Attached files
| file | filename |
|---|---|
| 8-K - ALLIANCEBERNSTEIN L.P. 8-K 2-10-2011 - ALLIANCEBERNSTEIN L.P. | form8k.htm |
| EX-99.01 - EXHIBIT 99.01 - ALLIANCEBERNSTEIN L.P. | ex99_01.htm |
| EX-99.04 - EXHIBIT 99.04 - ALLIANCEBERNSTEIN L.P. | ex99_04.htm |
| EX-99.03 - EXHIBIT 99.03 - ALLIANCEBERNSTEIN L.P. | ex99_03.htm |
EXHIBIT 99.02
February 10, 2011
John B. Howard
Departing Chief Financial Officer
Edward J. Farrell
Interim Chief Financial Officer
Fourth Quarter 2010 Review
Peter S. Kraus
Chairman & Chief Executive Officer
David A. Steyn
Chief Operating Officer
AllianceBernstein.com
1
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this news release 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 factors that could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial
markets, the investment performance of sponsored investment products and separately-managed accounts, general economic conditions, industry trends, future
acquisitions, competitive conditions, and current and proposed government regulations, including changes in tax regulations and rates and the manner in which the
earnings of publicly-traded partnerships are taxed. AllianceBernstein cautions readers to carefully consider such factors. Further, such forward-looking statements speak
only as of the date on which such statements are made; AllianceBernstein undertakes no obligation to update any forward-looking statements to reflect events or
circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to
differ, see “Risk Factors” and “Cautions Regarding Forward-Looking Statements” in AllianceBernstein’s Form 10-K for the year ended December 31, 2010. Any or all of
the forward-looking statements made in this news release, Form 10-K, other documents AllianceBernstein files with or furnishes to the SEC, and any other public
statements issued by AllianceBernstein, may turn out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors” and “Cautions
Regarding Forward-Looking Statements”, and those listed below, could also adversely affect AllianceBernstein’s financial condition, results of operations and business
prospects.
1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial
markets, the investment performance of sponsored investment products and separately-managed accounts, general economic conditions, industry trends, future
acquisitions, competitive conditions, and current and proposed government regulations, including changes in tax regulations and rates and the manner in which the
earnings of publicly-traded partnerships are taxed. AllianceBernstein cautions readers to carefully consider such factors. Further, such forward-looking statements speak
only as of the date on which such statements are made; AllianceBernstein undertakes no obligation to update any forward-looking statements to reflect events or
circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to
differ, see “Risk Factors” and “Cautions Regarding Forward-Looking Statements” in AllianceBernstein’s Form 10-K for the year ended December 31, 2010. Any or all of
the forward-looking statements made in this news release, Form 10-K, other documents AllianceBernstein files with or furnishes to the SEC, and any other public
statements issued by AllianceBernstein, may turn out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors” and “Cautions
Regarding Forward-Looking Statements”, and those listed below, could also adversely affect AllianceBernstein’s financial condition, results of operations and business
prospects.
The forward-looking statements referred to in the preceding paragraph include statements regarding :
<The pipeline of new institutional mandates not yet funded: Before they are funded, institutional mandates do not represent legally binding commitments to fund
and, accordingly, the possibility exists that not all mandates will be funded in the amounts and at the times currently anticipated.
and, accordingly, the possibility exists that not all mandates will be funded in the amounts and at the times currently anticipated.
<Our confidence that we will outperform in equities in the months ahead which, combined with an improved risk appetite on the part of investors, will lead to
improved flows: We cannot predict the timing or degree of global market growth, nor our absolute or relative investment performance for our clients. The actual
performance of the capital markets and other factors beyond our control will affect our investment success for clients and asset flows. Furthermore, improved flows
depend on a number of factors, including our ability to deliver consistent, competitive investment performance, which cannot be assured, conditions of financial markets,
changes and volatility in political, economic, capital market or industry conditions, consultant recommendations, and changes in our clients’ investment preferences, risk
tolerances and liquidity needs.
improved flows: We cannot predict the timing or degree of global market growth, nor our absolute or relative investment performance for our clients. The actual
performance of the capital markets and other factors beyond our control will affect our investment success for clients and asset flows. Furthermore, improved flows
depend on a number of factors, including our ability to deliver consistent, competitive investment performance, which cannot be assured, conditions of financial markets,
changes and volatility in political, economic, capital market or industry conditions, consultant recommendations, and changes in our clients’ investment preferences, risk
tolerances and liquidity needs.
