Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Alliance Capital Management — Q2 2005 Earnings Presentation
47 slides from Alliancebernstein Holding L.p's earnings presentation, Jul 27, 2005
Slide 1: Second-Quarter 2005 Review
a « ‘wwew alliancecapital com AllianceCapital & eee Second-Quarter 2005 Review Lewis A. Sanders Gerald M. Lieberman Chairman & Chief Executive Orticer President & Chiet Operating Oficer ‘Arfoncae reps te tray ee aoe Woman onde conse here aoe,
Slide 2: Introduction and Forward-Looking Statements
Introduction ‘The SEC adopted Regulation FO in October2000, in ight Regulaton FO, Management il be inited in cesponding to ingle from investor oF analysts ina porpubtefoum. Forward-Looking Statements Certain tatment inthis presenta ate "Yosrdosking statement within the meaning of he Prnate Secuttes
Slide 3: Market Performance - U.S.
sorte ant 206 Ree Market Performance - U.S. 3 012 Months* 20.2005 10-2005 14.1% 63% 68% 3.0% 4s 0.1% 05)% S&P 500 Russell 1000Growth Russell 1000 Value Lehman Aggregate Bond amon enon se 205 ‘Shue’Pantmusencanjay Uimay tote, MSC ae Stace Fore
Slide 4: Market Performance - Non-U.S.
Market Performance - Non-U.S. 34.9% 12 Months 20-2005 102005 137% (10)% 0.2)% MSCI EAFE MCI Emerging Markets MSCI WORLD fy, oom Bote, SCI, ave Stand & Poor 4 AllianceCapital AX
Slide 5: Alliance Capital Investment Performance
Alliance Capital Investment Performance ™ Overall, investment returns for clients were strong investment results in Value equities remained competitive, especially in international and global services U.S. Growth Equity outperformed U.S. Value Equity for the first time in 4 quarters ulmportantly, Gr
Slide 6: Changes in Assets Under Management
Changes in Assets Under Management By Investment Orientation Three Months Ended June 30, 2005 In $ Millions Value Growth Fixed Indext Equity Equity Income Structured — ‘Total Beginning of Period $195,198 «$118,159 «$191,885 $28,764 «$599,946 SalesiNew accounts 8,023 3.912 437 (283) 15,789 Redemption
Slide 7: Changes In Assets Under Management
Changes In Assets Under Management By Investment Orientation ‘Twelve Months Ended June 30, 2005, In $ Millions Value Growth Fixed Indext Equity Equity Income Structured Total Beginning of Period $160,728 $120,201 $172,910 © $28,959 «$482,198 SalesiNew accounts 29,519 18,716 24,118 610 72,963 Redempt
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Slide 9: Retail Asset Management—Second Quarter Highlights
Retail Asset Management— Second Quarter Highlights m Sale of non-core Cash Management Services "CMS" to Federated Investors, Inc. completed in June 1m Positive net long-term flows into Value Equities were more than offset by outlaws from affiliated Fixed Income accounts © Majority of outflows were s
Slide 10: Private Client Asset Management—Second Quarter Highlights
Private Client Asset Management— Second Quarter Highlights 1 Positive net long-term flows for In $ Billions the three and twelve month ( i periods Beginning AUM m= Financial Advisors up 9% to 239 Net Long-Term Flows since 1005 Market Appreciation Footprint = Footprint expansion remains on ERE RON tr
Slide 11: Institutional Research Services—Second Quarter Highlights
Institutional Research Services— Second Quarter Highlights Higher U.S. revenues driven by higher market share and volume ‘© Market share gains result of success with portfolio and algorithmic trading products © Increased volume completely offset by continued industry-wide pricing declines = Growth o
Slide 12: Growth in Non-U.S. Assets
seortc ant 26 Ree Growth in Non-U.S. Assets In $ Billions $482 Billion at June 30, 2004") 7 By Service Non-U.S. us. By Client Domicile Non-U.S {totes C2) uoaenen termes ors en EON {Bence cx Maogene teas $516 Billion at June 30, 205%) et
Slide 13: Assets Under Management by Investment Orientation
Assets Under Management by Investment Orientation $482 Billion at $516 Billion at June 30,2004 June 30, 2005 Fixed Income pach Mgmt ‘Value Componer rex / Structured Growth Comparent 8 AllianceCapital AX.
