 | Philip Talamo, Investor Relations 212.969.2383 ir@alliancebernstein.com | John Meyers, Media 212.969.2301 pr@allianceberstein.com | |
| News Release | |||
AllianceBernstein Holding L.P. Announces Third Quarter Diluted Net Income of $0.87 per Unit and Declares a $0.87 per Unit Cash Distribution
New York, NY, October 25, 2006 - AllianceBernstein Holding L.P. (“AllianceBernstein Holding”) (NYSE: AB) and AllianceBernstein L.P. (“AllianceBernstein”) today reported financial and operating results for the quarter ended September 30, 2006.
AllianceBernstein Holding (The Publicly Traded Partnership):
| · | Diluted net income per unit for the quarter ended September 30, 2006 was $0.87, an increase of 17.6% as compared to $0.74 for the same period in 2005. |
| · | Distribution per unit for the third quarter of 2006 is $0.87, an increase of 17.6% as compared to $0.74 for the same period in 2005. The distribution is payable on November 16, 2006 to holders of AllianceBernstein Holding Units at the close of business on November 6, 2006. |
AllianceBernstein (The Operating Partnership):
| · | Assets Under Management (AUM) at September 30, 2006 were $659.3 billion, an 18.7% increase over a year ago, due to market appreciation and net inflows across all distribution channels. |
| · | Average AUM were $641.4 billion for the quarter ended September 30, 2006, an increase of 19.4% over the same quarter a year ago. |
| · | Net inflows(1) for the three months ended September 30, 2006 were $8.3 billion, consisting of Institutional Investments net inflows of $5.7 billion, Retail net inflows of $1.4 billion and Private Client net inflows of $1.2 billion. |
| · | Net inflows(1) for the twelve months ended September 30, 2006 were $48.1 billion, consisting of Institutional Investments net inflows of $30.0 billion, Retail net inflows of $10.9 billion and Private Client net inflows of $7.2 billion. |
________________
(1) | Excludes acquisition of Hong Kong joint venture interest, disposition of South Africa joint venture interest and transfers of certain client accounts among distribution channels resulting from changes in how we service these accounts. |
“On the most important metric, results for clients, the third quarter was strong. Capital market returns were robust in both equities and fixed income. Relative returns of our key value equities services generally exceeded their respective benchmarks. Fixed income services produced returns quite close to their benchmarks. But growth services, while producing good absolute returns, trailed their benchmarks in what was yet another difficult quarter for this style of investing. We continue to believe that substantial opportunity is present in the growth sectors of the equity markets worldwide and that we are well-positioned to capitalize on this prospect,” said Lewis A. Sanders, Chairman and Chief Executive Officer.
“As expected, net cash inflows slowed in the third quarter to $8.3 billion, an annualized organic growth rate of more than 5%. Trailing 12 months net cash inflows were $48.1 billion, an organic growth rate of nearly 9%. Net flows were positive in all client groups and across our three main investment platforms: growth equities, value equities and fixed income. Global and international services continued to account for the lion’s share of new mandates and in aggregate are now close to 51% of total assets under management. Growth remained strong among clients domiciled outside of the U.S. as well, with such clients now accounting for more than a third of total AUM. Encouraging, too, was an increase during the quarter in the backlog of mandates won but not yet funded in the institutional channel.”
“In contrast to asset management services, revenue in institutional research services turned down, primarily from pan-European clients. While disappointing, the fundamentals of this business remain intact. Client use of our algorithmic trading platform in the U.S. has continued to grow and we are on schedule to launch a similar platform in Europe in early 2007. Our research franchise remains strong. Thus, we are optimistic that growth will resume in this business in the periods ahead.”
“The firm’s overall financial results were good with net revenue rising by 17.5% as compared to last year’s third quarter and operating margin expanding by 140 basis points to 28.9%, a strong showing in a quarter having seasonally low performance fee related income. Operating income rose by 23.5% and net income by 19.4% in the quarter. The growth in net income was below that of operating income as last year’s third quarter included a gain on the disposition of our Indian mutual funds.”
