EX-99.01 2 ex99_01.htm EXHIBIT 99.01 ex99_01.htm

 
   Philip Talamo, Investor Relations
   212.969.2383
   ir@alliancebernstein.com
John Meyers, Media
212.969.2301
pr@alliancebernstein.com

News Release

AllianceBernstein Holding L.P. Announces Second Quarter Diluted Net Income of $1.16 per Unit and Declares a $1.16 per Unit Cash Distribution


New York, NY, July 25, 2007– AllianceBernstein Holding L.P. (“AllianceBernstein Holding”) (NYSE: AB) and AllianceBernstein L.P. (“AllianceBernstein”) today reported financial and operating results for the quarter ended June 30, 2007.

AllianceBernstein Holding (The Publicly Traded Partnership):
 
—
Diluted net income per Unit for the quarter ended June 30, 2007 was $1.16, an increase of 30.3% from $0.89 for the same period in 2006.

 
—
Distribution per Unit for the second quarter of 2007 will be $1.16, an increase of 30.3% from $0.89 for the same period in 2006.  The distribution is payable on August 16, 2007 to holders of record of AllianceBernstein Holding Units at the close of business on August 6, 2007.

AllianceBernstein (The Operating Partnership):
 
—
Assets Under Management (AUM) at June 30, 2007 were $792.9 billion, a 26.8% increase from a year ago, due to market appreciation and net inflows across all distribution channels.

 
—
Net inflows for the three months ended June 30, 2007 were $9.5 billion, consisting of Institutional Investments net inflows of $4.1 billion, Retail net inflows of $3.8 billion and Private Client net inflows of $1.6 billion.

 
—
Net inflows for the twelve months ended June 30, 2007 were $41.7 billion, consisting of Institutional Investments net inflows of $22.5 billion, Retail net inflows of $10.9 billion and Private Client net inflows of $8.3 billion.

 
 
 
“On the most important metric, investment results for clients, the second quarter was generally quite good. Equity returns were robust, driven by strong gains in stock prices throughout the world. Value equity and hedge fund services performed especially well, with the majority exceeding their benchmarks. While growth equity services produced strong absolute returns, they generally trailed benchmarks. However, these services have experienced a strong start in the current quarter. Rising global interest rates negatively affected fixed income returns, but relative returns were favorable in many key services, further improving our competitive position in this asset class,” said Lewis Sanders, Chairman and Chief Executive Officer.

“While total assets under management grew by almost 7% sequentially, organic growth slowed somewhat in the second quarter.  Growth was strongest in the retail channel as inflows in non-U.S. markets accelerated as compared to the last few quarters. Growth slowed, however, in the private client channel, owing largely to seasonal factors.  Global and International services continued to account for the majority of new mandates and now account for 58% of AUM. Net inflows from clients domiciled outside the U.S. continued to grow strongly as well, driving the share of AUM from such clients to 38% of the firm’s total. Our array of hedge fund services had another quarter of rapid growth, with AUM rising by 18% during the three months ended June 2007 to $10.5 billion. Lastly, the volume of won, but not yet funded, institutional mandates remains substantial.

“The firm’s financial results in the second quarter were also quite good, with revenue rising by 24.2% and operating income by 36.5% versus last year’s comparable quarter. Operating margins expanded by 280 basis points versus the prior year quarter to 31.0%. A rising effective tax rate, lower non-operating income and an increase in Units outstanding due primarily to employee option exercises held the year-over-year growth in net income per Unit for the quarter to a still strong 30.3%.

“As discussed in earlier communications, the company’s earnings are becoming more seasonal, owing primarily to the growing pool of assets under management with performance fee arrangements, as well as other factors affecting expense ratios.  To clarify this point, we offered full year 2007 earnings guidance at the completion of the first quarter.  We now estimate that 2007 earnings at the holding company level will be approximately $4.90-$5.25 per Unit, versus previous guidance of $4.65-$5.00 per Unit. This estimate assumes asset inflows continuing at levels similar to recent rates and equity and fixed income market returns at annual rates of 8% and 5%, respectively, for the balance of the year.  Also, we continue to expect that the fourth quarter will account for a disproportionate share of total earnings. It is important to stress that the firm’s earnings are subject to considerable uncertainty including, but not limited to, capital market volatility, which can be amplified by the aforementioned increase in assets under management subject to performance fee arrangements.
 
 
 
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 “As we have repeatedly noted, continued and consistent strength in the firm’s financial performance, and thus strong returns for our Unitholders, depend on our ability to provide superior investment returns and world-class service to our clients.  AllianceBernstein remains committed to doing just that,” Mr. Sanders concluded.
 
 
CONFERENCE CALL INFORMATION RELATING TO SECOND QUARTER 2007 RESULTS
JULY 25, 2007 AT 5:00 P.M. (Eastern Daylight Time)

AllianceBernstein’s management will review second quarter 2007 financial and operating results on Wednesday, July 25, 2007, during a conference call beginning at 5:00 p.m. (EDT), following the release of its financial results after the close of the New York Stock Exchange.  The conference call will be hosted by Lewis A. Sanders, Chairman and Chief Executive Officer, and Gerald M. Lieberman, President and Chief Operating Officer.