<The degree to which the $89.6 million real estate charge we recorded during the third quarter of 2010 will reduce occupancy costs on existing real estate in
2011 and subsequent years: The charge we recorded during the third quarter and our estimates of reduced occupancy costs in future years are based on existing sub-
leases, as well as our current assumptions of when we can sub-lease the remaining space and current market rental rates, which are factors largely beyond our control. If
our assumptions prove to be incorrect, we may be forced to take an additional charge and/or our estimated occupancy cost reductions may be less than we currently
anticipate.
2011 and subsequent years: The charge we recorded during the third quarter and our estimates of reduced occupancy costs in future years are based on existing sub-
leases, as well as our current assumptions of when we can sub-lease the remaining space and current market rental rates, which are factors largely beyond our control. If
our assumptions prove to be incorrect, we may be forced to take an additional charge and/or our estimated occupancy cost reductions may be less than we currently
anticipate.
<Our intention to continue to engage in open market purchases of Holding Units, from time to time, to help fund anticipated obligations under our incentive
compensation award program: The number of Holding Units needed in future periods to make incentive compensation awards is dependent upon various factors,
some of which are beyond our control, including the fluctuation in the price of a Holding Unit.
compensation award program: The number of Holding Units needed in future periods to make incentive compensation awards is dependent upon various factors,
some of which are beyond our control, including the fluctuation in the price of a Holding Unit.
<Our confidence that we will deliver consistent, long-term value to all of our stakeholders: Changes and volatility in political, economic, capital market or industry
conditions can result in changes in demand for our products and services or impact the value of our assets under management, all of which may significantly hinder our ability
conditions can result in changes in demand for our products and services or impact the value of our assets under management, all of which may significantly hinder our ability
to execute on our strategy.
ability to execute on our strategy.
ability to execute on our strategy.
AllianceBernstein.com
2
Perspective on 2010: Progress amid Headwinds
< Average AUM $446 $475 6
< Gross Sales 47 60 29
< Net Flows (69.7) (56.2) 19
< Base Fees 1,890 2,031 7
< Adjusted Margins 18.4% 21.3% 16
< Adjusted Operating Inc. 453 554 22
< Adjusted EPU $1.38 $1.60 16
< Long-Term Debt 0 0
< Ratings (Moody’s/S&P) A1/AA- A1/AA-
< Share Repurchases $7 $226
< Dividend Yield** 5.1% 6.5%
In US $ Billions except for revenue and share repurchase ($ Millions) and adjusted EPU
Assets and
Flows*
Flows*
Operating
Results
Results
Capital
Management
Management
FY2009
FY2010
% Change
*Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
**Dividend yield calculated as cash distributions per unit paid during each year divided by year-end stock price
AllianceBernstein.com
3
2010 Like 2009: Continued Shift from Equities to Fixed Income
*Taxable only
Source: Strategic Insight. Includes all open-end mutual funds
Retail Industry Mutual Fund Net Flow Trends
In US $ Billions
4
Our World-Class Fixed Income Franchise Benefited
Benchmark:
Strategic
Core Plus
Emerging
Market Debt
Global
Plus
Barclays Global Aggregate Bond
Index (Unhedged)
Index (Unhedged)
JPM EMBI Global
2009
2010
Custom Index
2008
US Fixed Income: $117 Billion
Non-US Fixed Income: $89 Billion
Performance as of December 31, 2010
The information in this table is provided solely for use in connection with this presentation, and is not directed toward existing or potential investment advisory clients of AllianceBernstein.
Investment performance of composites is presented after investment management fees.
*Mercer Insight MPA database
Past performance is not a reliable indicator of future performance. You should not rely on past performance to make investment decisions.
