156 156 0.6% General & Administrative 128 81 57.1% Interest 7 6 8.7% Amortization of Intangibles 5 5 _ Total $ 670 $ 557 20.3% NOTE: Percentages are
Slide 20: AllianceBernstein Second Quarter Compensation & Benefits
AllianceBernstein Second Quarter Compensation & Benefits In $ Millions Percent 2Q 2006 2Q 2005 Change Base Compensation $ 94 $ 85 10.0% n 470 higher headcount Incentive Compensation 147 129 14.5% n Higher earnings; lower amortization Commissions 94 67 40.4% n New business across all channels Fringes
Slide 21: AllianceBernstein Second Quarter Expenses
AllianceBernstein Second Quarter Expenses In $ Millions Percent 2Q 2006 2Q 2005 Change Employee Comp & Benefits $ 374 $ 309 21.1% Promotion & Servicing 156 156 0.6% $18 MM '05 legal recovery; General & Administrative 128 81 57.1% higher '06 occupancy, n data processing and market data services Inter
Slide 22: AllianceBernstein Second Quarter Net Income
AllianceBernstein Second Quarter Net Income In $ Millions Percent 2Q 2006 2Q 2005 Change Net Revenues $ 933 $ 756 23.4% Expenses 670 557 20.3% Operating Income 263 199 32.1% Non-operating income 10 13 -21.0% Income before Taxes 273 212 29.0% Income Taxes 12 14 -11.8% < Lower estimated full year rate
Slide 23: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In $ Millions (except per unit amounts) Percent 2Q 2006 2Q 2005 Change AllianceBernstein: Net Income $ 261 $ 198 31.9% Weighted Average Equity Ownership Interest 32.4% 31.6% AllianceBernstein Holding: Equity in Earnings $ 85 $ 63 34.9% Income Taxes 9 7 30.
Slide 24: Appendix
7B ALLIANCEBERNSTEIN Appendix
Slide 25: Market Environment
Market Environment Annualized Cumulative 2Q 06 One Year Three Years Three Years MSCI Emerging Markets (4.3) 35.5 34.3 142.4 MSCI EAFE 0.7 26.6 23.9 90.4 MSCI World (0.5) 16.9 16.9 59.6 Russell 1000 Growth (3.9) 6.1 8.3 27.2 Russell 1000 Value 0.6 12.1 15.7 54.9 S&P 500 (1.4) 8.6 11.2 37.6 Lehman Agg
Slide 26: Investment Performance: Delivering Results for Clients
Investment Performance: Delivering Results for Clients Net-of-Fee Annualized Relative Performance Premiums The information in this table is provided solely for use in connection with this presentation and is not directed towards existing or potential investment advisory clients of AllianceBernstein.
Slide 27: Relative Performance: Institutional Growth Equity (After Fees)
Relative Performance: Institutional Growth Equity (After Fees) (1) Institutional Equity Composites vs. Benchmarks Global Emerging Large Cap U.S. Mid Cap Small Cap Intl Lg Cap Research Markets (2) (3) (4) (5) (6) (7) (8) Growth Growth Growth Growth Growth Growth Growth 2Q 06 (3.7) (6.1) (7.6) (2.0) (
Slide 28: Relative Performance: Institutional Value Equity (After Fees)
Relative Performance: Institutional Value Equity (After Fees)(1) Institutional Equity Composites vs. Benchmarks U.S. U.S. Emerging Strategic Diversified International Global Markets (2) (2) (3) (4) (5) Value Value Value Value Value 2Q 06 (0.4) (0.2) (0.7) 1.3 (2.1) One Year (0.8) (0.8) 6.4 6.9 (3.1)
Slide 29: Relative Performance: Style Blend Services (After Fees)
Relative Performance: Style Blend Services (After Fees)(1) Blend Equity Composites vs. Benchmarks International Emerging Markets U.S. Style Global Style Style Style (2) (5) (4) Blend Blend Blend (3) Blend 2Q 06 (2.2) (1.1) (2.1) (2.0) One Year 0.6 5.3 0.7 (3.0) Three Years 0.3 3.0 (1.0) 3.2 Since In
Slide 30: Relative Performance: Institutional Fixed Income (After Fees)