Parties may access the conference call by either webcast or telephone:

1.
To listen by webcast, please visit AllianceBernstein’s Investor Relations website at http://ir.alliancebernstein.com/investorrelations at least fifteen minutes prior to the call to download and install any necessary audio software.

2.
To listen by telephone, please dial (866) 935-4839 in the U.S. or (212) 729-5023 outside the U.S., 10 minutes before the 5:00 p.m. (EDT) scheduled start time.  The conference ID# is 8666417.

The presentation slides that will be reviewed during the conference call are expected to be available at the above web address shortly after the release of second quarter 2007 financial results on July 25, 2007.
 
An audio replay of the conference call will be made available for one week beginning at approximately 7:00 p.m. (EDT) on July 25, 2007. In the U.S., please call (877) 519-4471 or, outside the U.S., call (973) 341-3080, and provide the conference ID# 8666417.  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.

 
 
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At June 30, 2007, AllianceBernstein Holding L.P. (“Holding”) owned approximately 33.3% of the issued and outstanding AllianceBernstein Units.  AXA Financial was the beneficial owner of approximately 62.8% of the AllianceBernstein Units at June 30, 2007 (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 63.2% economic interest in AllianceBernstein.  AXA Financial is a wholly-owned subsidiary of AXA, one of the largest global financial services organizations.

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 regulations and rates and the manner in which the earnings of publicly traded partnerships are taxed.  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 1A of Form 10-K for the year ended December 31, 2006.  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. Of course, factors other than those listed in “Risk Factors” could also adversely affect our revenues, financial condition, results of operations, and business prospects.

The forward-looking statements we make in this news release include estimated earnings guidance and related assumptions provided for full year 2007.  The earnings guidance is based on a number of assumptions, including, but not limited to, the following:  net inflows of client assets under management continuing at levels similar to recent rates, and equity and fixed income market returns at annual rates of 8% and 5%, respectively, for the balance of the year.  Net inflows of client assets are subject to domestic and international securities market conditions, competitive factors, and relative performance, each of which may have a negative effect on net inflows; capital market performance is inherently unpredictable.  Our expectation that the fourth quarter will account for a disproportionate share of total earnings is based on the relative amount of assets under management subject to performance fees that are calculated at the end of fourth quarter.  In view of these factors, and particularly given the volatility of capital markets (and the effect of such volatility on performance fees and the value of investments in respect of incentive compensation) and the difficulty of predicting client asset inflows and outflows, our earnings estimates should not be relied on as predictions of actual performance, but only as estimates based on assumptions that may or may not be correct.  There can be no assurance that we will be able to meet the investment and service goals and needs of our clients or that, even if we do, it will have a positive effect on the company’s financial performance.
 
 
 
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ALLIANCEBERNSTEIN L.P.
(THE OPERATING PARTNERSHIP)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, $ thousands)

   
Three Months Ended
  
   
6/30/07
    
6/30/06
  
Revenues:
            
Investment Advisory & Services Fees
   $
845,192
     $
690,213
  
Distribution Revenues
    
118,939
      
104,456
  
Institutional Research Services
    
102,847
      
102,631
  
Dividend and Interest Income
    
70,068
      
61,462
  
Investment Gains (Losses)
    
32,082
       (15,537 )
Other Revenues
    
44,608
      
35,966
  
Total Revenues
    
1,213,736
      
979,191
  
Less: Interest Expense
    
54,963
      
45,861
  
Net Revenues
    
1,158,773
      
933,330
  
                 
Expenses:
                
Employee Compensation & Benefits
    
475,887
      
373,780
  
Promotion & Servicing:
                
Distribution Plan Payments
    
84,814
      
72,795
  
Amortization of Deferred Sales Commissions
    
24,799
      
23,589
  
Other
    
62,891
      
59,949
  
General & Administrative
    
138,457
      
127,673
  
Interest on Borrowings
    
7,037
      
6,852
  
Amortization of Intangible Assets
    
5,179
      
5,175
  
     
799,064
      
669,813
  
                 
Operating Income
    
359,709
      
263,517
  
Non-Operating Income
    
4,014
      
9,730
  
                 
Income before Income Taxes
    
363,723
      
273,247
  
                 
Income Taxes
    
28,794
      
12,145
  
                 
NET INCOME
   $
334,929
     $
261,102
  
                 
Operating Income Margin
     31.0 %     28.2 %
 
 
 
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ALLIANCEBERNSTEIN HOLDING L.P.
(THE PUBLICLY TRADED PARTNERSHIP)
SUMMARY STATEMENTS OF INCOME
(unaudited, $ thousands except per unit amounts)

   
Three Months Ended
  
   
6/30/07
    
6/30/06
  
             
Equity in Earnings of Operating Partnership
   $
110,267
     $
84,514
  
                 
Income Taxes
    
9,620
      
8,509
  
                 
NET INCOME
    
100,647
      
76,005
  
                 
Additional Equity in Earnings of Operating Partnership (1)
    
