AllianceBernstein Holding L.P. · NYSE:AB

AllianceBernstein Holding L.P — Q3 2009 Earnings Presentation

36 slides from AllianceBernstein Holding L.P's earnings presentation, Oct 29, 2009

  1. Slide 1: Third Quarter 2009 Review

    October 29, 2009 Third Quarter 2009 Review Peter S. Kraus Chairman & Chief Executive Officer David A. Steyn Chief Operating Officer Robert H. Joseph, Jr. Chief Financial Officer

  2. Slide 2: Cautions Regarding Forward-Looking Statements

    Cautions Regarding Forward-Looking Statements Certain statements provided by management in this presentation 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 fac

  3. Slide 3: Third Quarter 2009 Highlights

    Third Quarter 2009 Highlights Performance continues to improve, especially in Fixed Income and Value AUM increased 11% sequentially, as net outflows slowed by 46% Operating Margin and Net Income down versus 3Q08, but up sequentially AllianceBernstein.com 3Q09 Earnings Call Presentation 2

  4. Slide 4: Relative Performance: Value Equity

    Relative Performance: Value Equity Institutional Equity Composites vs. Benchmarks Percent Global Value International Value US Diversified Value 3Q:2009 3.9 2.6 0.0 Jan–Sep 2009 5.9 5.2 1.6 1 Year (2.2) (4.2) 1.6 3 Years (5.6) (4.1) (2.7) 5 Years (1.7) (1.2) (2.1) 10 Years 3.1 2.5 0.4 Benchmark MSCI

  5. Slide 5: Relative Performance: Growth Equity

    Relative Performance: Growth Equity Institutional Equity Composites vs. Benchmarks Percent US Large Cap Growth Global Research Growth International Large Cap Growth 3Q:2009 2.8 (1.0) (3.0) Jan–Sep 2009 1.9 (0.1) (4.6) 1 Year 3.4 (7.0) (9.9) 3 Years 0.0 (5.7) (3.7) 5 Years 0.7 (3.5) (3.5) 10 Years 0.

  6. Slide 6: Relative Performance: Blend Strategies

    Relative Performance: Blend Strategies Institutional Blend Strategies Composites vs. Benchmarks Percent Global Blend International Blend Emerging Markets Blend 3Q:2009 1.9 0.1 2.0 Jan–Sep 2009 3.5 0.8 7.0 1 Year (4.1) (5.6) (1.1) 3 Years (5.6) (3.7) (2.7) 5 Years (2.6) (2.5) (2.1) Since Inception (1

  7. Slide 7: Relative Performance: Fixed Income

    Relative Performance: Fixed Income Institutional Fixed Income Composites vs. Benchmarks Percent Corporate Bonds Strategic Core Plus Global Plus 3Q:2009 1.2 3.8 4.1 Jan–Sep 2009 4.2 10.6 9.7 1 Year (0.1) 4.4 1.5 3 Years (0.4) (0.5) (1.5) 5 Years (0.2) (0.1) (0.6) 10 Years 0.2 N/A N/A Benchmark* Custo

  8. Slide 8: Net Flows By Investment Service

    Net Flows By Investment Service In US dollars (billions) $10.2 $4.1 $2.7 $0.3 ($0.7) ($2.6) ($5.4) ($5.4) ($4.9) ($6.6) ($6.6) ($11.6) ($11.4) ($13.7) ($13.5) ($15.2) 4Q:08 1Q:09 2Q:09 3Q:09 Total Net Flows: ($23.2B) ($20.2B) ($24.0B) ($12.9B) Value Growth Fixed Other* *Includes Index, Structured an

  9. Slide 9: Net Flows By Distribution Channel

    Net Flows By Distribution Channel In US dollars (billions) ($1.8) ($1.0) ($1.9) ($3.9) ($3.5) ($3.3) ($3.5) ($9.0) ($10.3) ($10.0) ($13.4) ($18.7) 4Q:08 1Q:09 2Q:09 3Q:09 Institutions Retail Private Client AllianceBernstein.com 3Q09 Earnings Call Presentation 8

  10. Slide 10: Private Client Highlights

    Private Client Highlights Net outflows improved in 3Q09 vs. 2Q09; based on client interactions, risk aversion continues to decline Significant new research will be published in 4Q09 and implemented in client accounts in 1H10 Portfolio risk management through dynamic asset allocation Purchasing power

