Exhibit 99.13
| News Release | | 
|
FOR IMMEDIATE RELEASE
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 SECOND QUARTER 2004 RESULTS
Alliance Capital Management Holding L.P. Announces Diluted Net Income of $0.53 per Unit
and Declares a $0.53 per Unit Cash Distribution
New York, NY, July 27, 2004 – Alliance Capital Management Holding L.P. (“Alliance Holding”) (NYSE: AC), and Alliance Capital Management L.P. (“Alliance Capital”), today reported results for the second quarter of 2004.
Alliance Holding (The Publicly Traded Partnership):
• Diluted net income per Unit for the quarter ended June 30, 2004 was $0.53, up 3.9%, compared to $0.51 for the same period in 2003.
• Distribution per Unit for the second quarter is $0.53, compared to $0.51 for the second quarter of 2003. The second quarter distribution is payable on August 16, 2004 to record holders of Alliance Holding Units at the close of business on August 6, 2004.
Alliance Capital (The Operating Partnership):
• Assets Under Management (AUM) at June 30, 2004 were $481 billion, a 12.8% increase from a year ago, due primarily to equity market appreciation.
• Average AUM was $477 billion for the quarter ended June 30, 2004, an increase of 16.3% from the same quarter a year ago.
• Long-term net asset inflows for the three months ended June 30, 2004 were $1.4 billion. Institutional Investment Management and Private Client experienced net asset inflows of $1.2 billion and $1.1 billion, respectively, which were partially offset by Retail net asset outflows of $0.9 billion. Cash Management outflows were $2.9 billion.
• Long-term net asset inflows for the twelve months ended June 30, 2004 were $0.9 billion. Private Client and Institutional Investment Management inflows were $4.9 billion and $1.1 billion, respectively, while Retail experienced net asset outflows of $5.1 billion. Cash management outflows were $4.6 billion.
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“On the most important metric, investment returns for our clients, second quarter results were satisfactory, with many services performing at or above benchmarks for the quarter and the first half,” Lewis Sanders, Chief Executive Officer said.
“New business volume improved substantially as compared to the first quarter, led by global services in the institutional market. Asset inflows remained strong in our private client business, but, as expected, results in the retail channel were depressed with the exception of managed accounts where growth accelerated noticeably. Attrition in U.S. growth services continued to be relatively high, holding net long-term assets inflows firm wide to a modest level.
“Profit margins were pressured by a rise in general and administrative costs related, in part, to non-recurring factors. Such costs are expected to decline from second quarter levels during the balance of the year but they are likely to remain well above last year’s run rate owing primarily to increased occupancy costs and additional provisions for related restructuring actions.
“Substantial progress was made in a range of initiatives during the quarter, especially in research. Development was completed on a new tool to improve forecast accuracy, which holds promise to add measurably to client investment returns.
“Ultimately, success in our business rests on delivering superior investment performance to our clients. Our global investment platforms in growth equities, value equities and fixed income, enhanced by continuing innovations in research, encourage us that we can deliver on this imperative,” Mr. Sanders concluded.
SUMMARY FINANCIAL RESULTS OF ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
($ millions)
| | Three Months Ended | | % | |
| | 6/30/04 | | 6/30/03 | | Change | |
| | | | | | | |
Revenues | | $737 | | $662 | | 11.4 | % |
Expenses | | 571 | | 506 | | 13.0 | |
Income Before Taxes | | 166 | | 156 | | 6.2 | |
| | | | | | | |
Income Taxes | | 10 | | 8 | | 23.3 | |
| | | | | | | |
Net Income | | $156 | | $148 | | 5.2 | % |
| | | | | | | |
Pre-tax Margin (1) | | 22.5 | % | 23.6 | % | | |
(1) Pre-tax income as a percentage of revenues Note: Percentages are calculated using underlying numbers | | | |
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• Revenues and Expenses for the second quarter were each increased by approximately $10 million owing to the effects of FIN 46 consolidations.
• Expenses include a write-off of capitalized software of approximately $12 million and incremental insurance recoveries of approximately $8 million from previously incurred legal expenses.
CONFERENCE CALL INFORMATION RELATING TO SECOND QUARTER 2004 RESULTS
Alliance Capital’s management will review second quarter 2004 financial and operating results on Tuesday, July 27, 2004, during a conference call at 5:00 p.m. (New York Time). The call 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 888-428-4479 in the U.S. or 612-332-0107 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 available 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 8:00 p.m. (New York Time) July 27, 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 738447. 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 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.
