SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 29, 1996
ALLIANCE CAPITAL MANAGEMENT L.P.
- - -------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-9818 13-3434400
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification
Number)
1345 Avenue of the Americas, New York, New York 10105
- - ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
212-969-1000
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(Registrant's telephone number including area code)
On March 6, 1996, Alliance Capital Management L.P. (the "Partnership"), filed a
report on Form 8-K, dated February 29, 1996 ("Form 8-K"), reporting the
acquisition of the business of Cursitor-Eaton Asset Management Company and
Cursitor Holdings Limited.
Pursuant to Item 7 of Form 8-K, the required financial statements and pro forma
financial information were not included under Item 7 of Form 8-K because it was
impracticable to provide such information at time of filing. This filing on
Form 8-K/A amends Item 7 of the Partnership's Form 8-K to include the required
information.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
Historical Combined Audited Financial Statements of Cursitor as of December
31, 1995 and 1994.
Auditors' Report on the Financial Statements of Cursitor Holdings, L.P.
as of December 31, 1995 and 1994.
(b) Pro Forma Financial Information
Unaudited Pro Forma Condensed Combined Statement of Financial Condition of
Alliance Capital Management L.P. as of December 31, 1995.
Unaudited Pro Forma Condensed Combined Statement of Income of Alliance
Capital Management L.P. for the year ended December 31, 1995.
(c) Exhibits
The exhibits required by Item 601 of Regulation S-K and filed herewith are
listed in the Exhibit Index which immediately follows the signature page.
Cursitor
HISTORICAL COMBINED FINANCIAL STATEMENTS
Years ended 31 December 1995 and 1994
KPMG
26 April 1996
THIS REPORT CONTAINS 13 PAGES
[LOGO]
PO Box 695
8 Salisbury Square
London EC4Y 8BB
United Kingdom
Auditors' report to:
The Members
Cursitor Alliance Holdings Limited
The Partners
Cursitor Holdings Limited Partnership
We have audited the accompanying combined balance sheets of Cursitor Alliance
Holdings Limited and Cursitor Holdings Limited Partnership ("Cursitor"), as of
December 31, 1995 and 1994, and the related combined statements of earnings,
changes in shareholders' capital, changes in partners' capital and cash flows
for the years then ended. These combined financial statements are the
responsibility of the directors of Cursitor Alliance Holdings Limited and the
partners of Cursitor Holdings Limited Partnership. Our responsibility is to
express an opinion on these combined financial statements based on our audits.
We did not audit the financial statements of Cursitor Holdings Limited
Partnership, which statements reflect total assets constituting 56.1% (1994:
47.8%) and total revenues constituting 64.9% in 1995 (1994: 63.1%) of the
related combined totals. These statements were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for Cursitor Holdings Limited Partnership, is based solely on
the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statements presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, the
combined Cursitor financial statements referred to above present fairly, in all
material respects, the financial position of Cursitor as of December 31, 1995
and 1994, and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.
/s/ KPMG
KPMG 26 April 1996
Chartered Accountants
Registered Auditors
CURSITOR
Combined balance sheets
AT 31 DECEMBER
1995 1994
$000 $000
ASSETS
Cash and cash equivalents 2,557 1,507
Fees receivable 9,356 7,369
Investments 783 165
Furniture, equipment and leasehold
improvements, net 1,124 1,414
Intangible assets, net 8,032 10,019
Other assets 1,275 1,215
------ ------
Total assets 23,127 21,689
------ ------
------ ------
LIABILITIES AND CAPITAL OF SHAREHOLDERS AND PARTNERS
Liabilities:
Accounts payable and accrued expenses 5,956 5,240
------ ------
Total liabilities 5,956 5,240
------ ------
Capital:
Partners' capital 9,630 7,861
Shareholders' capital 7,541 8,588
------ ------
Total capital 17,171 16,449
Total liabilities and capital 23,127 21,689
------ ------
See accompanying notes
3
CURSITOR
Combined statements of earnings
FOR THE YEAR ENDED 31 DECEMBER
1995 1994
$000 $000
REVENUES:
Investment advisory and services fees 35,578 30,074
Other revenues 883 99
------ ------
36,461 30,173
------ ------
EXPENSES:
Employee compensation and benefits 7,654 6,074
General and administrative 5,711 5,288
Amortisation of intangible assets 1,954 1,922
------ ------
15,319 13,284
------ ------