1,392
      
1,348
  
                 
NET INCOME - Diluted (2)
   $
102,039
     $
77,353
  
                 
DILUTED NET INCOME PER UNIT
   $
1.16
     $
0.89
  
                 
DISTRIBUTION PER UNIT
   $
1.16
     $
0.89
  

(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
JUNE 30, 2007

         
Weighted Average Units
Three Months Ended
  
   
Period End
Units
    
Basic
    
Diluted
  
                   
AllianceBernstein
    
260,001,799
      
259,782,565
      
261,588,156
  
                         
AllianceBernstein Holding
    
86,607,956
      
86,388,722
      
88,194,313
  
 
 
 
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ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
THREE MONTHS ENDED JUNE 30, 2007
($ millions)

   
Institutional
Investments
    
Retail
    
Private
Client
    
Total
  
                         
Beginning of Period
   $
468,358
     $
172,998
     $
100,339
     $
741,695
  
                                 
Sales/New accounts
    
14,705
      
13,578
      
4,297
      
32,580
  
Redemptions/Terminations
     (5,370 )     (9,216 )     (1,085 )     (15,671 )
Cash flow
     (5,199 )     (321 )     (1,511 )     (7,031 )
Unreinvested dividends
    
-
       (257 )     (109 )     (366 )
Net inflows
    
4,136
      
3,784
      
1,592
      
9,512
  
                                 
Transfers (1)
     (21 )     (24 )    
45
      
-
  
                                 
Market appreciation
    
28,133
      
8,654
      
4,948
      
41,735
  
                                 
End of Period
   $
500,606
     $
185,412
     $
106,924
     $
792,942
  


ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
TWELVE MONTHS ENDED JUNE 30, 2007
($ millions)

   
Institutional
Investments
    
Retail
    
Private
Client
    
Total
  
                         
Beginning of Period
   $
395,973
     $
146,391
     $
82,794
     $
625,158
  
                                 
Sales/New accounts
    
61,143
      
46,299
      
16,614
      
124,056
  
Redemptions/Terminations
     (25,913 )     (34,350 )     (3,631 )     (63,894 )
Cash flow
     (12,702 )    
93
       (4,188 )     (16,797 )
Unreinvested dividends
     (1 )     (1,144 )     (485 )     (1,630 )
Net inflows
    
22,527
      
10,898
      
8,310
      
41,735
  
                                 
Transfers (1)
     (715 )     (24 )    
739
      
-
  
                                 
Market appreciation
    
82,821
      
28,147
      
15,081
      
126,049
  
                                 
End of Period
   $
500,606
     $
185,412
     $
106,924
     $
792,942
  

(1) Transfer of certain client accounts were made among distribution channels resulting from changes in how these accounts are serviced by the firm.
 

 
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ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
BY INVESTMENT SERVICE
AT JUNE 30, 2007
($ millions)

   
Institutional
Investments
    
Retail
    
Private
Client
    
Total
  
Equity:
                        
Value
                        
U.S.
   $
55,711
     $
36,788
     $
27,345
     $
119,844
  
Global & International
    
187,364
      
55,173
      
25,829
      
268,366
  
     
243,075
      
91,961
      
53,174
      
388,210
  
Growth
                                
U.S.
    
32,862
      
25,575
      
14,657
      
73,094
  
Global & International
    
79,257
      
21,929
      
11,652
      
112,838
  
     
112,119
      
47,504
      
26,309
      
185,932
  
                                 
Total Equity
    
355,194
      
139,465
      
79,483
      
574,142
  
                                 
Fixed Income:
                                
U.S.
    
73,597
      
11,053
      
26,841
      
111,491
  
Global & International
    
46,009
      
29,890
      
508
      
76,407
  
     
119,606
      
40,943
      
27,349
      
187,898
  
                                 
Index/Structured:
                                
U.S.
    
20,099
      
5,004
      
82
      
25,185
  
Global & International
    
5,707
      
-
      
10
      
5,717
  
     
25,806
      
5,004
      
92
      
30,902
  
                                 
Total:
                                
U.S.
    
182,269
      
78,420
      
68,925
      
329,614
  
Global & International
    
318,337
      
106,992
      
37,999
      
463,328
  
    $
500,606
     $
185,412
     $
106,924
     $
792,942
  
 

 
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ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
($ millions)

   
Three Month Period
    
Twelve Month Period
  
   
6/30/07
    
6/30/06
    
6/30/07
    
6/30/06
  
                         
Ending Assets Under Management
   $
792,942
     $
625,158
     $
792,942
     $
625,158
  
                                 
Average Assets Under Management
   $
774,713
     $
625,351
     $
708,499
     $
581,591
  


ALLIANCEBERNSTEIN L.P.
ASSETS UNDER MANAGEMENT
BY CLIENT DOMICILE
AT JUNE 30, 2007
($ millions)

   
Institutional
Investments
    
Retail
    
Private
Client
    
Total
  
                         
U. S. Clients
   $
248,741
     $
140,411
     $
103,434
     $
492,586
  
Non-U.S. Clients
    
251,865
      
45,001
      
3,490
      
300,356
  
    $
500,606
     $
185,412
     $
106,924
     $
792,942
  

 
 
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