  11. Slide 11: Retail Update

    Retail Update Net outflows improved in 3Q09 vs. 2Q09 based on improved sales Mutual fund flows remain positive, with gross sales up 43% Fixed income dominates new-business asset mix Mutual fund performance remains strong: 69% of mutual funds are in top 50% of peer groups (asset-weighted) Sub-advisor

  12. Slide 12: Institutions Highlights

    Institutions Highlights Net outflows improved by 47% in 3Q09 vs. 2Q09 Gross 3Q09 sales were $5.3 billion, compared with $1.3 billion in 2Q09 Increased interest from sovereign funds in fixed income offerings Reopened regional equity services are beginning to refill Sales outpaced fundings - pipeline

  13. Slide 13: Bernstein Research Highlights

    Bernstein Research Highlights Revenue down 12% compared to record quarter in 3Q08; down 1% from 2Q09 Most recent data from independent surveys point to strong Y/Y market share gains in 1H09 across all geographies, particularly Europe Continued investment in our trading platform Recent investments (E

  14. Slide 14: Five Quarter Headcount Trend

    Five Quarter Headcount Trend Headcount 6,000 down 20% 5,663 from 3Q08 pe a k 4,997 5,000 4,761 4,654 4,544 4,000 3,000 2,000 1,000 0 3Q08 4Q08 1Q09 2Q09 3Q09 AllianceBernstein.com 3Q09 Earnings Call Presentation 13

  15. Slide 15: Third Quarter 2009 Net Income

    Third Quarter 2009 Net Income In US dollars (millions) 3Q 3Q Percent 2009 2008 Change Net Revenues $806 $841 -4% Operating Expenses 583 590 -1% Operating Income 223 251 -11% One-time $10M contingent payment from Non-Operating Income 17 5 243% 2005 sale of cash management business Income Before Incom

  16. Slide 16: Third Quarter 2009 Revenues

    Third Quarter 2009 Revenues In US dollars (millions) 3Q 3Q Percent Revenues 2009 2008 Change Advisory Fees $484 $713 -32% Lower AUM and adverse mix shift Distribution 74 97 -24% Lower average mutual fund AUM Market share gains offset by lower levels of Institutional Research Services 109 125 -12% cl

  17. Slide 17: Third Quarter 2009 Operating Expenses

    Third Quarter 2009 Operating Expenses In US dollars (millions) 3Q 3Q Percent 2009 2008 Change Expenses Compensation & Benefits $336 $329 2% Slide 17 Promotion & Servicing 111 140 -21% Lower distribution plan costs $35M insurance reimbursement recognized in 3Q08 General & Administrative 130 114 14% P

  18. Slide 18: Third Quarter 2009 Compensation & Benefits

    Third Quarter 2009 Compensation & Benefits In US dollars (millions) 3Q 3Q Percent 2009 2008 Change 18% decline in salaries, partially offset by $3M Base Compensation $112 $133 -16% increase in severance Incentive Compensation 3Q08 lower than 1H08 run rate due to YTD Cash 56 55 1% bonus accrual reduc

  19. Slide 19: Six-Quarter Deferred Compensation Net P&L Trend

    Six-Quarter Deferred Compensation Net P&L Trend In US dollars (millions) 2Q 3Q 4Q 1Q 2Q 3Q 2008 2008 2008 2009 2009 2009 Revenues Investment Gains (Losses) ($12) ($123) ($131) ($28) $63 $71 Dividends 1 1 7 1 2 1 Total Revenues ($11) ($122) ($124) ($27) $65 $72 Expenses Amortization of Original Award

  20. Slide 20: Third Quarter 2009 Review

    Third Quarter 2009 Review Peter S. Kraus Chairman & Chief Executive Officer AllianceBernstein.com 3Q09 Earnings Call Presentation 19

  21. Slide 21: Q&A

    Q&A AllianceBernstein.com 3Q09 Earnings Call Presentation 20

  22. Slide 22: Appendix

    Appendix AllianceBernstein.com 3Q09 Earnings Call Presentation 21

  23. Slide 23: Relative Performance: Institutional Value Equity

    Relative Performance: Institutional Value Equity Institutional Equity Composites vs. Benchmarks Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Benchmark US Diversified Value - 1.6 1.6 (2.7) (2.1) 0.4 Russell 1000 Value US Strategic Value 3.2 3.