Income before corporate taxes 21,142 16,889
Corporate taxes (1,210) (1,025)
------ ------
Net income 19,932 15,864
------ ------
------ ------
See accompanying notes
4
CURSITOR
Combined statements of changes in shareholders' capital
FOR THE YEAR ENDED 31 DECEMBER
Share Share Foreign Profit Total
capital premium exchange and loss
$000 $000 $000 $000 $000
Balance at 31 December 1993 3 11,438 (177) (2,046) 9,218
Net income - - - 837 837
Dividends paid - - - (1,547) (1,547)
Foreign exchange adjustment - - 80 - 80
----- ------ ----- ------ ------
Balance at 31 December 1994 3 11,438 (97) (2,756) 8,588
Net income - - - 1,132 1,132
Dividends paid - - - (2,280) (2,280)
Foreign exchange adjustment - - 100 - 100
Share issue 1 - - - 1
----- ------ ----- ------ ------
Balance at 31 December 1995 4 11,438 3 (3,904) 7,541
----- ------ ----- ------ ------
----- ------ ----- ------ ------
Combined statements of changes in partners' capital
FOR THE YEAR ENDED 31 DECEMBER
General Limited Total
partner partners
$000 $000 $000
Balance at 31 December 1993 (139) 8,002 7,863
Net income 2,587 12,440 15,027
Transfer of interests (34) 34 -
Distributions (2,975) (12,054) (15,029)
Balance at 31 December 1994 (561) 8,422 7,861
Net income 3,225 15,575 18,800
Transfer of interests (130) 130 -
Distributions (3,086) (13,945) (17,031)
------ ------- -------
Balance at 31 December 1995 (552) 10,182 9,630
------ ------- -------
------ ------- -------
See accompanying notes
5
CURSITOR
Combined statements of cash flows
FOR THE YEARS ENDED 31 DECEMBER
1995 1994
$000 $000
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 19,932 15,864
Adjustments to reconcile net income to net cash provided
from operating activities:
Amortisation and depreciation 2,566 2,432
Equity in earnings of investees (139) (16)
Changes in assets and liabilities
Decrease (increase) in fee receivable 866 (1,417)
(Increase) decrease in other assets (344) 890
(Decrease) increase in accounts payable
and accrued expenses (1,690) 83
-------- -------
Net cash provided from operating activities 21,191 17,836
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (469) -
Additions to furniture, equipment and
leasehold improvements (164) (1,501)
Purchase of Draycott Partners (269) -
-------- -------
Net cash used in investing activities (902) (1,501)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (17,031) (15,029)
Dividend payments (2,280) (1,547)
-------- -------
Net cash used in financing activities (19,311) (16,576)
-------- -------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 72 56
-------- -------
Net increase (decrease) in cash and cash equivalents 1,050 (185)
Cash and cash equivalents at beginning of year 1,507 1,691
-------- -------
Cash and cash equivalent at end of year 2,557 1,506
-------- -------
-------- -------
See accompanying notes
6
CURSITOR
Notes to the combined financial statements
1 ORGANISATION
Cursitor consists of Cursitor Alliance Holdings Limited (a United Kingdom
incorporated company, formerly Cursitor Holdings Limited) and Cursitor
Holdings LP a Delaware partnership. Cursitor Management Limited (a 100%
subsidiary of Cursitor Alliance Holdings Limited) and Cursitor Holdings LP
jointly own Cursitor - Eaton Asset Management Company, a New York general
partnership. The financial statements have been prepared to combine the
individual financial statements of the above organisations.
Cursitor provides investment management services on a discretionary basis
principally to institutional clients located worldwide. The institutional
clients include corporate and public employee pension funds, endowment
funds and other US and foreign institutions.
Cursitor - Eaton Asset Management Company and Cursitor Management Limited
are registered investment advisors under the Investment Advisors Act of
1940 and are members of the Investment Management Regulatory Organisation
Limited, in the United Kingdom.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The Cursitor combined financial statements have been prepared in conformity
with generally accepted accounting principles. The preparation of the
combined financial statements requires management of Cursitor to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported revenues and expenses for the
reported periods. Actual results could differ from those estimates.
COMBINATION
All significant intercompany transactions and balances among the combined
entities have been eliminated.
CASH AND CASH EQUIVALENTS
Highly liquid debt instruments with a maturity of three months or less are
considered cash equivalents. Due to the short-term maturity of these
instruments, their recorded value approximates fair value.