Relative Performance: Institutional Fixed Income (After Fees) (1) Institutional Fixed Income Composites vs. Benchmarks Core Core Corp Strategic Core (2) (3) (4) (6) Plus Mortgage Bonds Global (5) Plus 2Q 06 (0.1) (0.1) 0.0 0.1 0.1 One Year 0.6 (0.1) 0.1 0.2 0.9 Three Years 0.4 0.2 0.1 0.4 0.9 Five Y
Slide 31: Absolute Performance: Private Client (After Fees)
Absolute Performance: Private Client (After Fees)(1) Annualized 2Q 06 1 Year 3 Year 5 Year (2) Fully Diversified Simulation (2.1) 10.3 11.4 6.7 S&P 500 (1.4) 8.6 11.2 2.5 NOTE: The information in this table is provided solely for use in connection with this presentation, and is not directed towards
Slide 32: Relative Performance: Retail Growth Equity (After Fees)
Relative Performance: Retail Growth Equity (After Fees)(1) Retail Mutual Funds vs. Lipper Averages Global Strategic Large Cap Mid Cap Research Research Growth (2) Growth (3) Growth (4) Growth (5) Equity (6) 2Q 06 (3.1) (5.6) (6.7) (1.2) (4.6) One Year 0.4 (10.2) 1.0 2.0 1.6 Three Years 0.5 (1.6) 2.8
Slide 33: Relative Performance: Retail Value Equity (After Fees)
Relative Performance: Retail Value Equity (After Fees)(1) Retail Mutual Funds vs. Lipper Averages Growth & Small/Mid Cap Intl Global (2) (3) (4) (5) (6) Value Income Value Value Value 2Q 06 0.1 (2.2) 1.2 0.5 0.4 One Year 0.1 (4.3) 0.7 7.4 1.8 Three Years 0.9 (2.1) 1.4 2.6 (0.4) Five Years 2.7 (2.4)
Slide 34: Relative Performance: Retail Fixed Income (After Fees)
Relative Performance: Retail Fixed Income (After Fees)(1) Retail Fixed Income Funds vs. Peer Group Averages Global Emerging American Short Corporate Gov’t Market Income Duration Intermediate (2) (3) (4) (7) (5) (6) Bond Income Debt Portfolio Plus Duration 2Q 06 (0.5) (3.1) 0.4 (4.9) (0.0) (0.1) One
Slide 35: Relative Performance: Wealth Strategies (After Fees)
Relative Performance: Wealth Strategies (After Fees)(1) Retail Mutual Funds vs. Morningstar Averages Wealth Balanced Wealth (2) (3) (4) Preservation Wealth Appreciation 2Q 06 (0.1) (0.5) (0.6) One Year 2.0 3.5 7.4 Since Inception (5) 0.9 1.3 2.5 NOTE: The information in this table is provided solely
Slide 36: AllianceBernstein Transaction Fees
AllianceBernstein Transaction Fees In $ Millions Percent 2Q 2006 2Q 2005 Change Advisory Fees Prior period presentation $ 690 $ 533 29.4% Reclassification to IRS - (4) N/M As reported $ 690 $ 529 30.5% Institutional Research Services Prior period presentation $ 103 $ 76 34.5% Reclassification from A
Slide 37: AllianceBernstein Consolidated Balance Sheet
AllianceBernstein Consolidated Balance Sheet In $ Thousands, Unaudited 6/30/06 12/31/05 Assets Cash and investments $ 1,405,237 $ 999,213 Cash and securities, segregated 1,861,528 1,720,809 Receivables, net 3,162,391 2,936,245 Goodwill, net 2,893,339 2,876,657 Intangible assets, net 294,975 305,325
Slide 38: AllianceBernstein Consolidated Cash Flow
AllianceBernstein Consolidated Cash Flow In $ Thousands, Unaudited Six Months Ended 6/30/06 6/30/05 Cash Flows From Operating Activities: Net income $ 488,675 $ 366,504 Non-cash items: Amortization and depreciation: Amortization of deferred sales commissions 49,970 70,987 Amortization of deferred co
Slide 39: AllianceBernstein trademarks and inception-to-date performance
AllianceBernstein® and the AB AllianceBernstein Logo are trademarks and service marks owned by AllianceBernstein L.P. Bernstein Value Equities Inception Date Inception-June 2006 U.S. Strategic Value Dec 31, 73 +2.6% U.S. Diversified Value Jun 30, 86 +1.1 Global Value Sep 30, 95 +3.3 Emerging Markets
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