NEW YORK, April 23 /PRNewswire-FirstCall/ -- AllianceBernstein Holding L.P. ("AllianceBernstein Holding") (NYSE:AB) and AllianceBernstein L.P. ("AllianceBernstein") today reported financial and operating results for the quarter ended March 31, 2008.
AllianceBernstein Holding (The Publicly Traded Partnership):
-- Diluted net income per Unit for the quarter ended March 31, 2008 was
$0.83, a decrease of 9% from $0.91 for the same period in 2007.
-- Distribution per Unit for the first quarter of 2008 will be $0.83, a
decrease of 9% from $0.91 for the same period in 2007. The
distribution is payable on May 15, 2008 to holders of record of
AllianceBernstein Holding Units at the close of business on May 5,
2008.
AllianceBernstein (The Operating Partnership):
-- Assets Under Management (AUM) at March 31, 2008 were $735 billion, a 1%
decrease from a year ago, due to market depreciation partially offset
by net inflows.
-- Net outflows for the three months ended March 31, 2008 were $1.5
billion, consisting of Retail net outflows of $4.4 billion,
Institutional Investments net inflows of $2.5 billion and Private
Client net inflows of $0.4 billion.
-- Net inflows for the twelve months ended March 31, 2008 were $17.3
billion, consisting of Institutional Investments net inflows of $13.9
billion, Private Client net inflows of $5.4 billion and Retail net
outflows of $2.0 billion.
"Turbulent capital market conditions negatively impacted first quarter results for our clients and the firm. Absolute investment returns were weak across our entire equity and hedge fund service suite. With few exceptions, returns in these services trailed benchmarks as we implemented strategies to gradually increase exposure to investments depressed in price as a consequence of the current market turmoil. Such investments are believed to offer unusual opportunity but hurt returns in the quarter. Fixed income portfolios generally produced positive returns, providing important ballast to client portfolios. While relative returns were generally below targets in core and core plus services, virtually all of our municipal bond services outperformed," said Lewis Sanders, Chairman and Chief Executive Officer.
"The firm's organic growth turned slightly negative in the first quarter. Net redemptions in our retail channel, focused heavily in non-U.S. markets, were partially offset by net inflows in the institutional and private client channels. However, net inflows in both channels slowed sharply compared to recent periods, as many clients await greater clarity about the underlying factors creating current market volatility. Although the backlog of new institutional mandates not yet funded grew to over $16 billion--a historically robust amount--a firm-wide resumption of organic growth will likely be contingent upon an improvement in capital market conditions.
"Our Institutional Research Services unit was a bright spot in the first quarter, with revenues rising by 20% versus last year's comparable quarter. Results were especially strong in the U.S., reflecting continued client acceptance of our research and trading platforms.
"Despite a 5% increase in advisory fee revenue, net revenue for the quarter declined by 1% versus last year's comparable period. This decline was primarily driven by a negative swing of $78 million in investment gains and losses (equating to nearly 8% of net revenues), which largely stemmed from a $58 million decline in the value of investments related to employee deferred compensation plans. These lower valuations also reduced compensation expense by $20 million and will result in lower compensation expense in future periods should the value of these investments not recover. The decline in valuations resulted in a net reduction in first quarter 2008 earnings per Unit of approximately $0.13. In addition, current quarter earnings were reduced by $0.04 per Unit for costs incurred to conclude certain employee-related arbitrations, a significant portion of which we believe will be recovered from insurance. Despite the impact of these items and slowing revenue growth in general, operating income declined by less than 5% and our operating margin declined by less than 100 basis points to 26.5%, both helped by ongoing expense management initiatives. Also contributing to the 8% year-over-year decline in net income was a higher effective tax rate this quarter due to the continuing shift of the firm's profits to regions outside the U.S. where taxes are higher.
"As we noted at year end 2007, turbulence in the capital markets, while unsettling, does plant the seeds for better future absolute and relative investment returns. We are working hard to capture these opportunities for clients, the success of which will redound to the benefit of all the stakeholders of AllianceBernstein," concluded Mr. Sanders.
CONFERENCE CALL INFORMATION RELATING TO FIRST QUARTER 2008 RESULTS
April 23, 2008 at 5:00 P.M. (Eastern Daylight Time)AllianceBernstein's management will review first quarter 2008 financial and operating results on Wednesday, April 23, 2008, during a conference call beginning at 5:00 p.m. (EDT), following the release of its financial results after the close of the New York Stock Exchange. The conference call will be hosted by Lewis A. Sanders, Chairman and Chief Executive Officer, and Gerald M. Lieberman, President and Chief Operating Officer.
Parties may access the conference call by either webcast or telephone:
1. To listen by webcast, please visit AllianceBernstein's Investor
Relations website at http://ir.alliancebernstein.com/investorrelations
at least 15 minutes prior to the call to download and install any
necessary audio software.
2. To listen by telephone, please dial (866) 556-2265 in the U.S. or (973)
935-8521 outside the U.S., 10 minutes before the 5:00 p.m. (EDT)
scheduled start time. The conference ID# is 42356263.