Slide 14: Alliance Capital Second Quarter Revenues
seortc ant 26 Ree Alliance Capital Second Quarter Revenues In $ Millions *In $ Billions 20 2Q Percent (2005 2004 ‘Change leMatietappredaton and positive net aset foe in tional Investment Management and at Cent channel, party Revenues ose by the sale of Cash Management Semis (CMS) [SEES a a | Distrib
Slide 15: Second Quarter Advisory and Transaction Fees
Alliance Capital Second Quarter Advisory and Transaction Fees In $ Millions 20 2005 By Fee Type: Base Fees $505 Transaction Charges 4 Performance Fees 2 Total $533 By Channel: a Institutional $219 Retail 163 Private Client _181 Total _$593 NOTE: Feo pe acaba ng muster aides Manat amet UE 4.3% Chant
Slide 16: Alliance Capital Second Quarter Revenues
seortc ant 26 Ree Alliance Capital Second Quarter Revenues In $ Millions 2Q 20 Percent 2005 2004 Change Revenues Advisory Fees $533, $511 43% Institutional Research Sves 76 n 7 Other 62 51 223 Total $769. $745, 3.2% ove pemeupye an cava wag natin aigepetes Oaab NE WaRetBOUaNE
Slide 17: Second Quarter Net Distribution Activity
Alliance Capital Second Quarter Net Distribution Activity In $ Millions 20 20 Percent 2005 2004 Change Distribution Revenues $98 $112 (12D) cite mcr’ Plan Payments pinay eto Distribution Expense Be sae of Cash Management Amort of Def Sales Comm 36 47 (26.2) mecreate aueto cortning — = in Behave ate
Slide 18: Alliance Capital Second Quarter Revenues
seortc ant 26 Ree Alliance Capital Second Quarter Revenues In $ Millions 20 20 Percent 2005 2004 Shange Revenues Advisory Fees $533 $511 43% Distribution 98 112 (127) tease involume and maket ‘nde addtional trading “ays, padiaty ose by inceased Total $769. $745 92% NOTE Pome bye an oabims wig mani a
Slide 19: Second Quarter Other Revenues
Alliance Capital Second Quarter Other Revenues In $ Millions 20 2005 Shareholder Servicing Fees $26 Investment Gains & Losses 7 Dividend & interest, net " Net Gain on Cash Mgmt Services 12 Other, net a Total Sez NOTE Fee eae cabAa wg MUCK aide RMROD Ne Mamet HED Percent (15.19% 379 16.1 NM 46 22.3%
Slide 20: Alliance Capital Second Quarter Expenses
seortc ant 26 Ree 8 Alliance Capital Second Quarter Expenses In $ Millions 20 20 Percent 2005 2004 Change Promotion & Servicing 156 192 (18.8) ‘General & Administrative 81 14 (287) Interest 6 6 o1 Amortization of Intangibles 5 - $557 $879 (8.8)% nove Peenntye a oaims 9 ndepeiee omeradtie manetaou ns
Slide 21: Second Quarter Compensation and Benefits
Alliance Capital Second Quarter Compensation and Benefits In $ Millions 20 2a 2005 2004 Base Compensation $85 $77 Incentive Compensation 129 103 Commissions 67 58 Fringes & Other 28 24 Total $308 $262 NOTE: Petenter aca orattie wanetgouns Percent Change som: “gcetmeeee Bi winsieerise end 163 spun st
Slide 22: Alliance Capital Second Quarter Expenses
seortc ant 26 Ree Alliance Capital Second Quarter Expenses In $ Millions 20 20 Percent 2005 2004 Change Employee Comp. & Benefits $309 $262 179% ‘Lower ditibuion plan payments, (Promotion senicng 0 956 192) iy saraseeretenieeaes, Tomer OSC amestzaton Interest 6 6 o1 Amortization of Intangibles 5 5 -
Slide 23: Second Quarter G&A Expenses
Alliance Capital Second Quarter G&A Expenses In $ Millions 2a 2005 Office & Related $44 Technology a Professional Fees © Portfolio Services 10 Minority interest 1 Other 10 at noTE-Peme oye am abtetes ung mun ts aWdepeFes MHRA wanst ROW, Percent Change 1.0% 61) NM (36) (87.5) (84.7) (28.7) % + Lower
Slide 24: Alliance Capital Second Quarter Net Income
Alliance Capital Second Quarter Net Income In $ Millions 20 2005 Revenues $769 Expenses 587. Income Before Taxes 212 Income Taxes 14 Net income $198, Pre-Tax Margin® 218% pene roge oman. ecobites ge We and eopeies ooo Te WaRstBOH NS Percent Change 3.2% (38) 276 36.1 27.4% AllianceCapital AX
Slide 25: Alliance Holding Financial Results
