Exhibit 99.02
News Release | 
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FOR IMMEDIATE RELEASE |
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Contacts: | | Valerie Haertel (Investor Relations) | | John Meyers (Media) |
| | (212) 969-6414 | | (212) 969-2301 |
| | investor_relations@acml.com | | john_meyers@acml.com |
ALLIANCE CAPITAL ANNOUNCES FOURTH QUARTER AND FULL YEAR 2003 RESULTS
New York, NY, January 29, 2004 – Alliance Capital Management Holding L.P. (“Alliance Holding”) (NYSE: AC), and Alliance Capital Management L.P. (“Alliance Capital”), today reported results for the fourth quarter and full year ended December 31, 2003.
Alliance Holding (The Publicly Traded Partnership):
• Diluted net income per Unit for the fourth quarter ended December 31, 2003 was $0.13, as compared to $0.51 from the same period in 2002. Fourth quarter net income was reduced by $0.54 per Unit as a result of a charge related to the SEC/NYAG settlement for mutual fund matters and legal proceedings.
• As a result of the charge, there will be no cash distributions paid to Unitholders for the fourth quarter. Distributions are expected to resume for the first quarter of 2004 and return to traditional levels in relation to cash flow for the second quarter of 2004.
• For the year, diluted net income per Unit was $1.01, down 52% from $2.11 in 2002. Full year earnings for 2003 were reduced by $1.11 per Unit as a result of third and fourth quarter charges related to the SEC/NYAG settlement for mutual fund matters and legal proceedings.
Alliance Capital (The Operating Partnership):
• Assets Under Management (AUM) at December 31, 2003 were $475 billion, up 22.8% from a year ago, due primarily to equity market appreciation and net cash inflows into institutional and private client accounts.
• Average AUM was $456 billion for the quarter ended December 31, 2003, an increase of 18.7% from the same quarter a year ago. For the year ended 2003, average AUM was $421 billion, an increase of 1.5% from 2002.
• Net asset inflows were $1.4 billion for fourth quarter and $7.7 billion for full year 2003. Net asset inflows in the institutional investment management and private client channels more than offset net redemptions in U.S. retail mutual funds and cash management products for both the fourth quarter and full year.
SUMMARY FINANCIAL RESULTS OF ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
($ millions)
| | Three Months Ended | | % | | Twelve Months Ended | | % | |
| | 12/31/03 | | 12/31/02 | | Change | | 12/31/03 | | 12/31/02 | | Change | |
| | | | | | | | | | | | | |
Revenues | | $ | 769 | | $ | 648 | | 18.7 | | $ | 2,733 | | $ | 2,742 | | -0.4 | |
Expenses: | | | | | | | | | | | | | |
Operating Expenses | | 567 | | 494 | | 14.9 | | 2,044 | | 2,099 | | -2.6 | |
Charge for Mutual Fund Matters & Legal Proceedings | | 140 | | — | | n/a | | 330 | | — | | n/a | |
| | 707 | | 494 | | 43.2 | | | 2,374 | | 2,099 | | 13.1 | |
| | | | | | | | | | | | | |
Income Before Income Taxes | | 62 | | 154 | | -59.8 | | 359 | | 643 | | -44.3 | |
| | | | | | | | | | | | | |
Income Taxes | | 8 | | 7 | | 10.3 | | 29 | | 32 | | -10.8 | |
| | | | | | | | | | | | | |
Net Income | | $ | 54 | | $ | 147 | | -63.5 | | $ | 330 | | $ | 611 | | -46.0 | |
| | | | | | | | | | | | | | | | | | |
Lewis A. Sanders, Alliance Capital’s Chief Executive Officer said, “As measured by the most important metric, investment performance, 2003 was a good year for our clients with almost all services posting strong absolute returns and many outperforming their benchmarks. We are pleased with the firm’s results in the institutional and private client channels with net asset inflows exceeding $14 billion for the year and client and consultant support remaining strong.”
“However, it was a difficult year in retail mutual funds. The negative financial and reputational effects of inappropriate market timing in some of our mutual funds were substantial, with the costs of settling this issue driving earnings down sharply in the third and fourth quarters of 2003 and for the full year,” Mr. Sanders said.