Source: Institutional Investor and AllianceBernstein
Assets Under Management
(By Client Domicile)
(By Client Domicile)
Quartile*
Quartile*
Quartile*
AllianceBernstein.com
5
Shift in AUM Mix Improves Average Fee Realization
Year-over-Year Change in AUM Mix
US$ Billions
Fixed
Income
Income
$184
38%
$265
54%
Equity
Other*
8%
8%
$37
2009
Average Fee Realization
42.4 bps
2010
Average Fee Realization
$219
46%
$206
43%
Equity
Other*
11%
11%
$53
*Includes index, structured, asset allocation services and other non-actively managed AUM
AllianceBernstein.com
6
By Strategy
Firm-Wide Diversification
On Annualized Fee Base of $2.1 Billion
Value
Growth
Fixed
3% Other
By Channel
Institutions*
AUM (6)%
Rev. (6)%
Retail*
AUM +5%
Rev. +22%
Private Client*
AUM +4%
Rev. +12%
As of December 31, 2010
*Year-over-year changes in AUM and base fees 2009 to 2010
AllianceBernstein: Breadth and Balance
AllianceBernstein.com
7
A Closer Look at Performance Since the Bottom
*All Lipper Global Large Cap Value Mutual Fund share classes with a front-end sales charge
Performance net of expenses, but before sales charges
Source: Lipper and AllianceBernstein
Cumulative Returns vs. Peers
(1/13)
(1/13)
(1/13)
(9/13)
(7/13)
(1/13)
(2/13)
(13/13)
Rank
104%
23%
4%
9%
81%
18%
17%
4%
8%
3%
22%
15%
(16)%
3%
(13)%
13%
3/9/09 to
12/31/10
2Q 09
3Q 09
4Q 09
1Q 10
2Q 10
3Q 10
4Q 10
AB Global Value
Lipper Global Large Cap Value Peer Group*
Since Market
Bottom
AllianceBernstein.com
8
Green Shoots: Investment Performance in Fourth Quarter
Percent of Long-Term Fund Assets Beating Lipper Category Average*
*On an asset-weighted basis, including US and Offshore Funds
AB's Offshore Funds are ranked based on Lipper's Global Fund universe focusing on primary share class.
AB's US Funds are ranked based on all share classes in Lipper's US Domestic funds universe.
AllianceBernstein.com
9
Asset Flows by Distribution Channel: Quarterly Trend
In US $ Billions
Net Totals: $(11.8) $(6.6) $(4.7) $(15.6) $(29.3)
4Q 09 1Q 10 2Q 10 3Q 10 4Q 10
*Previously reported preliminary assets under management for December 31, 2010, and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
Preliminary Jan 2011
Net Flows $(1.4)B
Int. Ret. P.C.
10
Institutional Flows:* Annual Trends
*Previously reported preliminary assets under management for December 31, 2010, and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
In US $ Billions
11
Retail Flows: Annual Trends
In US $ Billions
12
Retail Annual Gross Sales
Retail Fixed Income
Global High Yield $7.3 $11.1 52%
American Income 1.7 3.3 94%
US Municipal Bond Funds 0.8 1.8 125%
Emerging Markets Debt 0.0 0.5 —
< 90% increase in fixed income sales; 11% and 8% in value and growth
< Retail average AUM up 17% year-over-year
< Asia and EMEA sales increased 69%; 1/3 of AUM now outside of US
2009 2010 % Change
In US $ Billions
13
Private Client Flows: Annual Trends
In US $ Billions
AllianceBernstein.com
14
Launch date was Monday, February 22, 2010
A Year in the Life of DAA
Private Client AUM with DAA Overlay
In US $ Millions
AllianceBernstein.com
15
1997
2001
2002
US Equity
Long/Short
Long/Short
Fixed Income
Long/Short
Long/Short
Global Equity and
Currency Long/Short
Currency Long/Short
2006
Distressed
Investing
Investing
2008
Government
Assets (TALF & PPIP)
2009
2010
Diversified
Alternative
Fund of
Funds
Alternative
Fund of
Funds
A History of Alpha: The Launch of Our Alternatives Platform
Venture Capital
Commodities Long/Short
Alternative Investments*
Direct Hedge
Fund Strategies
Fund Strategies
Hedge Fund
Fund of Funds
Direct Private
Capital
Capital
Private Equity
Fund of Funds
Fund of Funds
Real
Estate
Estate
*For illustrative purposes only
1999
2004
AllianceBernstein.com
16
Bernstein Research Services
< Fourth quarter revenue up 11% versus prior quarter, driven by both US and Europe. Market
volumes, however, remained sluggish
volumes, however, remained sluggish
< Full year revenue down 1%, with US down slightly and Europe up modestly
< Best-ever recognition in annual Institutional Investor All-Europe survey
= Bernstein analysts voted #1 in seven different sectors
= Bernstein placed 8th overall in league table, 7th when weighted by analyst rankings
< 2011 focus to remain on driving globalization, increasing core cash equities market share, and
capitalizing on new service investments
capitalizing on new service investments
AllianceBernstein.com
17
Financial Highlights: Fourth Quarter and Full Year 2010
Adjusted
EPU
EPU
36¢
40¢
19.3%
21.0%
18.4%
21.3%
4%
2%
5%
1%
Adjusted
Revenues
Revenues
Adjusted
Expenses
Expenses
% Change Q4 vs. Q3
% Change 2010 vs. 2009
$1.38
$1.60
Adjusted
Operating Margins
Operating Margins
Adjusted Revenue/
Expense Trends
Expense Trends
51.5
88.9
7.0
226.4
Share Repurchases
($ Millions)
($ Millions)
AllianceBernstein.com
18
Fourth Quarter and Full Year 2010 Income Statement
Percentages are calculated using expenses rounded to the nearest thousand.