At June 30, 2004, Alliance Holding owned approximately 31.5% of the Alliance Capital Units. AXA Financial was the beneficial owner of approximately 57.3% of the outstanding Alliance Capital Units at June 30, 2004 (including those held indirectly through its ownership of approximately 1.8% of the outstanding Alliance Holding Units), which, including the general partnership interests in Alliance Capital and Alliance Holding, represent an approximate 58.3% economic interest in Alliance Capital. AXA Financial, Inc. is a wholly-owned
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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 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, 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. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, please refer to the Risk Factors section in Part I of Form 10-K for the year ended December 31, 2003. Any or all of the forward-looking statements that we make in Form 10-K, this news release, 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 the Risk Factors section of Form 10-K could also adversely affect our business, operating results or financial condition.
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)
| | Three Months Ended | |
| | 6/30/04 | | 6/30/03 | |
Revenues: | | | | | |
Investment Advisory & Services Fees | | $511,219 | | $443,680 | |
Distribution Revenues | | 111,933 | | 108,661 | |
Institutional Research Services | | 70,980 | | 68,612 | |
Shareholder Servicing Fees | | 23,465 | | 25,679 | |
Other Revenues, Net | | 19,546 | | 15,113 | |
| | | | | |
| | 737,143 | | 661,745 | |
| | | | | |
Expenses: | | | | | |
Employee Compensation & Benefits | | 261,899 | | 226,671 | |
Promotion & Servicing: | | | | | |
Distribution Plan Payments | | 92,804 | | 91,950 | |
Amortization of Deferred
Sales Commissions | | 46,693 | | 52,315 | |
Other | | 44,370 | | 41,681 | |
General & Administrative | | 113,968 | | 81,406 | |
Interest | | 6,299 | | 6,286 | |
Amortization of Intangible Assets | | 5,175 | | 5,175 | |
| | | | | |
| | 571,208 | | 505,484 | |
| | | | | |
Income Before Income Taxes | | 165,935 | | 156,261 | |
| | | | | |
Income Taxes | | 10,112 | | 8,203 | |
| | | | | |
NET INCOME | | $155,823 | | $148,058 | |
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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 | |
| | 6/30/04 | | 6/30/03 | |
| | | | | |
Equity in Earnings of Operating Partnership | | $48,585 | | $45,108 | |
| | | | | |
Income Taxes | | 6,206 | | 5,213 | |
| | | | | |
NET INCOME | | $42,379 | | $39,895 | |
| | | | | |
Additional Equity in Earnings of Operating Partnership (1) | | 526 | | 904 | |
| | | | | |
NET INCOME – Diluted (2) | | $42,905 | | $40,799 | |
| | | | | |
DILUTED NET INCOME PER UNIT | | $ 0.53 | | $ 0.51 | |
| | | | | |
DISTRIBUTIONS PER UNIT | | $ 0.53 | | $ 0.51 | |
(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.
ALLIANCE CAPITAL AND ALLIANCE HOLDING
UNITS AND WEIGHTED AVERAGE UNITS OUTSTANDING
JUNE 30, 2004
| | | | Weighted Average Units | |
| | Period Ending Units
Outstanding | | Three Months Ended | |
| | | | |
| | | Basic | | Diluted | |
Alliance Capital | | 253,250,267 | | | 253,110,823 | | | 254,555,932 | | |
| | | | | | | | | | |
Alliance Holding | | 79,856,424 | | | 79,716,980 | | | 81,162,089 | | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
THREE MONTHS ENDED JUNE 30, 2004
($ millions)
| | Institutional
Investment
Management | | | Retail | | | Private
Client | | | Total | | |
| | | | | | | | | | | | | |
Beginning of Period | | $270,688 | | | $158,735 | | | $54,195 | | | $483,618 | | |
| | | | | | | | | | | | | |
Long-Term Flows | | | | | | | | | | | | | |
Sales/New accounts | | 9,976 | | | 6,162 | | | 2,056 | | | 18,194 | | |
Redemptions/Terminations | | (4,452 | ) | | (6,872 | ) | | (690 | ) | | (12,014 | ) | |
Cash flow | | (4,346 | ) | | 38 | | | (308 | ) | | (4,616 | ) | |
Unreinvested dividends | | - | | | (214 | ) | | 27 | | | (187 | ) | |
| | | | | | | | | | | | | |
Net new long-term inflows(outflows) | | 1,178 | | | (886 | ) | | 1,085 | | | 1,377 | | |
| | | | | | | | | | | | | |
Net cash management, sales | | - | | | (2,927 | ) | | - | | | (2,927 | ) | |