Alliance Holding Financial Results in $ Millions (except per unit amounts) 20 Alliance Capital: ae Net Income $198 Weighted Average Equity Ownership Interest by Alliance Holding 31.6% Alliance Holding: Equity in Eamings 5 63 Income Taxes z Net Income 56 ‘Additional Equity in Eamings ®__1 Net Income
Slide 26: Looking Ahead - Earnings Guidance for 2005
Looking Ahead —- Earnings Guidance for 2005 Management Assumptions m Annualized returns in the capital markets of 8% and 5%, respectively, for equity and fixed income assets; measured from June 2005 ‘mlmprovement in net inflows of assets under management in the second half of 2005, aincaed net inflo
Slide 27: Looking Ahead - Earnings Guidance for 2005 (Cont'd)
Looking Ahead — Earnings Guidance for 2005 (Cont'd) Second Half 2005 Alliance Holding EPU Guidance m Earnings of $0.60-0.70 per unitin 305 Earnings of $0.70-0.80 per unitin 405 m Includes performance-related fees of $0.10-0.15 per unit, earned primarily in the fourth quarter Capital market returns a
Slide 28: Alliance Capital
AllianceCapital A\
Slide 29: Market Environment
Market Environment 2Q05, SSP 500 14% Russell 1000 Growth 25 Russell 1000 Value A Lehman Aggregate Bond 30 MSCIEAFE (1.0) MSCI Emerging Markets 42 MSCI World 04 rine Bough 20,05 ‘One Year 6.3% 17 14.4 68 13.7 349 10.4 Annualized Three Years 8.3% 73 110 58 12.4 24.4 10.0 Cumulative Three 27.0% 23.4 36
Slide 30: Relative Performance: Institutional Value Equity (After Fees)
Relative Performance: Institutional Value Equity (After Fees)\") Institutional Equity Composites vs. Benchmarks US. Emerging Strategic International Global Markets Valuel?) Value Value) Value). 2005 +1.0% +0.5% 410.2% @1)% one Year fo) @n +66 +49 130 Three Years 4) 2 +48 +29 +105 Five Years +47 +48
Slide 31: Relative Performance: Institutional Growth Equity (After Fees)
Relative Performance: Institutional Growth Equity (After Fees)!") Institutional Equity Composites vs. Benchmarks Global Emerging LargeCap U.S. Mid Cap SmallCap IntlLg Cap Research Markets Growth?) —Growth® Growth Growth) Growth®) Growth”) Growth'®) 2005 +4.0% 14.8% 122% 0.0% 105% 421% 101% one Year
Slide 32: Relative Performance: Institutional Fixed Income (After Fees)
Relative Performance: Institutional Fixed Income (After Fees)(") Institutional Fixed Income Composites vs. Benchmarks Strategic Core Corp High Core Core Plus®) Mortyage® Bonds Yiel®) Global) Plus!” 2005 OD% +0.1% 40.1% 40.4% 0.1)% OD% onevear 0.0 00 108 on +08 103 Tnree Years +05 108 105 ao 03 42 Fi
Slide 33: Relative Performance: Retail Value Equity (After Fees)
Relative Performance: Retail Value Equity (After Fees)(") Value!) 2005 10.3% one Year -+1.2 Three Years +17 Five Years — 10Years = Retail Mutual Funds vs. Lipper Averages ‘Small Large Cap Growth & Cap/ttid Cap —_ Intl Global Income Value’ -Value®) «= Value®) Balanced”) 0n% +0.6% 0.9% 05% oH% a8) ()
Slide 34: Relative Performance: Retail Growth Equity (After Fees)
Relative Performance: Retail Growth Equity (After Fees)\") Retail Mutual Funds vs. Lipper Averages Globat LargeCap Growth Mid Cap Research Growth) Multi Cap) Growth Growth?) 2008 13.5% 14.2% 12.5% 11.3% onevear +09 4) ) +30 Three Years (1.3) "4 +75 = isa Five Years (3.3) +18 +42 - 424 10 Years 00 “9
Slide 35: Relative Performance: Retail Fixed Income (After Fees)
a Relative Performance: Retail Fixed Income (After Fees)\") Retail Fixed Income Funds vs. Lipper Averages Americas Emerging cml. Corporate — Gov't. Market High Short American Bond?) Income®) —Debf) Yield Duration Plus®) Income-Offshore” 2005 (0.8)% +6.6% (1.2% +0.3% 0.19% +2.0% One Year +23 +6.0 BH
Slide 36: Absolute Performance: Private Client (After Fees)
8 Absolute Performance: Private Client (After Fees)(") Annualized 2005, AYear 3Year SYear All Balanced Accounts® +1.9% 47.9% 48.0% 46.7% Global Balanced Benchmark 415 478 +79 +16 NOTE THe Mma Se tele pomondcomit tee McoR CoN WR HE GZeA Eo, NEE Wotan mat eg eépomATnae a aCeonyChN FANE PRL Qmemetputma