The presentation that will be reviewed during the conference call will be available on AllianceBernstein's Investor Relations website shortly after the release of first quarter 2008 financial results on April 23, 2008.
An audio replay of the conference call will be available beginning at approximately 7:00 p.m. (EDT) on April 23, 2008 and will be available for one week. To access the audio replay, please call (800) 642-1687 from the U.S., or outside the U.S. call (706) 645-9291, and provide conference ID# 42356263. The replay will also be available via webcast on AllianceBernstein's website for one week.
About AllianceBernstein
AllianceBernstein is a leading global investment management firm that offers high-quality research and diversified investment services to institutional clients, individuals and private clients in major markets around the world. AllianceBernstein employs more than 500 investment professionals with expertise in growth equities, value equities, fixed income securities, blend strategies and alternative investments and, through its subsidiaries and joint ventures, operates in more than 20 countries. AllianceBernstein's research disciplines include fundamental research, quantitative research, economic research and currency forecasting. Through its integrated global platform, AllianceBernstein is well-positioned to tailor investment solutions for its clients. AllianceBernstein also offers in-depth, fundamental, independent research, as well as portfolio strategies, trading and brokerage-related services to its institutional investor clients.
At March 31, 2008, AllianceBernstein Holding L.P. ("Holding") owned approximately 33.5% of the issued and outstanding AllianceBernstein Units. AXA Financial was the beneficial owner of approximately 62.7% of the AllianceBernstein Units at March 31, 2008 (including those held indirectly through its ownership of approximately 1.7% of the issued and outstanding Holding Units) which, including the general partnership interests in AllianceBernstein and Holding, represent an approximate 63.1% economic interest in AllianceBernstein. AXA Financial is a wholly-owned subsidiary of AXA, one of the largest global financial services organizations.
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, future acquisitions, competitive conditions, and government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly traded partnerships are taxed. We caution readers to carefully consider such factors. Further, such forward looking statements speak only as of the date on which such statements are made; we undertake 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" in Item 1A of our 2007 Form 10-K. Any or all of the forward-looking statements that we make in this news release, Form 10-K or any other public statements we issue may turn out to be wrong. It is important to remember that other factors besides those listed in "Risk Factors" and those listed below could also adversely affect our revenues, financial condition, results of operations, and business prospects.
The forward-looking statements referred to in the preceding paragraph include statements regarding:
-- Current market turmoil offering unusual investment opportunity, and a
firm-wide resumption of organic growth: The actual performance of the
capital markets and other factors beyond our control will affect our
investment success for clients and asset flows.
-- Our backlog of new institutional mandates not yet funded growing to
over $16 billion: 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 we currently anticipate.
-- Lower compensation expense in future periods resulting from a decline
in the value of investments related to employee deferred compensation
plans: The actual performance of the capital markets and other factors
beyond our control will affect the value of these investments.
-- Our ability to recover a significant portion of costs incurred to
conclude employment-related arbitrations: Our ability to recover a
significant portion of these costs depends on the willingness of our
insurer to reimburse us under an existing policy.
ALLIANCEBERNSTEIN L.P.
(THE OPERATING PARTNERSHIP)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
MARCH 31, 2008
(unaudited, $ thousands)
Three Months Ended
------------------------------
3/31/08 3/31/07
----------- ------------
Revenues:
Investment Advisory & Services Fees $817,231 $775,487
Distribution Revenues 109,302 112,210
Institutional Research Services 118,286 98,956
Dividend and Interest Income 30,992 68,309
Investment Gains (Losses) (64,230) 13,634
Other Revenues 30,780 29,795
----------- ------------
Total Revenues 1,042,361 1,098,391
Less: Interest Expense 13,339 54,055
----------- ------------
Net Revenues 1,029,022 1,044,336
----------- ------------
Expenses:
Employee Compensation & Benefits 433,672 440,525
Promotion & Servicing:
Distribution Plan Payments 79,224 77,710
Amortization of Deferred
Sales Commissions 22,019 24,715
Other 57,223 58,529
General & Administrative 152,404 143,767
Interest on Borrowings 6,565 7,482
Amortization of Intangible Assets 5,179 5,179
----------- ------------
756,286 757,907
----------- ------------
Operating Income 272,736 286,429
Non-Operating Income 4,752 4,199
----------- ------------
Income before Income Taxes 277,488 290,628
Income Taxes 30,045 22,927
----------- ------------
NET INCOME $247,443 $267,701
=========== ============
Operating Income Margin 26.5% 27.4%
ALLIANCEBERNSTEIN HOLDING L.P.
(THE PUBLICLY TRADED PARTNERSHIP)
SUMMARY STATEMENTS OF INCOME
(unaudited, $ thousands except per unit amounts)
Three Months Ended
------------------------------
3/31/08 3/31/07
----------- ------------
Equity in Earnings of Operating
Partnership $81,997 $87,834
Income Taxes 9,561 9,309
----------- ------------
NET INCOME 72,436 78,525
Additional Equity in Earnings of
Operating Partnership(1) 170 1,269
----------- ------------
NET INCOME - Diluted(2) $72,606 $79,794
=========== ============
DILUTED NET INCOME PER UNIT $0.83 $0.91
=========== ============
DISTRIBUTION PER UNIT $0.83 $0.91
=========== ============
(1) To reflect higher ownership in the Operating Partnership resulting
from application of the treasury stock method to outstanding options.
