Exhibit 99.11
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 FIRST QUARTER 2005 RESULTS
Alliance Capital Management Holding L.P. Announces Diluted Net Income of $0.58 per Unit
and Declares a $0.56 per Unit Cash Distribution
New York, NY, April 28, 2005 – Alliance Capital Management Holding L.P. (“Alliance Holding”) (NYSE: AC), and Alliance Capital Management L.P. (“Alliance Capital”), today reported results for the first quarter of 2005.
Alliance Holding (The Publicly Traded Partnership):
• Diluted net income per unit for the quarter ended March 31, 2005 was $0.58 as compared to $0.58 for the same period in 2004.
• Distribution per unit for the first quarter of 2005 is $0.56, payable on May 19, 2005 to record holders of Alliance Holding Units at the close of business on May 9, 2005.
Alliance Capital (The Operating Partnership):
• Assets Under Management (AUM) at March 31, 2005 were $534 billion, up 9.8% from a year ago, due primarily to equity market appreciation and net asset inflows.
• Average AUM was $538 billion for the quarter ended March 31, 2005, an increase of 10.7% from the same quarter a year ago.
• Long-term net asset inflows for the twelve months ended March 31, 2005 were $19.7 billion. Institutional Investment Management net asset inflows of $17.7 billion and Private Client net asset inflows of $5.3 billion were partially offset by Retail net asset outflows of $3.3 billion. Additionally, cash management net asset outflows totaled $5.7 billion, which included transfers of approximately $1 billion in connection with the previously announced sale of the cash management services unit to Federated Investors, Inc. (“CMS Sale”).
• Long-term net asset inflows for the three months ended March 31, 2005 were $5.8 billion. Institutional Investment Management and Private Client experienced net asset inflows of $3.8 billion and $2.3 billion, respectively, partially offset by Retail net asset outflows of $0.3 billion. Cash management net asset outflows of approximately $2 billion were largely the result of the CMS sale.
“On the most important metric, investment returns for our clients, the first quarter was generally disappointing in the U.S., a derivative primarily of difficult capital market conditions. Absolute returns were negative in both equities and fixed income and relative returns were lackluster. Results, however, were considerably better in our non-U.S. services, many of which produced positive returns and continued to achieve strong relative performance,” said Lewis A. Sanders, Chairman and Chief Executive Officer.
As previously reported, financial performance in the first quarter was below expectations, reflecting primarily the effect of weak capital market conditions on investment advisory fees, unusually high legal costs and unrealized mark-to-market losses on equity investments held for deferred compensation plan obligations. High legal fees stemmed from the trial of an action brought by the Florida State Board of Administration; as previously reported, Alliance prevailed on all claims related to this matter and both parties agreed that there will be no appeal. As such, legal fees are expected to decline in future periods and earnings will likely benefit from related insurance recoveries. In addition, mark-to-market losses, if not recovered, will result in lower compensation expense in future periods as employees vest in these plans.
“The firm’s organic growth rate accelerated in the first quarter. Gross and net inflows reached new highs in the private client segment, with this unit’s annualized organic growth rate moving well into double digits. Gross inflows also strengthened among institutional clients and attrition rates stabilized, resulting in substantially improved net inflows. Noteworthy, too, was a substantial increase during the quarter in the backlog of institutional mandates won but not yet funded,” said Mr. Sanders.
The retail segment remained weak, with U.S. retail mutual fund market share continuing at depressed levels. However, sustained growth in managed accounts and inflows into Luxembourg-based mutual funds have stabilized this business overall. The small net outflow in the retail unit for the quarter was attributable mostly to the closing of a number of mutual funds, part of a previously announced plan to improve the clarity and utility of our product array for this client group.
“Among our services, those in the global arena continued to drive the company’s growth. At the quarter’s end, long-term assets under management invested in non-U.S. services totaled $194 billion, up 39% over the last twelve months. Our style blend services continued to gain client acceptance as well, especially those based on global value and global growth components,” said Mr. Sanders.