7
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Furniture, equipment and leasehold improvements are stated at cost, less
accumulated depreciation and amortisation. Depreciation is provided on a
straight line basis over the estimated useful lives of three years for
computer equipment and four years for other assets.
INTANGIBLE ASSETS
Intangible assets, being goodwill arising from acquisitions, are amortised
on a straight line basis over their estimated useful life of ten years.
REVENUE RECOGNITION
Investment advisory and services fees are recorded as revenue when earned.
Performance fees are recognised in the period in which they are earned,
except where Cursitor is not a direct party to the agreement with the
client, in which event such fees are only recognised once they have been
confirmed by the third party to the agreement.
FOREIGN CURRENCY TRANSLATION
Net foreign currency gains and losses resulting from the translation of
costs and liabilities of foreign operations into United States dollars are
accumulated in shareholders' capital.
CORPORATE TAXES
In Cursitor Alliance Holdings Limited, United Kingdom corporation tax and
overseas taxes are provided, at appropriate rates, on the taxable profits
for the year.
OTHER BUSINESS TAXES
Cursitor Holdings LP and Cursitor - Eaton Asset Management Company, as US
partnerships, are not subject to federal and state income taxes. Partners
are required to report separately to federal and other taxing authorities
their respective shares of the partnerships' income and such tax
liabilities are not included in these financial statements. Both
partnerships are subject to New York City unincorporated business tax.
Cursitor Holdings LP is subject to New Hampshire business profits tax.
8
3 ANALYSIS OF REVENUE AND INCOME BEFORE CORPORATE TAXES
1995 1995 1994 1994
Revenue Income Revenue Income
before before
corporate corporate
taxes taxes
USA 31,093 16,336 25,016 11,764
Europe 5,368 1,456 5,157 1,583
------ ------ ------ ------
36,461 17,792 30,173 13,347
Common overheads - 186 - 595
Amortisation of intangibles - 1,954 - 1,922
------ ------ ------ ------
36,461 19,932 30,173 15,864
------ ------ ------ ------
------ ------ ------ ------
4 ACQUISITIONS
On 29 December 1995 Cursitor Alliance Holdings Limited acquired the entire
share capital of Draycott Partners Limited, a company registered in
Massachusetts, for a consideration of $577,000 which was settled in cash.
In the period from 1 January 1995 to the date of acquisition, the loss
before tax of Draycott Partners Limited was $75,000 (1994: $437,000).
The acquisition was accounted for under the purchase method of accounting.
Goodwill of $32,000 was expensed, representing the excess of the purchase
price over the estimated fair value of the net assets of the acquired
business. Proforma financial information for the years ended 31 December
1994, and 1995, reflecting the affects of the acquisition are not presented
because they would not be materially different from the actual results
reported.
The acquisition agreement includes an agreement to pay further
consideration, contingent on Draycott Partners Limited's utilisation of its
$5.1 million tax losses carried forward. Cursitor Alliance Holdings
Limited will pay the seller 50% of such losses as are utilised. In view of
the uncertainty of being able to realise the benefits of these losses, a
100% valuation provision has been established.
9
5 INVESTMENTS
1995 1994
$000 $000
HME Global Partnership LP 90 86
Cursitor - Eaton East Asian Equities Fund LP 606 -
United Kingdom government bonds 87 79
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783 165
--- ---
--- ---
The government bonds are listed on The London Stock Exchange.
Cursitor - Eaton Asset Management Company records its investments in HME
Global Partnership LP, an investment partnership, at estimated fair value.
As the sole general partner, Cursitor - Eaton Asset Management Company owns
a 1% interest.
Cursitor - Eaton Asset Management Company has invested in the Cursitor -
Eaton East Asian Equities Fund, LP ("Fund"). Cursitor - Eaton Asset
Management Company is the Fund's investment advisor and one of the three
general partners and records its investment at estimated fair value.
6 FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Furniture, equipment and leasehold improvements are comprised of the
following:
1995 1994
$000 $000
Furniture and equipment 2,756 2,422
Leasehold improvements 223 207
------ ------
2,979 2,629
Less accumulated depreciation and amortisation (1,855) (1,215)
------ ------
Furniture, equipment and leasehold improvements, net 1,124 1,414
------ ------
------ ------
7 SHARE CAPITAL
The share capital of Cursitor Alliance Holdings Limited consists of
ordinary and deferred shares. A deferred share ranks behind an ordinary
share on a liquidation and is not entitled to dividend or to vote in
general meetings of the company.