(2) For calculation of Diluted Net Income per Unit.
ALLIANCEBERNSTEIN AND ALLIANCEBERNSTEIN HOLDING
UNITS OUTSTANDING AND WEIGHTED AVERAGE UNITS OUTSTANDING
MARCH 31, 2008
Weighted Average Units
Three Months Ended
----------------------------
Period End
Units Basic Diluted
------------- ------------- --------------
AllianceBernstein 260,798,798 260,627,159 260,943,171
AllianceBernstein Holding 87,404,955 87,233,316 87,549,328
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
THREE MONTHS ENDED MARCH 31, 2008
($ millions)
Institutional Private
Investments Retail Client Total
------------ --------- --------- ---------
Beginning of Period $508,081 $183,165 $109,144 $800,390
Sales/New accounts 12,162 7,820 3,330 23,312
Redemptions/Terminations (3,655) (10,328) (1,859) (15,842)
Cash flow (5,916) (1,672) (1,029) (8,617)
Unreinvested dividends - (239) (114) (353)
------------ --------- --------- ---------
Net inflows/(outflows) 2,591 (4,419) 328 (1,500)
Transfers(1) (41) 41 - -
Market depreciation (39,304) (16,076) (8,179) (63,559)
------------ --------- --------- ---------
End of Period $471,327 $162,711 $101,293 $735,331
============ ========= ========= =========
(1) Transfers of certain client accounts were made among distribution
channels resulting from changes in how these accounts are serviced by
the firm.
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
TWELVE MONTHS ENDED MARCH 31, 2008
($ millions)
Institutional Private
Investments Retail Client Total
------------ --------- --------- ---------
Beginning of Period(1) $468,453 $172,998 $100,339 $741,790
Sales/New accounts 63,519 41,125 15,744 120,388
Redemptions/Terminations (28,845) (37,900) (5,318) (72,063)
Cash flow (20,805) (3,916) (4,498) (29,219)
Unreinvested dividends (1) (1,272) (521) (1,794)
------------ --------- --------- ---------
Net inflows/(outflows) 13,868 (1,963) 5,407 17,312
Transfers(2) 509 (511) 2 -
Market depreciation (11,503) (7,813) (4,455) (23,771)
------------ --------- --------- ---------
End of Period $471,327 $162,711 $101,293 $735,331
============ ========= ========= =========
(1) Prior period AUM has been adjusted to reflect the assets associated
with existing services previously not included.
(2) Transfers of certain client accounts were made among distribution
channels resulting from changes in how these accounts are serviced by
the firm.
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
BY INVESTMENT SERVICE
AT MARCH 31, 2008
($ millions)
Institutional Private
Investments Retail Client Total
------------ --------- --------- ---------
Equity:
Value
U.S. $42,932 $28,881 $22,197 $94,010
Global & International 174,808 50,185 22,759 247,752
------------ --------- --------- ---------
217,740 79,066 44,956 341,762
------------ --------- --------- ---------
Growth
U.S. 26,827 20,499 13,727 61,053
Global & International 77,768 20,163 11,067 108,998
------------ --------- --------- ---------
104,595 40,662 24,794 170,051
------------ --------- --------- ---------
Total Equity 322,335 119,728 69,750 511,813
------------ --------- --------- ---------
Fixed Income:
U.S. 73,370 9,540 30,745 113,655
Global & International 58,661 29,572 765 88,998
------------ --------- --------- ---------
132,031 39,112 31,510 202,653
------------ --------- --------- ---------
Index/Structured:
U.S. 10,943 3,871 24 14,838
Global & International 6,018 - 9 6,027
------------ --------- --------- ---------
16,961 3,871 33 20,865
------------ --------- --------- ---------
Total:
U.S. 154,072 62,791 66,693 283,556
Global & International 317,255 99,920 34,600 451,775
------------ --------- --------- ---------
$471,327 $162,711 $101,293 $735,331
============ ========= ========= =========
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
($ millions)
Three Month Period Twelve Month Period
----------------------- -----------------------
3/31/08 3/31/07(1) 3/31/08 3/31/07(1)
---------- ----------- ---------- -----------
Ending Assets
Under Management $735,331 $741,790 $735,331 $741,790
Average Assets
Under Management $758,359 $726,810 $781,568 $671,525
(1) Prior period AUM has been adjusted to reflect the assets associated
with existing services previously not included.
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
BY CLIENT DOMICILE
AT MARCH 31, 2008
($ millions)
Institutional Private
Investments Retail Client Total
------------ --------- --------- ---------
U. S. Clients $218,841 $124,233 $97,846 $440,920
Non-U.S. Clients 252,486 38,478 3,447 294,411
------------ --------- --------- ---------
$471,327 $162,711 $101,293 $735,331
============ ========= ========= =========
Source: AllianceBernstein L.P.
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