Please refer to pages 46-50 for additional information on the reconciliation of GAAP financial results to adjusted financial results.
< GAAP revenues up 3% versus the prior quarter and up 1% versus the prior full year
< Q4 GAAP operating expenses down 11% from Q3, which included a $90 mil. real estate charge. Full year 2010
expenses up 7%, primarily attributable to real estate charges.
expenses up 7%, primarily attributable to real estate charges.
< 2010 full year effective tax rate 8.3%, versus 2009 full year rate of 7.4%
AllianceBernstein.com
19
Fourth Quarter and Full Year 2010 Revenues
Percentages are calculated using revenues and expenses rounded to the nearest thousand.
(1) Includes investment (gains) losses and dividends and interest on deferred compensation-related investments and 90% of the investment (gains) losses of our consolidated venture capital fund
Please refer to pages 46-50 for additional information on the reconciliation of GAAP financial results to adjusted financial results.
attributable to non-controlling interests
< Q4 base fees up 3% versus Q3 and up 7% versus 2009
AllianceBernstein.com
20
Fourth Quarter and Full Year 2010 Operating Expenses
Percentages are calculated using expenses rounded to the nearest thousand
(1) Please refer to page 42 for additional information on the deferred compensation net P&L trends
< Q4 adjusted operating expenses up 2% versus Q3 and up 1% versus 2009
AllianceBernstein.com
21
Fourth Quarter and Full Year 2010 GAAP to Adjusted Reconciliation
Please refer to pages 46-50 for additional information on the reconciliation of GAAP financial results to adjusted financial results
Percentages are calculated using revenues and expenses rounded to the nearest thousand
(1) Net impact of investment (gains) losses and employee compensation related to the mark-to-market of deferred compensation balances
< Q4 adjusted earnings up 14% sequentially, and full year adjusted earnings up 22% versus 2009
< Adjusted operating margins improved versus both Q3 and 2009
AllianceBernstein.com
22
Adjusted Operating Income: 4Q 2010 vs. 3Q 2010
$122
$139
$20
$11
$(6)
$(4)
*3Q included $5 million seed capital gains, which are flat in 4Q
$(7)
$3
US$ Millions
AllianceBernstein.com
23
Adjusted Operating Income: 2010 vs. 2009
$453
$554
$141
$(9)
$16
$(15)
$(19)
$2
$(15)
US$ Millions
AllianceBernstein.com
24
Q & A
AllianceBernstein Fourth Quarter 2010 Review
AllianceBernstein.com
25
Appendix
AllianceBernstein.com
26
Performance Since the Market Bottom
Source: Lipper and AllianceBernstein. Performance net of expenses, but before sales charges. Peer groups shown include all fund share classes with a front-end sales charge. Performance of mutual funds may vary from
institutional composite average performance. All funds shown are included in the stated Institutional Composite averages.
institutional composite average performance. All funds shown are included in the stated Institutional Composite averages.
Rank (7/16) (1/13) (7/19) (8/40) (6/18) (51/80) (6/69) (11/37)
Universe: Global Large Global Large Global Multi International Large International Large Large Cap Mid Cap Small Cap
Cap Growth Cap Value Cap Growth Cap Growth Cap Value Value Funds Growth Funds Value Funds
Institutional Global Global Global Thematic International Research International US Diversified US SMID Cap US SMID Cap
Composite Research Growth Value Growth Growth AC Value Value (Russell) Growth Value
AllianceBernstein.com
27
Institutional Value Equity: Relative Performance
Performance is preliminary.
*Prior to 2001, MSCI EM gross dividends reinvested was used.
As of December 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
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.