10
8 COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The companies which comprise Cursitor, lease office space under various
operating leases. The minimum commitments under such leases at 31 December
1995 were as follows:
Year ended $000
1996 376
1997 292
1998 253
1999 253
2000 253
Thereafter 770
------
2,197
------
------
A United States lease is subject to escalation based upon certain operating
expenses.
Rent expense for the years ended 31 December 1995 and 1994 was $ 335,000
and $ 318,000 respectively.
CONCENTRATIONS OF RISK
Cursitor has an agreement with Trust Company of the West ("TCW") which
gives TCW the right to establish arrangements whereby their clients can
receive Cursitor's investment management products. Approximately two
thirds of Cursitor's investment advisory and services fees for the years
ended 31 December 1995 and 1994 were earned from this relationship.
9 EMPLOYEE RETIREMENT PLAN
Cursitor Alliance Holdings Limited maintains a defined benefit retirement
plan covering all qualifying employees. Pensions are related to final
salary and service period. The company pays contributions to a separate
trust fund. The trustees determine the funding policy on the advice of an
actuary. The trust's assets are invested in a mixed fund.
11
9 EMPLOYEE RETIREMENT PLAN (CONTINUED)
The following table presents the retirement plan's funded status and the
amounts recognised in the combined financial statements (comparatives have
not been prepared given the relative amounts involved):
1995
$000
Actuarial present value of benefit obligations:
Accumulated vested benefit obligations (445)
----
Accumulated unvested benefit obligations (21)
----
Projected benefit obligation for service rendered to date (599)
Plan assets at fair value 531
----
Plan assets less than projected benefit obligation (68)
Prior service cost not yet recognised in net periodic pension cost -
Unrecognised transitional obligation 40
----
Accrued pension expense included in accrued expenses
under employee benefit plans 28
----
----
Net expense under the retirement plan was comprised of:
1995
$000
Service cost 159
Interest cost on projected benefit obligations 43
Return on plan assets (51)
Net amortisation and deferral 6
----
Net pension charge 157
----
----
The actuarial computation at 31 December 1995 was made
utilising the following assumptions:
1995
Discount rate on benefit obligations 7.25%
Expected long-term rate of return on plan assets 9.50%
Annual salary increases 7.50%
12
10 SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest and corporate taxes were as follows:
1995 1994
$000 $000
Interest 120 36
Corporate taxes 1,221 1,142
Other business taxes 263 201
----- -----
11 SUBSEQUENT EVENTS
On February 29 1996, Cursitor was acquired by Alliance Capital Management
L.P. ("Partnership") in exchange for 1,764,115 Partnership units, $84.9
million in cash, notes in the aggregate amount of $21.5 million which are
payable ratably over the next four years and substantial additional
consideration which is to be determined at a later date.
13
[LOPEZ EDWARDS FRANK & CO., LLP LOGO]
- - -------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER MACINTYRE STRATER INTERNATIONAL
INDEPENDENT AUDITORS' REPORT
To the Partners
Cursitor Holdings, L.P.
We have audited the accompanying balance sheets of Cursitor Holdings, L.P.
as of December 31, 1995 and 1994, and the related statements of income, cash
flows, and changes in partners' capital for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cursitor Holdings, L.P. as
of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles.
/s/ Lopez Edwards Frank & Co., LLP
New York, New York
February 21, 1996
ITEM 7(b) PRO FORMA FINANCIAL INFORMATION
ALLIANCE CAPITAL MANAGEMENT L.P.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On February 29, 1996, Alliance Capital Management L.P. (the "Partnership")
acquired substantially all of the assets and liabilities of Cursitor
Holdings, L.P. ("CHLP") and all of the outstanding shares of Cursitor
Alliance Holdings Limited (formerly, Cursitor Holdings Limited)
(collectively, "Cursitor") for approximately $149.6 million. In addition,
$4.0 million in acquisition costs were incurred. The purchase price consists
of 1,764,115 units representing assignments of beneficial ownership of
limited partnership interests in the Partnership ("Units") with an aggregate
value of $43.2 million, $84.9 million in cash, notes in the aggregate
principal amount of $21.5 million ("Notes") and substantial additional
consideration which will be determined at a later date. The Partnership is
also obligated to pay in cash a purchase price adjustment of approximately
$9.4 million in 1996. The aggregate value of the Units was calculated based
on a Unit price of $24.50, the closing price of the Units on the New York
Stock Exchange on February 28, 1996. The Notes bear interest at 6% and are
payable ratably over the next four years. Senior management of Cursitor owns
a minority interest in the newly formed limited liability company, Cursitor
Alliance LLC.