Slide 37: Relative Performance: Style Blend Services (After Fees)
Relative Performance: Style Blend Services (After Fees)'") Blend Equity Composites vs. Benchmarks International Emerging Markets US. Style Style Style Global Style Blend® Blend® Blend Blend®) 2005 120% 20.5% ane +1.0% one Year 1 so4 +48 +30 Three Years 103 108 +64 NA since inception +0.1, “9 104 “7
Slide 38: Relative Performance: Wealth Strategies (After Fees)
Relative Performance: Wealth Strategies (After Fees)\") Retail Mutual Funds vs. Morningstar Averages Wealth Balanced Wealth Preservation) Wealth?) Appreciation’ 2005 +0.8% 12% 114% one Year 18 4 +30 Since inception® 413 +09 43 ‘oe ¥poatesonor we cones wt re neta twang ot ote ere amy of Ace CPL ) nas
Slide 39: Changes in Assets Under Management by Channel
Changes in Assets Under Management by Channel Three Months Ended June 30, 2005 i$ Millions Beginning of Period SalesMew accounts Redemptions/Terminations Cash flow Unreinvested dividends Net long-term inflows (outflows) Net cash management Market appreciation End of Period % Total (end of perioa) %
Slide 40: Changes In Assets Under Management by Channel
Changes In Assets Under Management by Channel ‘Twelve Months Ended June 30, 2005, In $ Millions Beginning of Period Sales/New accounts Redemptions/Terminations Cash flow Unreinvested dividends Net long-term inflows (outflows) Net cash management Market appreciation End of Period 96 Total (end of per
Slide 41: Second Quarter Revenues by Distribution Channel
Second Quarter Revenues by Distribution Channel Institutional Investment Management Retail Private Client Institutional Research Services Other Total Percent Change 13.8% (11.2) 92 7A 813 3.2% AllianceCapital AX
Slide 42: Trends in Headcount
Trends in Headcount 4440 4446 4408 MS) 4,088 4,093 4100 4403 4391 4401 4an 4,094 4,080 ora 4,061 4,059 4068 as 4,065 4060 4054 4.033 4,035 40394004 3,960 1 2283314805131 90S BST wD TOT 1430 12/31 2002 +2003 2004 42005 AllianceCapital AX
Slide 43: Consolidated Balance Sheet
Alliance Capital Consolidated Balance Sheet in Thousands June 30, 2005 December 31, 2004 mee (Unaudited) Cash and investments $1,243,696 $1,253,690 Cash and securities, segregated 4,229,222 1,489,041 Receivables, net 21736,524 2,194,226 Goodwill, net 2.876667 2,876,657 intangible assets, net 315,675
Slide 44: Consolidated Cash Flow
Alliance Capital Consolidated Cash Flow In Thousands, Unausited Cash Flows From Operating Activities: Net income Non-cagh teme: Amortization of deterred sales cammscions ‘amortization of deterred compensation Other deprecation and amortization ther, net Changes in assets and lisbities Net cash provi
Slide 45: Alliance Capital Investment Management Services
Alliance Capital Investment Management Services Alliance Capital provides diversified investment management and related services globally to a broad range of clients including 1. Institutional Investment Management Services consists of investment management services to unaffiliated parties such as c
Slide 46: Alliance Capital Investment Management Services (continued)
Alliance Capital Investment Management Services (continued) 3.Private Client Services consists of investment management services provided to high-net-worth individuals, trusts and estates, charitable foundations, partnerships, private and family corporations and other entities by means of: @ separat
Slide 47: Searchable text section of graphics shown above
Searchable text section of graphics shown above [ GRAPHIC] [LOGO] www.alliancecapital.com July 26, 2005 Second-Quarter 2005 Review Lewis A. Sanders Gerald M. Lieberman Chairman & Chief Executive Officer President & Chief Operating Officer Any forecasts or opinions in this material may not be realize
Alliance Capital Management — Q2 2005 Earnings Presentation on 6ix