Institutional Equity Composites vs. Benchmarks
|
|
|
Periods Ended December 31, 2010
|
|
|||
|
Service
|
4Q
2010 |
One
Year |
Three
Years |
Five
Years |
10
Years |
Benchmark
|
|
US Diversified Value
|
0.4
|
(2.9)
|
(2.6)
|
(2.3)
|
(0.1)
|
Russell 1000 Value
|
|
US Strategic Value
|
0.8
|
(3.8)
|
(5.9)
|
(4.4)
|
1.5
|
S&P 500
|
|
US Strategic Value
|
1.0
|
(4.2)
|
(4.4)
|
(3.3)
|
(0.3)
|
Russell 1000 Value
|
|
International Value
|
(0.2)
|
(4.4)
|
(4.5)
|
(3.0)
|
1.9
|
MSCI EAFE (Cap, UH, net)
|
|
International Strategic Value
|
(0.8)
|
(4.9)
|
(6.1)
|
(3.5)
|
N/A
|
MSCI EAFE (Cap, UH, net)
|
|
Global Value
|
0.3
|
(5.3)
|
(5.9)
|
(3.7)
|
2.1
|
MSCI World (Cap, UH, net)
|
|
Global Strategic Value
|
0.4
|
(4.4)
|
(8.0)
|
(4.6)
|
N/A
|
MSCI World (Cap, UH, net)
|
|
Emerging Markets Value
|
(0.5)
|
(3.1)
|
0.1
|
(1.6)
|
2.8
|
MSCI EM (Cap, UH, net)*
|
AllianceBernstein.com
28
Institutional Growth Equity: Relative Performance
Performance is preliminary.
*Prior to 2001, MSCI EM gross dividends reinvested was used.
As of December 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
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.
Institutional Equity Composites vs. Benchmarks
|
|
|
Periods Ended December 31, 2010
|
|
|||
|
Service
|
4Q
2010 |
One
Year |
Three
Years |
Five
Years |
10
Years |
Benchmark
|
|
Global Research Growth
|
(0.0)
|
(3.0)
|
(7.3)
|
(4.8)
|
(1.4)
|
MSCI World (Cap, UH, net)
|
|
US Large Cap Growth
|
1.8
|
(6.9)
|
(2.9)
|
(2.9)
|
(0.7)
|
Russell 1000 Growth
|
|
Int'l Research Growth All Country
|
0.8
|
0.3
|
(3.2)
|
(0.8)
|
N/A
|
MSCI ACWI ex US (Cap, UH, net)
|
|
US Thematic Research
|
6.4
|
10.2
|
1.6
|
0.2
|
1.6
|
S&P 500 Index
|
|
US Small Cap Growth
|
0.8
|
8.0
|
0.1
|
1.1
|
0.6
|
Russell 2000 Growth
|
|
Global Large Cap Growth
|
(1.4)
|
(3.8)
|
(6.1)
|
(3.4)
|
(2.8)
|
MSCI World (Cap, UH, net)
|
|
Int'l Large Cap Growth
|
(1.9)
|
(3.6)
|
(5.1)
|
(3.5)
|
|
MSCI EAFE (Cap, UH, net)
|
|
Emerging Markets Growth
|
(0.6)
|
(3.9)
|
(3.5)
|
(2.9)
|
(1.1)
|
MSCI EM (Cap, UH, net)*
|
|
(1.8)
|
AllianceBernstein.com
29
Institutional Blend Strategies: Relative Performance
Performance is preliminary.
As of December 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
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.
Institutional Blend Strategies Equity Composites vs. Benchmarks
|
|
|
|
|
Periods Ended December 31, 2010
|
|
|||
|
Service
|
4Q
2010 |
One
Year |
Three
Years |
Five
Years |
10
Years |
Benchmark
|
|
Global Blend Strategies
|
(0.4)
|
(4.6)
|
(6.7)
|
(4.3)
|
N/A
|
MSCI World (Cap, UH, net)
|
|
International Blend Strategies
|
(1.0)
|
(3.5)
|
(4.3)
|
(3.1)
|
N/A
|
MSCI EAFE (Cap, UH, net)
|
|
US Blend Strategies
|
1.7
|
(5.0)
|
(3.2)
|
(3.0)
|
N/A
|
S&P 500
|
|
Emerging Markets Blend Strategies
|
(0.7)
|
(4.2)
|
(1.9)
|
(2.5)
|
N/A
|
MSCI EM (Cap, UH, net)
|
AllianceBernstein.com
30
Institutional Fixed Income: Relative Performance
Performance is preliminary.
As of December 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
*The benchmarks listed are the current benchmarks for the investments service—certain benchmarks have evolved over time and therefore are time blended.
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.