The acquisition has been accounted for under the purchase method of accounting.
The excess of the purchase price, including acquisition costs plus minority
interest, over the fair value of Cursitor's net assets acquired at February 29,
1996 resulted in goodwill of approximately $161.0 million, which will be
amortized over 20 years.
The following unaudited pro forma condensed combined financial statements for
the year ended December 31, 1995 are based on the historical consolidated
financial statements of the Partnership set forth in its 1995 Annual Report on
Form 10-K and the historical combined financial statements of Cursitor for the
year ended December 31, 1995 included in this Form 8-K/A. The pro forma
financial statements give effect to the purchase of the business of Cursitor as
described in the Transaction Agreement dated December 28, 1995.
The pro forma financial statements include (a) the condensed historical
statements of financial condition for the Partnership and Cursitor,
respectively, as of December 31, 1995, and the unaudited condensed pro forma
statement of financial condition for the combined entity as of December 31,
1995, and (b) the condensed historical statements of income for the Partnership
and Cursitor for the year ended December 31, 1995, and the unaudited condensed
pro forma statement of income for the combined entity for the year ended
December 31, 1995. The unaudited pro forma condensed combined statement of
financial condition as of December 31, 1995 has been prepared as though the
acquisition of Cursitor had taken place on December 31, 1995 and the unaudited
pro forma condensed combined statement of income for the year ended December 31,
1995 has been prepared as though the acquisition had taken place as of January
1, 1995. These pro forma financial statements and notes thereto should be read
in conjunction with the historical financial statements of the Partnership and
Cursitor.
The unaudited pro forma condensed combined financial statements do not purport
to represent what the consolidated financial position or results of operations
of the combined entities would have been if the acquisition had occurred on the
dates referred to above or to be indicative of the future financial position or
results of operations of the combined entities after the acquisition.
Alliance Capital Management L.P.
Unaudited Pro Forma Condensed Combined Statement of Financial Condition
December 31, 1995
(in thousands)
Pro Forma
Partnership Cursitor Adjustments Pro Forma
Historical Historical (Note 1) Combined
---------- --------- ------------ ----------
ASSETS
Cash and cash equivalents $124,256 $ 2,557 $(84,850)(a) $ 41,963
Fees receivable 85,612 9,356 94,968
Receivable from brokers and dealers for sale of shares
of Alliance mutual funds 26,651 26,651
Investments, available-for-sale 35,375 35,375
Furniture, equipment and leasehold improvements, net 44,208 1,124 45,332
Intangible assets, net 84,209 8,032 (8,032)(b) 245,191
160,982 (c)
Deferred sales commissions, net 149,583 149,583
Other assets 25,164 2,058 27,222
-------- ------- -------- ---------
Total assets $575,058 $23,127 $ 68,100 $666,285
-------- ------- -------- ---------
-------- ------- -------- ---------
LIABILITIES AND CAPITAL
Liabilities:
Accounts payable and accrued expenses $74,054 $5,956 $ 9,388 (d) $93,398
4,000 (e)
Payable to Alliance mutual funds for share purchases 45,217 45,217
Accrued expenses under employee benefit plans 44,086 44,086
Debt 3,462 21,500 (f) 24,962
Minority interests in consolidated subsidiaries 1,530 12,806 (g) 14,336
-------- ------- -------- ---------
Total liabilities 168,349 5,956 47,694 221,999
-------- ------- -------- ---------
Capital:
Shareholders' equity 7,541 (7,541)(h)
Partners' capital 406,709 9,630 (14,432)(h) 444,286
42,379 (i)
-------- ------- -------- ---------
Total capital 406,709 17,171 20,406 444,286
-------- ------- -------- ---------
Total liabilities and capital $575,058 $23,127 $ 68,100 $666,285
-------- ------- -------- ---------
-------- ------- -------- ---------
See notes to unaudited pro forma condensed combined financial statements.
Alliance Capital Management L.P.