“Continued improvement in profitability is dependent on meeting the investment objectives of clients, on which we remain singularly focused,” concluded Mr. Sanders.
www.alliancebernstein.com
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Conference Call Information Relating To Third Quarter 2006 Results
AllianceBernstein’s management will review third quarter 2006 financial and operating results on Wednesday, October 25, 2006, during a conference call at 5:30 p.m. (New York Time), following the release of its financial results after the close of the New York Stock Exchange. The conference call will be hosted by Chairman and Chief Executive Officer, Lewis A. Sanders and President and Chief Operating Officer, Gerald M. Lieberman.
Parties may access the conference call by either telephone or webcast.
| 1. | To listen by telephone, please dial (866) 256-9820 in the U.S. or (973) 638-3153 outside the U.S., ten minutes before the 5:30 p.m. (New York time) scheduled start time. The conference ID# is 7929942. |
| 2. | To listen by webcast, please visit AllianceBernstein’s Investor Relations website at http://ir.alliancebernstein.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 on AllianceBernstein’s website at the above web address after the release of its results on October 25, 2006.
An audio replay of the conference call will be made available for one week beginning at 7:30 p.m. (New York Time) on October 25, 2006. In the U.S., please call (877) 519-4471 or, outside the U.S., call (973) 341-3080, and provide the conference ID# 7929942. The replay will also be available via webcast on AllianceBernstein’s website for one week.
About AllianceBernstein
AllianceBernstein L.P. ("AllianceBernstein") 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. AllianceBernstein is also one of the largest mutual fund sponsors, with a diverse family of globally distributed mutual fund portfolios. Through its subsidiary, Sanford C. Bernstein & Co., LLC, AllianceBernstein provides in-depth research, portfolio strategy and trade execution to the institutional investment community.
At September 30, 2006, AllianceBernstein Holding L.P. (“Holding”) owned approximately 32.8% of the issued and outstanding AllianceBernstein Units. AXA Financial was the beneficial owner of approximately 60.1% of the AllianceBernstein Units at September 30, 2006 (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 60.5% economic interest in AllianceBernstein. AXA Financial is a wholly-owned subsidiary of AXA, one of the largest global financial services organizations.
www.alliancebernstein.com
Page 3 of 9
Forward-Looking Statements
Certain statements in this news release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These 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 our forward-looking statements in light of these factors. Further, these 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 subsequent events or circumstances. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see “Risk Factors” in Item 1 of Form 10-K for the year ended December 31, 2005. 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” and other than those listed below could also adversely affect our business, operating results, or financial condition.
The forward-looking statements referred to in the preceding paragraph include statements regarding substantial investment opportunity in growth stocks, the encouragement we take from the backlog of unfunded institutional mandates and our optimism that growth will resume in institutional research services. The actual performance of the capital markets and other factors beyond our control will affect our investment success and asset inflows. Declines in rates charged for brokerage transactions and fluctuations in transaction volume and market share will affect the growth of our institutional research services.
www.alliancebernstein.com
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ALLIANCEBERNSTEIN L.P.