Institutional Fixed Income Composites vs. Benchmarks*
|
|
|
|
|
Periods Ended December 31, 2010
|
|
|
|||
|
Service
|
4Q
2010 |
One
Year |
Three
Years |
Five
Years |
10
Years |
Benchmark
|
|
|
Corporate Bonds
|
0.2
|
0.6
|
0.2
|
0.0
|
0.1
|
Custom Corporate Index
|
|
|
Strategic Core Plus
|
0.5
|
2.9
|
1.3
|
0.6
|
N/A
|
Custom Index
|
|
|
Global Plus
|
(0.0)
|
2.8
|
(0.3)
|
(0.0)
|
N/A
|
Barclays Global Aggregate
Bond Index (Unhedged) |
|
|
Global Fixed Income
|
0.0
|
3.2
|
1.4
|
1.1
|
0.7
|
CitiGroup WGBI - Unhedged
|
|
|
Emerging Market Debt
|
0.7
|
3.1
|
2.3
|
2.1
|
3.2
|
JPM EMBI Global
|
|
|
Low Duration
|
0.5
|
1.8
|
(0.8)
|
(1.1)
|
(0.4)
|
BofA Merrill Lynch U.S. Treasury (1-3
Years) |
|
AllianceBernstein.com
31
Private Client: Absolute Performance
Performance is preliminary.
As of December 31, 2010
Investment performance of composites is presented after investment management fees. Periods of more than one year are annualized.
*The Fully Diversified 60% stocks/40% bonds (simulation) is meant to be illustrative of the value generated by the "total solution" approach AllianceBernstein encourages for most clients: a
diversified allocation across investment portfolios of varying types aimed at optimizing return and volatility over time. The Bernstein Fully Diversified Portfolio is composed of specific proportions
diversified allocation across investment portfolios of varying types aimed at optimizing return and volatility over time. The Bernstein Fully Diversified Portfolio is composed of specific proportions
of each of the products that follow, which were included in the simulation as of the following dates: Strategic Value—January 1, 1983; Strategic Growth—January 1, 1983 (ACM Large Cap
Growth used as a proxy for Strategic Growth through January 1, 2001; Strategic Growth used thereafter); Intermediate Municipal Bond Composite—January 1, 1983; Bernstein Tax-Managed
International Fund—July 1, 1992; Emerging Markets Fund—January 1, 1996; AllianceBernstein Institutional REIT Fund—July 1, 2001 (The AllianceBernstein Institutional REIT Fund was removed
from the simulation on December 31, 2008) DAA Overlay - April 1, 2010. The portfolio was rebalanced quarterly through December 31, 2005; monthly thereafter. Simulated performance results
have certain inherent limitations. The results may not reflect the impact that certain material economic and market factors might have had on actual decision making if they were reflective of a
managed account. No representation is being made that any account will, or is likely to, achieve profits or losses similar to those described herein.
Source: Standard and Poor’s, Morgan Stanley, Lipper and AllianceBernstein
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|
|
|
|
|
|
|
|
Periods Ended December 31, 2010
|
|
|||
|
Service
|
4Q
2010 |
One
Year |
Three
Years |
Five
Years |
10
Years |
|
|
Fully Diversified Simulation*
|
5.8
|
8.3
|
(2.7)
|
1.7
|
3.9
|
|
|
S&P 500
|
10.8
|
15.1
|
(2.9)
|
2.3
|
1.4
|
|
|
|
|
|
|
|
|
|
|
MSCI World (Cap, UH, net)
|
9.0
|
11.8
|
(4.9)
|
2.4
|
2.3
|
|
|
|
|
|
|
|
|
|
|
Lipper Short/Int Blended Muni Fund
Avg |
(2.2)
|
2.0
|
3.0
|
3.1
|
3.4
|
|
|
|
|
|
|
|
|
|
AllianceBernstein.com
32
Retail Value Equity: Relative Performance
Retail Mutual Funds vs. Lipper Averages
Mutual fund and Lipper performance data through December 31, 2010.
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 performance of mutual funds is presented after investment management fees.
Source: AllianceBernstein and Lipper.
AllianceBernstein.com
33
Retail Growth Equity: Relative Performance
(1) Performance figures other than 4Q10 and One Year positively affected by class action settlement proceeds
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 performance of mutual funds is presented after investment management fees
Source: AllianceBernstein and Lipper. Mutual Fund and Lipper performance data through 12/31/10.
AllianceBernstein.com
34
Retail Fixed Income: Relative Performance
Retail Fixed Income Funds vs. Lipper Averages
(1) Performance figures other than 4Q10 and One Year positively affected by class action settlement proceeds
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 performance of mutual funds is presented after investment management fees
Source: AllianceBernstein and Lipper. Mutual Fund and Lipper performance data through 12/31/10.