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1995
(in thousands, except per Unit amounts)
Pro Forma
Partnership Cursitor Adjustments Pro Forma
Historical Historical (Note 2) Combined
---------- --------- ---------- ----------
REVENUES:
Investment advisory and services fees $456,580 $35,578 $492,158
Distribution plan fees from Alliance mutual funds 128,733 128,733
Shareholder servicing and administration fees 43,383 43,383
Other revenues 10,559 883 (4,243)(a) 7,199
-------- ------- -------- --------
639,255 36,461 (4,243) 671,473
-------- ------- -------- --------
EXPENSES:
Employee compensation and benefits 172,202 7,654 $ 2,547 (b) 182,403
Promotion and servicing:
Distribution plan payments to financial intermediaries 110,754 110,754
Amortization of deferred sales commissions 50,501 50,501
Other 39,959 39,959
General and administrative 88,889 5,711 703 (c) 95,303
Amortization of intangible assets 8,747 1,954 (1,954)(d)
8,049 (e) 16,796
Interest 1,192 1,290 (f) 2,482
-------- ------- -------- --------
472,244 15,319 10,635 498,198
-------- ------- -------- --------
Income before income taxes 167,011 21,142 (14,878) 173,275
Income taxes 11,624 1,210 (1,041)(g) 11,793
-------- ------- -------- --------
Net income $155,387 $19,932 $(13,837) $161,482
-------- ------- -------- --------
-------- ------- -------- --------
Net income per Unit $1.89 $1.92
-------- --------
-------- --------
Weighted average Units outstanding 81,558 1,764 83,322
-------- -------- --------
-------- -------- --------
See notes to unaudited pro forma condensed combined financial statements.
ITEM 7(b) PRO FORMA FINANCIAL INFORMATION
ALLIANCE CAPITAL MANAGEMENT L.P.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(1) Pro forma adjustments to the unaudited pro forma condensed combined
statement of financial condition consist of:
(a) To reflect the portion of the purchase price paid in cash of $84.9
million.
(b) To eliminate Cursitor's historical intangible assets.
(c) Represents goodwill of approximately $161.0 million, the excess of the
purchase price including acquisition costs plus minority interest,
over the fair value of Cursitor's net assets acquired at February 29,
1996.
(d) To reflect the estimated purchase price adjustment of $9.4 million.
(e) To accrue for acquisition costs of $4.0 million.
(f) Represents promissory notes issued by Cursitor Alliance LLC to CHLP in
an aggregate principal amount of $21.5 million.
(g) Represents the 7% minority interest in the equity of Cursitor Alliance
LLC held by CHLP.
(h) To eliminate Cursitor's shareholders' equity and partners'
capital, including undistributed earnings accumulated through
February 29, 1996.
(i) Represents the aggregate value of Units issued of $43.2 million, less
the minority interest attributable to Alliance's international
subsidiaries contributed to Cursitor Alliance LLC. The value of the
Units issued was calculated based on a Unit price of $24.50, the
closing price on the New York Stock Exchange on February 28, 1996.
These Units have been included in the calculation of pro forma
earnings per Unit.
(2) Pro forma adjustments to the unaudited pro forma condensed combined
statement of income consist of:
(a) To reflect the reduction in interest income attributable to the
portion of the purchase price paid in cash of $84.9 million.
(b) To adjust incentive compensation expense on a combined basis to
conform to the Partnership's incentive compensation program.
(c) To reflect the minority interest in Cursitor Alliance LLC earnings.
(d) To reflect the elimination of Cursitor amortization expense related to
intangible assets not acquired by the Partnership.
(e) To reflect the amortization of goodwill based on an estimated life of
20 years.
(f) To reflect interest expense on the $21.5 million in promissory notes
issued by Cursitor Alliance LLC to CHLP at 6.0%.
(g) Income tax on net pro forma adjustments estimated at 7%.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALLIANCE CAPITAL MANAGEMENT L.P.
Dated: May 6, 1996 By: Alliance Capital Management Corporation,
General Partner
By: /s/ John D. Carifa
---------------------------------
John D. Carifa
President
EXHIBIT INDEX
The following exhibits required to be filed by Item 601 of Regulation S-K are
included herewith:
EXHIBIT NUMBER DESCRIPTION
23.1 Consent of KPMG
23.2 Consent of Lopez Edwards Frank & Co., LLP