“It will take time to restore our standing in the mutual fund business, but we are committed to achieving this goal. The agreements recently reached with authorities to resolve this matter have set us on the right path. They provide for substantial and lasting benefits to our mutual fund shareholders, and promise to greatly strengthen mutual fund governance and firm-wide compliance procedures,” he stressed.
“We look forward to better results this year. Our global investment platforms in growth and value equities and fixed income are gaining traction among institutional clients around the world. We have embarked on a substantial expansion of our private client distribution footprint in the U.S. The new management of our retail business is hard at work transforming our position in the market place. We are committed to improving still further on the value proposition we offer to retail investors and their advisors. And our institutional research business, after a challenging year in 2003, appears poised to resume its growth. Most of all, we are excited by the progress we are making in research innovation and its implications for still better investment performance,” Mr. Sanders concluded.
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Unit Purchase
Alliance Capital intends to engage in open-market purchases of approximately one million Alliance Holding Units, from time to time at its discretion, to fund obligations under certain Alliance Capital deferred compensation plans.
CONFERENCE CALL INFORMATION RELATING TO FOURTH QUARTER
AND FULL YEAR 2003 RESULTS
Alliance Capital’s management will review fourth quarter and full year 2003 financial and operating results on Thursday, January 29, 2004, during a conference call at 5:00 p.m. (New York Time), following the release of its financial results after the close of the New York Stock Exchange, that will be hosted by Chief Executive Officer Lewis A. Sanders and Chief Operating Officer Gerald M. Lieberman.
Parties interested in listening to the conference call may access it by either telephone or webcast.
1. To listen by telephone, please dial 888-276-9995 in the U.S. or 612-332-0802 outside the U.S., ten minutes before the 5:00 p.m. (New York Time) scheduled start time. Please indicate access code “Alliance” when dialing in.
2. To listen by webcast, please visit Alliance Capital’s Investor Relations website at http://ir.alliancecapital.com at least fifteen minutes prior to the call to download and install any necessary audio software.
The presentation slides that will be reviewed during the conference call are expected to be available immediately after the release of its results on January 29, 2004 on Alliance Capital’s website at the above web address.
A replay of the conference call will be made available for one week beginning at 8:30 p.m. (New York Time) January 29, 2004. In the U.S. please call 800-475-6701 or for callers outside the U.S. 320-365-3844, and provide the access code 716005. The replay will also be available via webcast on Alliance Capital’s website for one week.
ABOUT ALLIANCE CAPITAL
Alliance Capital is a leading global investment management firm providing investment management services for many of the largest U.S. public and private employee benefit plans, foundations, public employee retirement funds, pension funds, endowments, banks, insurance companies and high-net-worth individuals worldwide. Alliance Capital is also one of the largest mutual fund sponsors, with a diverse family of globally distributed mutual fund portfolios. Through its Sanford C. Bernstein & Co., LLC subsidiary, Alliance provides in-depth research, portfolio strategy and trade execution to the institutional investment community.
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At December 31, 2003, Alliance Holding owned approximately 31.0% of the Alliance Capital Units. AXA Financial was the beneficial owner of approximately 55.0% of the outstanding Alliance Capital Units at December 31, 2003 (including those held indirectly through its ownership of 1.9% of the outstanding Alliance Holding Units), which, including the general partnership interests in Alliance Capital and Alliance Holding, represent an approximate 55.5% economic interest in Alliance Capital. AXA Financial, Inc. is a wholly-owned subsidiary of AXA, one of the largest global financial services organizations. Additional information may be found at www.alliancecapital.com.