“Lasting success in our business is based on knowledge — having more of it and using it better than market participants at large. We remain focused on expanding our research capabilities towards this end, with the goal of helping our clients achieve investment success and peace of mind along the way,” Mr. Sanders concluded.
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SUMMARY FINANCIAL RESULTS OF ALLIANCE CAPITAL MANAGEMENT L.P.
($ millions)
| | Three Months Ended | | % | |
| | 3/31/05 | | 3/31/04 | | Change | |
| | | | | | | |
Revenues | | $ | 750 | | $ | 752 | | -0.3 | |
| | | | | | | |
Expenses | | 571 | | 575 | | -0.6 | |
| | | | | | | |
Income Before Income Taxes | | 179 | | 177 | | 0.8 | |
| | | | | | | |
Income Taxes | | 10 | | 9 | | 15.7 | |
| | | | | | | |
Net Income | | $ | 169 | | $ | 168 | | — | |
| | | | | | | |
Pre-tax Margin (1) | | 23.8 | % | 23.6 | % | | |
(1) Pre-tax income as a percentage of total revenues |
• Revenues for the first quarter decreased 0.3% to $750 million from $752 million in the first quarter of 2004, primarily due to mark-to-market losses on investments related to deferred compensation plans, lower distribution revenue and lower shareholder servicing fees in the Retail channel, offset partially by higher investment advisory fees due to growth in AUM.
• Expenses decreased 0.6% to $571 million from $575 million, the result of lower amortization of deferred sales commissions and lower distribution plan payments, offset partially by higher base compensation expense and higher than expected legal fees.
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CONFERENCE CALL INFORMATION RELATING TO FIRST QUARTER 2005 RESULTS
Management will review first quarter 2005 financial and operating results on Thursday, April 28, 2005 during a conference call at 5:30 p.m. (New York Time). The call will be hosted by Chairman and Chief Executive Officer, Lewis A. Sanders and President 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 800-553-5260 in the U.S. or 612-332-0530 outside the U.S., ten minutes before the 5:30 p.m. (New York Time) scheduled start time. When dialing in, please indicate access code 778373.
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 8:30 p.m. (New York Time) April 28, 2005. In the U.S. please call 800-475-6701 or for callers outside the U.S. 320-365-3844, and provide the access code 778373. 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.
At March 31, 2005, Alliance Holding owned approximately 31.9% of the Alliance Capital Units. AXA Financial was the beneficial owner of approximately 60.2% of the issued and outstanding Alliance Capital Units at March 31, 2005 (including those held indirectly through its ownership of approximately 1.8% of the issued and outstanding Alliance Holding Units), which, including the general partnership interests in Alliance Capital and Alliance Holding, represent an approximate 61.2% 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.
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Forward-Looking Statements
Certain statements in this new 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 we achieve for our clients, general economic conditions, future acquisitions, competitive conditions, and government regulations, including changes in tax rates. We caution readers to carefully consider such forward-looking statements in light of these 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 I of Form 10-K for the year ended December 31, 2004. 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. Please remember that factors other than those listed in “Risk Factors” could also adversely affect our business, operating results, or financial condition.
The forward-looking statements we make in this news release include statements regarding expected levels of certain expenses. Legal fees associated with litigation (net of partially offsetting insurance recoveries), and the costs of compliance with the Sarbanes-Oxley Act of 2002, and various other expenses, fluctuate from period to period. Litigation is inherently unpredictable, and costs of regulatory compliance vary due to changes in regulation, guidance from regulators, and evolving industry-wide standards.