AllianceBernstein.com
35
Wealth Strategies: Relative Performance
Retail Mutual Funds vs. Lipper Averages
(1) Performance figures other than 4Q10 and One Year positively affected by class action settlement proceeds
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 performance of mutual funds is presented after investment management fees
Source: AllianceBernstein and Lipper. Mutual Fund and Lipper performance data through 12/31/10.
AllianceBernstein.com
36
Three Months Ended 12/31/10: AUM Roll-Forward by Distribution Channel
In US $ Billions
(1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
we serve in an advisory capacity and do not have discretionary trading authority.
(2) In the fourth quarter 2010 AB acquired the alternative investments group of SunAmerica.
AllianceBernstein.com
37
(1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
we serve in an advisory capacity and do not have discretionary trading authority.
(2) Includes index, structured, asset allocation services and other non-actively managed AUM.
(3) In the fourth quarter 2010 AB acquired the alternative investments group of SunAmerica.
(4) Approximately $71 billion in Blend Strategies AUM are reported in their respective services.
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|
|
|
In US $ Billions
Three Months Ended 12/31/10: AUM Roll-Forward by Investment Service
AllianceBernstein.com
38
Twelve Months Ended 12/31/10: AUM Roll-Forward by Distribution Channel
In US $ Billions
(1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
we serve in an advisory capacity and do not have discretionary trading authority.
(2) In the fourth quarter 2010 AB acquired the alternative investments group of SunAmerica.
AllianceBernstein.com
39
(1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
we serve in an advisory capacity and do not have discretionary trading authority.
(2) Includes index, structured, asset allocation services and other non-actively managed AUM.
(3) In the fourth quarter 2010 AB acquired the alternative investments group of SunAmerica.
(4) Approximately $71 billion in Blend Strategies AUM are reported in their respective services.
|
|
|
|
In US $ Billions
Twelve Months Ended 12/31/10: AUM Roll-Forward by Investment Service
AllianceBernstein.com
40
AUM by Region
Retail
Institutions
Private Client
$272.9 $127.0 $78.1
In US $ Billions
As of December 31, 2010
AllianceBernstein.com
41
Fourth Quarter 2010 Advisory Fees
(1) Previously reported preliminary assets under management for December 31, 2010 and prior periods have been adjusted by removing from our Institutional AUM an affiliated account for which
we serve in an advisory capacity and do not have discretionary trading authority.
we serve in an advisory capacity and do not have discretionary trading authority.
Percentages are calculated using AUM rounded to the nearest million and revenues to the nearest thousand
In US Dollars
AllianceBernstein.com
42
Six-Quarter Deferred Compensation Net P&L Trend
In US $ Millions
AllianceBernstein.com
43
Consolidated Balance Sheet
In US $ Millions
AllianceBernstein.com
44
Consolidated Statement of Cash Flows
AllianceBernstein.com
45
AllianceBernstein Holding Financial Results
Percentages are calculated using income, earnings and expenses rounded to the nearest thousand
Please refer to pages 46-50 for additional information on the reconciliation of GAAP financial results to adjusted financial results
In US $ Millions (excluding per unit amounts)
AllianceBernstein.com
46
AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein.com
47
AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein.com
48
AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein.com
49
AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein.com
50
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 exclude investment gains and losses and dividends and interest on deferred compensation-related investments, and 90% of the investment gains and
losses of our consolidated venture capital fund attributable to non-controlling interests. In addition, adjusted net revenues offset distribution-related payments to third parties as well
as amortization of deferred sales commissions against distribution revenues. We believe the offset of distribution-related payments from net revenues is useful for our investors
and other users of our financial statements because such presentation appropriately reflects the nature of these costs as pass-through payments to third parties who perform
functions on behalf of our sponsored mutual funds and/or shareholders of these funds. Amortization of deferred sales commissions is offset against net revenues because such
costs, over time, offset distribution revenues earned by the company.
losses of our consolidated venture capital fund attributable to non-controlling interests. In addition, adjusted net revenues offset distribution-related payments to third parties as well
as amortization of deferred sales commissions against distribution revenues. We believe the offset of distribution-related payments from net revenues is useful for our investors
and other users of our financial statements because such presentation appropriately reflects the nature of these costs as pass-through payments to third parties who perform
functions on behalf of our sponsored mutual funds and/or shareholders of these funds. Amortization of deferred sales commissions is offset against net revenues because such
costs, over time, offset distribution revenues earned by the company.