Forward-Looking Statements
Certain statements provided by Alliance Capital and Alliance Holding in this press 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, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of such factors include, but are not limited to, the following: the performance of financial markets, the investment performance of Alliance Capital’s sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions, and government regulations, including changes in tax rates. Alliance Capital and Alliance Holding caution readers to carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are made; Alliance Capital and Alliance Holding undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)
| | Three Months Ended | | Twelve Months Ended | |
| | 12/31/03 | | 12/31/02 | | 12/31/03 | | 12/31/02 | |
Revenues: | | | | | | | | | |
Investment Advisory & Services Fees | | $ | 546,849 | | $ | 439,206 | | $ | 1,882,399 | | $ | 1,847,876 | |
Distribution Revenues | | 114,725 | | 104,111 | | 436,037 | | 467,463 | |
Institutional Research Services | | 68,964 | | 69,251 | | 267,868 | | 294,910 | |
Shareholder Servicing Fees | | 20,795 | | 25,932 | | 94,276 | | 101,569 | |
Other Revenues, Net | | 17,732 | | 9,585 | | 52,241 | | 30,604 | |
| | 769,065 | | 648,085 | | 2,732,821 | | 2,742,422 | |
| | | | | | | | | |
Expenses: | | | | | | | | | |
Employee Compensation & Benefits | | 269,631 | | 216,209 | | 914,529 | | 907,075 | |
Promotion & Servicing: | | | | | | | | | |
Distribution Plan Payments | | 94,906 | | 88,786 | | 370,575 | | 392,780 | |
Amortization of Deferred Sales Commissions | | 50,771 | | 54,967 | | 208,565 | | 228,968 | |
Other | | 45,650 | | 39,698 | | 164,972 | | 193,322 | |
General & Administrative | | 94,564 | | 82,503 | | 339,706 | | 329,059 | |
Interest | | 6,349 | | 6,309 | | 25,286 | | 27,385 | |
Amortization of Intangible Assets | | 5,175 | | 5,175 | | 20,700 | | 20,700 | |
Charge for Mutual Fund Matters & Legal Proceedings | | 140,000 | | — | | 330,000 | | — | |
| | 707,046 | | 493,647 | | 2,374,333 | | 2,099,289 | |
| | | | | | | | | |
Income Before Income Taxes | | 62,019 | | 154,438 | | 358,488 | | 643,133 | |
| | | | | | | | | |
Income Taxes | | 8,518 | | 7,721 | | 28,680 | | 32,155 | |
| | | | | | | | | |
NET INCOME | | $ | 53,501 | | $ | 146,717 | | $ | 329,808 | | $ | 610,978 | |
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ALLIANCE CAPITAL MANAGEMENT HOLDING L.P.
(THE PUBLICLY TRADED PARTNERSHIP)
SUMMARY STATEMENTS OF INCOME
(unaudited, in thousands except per Unit amounts)
| | Three Months Ended | | Twelve Months Ended | |
| | 12/31/03 | | 12/31/02 | | 12/31/03 | | 12/31/02 | |
| | | | | | | | | |
Equity in Earnings of Operating Partnership | | $ | 16,321 | | $ | 44,291 | | $ | 100,424 | | $ | 183,695 | |
| | | | | | | | | |
Income Taxes | | 6,227 | | 5,130 | | 21,819 | | 21,653 | |
| | | | | | | | | |
NET INCOME | | $ | 10,094 | | $ | 39,161 | | $ | 78,605 | | $ | 162,042 | |
| | | | | | | | | |
Additional Equity in Earnings of OperatingPartnership (1) | | 234 | | 873 | | 1,830 | | 5,582 | |
| | | | | | | | | |
NET INCOME – Diluted (2) | | $ | 10,328 | | $ | 40,034 | | $ | 80,435 | | $ | 167,624 | |
| | | | | | | | | |
DILUTED NET INCOME PER UNIT | | $ | 0.13 | | $ | 0.51 | | $ | 1.01 | | $ | 2.11 | |
| | | | | | | | | |
DISTRIBUTIONS PER UNIT | | $ | 0.00 | | $ | 0.52 | | $ | 1.45 | | $ | 2.15 | |
(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.
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ANALYSIS OF PRE-TAX OPERATING EARNINGS MARGIN (1)
($ thousands)
| | Three Months Ended | | Twelve Months Ended | |
| | 12/31/03 | | 12/31/02 | | 12/31/03 | | 12/31/02 | |
Pre-tax Margin (GAAP) (1) | | | | | | | | | |
Total Revenues | | $ | 769,065 | | $ | 648,085 | | $ | 2,732,821 | | $ | 2,742,422 | |
| | | | | | | | | |
Pre-tax Income | | $ | 62,019 | | $ | 154,438 | | $ | 358,488 | | $ | 643,133 | |
| | | | | | | | | |
Pre-tax Margin (GAAP) | | 8.1 | % | 23.8 | % | 13.1 | % | 23.5 | % |
| | | | | | | | | |
Pre-tax Margin (Non-GAAP)(2) | | | | | | | | | |
Total Revenues | | $ | 769,065 | | $ | 648,085 | | $ | 2,732,821 | | $ | 2,742,422 | |
Less: Distribution Revenues | | (114,725 | ) | (104,111 | ) | (436,037 | ) | (467,463 | ) |
Net Revenues | | 654,340 | | 543,974 | | 2,296,784 | | 2,274,959 | |
| | | | | | | | | |
Total Expenses | | 707,046 | | 493,647 | | 2,374,333 | | 2,099,289 | |
Less: Distribution Revenues | | (114,725 | ) | (104,111 | ) | (436,037 | ) | (467,463 | ) |
Net Expenses | | 592,321 | | 389,536 | | 1,938,296 | | 1,631,826 | |
| | | | | | | | | |
Pre-tax Income | | $ | 62,019 | | $ | 154,438 | | $ | 358,488 | | $ | 643,133 | |
| | | | | | | | | |
Pre-tax Margin (Non-GAAP) | | 9.5 | % | 28.4 | % | 15.6 | % | 28.3 | % |
(1) Pre-tax income as a percentage of total revenues.