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ALLIANCE CAPITAL MANAGEMENT L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)
| | Three Months Ended | |
| | 3/31/05 | | 3/31/04 | |
Revenues: | | | | | |
Investment Advisory & Services Fees | | $ | 536,170 | | $ | 510,968 | |
Distribution Revenues | | 107,833 | | 116,305 | |
Institutional Research Services | | 75,217 | | 79,424 | |
Shareholder Servicing Fees | | 25,246 | | 31,270 | |
Other Revenues, Net | | 5,779 | | 14,340 | |
| | | | | |
| | 750,245 | | 752,307 | |
| | | | | |
Expenses: | | | | | |
Employee Compensation & Benefits | | 285,062 | | 274,804 | |
Promotion & Servicing: | | | | | |
Distribution Plan Payments | | 91,438 | | 97,114 | |
Amortization of Deferred Sales Commissions | | 36,548 | | 48,520 | |
Other | | 47,110 | | 51,870 | |
General & Administrative | | 99,879 | | 91,004 | |
Interest | | 6,272 | | 6,500 | |
Amortization of Intangible Assets | | 5,175 | | 5,175 | |
| | | | | |
| | 571,484 | | 574,987 | |
| | | | | |
Income Before Income Taxes | | 178,761 | | 177,320 | |
| | | | | |
Income Taxes | | 10,254 | | 8,866 | |
| | | | | |
NET INCOME | | $ | 168,507 | | $ | 168,454 | |
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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 | |
| | 3/31/05 | | 3/31/04 | |
| | | | | |
Equity in Earnings of Alliance Capital | | $ | 53,020 | | $ | 52,176 | |
| | | | | |
Income Taxes | | 6,186 | | 5,815 | |
| | | | | |
NET INCOME | | $ | 46,834 | | $ | 46,361 | |
| | | | | |
Additional Equity in Earnings of Alliance Capital (1) | | 748 | | 828 | |
| | | | | |
NET INCOME – Diluted (2) | | $ | 47,582 | | $ | 47,189 | |
| | | | | |
DILUTED NET INCOME PER UNIT | | $ | 0.58 | | $ | 0.58 | |
| | | | | |
DISTRIBUTIONS PER UNIT | | $ | 0.56 | | $ | 0.14 | |
(1) To reflect higher ownership in Alliance Capital 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
MARCH 31, 2005
| | | | Weighted Average Units | |
| | Period Ending Units | | Three Months Ended | |
| | Outstanding | | Basic | | Diluted | |
| | | | | | | |
Alliance Capital | | 254,600,699 | | 254,195,498 | | 256,082,810 | |
| | | | | | | |
Alliance Holding | | 81,206,856 | | 80,801,655 | | 82,688,967 | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
THREE MONTHS ENDED MARCH 31, 2005
($ millions)
| | Institutional | | | | | | | |
| | Investment | | | | | | | |
| | Management | | Retail | | Private Client | | Total | |
Beginning of Period | | $ | 311,258 | | $ | 163,552 | | $ | 63,954 | | $ | 538,764 | |
Sales/New accounts | | 9,660 | | 6,734 | | 2,954 | | 19,348 | |
Redemptions/Terminations | | (4,372 | ) | (6,441 | ) | (596 | ) | (11,409 | ) |
Cash flow | | (1,487 | ) | (444 | ) | — | | (1,931 | ) |
Unreinvested dividends | | — | | (188 | ) | (52 | ) | (240 | ) |
Net Long-Term Inflows/(Outflows) | | 3,801 | | (339 | ) | 2,306 | | 5,768 | |
Net Cash Management | | — | | (2,017 | ) | 16 | | (2,001 | ) |
Market Depreciation | | (3,749 | ) | (3,634 | ) | (1,202 | ) | (8,585 | ) |
End of Period | | $ | 311,310 | | $ | 157,562 | | $ | 65,074 | | $ | 533,946 | |
ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