  24. Slide 24: Relative Performance: Institutional Growth Equity

    Relative Performance: Institutional Growth Equity Institutional Equity Composites vs. Benchmarks Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Benchmark Global Research Growth (1.0) (0.1) (7.0) (5.7) (3.5) 1.0 MSCI World (net) US Large Cap Gro

  25. Slide 25: Relative Performance: Institutional Blend Strategies

    Relative Performance: Institutional Blend Strategies Institutional Blend Strategies Equity Composites vs. Benchmarks Periods Ended September 30, 2009 3Q Jan–Sep One Five 10 Service 2009 2009 Year Three Years Years Years Benchmark Global Blend Strategies 1.9 3.5 (4.1) (5.6) (2.6) N/A MSCI World Inter

  26. Slide 26: Relative Performance: Institutional Fixed Income

    Relative Performance: Institutional Fixed Income Institutional Fixed Income Composites vs. Benchmarks Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Benchmark Corporate Bonds 1.2 4.2 (0.1) (0.4) (0.2) 0.2 Custom Corporate Index Strategic Core P

  27. Slide 27: Absolute Performance: Private Client

    Absolute Performance: Private Client Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Fully Diversified Simulation 12.7 19.8 1.4 (2.9) 2.7 3.5 S&P 500 15.6 19.3 (6.9) (5.4) 1.0 (0.2) Performance is preliminary. As of September 30, 2009 Investment

  28. Slide 28: Relative Performance: Retail Value Equity

    Relative Performance: Retail Value Equity Retail Mutual Funds vs. Lipper Averages Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Lipper Average International Value 3.3 4.7 (6.1) (5.5) (2.3) N/A International Large Cap Value Growth & Income(1) (

  29. Slide 29: Relative Performance: Retail Growth Equity

    Relative Performance: Retail Growth Equity Retail Mutual Funds vs. Lipper Averages Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Benchmark or Lipper Average Global Growth 1.7 (1.3) (7.3) (6.0) (3.9) N/A Global Large Cap Growth U.S. Large Cap G

  30. Slide 30: Relative Performance: Retail Fixed Income

    Relative Performance: Retail Fixed Income Retail Fixed Income Funds vs. Peer Group Averages Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Peer Group Average Morningstar Fixed Income Global High Global High Yield Portfolio 4.2 15.8 6.2 1.1 3.0

  31. Slide 31: Relative Performance: Wealth Strategies

    Relative Performance: Wealth Strategies Retail Mutual Funds vs. Morningstar Averages Periods Ended September 30, 2009 3Q Jan–Sep One Three Five 10 Service 2009 2009 Year Years Years Years Morningstar Average Wealth Preservation 0.4 (0.8) (0.3) (0.3) 0.1 N/A Conservative Allocation Balanced Wealth 3.

  32. Slide 32: Third Quarter 2009 Advisory Fees

    Third Quarter 2009 Advisory Fees 3Q 3Q Percent 2009 2008 Change Ending AUM ($ Billions) $498 $590 -16% Up $51B (11%) sequentially Average AUM ($ Billions) $474 $669 -29% Up $37B (8%) sequentially By Fee Type ($ Millions): Base Fees $484 $713 -32% Lower AUM and adverse mix shift Performance Fees 0 0

  33. Slide 33: AllianceBernstein Holding Financial Results

    AllianceBernstein Holding Financial Results In US dollars (millions)—except per unit amounts 3Q 3Q Percent 2009 2008 Change AllianceBernstein Net Income Attributable to AllianceBernstein $199 $220 -9% Weighted Average Equity Ownership Interest 34.5% 33.2% AllianceBernstein Holding Equity in Net Inco

  34. Slide 34: Consolidated Balance Sheet

    Consolidated Balance Sheet In US dollars (millions) Assets Sept 30, 2009 Dec 31, 2008 Cash and cash equivalents $571.0 $552.6 Cash and securities, segregated 1,274.3 2,572.6 Receivables, net 1,202.3 1,027.8 Investments: Related to Deferred Compensation 497.3 305.8 Other 307.8 272.0 Goodwill, net 2,8

  35. Slide 35: Consolidated Statement of Cash Flows

    Consolidated Statement of Cash Flows In US dollars (millions) Nine Months Ended Sep 30, 2009 Sep 30, 2008 Cash Flows From Operating Activities: Net Income $387.6 $778.9 Non-cash items: Amortization of deferred sales commissions 42.1 61.9 Amortization of non-cash deferred compensation 51.8 47.3 Depre

  36. Slide 36: ALLIANCEBERNSTEIN

    /B ALLIANCEBERNSTEIN

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