(THE OPERATING PARTNERSHIP)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
SEPTEMBER 30, 2006
(unaudited, in thousands)
Three Months Ended | |||||||
9/30/06 | 9/30/05 | ||||||
| Revenues: | |||||||
| Investment Advisory & Services Fees | $ | 677,914 | $ | 545,464 | |||
| Distribution Revenues | 103,810 | 95,174 | |||||
| Institutional Research Services | 87,908 | 91,191 | |||||
| Dividend and Interest Income | 63,680 | 41,378 | |||||
| Investment Gains (Losses) | 18,571 | 22,131 | |||||
| Other Revenues | 29,794 | 27,247 | |||||
| Total Revenues | 981,677 | 822,585 | |||||
| Less: Interest Expense | 46,966 | 27,253 | |||||
| Net Revenues | 934,711 | 795,332 | |||||
| Expenses: | |||||||
| Employee Compensation & Benefits | 375,655 | 327,255 | |||||
| Promotion & Servicing: | |||||||
| Distribution Plan Payments | 71,414 | 62,184 | |||||
| Amortization of Deferred Sales Commissions | 21,679 | 32,156 | |||||
| Other | 52,771 | 49,959 | |||||
| General & Administrative | 132,041 | 93,716 | |||||
| Interest on Borrowings | 5,936 | 6,282 | |||||
| Amortization of Intangible Assets | 5,182 | 5,175 | |||||
| 664,678 | 576,727 | ||||||
| Operating Income | 270,033 | 218,605 | |||||
| Non-Operating Income | 3,112 | 12,211 | |||||
| Income before Income Taxes | 273,145 | 230,816 | |||||
| Income Taxes | 20,171 | 18,888 | |||||
NET INCOME | $ | 252,974 | $ | 211,928 | |||
Pre-tax Operating Margin | 28.9 | % | 27.5 | % | |||
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ALLIANCEBERNSTEIN HOLDING L.P.
(THE PUBLICLY TRADED PARTNERSHIP)
SUMMARY STATEMENTS OF INCOME
(unaudited, in thousands except per unit amounts)
Three Months Ended | |||||||
9/30/06 | 9/30/05 | ||||||
| Equity in Earnings of Operating Partnership | $ | 82,028 | $ | 67,237 | |||
| Income Taxes | 8,025 | 6,667 | |||||
NET INCOME | 74,003 | 60,570 | |||||
Additional Equity in Earnings of Operating Partnership (1) | 1,238 | 752 | |||||
NET INCOME - Diluted (2) | $ | 75,241 | $ | 61,322 | |||
DILUTED NET INCOME PER UNIT | $ | 0.87 | $ | 0.74 | |||
DISTRIBUTION PER UNIT | $ | 0.87 | $ | 0.74 | |||
| (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
SEPTEMBER 30, 2006
Weighted Average Units | ||||||||||
Three Months Ended | ||||||||||
Period End Units | Basic | Diluted | ||||||||
| AllianceBernstein | 258,118,632 | 257,837,755 | 259,964,460 | |||||||
| AllianceBernstein Holding | 84,724,789 | 84,443,912 | 86,570,617 | |||||||
www.alliancebernstein.com
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ASSETS UNDER MANAGEMENT
THREE MONTHS ENDED SEPTEMBER 30, 2006
($ millions)
Institutional Investments | Retail | Private Client | Total | ||||||||||
Beginning of Period | $ | 395,973 | $ | 146,391 | $ | 82,794 | $ | 625,158 | |||||
| Sales/New accounts | 11,065 | 8,879 | 2,956 | 22,900 | |||||||||
| Redemptions/Terminations | (4,300 | ) | (7,215 | ) | (624 | ) | (12,139 | ) | |||||
| Cash flow | (1,013 | ) | (80 | ) | (1,040 | ) | (2,133 | ) | |||||
| Unreinvested dividends | - | (232 | ) | (93 | ) | (325 | ) | ||||||
Net inflows | 5,752 | 1,352 | 1,199 | 8,303 | |||||||||
| Market appreciation | 16,093 | 6,163 | 3,566 | 25,822 | |||||||||
End of Period | $ | 417,818 | $ | 153,906 | $ | 87,559 | $ | 659,283 | |||||
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
TWELVE MONTHS ENDED SEPTEMBER 30, 2006
($ millions)