TWELVE MONTHS ENDED MARCH 31, 2005
($ millions)
| | Institutional | | | | | | | |
| | Investment | | | | | | | |
| | Management | | Retail | | Private Client | | Total | |
Beginning of Period | | $ | 271,012 | | $ | 158,951 | | $ | 56,393 | | $ | 486,356 | |
Sales/New accounts | | 40,651 | | 23,372 | | 8,952 | | 72,975 | |
Redemptions/Terminations | | (19,617 | ) | (24,640 | ) | (2,900 | ) | (47,157 | ) |
Cash flow | | (3,315 | ) | (1,242 | ) | (546 | ) | (5,103 | ) |
Unreinvested dividends | | (1 | ) | (806 | ) | (224 | ) | (1,031 | ) |
Net Long-Term Inflows/(Outflows) | | 17,718 | | (3,316 | ) | 5,282 | | 19,684 | |
Net Cash Management | | (1,444 | ) | (4,095 | ) | (198 | ) | (5,737 | ) |
Market Appreciation | | 24,024 | | 6,022 | | 3,597 | | 33,643 | |
End of Period | | $ | 311,310 | | $ | 157,562 | | $ | 65,074 | | $ | 533,946 | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
($ millions)
| | Three Month Periods | | Twelve Month Periods | |
| | 3/31/05 | | 3/31/04 | | 3/31/05 | | 3/31/04 | |
| | | | | | | | | |
Average Assets Under Management | | $ | 537,647 | | $ | 485,473 | | $ | 501,667 | | $ | 446,941 | |
| | | | | | | | | |
Ending Assets Under Management | | $ | 533,946 | | $ | 486,356 | | $ | 533,946 | | $ | 486,356 | |
ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
BY INVESTMENT SERVICE
AS OF MARCH 31, 2005
($ millions)
| | Institutional
Investment
Management | | Retail | | Private
Client | | Total | |
Equity | | | | | | | | | |
Growth | | | | | | | | | |
U.S. | | $36,061 | | $30,450 | | $7,106 | | $73,617 | |
Global & International | | 26,334 | | 14,081 | | 4,127 | | 44,542 | |
| | 62,395 | | 44,531 | | 11,233 | | 118,159 | |
Value | | | | | | | | | |
U.S. | | 49,106 | | 30,803 | | 21,893 | | 101,802 | |
Global & International | | 72,926 | | 9,820 | | 10,590 | | 93,336 | |
| | 122,032 | | 40,623 | | 32,483 | | 195,138 | |
Total Equity | | 184,427 | | 85,154 | | 43,716 | | 313,297 | |
| | | | | | | | | |
Fixed Income | | | | | | | | | |
U.S. | | 76,842 | | 43,742 | | 21,072 | | 141,656 | |
Global & International | | 26,624 | | 23,438 | | 167 | | 50,229 | |
| | 103,466 | | 67,180 | | 21,239 | | 191,885 | |
| | | | | | | | | |
Index/Structured | | | | | | | | | |
U.S. | | 19,167 | | 4,068 | | 119 | | 23,354 | |
Global & International | | 4,250 | | 1,160 | | — | | 5,410 | |
| | 23,417 | | 5,228 | | 119 | | 28,764 | |
Total | | | | | | | | | |
U.S. | | 181,176 | | 109,063 | | 50,190 | | 340,429 | |
Global & International | | 130,134 | | 48,499 | | 14,884 | | 193,517 | |
| | $311,310 | | $157,562 | | $65,074 | | $533,946 | |
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ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
BY LOCATION (1)
AS OF MARCH 31, 2005
($ millions)
| | Institutional
Investment
Management | | Retail | | Private Client | | Total | |
| | | | | | | | | |
U.S. Clients | | $ | 203,819 | | $ | 125,900 | | $ | 62,767 | | $ | 392,486 | |
Non-U.S. Clients | | 107,491 | | 31,662 | | 2,307 | | 141,460 | |
| | $ | 311,310 | | $ | 157,562 | | $ | 65,074 | | $ | 533,946 | |
(1) Categorized by country domicile of client.
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