(2) Pre-tax margin (non-GAAP), pre-tax income as a percentage of net revenues, is presented as a non-GAAP financial measure. The table provides a reconciliation to pre-tax margin (GAAP). Management believes this presentation provides a measure of financial performance that is more comparable to other asset management companies.
ALLIANCE CAPITAL AND ALLIANCE HOLDING
UNITS AND WEIGHTED AVERAGE UNITS OUTSTANDING
DECEMBER 31, 2003
(in thousands)
| | | | Weighted Average | |
| | | | Three Months | | Twelve Months | |
| | Period End | | Basic | | Diluted | | Basic | | Diluted | |
Alliance Capital | | 251,382 | | 251,082 | | 253,235 | | 250,639 | | 253,030 | |
| | | | | | | | | | | |
Alliance Holding | | 77,988 | | 77,689 | | 79,841 | | 77,245 | | 79,636 | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
THREE MONTHS ENDED DECEMBER 31, 2003
($ millions)
| | Retail | | Institutional
Investment
Management | | Private
Client | | Total | |
| | | | | | | | | |
Beginning of Period | | $ | 145,580 | | $ | 245,376 | | $ | 46,808 | | $ | 437,764 | |
| | | | | | | | | |
Sales/New Accounts | | 5,781 | | 12,159 | | 1,911 | | 19,851 | |
Redemptions/Terminations | | (6,958 | ) | (7,982 | ) | (610 | ) | (15,550 | ) |
Net Cash Management Sales | | (1,003 | ) | — | | — | | (1,003 | ) |
Cash Flow | | 168 | | (1,512 | ) | (303 | ) | (1,647 | ) |
Unreinvested Dividends | | (187 | ) | — | | (60 | ) | (247 | ) |
Net New Business/(Outflows) | | (2,199 | ) | 2,665 | | 938 | | 1,404 | |
| | | | | | | | | |
Market Appreciation | | 10,403 | | 21,461 | | 3,767 | | 35,631 | |
Net Change | | 8,204 | | 24,126 | | 4,705 | | 37,03537,035 | |
| | | | | | | | | |
End of Period | | $ | 153,784 | | $ | 269,502 | | $ | 51,513 | | $ | 474,799 | |
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
TWELVE MONTHS ENDED DECEMBER 31, 2003
($ millions)
| | Retail | | Institutional
Investment
Management | | Private
Client | | Total | |
| | | | | | | | | |
Beginning of Period | | $ | 135,896 | | $ | 210,990 | | $ | 39,693 | | $ | 386,579 | |
| | | | | | | | | |
Sales/New Accounts | | 26,871 | | 31,754 | | 7,119 | | 65,744 | |
Redemptions/Terminations | | (26,919 | ) | (22,972 | ) | (2,236 | ) | (52,127 | ) |
Net Cash Management Sales | | (4,986 | ) | — | | — | | (4,986 | ) |
Cash Flow | | (804 | ) | 1,649 | | (684 | ) | 161 | |
Unreinvested Dividends | | (880 | ) | (1 | ) | (184 | ) | (1,065 | ) |
Net New Business/(Outflows) | | (6,718 | ) | 10,430 | | 4,015 | | 7,727 | |
| | | | | | | | | |
Transfers | | — | | 608 | | (608 | ) | — | |
| | | | | | | | | |
Market Appreciation | | 24,606 | | 47,474 | | 8,413 | | 80,493 | |
Net Change | | 17,888 | | 58,512 | | 11,820 | | 88,220 | |
| | | | | | | | | |
End of Period | | $ | 153,784 | | $ | 269,502 | | $ | 51,513 | | $ | 474,799 | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
($ millions)
| | Three Month Periods | | Twelve Month Periods | |
| | 12/31/03 | | 12/31/02 | | 12/31/03 | | 12/31/02 | |
| | | | | | | | | |