Institutional Investments | Retail | Private Client | Total | ||||||||||
Beginning of Period | $ | 342,180 | $ | 140,410 | $ | 72,876 | $ | 555,466 | |||||
| Sales/New accounts | 49,347 | 41,546 | 13,424 | 104,317 | |||||||||
| Redemptions/Terminations | (12,984 | ) | (29,102 | ) | (2,772 | ) | (44,858 | ) | |||||
| Cash flow | (6,384 | ) | (592 | ) | (3,024 | ) | (10,000 | ) | |||||
| Unreinvested dividends | - | (979 | ) | (394 | ) | (1,373 | ) | ||||||
Net inflows | 29,979 | 10,873 | 7,234 | 48,086 | |||||||||
Acquisition/(Disposition) (1), net | (1,054 | ) | 92 | - | (962 | ) | |||||||
Transfers (2) | 8,488 | (9,155 | ) | 667 | - | ||||||||
| Market appreciation | 38,225 | 11,686 | 6,782 | 56,693 | |||||||||
| �� | |||||||||||||
End of Period | $ | 417,818 | $ | 153,906 | $ | 87,559 | $ | 659,283 | |||||
| (1) | Acquisition of Hong Kong joint venture interest; disposition of South African joint venture interest. |
| (2) | Transfers of certain client accounts were made among distribution channels resulting from changes in how these accounts are serviced by the firm. AUM at September 30, 2006 reflect these transfers. |
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Page 7 of 9
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
BY INVESTMENT SERVICE
AT SEPTEMBER 30, 2006
($ millions)
Institutional Investments | Retail | Private Client | Total | ||||||||||
Equity: | |||||||||||||
Growth | |||||||||||||
| U.S. | $ | 37,103 | $ | 28,921 | $ | 12,406 | $ | 78,430 | |||||
| Global & International | 56,711 | 18,928 | 8,455 | 84,094 | |||||||||
| 93,814 | 47,849 | 20,861 | 162,524 | ||||||||||
Value | |||||||||||||
| U.S. | 53,185 | 33,660 | 25,666 | 112,511 | |||||||||
| Global & International | 135,516 | 29,567 | 16,709 | 181,792 | |||||||||
| 188,701 | 63,227 | 42,375 | 294,303 | ||||||||||
Total Equity | 282,515 | 111,076 | 63,236 | 456,827 | |||||||||
Fixed Income: | |||||||||||||
| U.S. | 73,607 | 11,658 | 23,945 | 109,210 | |||||||||
| Global & International | 37,868 | 25,654 | 294 | 63,816 | |||||||||
| 111,475 | 37,312 | 24,239 | 173,026 | ||||||||||
Index/Structured: | |||||||||||||
| U.S. | 18,845 | 4,483 | 84 | 23,412 | |||||||||
| Global & International | 4,983 | 1,035 | - | 6,018 | |||||||||
| 23,828 | 5,518 | 84 | 29,430 | ||||||||||
Total: | |||||||||||||
| U.S. | 182,740 | 78,722 | 62,101 | 323,563 | |||||||||
| Global & International | 235,078 | 75,184 | 25,458 | 335,720 | |||||||||
$ | 417,818 | $ | 153,906 | $ | 87,559 | $ | 659,283 | ||||||
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ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
($ millions)
Three Month Period | Twelve Month Period | ||||||||||||
9/30/06 | 9/30/05 | 9/30/06 | 9/30/05 | ||||||||||
| Ending Assets Under Management | $ | 659,283 | $ | 555,466 | $ | 659,283 | $ | 555,466 | |||||
| Average Assets Under Management | $ | 641,405 | $ | 537,034 | $ | 608,345 | $ | 526,058 | |||||
ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
BY CLIENT DOMICILE
AT SEPTEMBER 30, 2006
($ millions)
Institutional Investments | Retail | Private Client | Total | ||||||||||
U. S. Clients | $ | 230,942 | $ | 117,094 | $ | 85,211 | $ | 433,247 | |||||
Non-U.S. Clients | 186,876 | 36,812 | 2,348 | 226,036 | |||||||||
$ | 417,818 | $ | 153,906 | $ | 87,559 | $ | 659,283 | ||||||
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