Adjusted Operating Income
Adjusted operating income represents operating income on a GAAP basis (1) excluding the impact on net revenues and compensation expense of the mark-to-market gains and
losses (as well as the dividends and interest) associated with employee deferred compensation-related investments, (2) excluding real estate charges, and (3) including the net
loss or income of consolidated entities attributable to non-controlling interests.
losses (as well as the dividends and interest) associated with employee deferred compensation-related investments, (2) excluding real estate charges, and (3) including the net
loss or income of consolidated entities attributable to non-controlling interests.
(1) Prior to 2009, a large proportion of employee compensation was in the form of deferred awards that were notionally invested in AllianceBernstein investment services and
generally vested over a period of four years. AllianceBernstein has economically hedged the exposure to market movements by purchasing and holding these investments on its
balance sheet. The full value of the investments’ appreciation (depreciation) is recorded within investment gains and losses on the income statement in the current period. US
GAAP requires the appreciation (depreciation) in the compensation liability to be expensed over the award vesting period in proportion to the vested amount of the award as part of
compensation expense. This creates a timing difference between the recognition of the compensation expense and the investment gain or loss impacting operating income, which
will fluctuate over the life of the award and net to zero at the end of the multi-year vesting period. Although during periods of high market volatility these timing differences have an
impact on operating income and operating margin, over the life of the award any impact is ultimately offset. Because these plans are economically hedged, management believes
it is useful to reflect the offset ultimately achieved from hedging the investments’ market exposure in the calculation of adjusted operating income, adjusted operating margin and
adjusted diluted net income per Holding Unit, which will produce core operating results from period to period. The non-GAAP measures exclude gains and losses and dividends
and interest on deferred compensation-related investments included in revenues and compensation expense, thus eliminating the timing differences created by different treatment
under US GAAP of the market movement on the expense and the investments.
generally vested over a period of four years. AllianceBernstein has economically hedged the exposure to market movements by purchasing and holding these investments on its
balance sheet. The full value of the investments’ appreciation (depreciation) is recorded within investment gains and losses on the income statement in the current period. US
GAAP requires the appreciation (depreciation) in the compensation liability to be expensed over the award vesting period in proportion to the vested amount of the award as part of
compensation expense. This creates a timing difference between the recognition of the compensation expense and the investment gain or loss impacting operating income, which
will fluctuate over the life of the award and net to zero at the end of the multi-year vesting period. Although during periods of high market volatility these timing differences have an
impact on operating income and operating margin, over the life of the award any impact is ultimately offset. Because these plans are economically hedged, management believes
it is useful to reflect the offset ultimately achieved from hedging the investments’ market exposure in the calculation of adjusted operating income, adjusted operating margin and
adjusted diluted net income per Holding Unit, which will produce core operating results from period to period. The non-GAAP measures exclude gains and losses and dividends
and interest on deferred compensation-related investments included in revenues and compensation expense, thus eliminating the timing differences created by different treatment
under US GAAP of the market movement on the expense and the investments.
(2) Real estate charges have been excluded because they are not considered part of our core operating results when comparing financial results from period to period and to
industry peers.
industry peers.
(3) Most of the net income or loss of consolidated entities attributable to non-controlling interests relates to the 90% limited partner interests held by third parties in our
consolidated venture capital fund. We own a 10% limited partner interest in the fund. Because we are the general partner of the venture capital fund and are deemed to have a
controlling interest, US GAAP requires us to consolidate the financial results of the fund. However, recognizing 100% of the gains or losses in operating income while only retaining
10% is not reflective of our underlying financial results at the operating income level. As a result, we are excluding the 90% limited partner interests we do not own from our
adjusted operating income. Similarly, net income of joint ventures attributable to non-controlling interests, although not significant, is excluded because it does not reflect the
economic interest attributable to AllianceBernstein.
consolidated venture capital fund. We own a 10% limited partner interest in the fund. Because we are the general partner of the venture capital fund and are deemed to have a
controlling interest, US GAAP requires us to consolidate the financial results of the fund. However, recognizing 100% of the gains or losses in operating income while only retaining
10% is not reflective of our underlying financial results at the operating income level. As a result, we are excluding the 90% limited partner interests we do not own from our
adjusted operating income. Similarly, net income of joint ventures attributable to non-controlling interests, although not significant, is excluded because it does not reflect the
economic interest attributable to AllianceBernstein.
Adjusted Operating Margin
Adjusted operating margin allows us to monitor our financial performance and efficiency from period to period and to compare our performance to industry peers without the
volatility noted above in our discussion of adjusted operating income. Adjusted operating margin is derived by dividing adjusted operating income by adjusted net revenues.
volatility noted above in our discussion of adjusted operating income. Adjusted operating margin is derived by dividing adjusted operating income by adjusted net revenues.