Average Assets Under Management | | $ | 455,547 | | $ | 383,725 | | $ | 421,045 | | $ | 414,804 | |
| | | | | | | | | |
Ending Assets Under Management | | $ | 474,799 | | $ | 386,579 | | $ | 474,799 | | $ | 386,579 | |
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY INVESTMENT ORIENTATION
AT DECEMBER 31, 2003
($ millions)
| | Retail | | Institutional
Investment
Management | | Private
Client | | Total | |
Equity | | | | | | | | | |
Growth | | | | | | | | | |
U.S. | | $ | 35,796 | | $ | 55,854 | | $ | 5,556 | | $ | 97,206 | |
Global & International | | 10,783 | | 18,956 | | 125 | | 29,864 | |
| | 46,579 | | 74,810 | | 5,681 | | 127,070 | |
Value | | | | | | | | | |
U.S. | | 27,082 | | 53,145 | | 25,477 | | 105,704 | |
Global & International | | 5,762 | | 34,895 | | 8,560 | | 49,217 | |
| | 32,844 | | 88,040 | | 34,037 | | 154,921 | |
Total Equity | | 79,423 | | 162,850 | | 39,718 | | 281,991 | |
| | | | | | | | | |
Fixed Income | | | | | | | | | |
U.S. | | 50,100 | | 57,036 | | 11,717 | | 118,853 | |
Global & International | | 19,755 | | 25,730 | | — | | 45,485 | |
| | 69,855 | | 82,766 | | 11,717 | | 164,338 | |
| | | | | | | | | |
Passive | | | | | | | | | |
U.S. | | 4,307 | | 17,732 | | 77 | | 22,116 | |
Global & International | | 199 | | 6,154 | | 1 | | 6,354 | |
| | 4,506 | | 23,886 | | 78 | | 28,470 | |
Total | | | | | | | | | |
U.S. | | 117,285 | | 183,767 | | 42,827 | | 343,879 | |
Global & International | | 36,499 | | 85,735 | | 8,686 | | 130,920 | |
| | $ | 153,784 | | $ | 269,502 | | $ | 51,513 | | $ | 474,799 | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY INVESTMENT VEHICLE
AT DECEMBER 31, 2003
($ millions)
| | Retail | | Institutional
Investment
Management | | Private
Client | | Total | |
Separately Managed Accounts | | | | | | | | | |
Parent | | $ | — | | $ | 48,890 | | $ | — | | $ | 48,890 | |
Other (1) | | 7,736 | | 217,307 | | 35,914 | | 260,957 | |
| | 7,736 | | 266,197 | | 35,914 | | 309,847 | |
| | | | | | | | | |
Mutual Funds | | | | | | | | | |
Parent (2) | | 35,674 | | 1,016 | | — | | 36,690 | |
Other | | 110,374 | | 2,289 | | 15,599 | | 128,262 | |
| | 146,048 | | 3,305 | | 15,599 | | 164,952 | |
| | | | | | | | | |
Total | | $ | 153,784 | | $ | 269,502 | | $ | 51,513 | | $ | 474,799 | |
(1) Retail separately managed accounts represent assets managed in managed account products.
(2) Parent includes certain mutual funds sponsored by Alliance Capital’s parent and sub-advised by Alliance Capital.
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY LOCATION (1)
AT DECEMBER 31, 2003
($ millions)
| | Retail | | Institutional
Investment
Management | | Private
Client | | Total | |
U.S. Clients | | $ | 136,258 | | $ | 193,992 | | $ | 50,338 | | $ | 380,588 | |
Non-U.S.Clients | | 17,526 | | 75,510 | | 1,175 | | 94,211 | |
| | $ | 153,784 | | $ | 269,502 | | $ | 51,513 | | $ | 474,799 | |
(1) Categorized by country domicile of client.
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