| | | | | | | | | | | | | |
Market depreciation | | (76 | ) | | (1,199 | ) | | (182 | ) | | (1,457 | ) | |
| | | | | | | | | | | | | |
End of Period | | $271,790 | | | $153,723 | | | $55,098 | | | $480,611 | | |
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
TWELVE MONTHS ENDED JUNE 30, 2004
($ millions)
| | Institutional
Investment
Management | | | Retail | | | Private
Client | | | Total | | |
| | | | | | | | | | | | | |
Beginning of Period | | $234,574 | | | $147,037 | | | $44,592 | | | $426,203 | | |
| | | | | | | | | | | | | |
Long-Term Flows | | | | | | | | | | | | | |
Sales/New accounts | | 33,987 | | | 25,093 | | | 8,159 | | | 67,239 | | |
Redemptions/Terminations | | (26,785 | ) | | (28,231 | ) | | (2,320 | ) | | (57,336 | ) | |
Cash flow | | (6,059 | ) | | (1,112 | ) | | (841 | ) | | (8,012 | ) | |
Unreinvested dividends | | (1 | ) | | (844 | ) | | (119 | ) | | (964 | ) | |
| | | | | | | | | | | | | |
Net new long-term inflows(outflows) | | 1,142 | | | (5,094 | ) | | 4,879 | | | 927 | | |
| | | | | | | | | | | | | |
Net cash management, sales | | - | | | (4,622 | ) | | - | | | (4,622 | ) | |
| | | | | | | | | | | | | |
Market appreciation | | 36,074 | | | 16,402 | | | 5,627 | | | 58,103 | | |
| | | | | | | | | | | | | |
End of Period | | $271,790 | | | $153,723 | | | $55,098 | | | $480,611 | | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
($ millions)
| | Three Month Period | |
| | 6/30/04 | | 6/30/03 | |
| | | | | |
Average Assets Under Management | | $476,782 | | $409,917 | |
| | | | | |
Ending Assets Under Management | | $480,611 | | $426,203 | |
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY INVESTMENT ORIENTATION
AT JUNE 30, 2004
($ millions)
| | Institutional
Investment
Management | | Retail | | Private
Client | | Total | |
Equity: | | | | | | | | | |
Growth | | | | | | | | | |
U.S. | | $48,490 | | $35,068 | | $6,641 | | $90,199 | |
Global & International | | 21,656 | | 11,030 | | 3,300 | | 35,986 | |
| | 70,146 | | 46,098 | | 9,941 | | 126,185 | |
Value | | | | | | | | | |
U.S. | | 55,070 | | 28,533 | | 27,288 | | 110,891 | |
Global & International | | 41,220 | | 7,167 | | 5,923 | | 54,310 | |
| | 96,290 | | 35,700 | | 33,211 | | 165,201 | |
Total Equity | | 166,436 | | 81,798 | | 43,152 | | 291,386 | |
| | | | | | | | | |
Fixed Income: | | | | | | | | | |
U.S. | | 54,553 | | 47,675 | | 11,770 | | 113,998 | |
Global & International | | 27,387 | | 19,384 | | 104 | | 46,875 | |
| | 81,940 | | 67,059 | | 11,874 | | 160,873 | |
| | | | | | | | | |
Passive: | | | | | | | | | |
U.S. | | 17,806 | | 4,658 | | 72 | | 22,536 | |
Global & International | | 5,608 | | 208 | | - | | 5,816 | |
| | 23,414 | | 4,866 | | 72 | | 28,352 | |
Total: | | | | | | | | | |
U.S. | | 175,919 | | 115,934 | | 45,771 | | 337,624 | |
Global & International | | 95,871 | | 37,789 | | 9,327 | | 142,987 | |
| | $271,790 | | $153,723 | | $55,098 | | $480,611 | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY INVESTMENT VEHICLE
AT JUNE 30, 2004
($ millions)
| | Institutional
Investment
Management | | Retail | | Private
Client | | Total | |
Separately Managed Accounts | | | | | | | | | |
Parent | | $ 49,673 | | $ - | | $ - | | $ 49,673 | |
Other (1) | | 219,987 | | 8,352 | | 38,440 | | 266,779 | |
| | 269,660 | | 8,352 | | 38,440 | | 316,452 | |
| | | | | | | | | |
Mutual Funds | | | | | | | | | |
Parent (2) | | 94 | | 37,098 | | - | | 37,192 | |
Other | | 2,036 | | 108,273 | | 16,658 | | 126,967 | |
| | 2,130 | | 145,371 | | 16,658 | | 164,159 | |
| | | | | | | | | |
Total | | $271,790 | | $153,723 | | $55,098 | | $480,611 | |
(1) Retail separately managed accounts represent assets in managed account products.
(2) Parent includes certain mutual funds sponsored by Alliance Capital’s parent and sub-advised by Alliance Capital.
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY LOCATION (1)
AT JUNE 30, 2004
($ millions)
| | Institutional
Investment
Management | | Retail | | Private
Client | | Total | |
U.S. Clients | | $187,110 | | $136,278 | | $53,689 | | $377,077 | |
Non-U.S. Clients | | 84,680 | | 17,445 | | 1,409 | | 103,534 | |
| | $271,790 | | $153,723 | | $55,098 | | $480,611 | |
(1) Categorized by country domicile of client.
