NEW YORK, Jan 27, 2005 /PRNewswire-FirstCall via COMTEX/ -- Alliance Capital Management Holding L.P. ("Alliance Holding") (NYSE: AC), and Alliance Capital Management L.P. ("Alliance Capital"), today reported financial and operating results for the quarter and year ended December 31, 2004.
Alliance Holding (The Publicly Traded Partnership):
* Diluted net income per Unit for the quarter ended December 31, 2004 was
$0.82, as compared to $0.13 for the fourth quarter of 2003 which
reflected a charge to income of $0.54 resulting from the settlement
with the SEC/NYAG of mutual fund matters and legal proceedings.
* Distribution per Unit for the fourth quarter of 2004 is $0.82. The
distribution is payable on February 17, 2005 to holders of Alliance
Holding Units at the close of business on February 7, 2005.
Alliance Capital (The Operating Partnership):
* Assets Under Management (AUM) at December 31, 2004 were $539 billion, a
12.9% increase over a year ago, due to equity market appreciation and
net asset inflows.
* Average AUM were $509 billion for the quarter ended December 31, 2004,
an increase of 11.3% over the same quarter a year ago.
* Long-term net asset inflows for the three months ended December 31,
2004 were $9.0 billion with positive net asset flows across all
channels - Institutional Investment Management, Retail and Private
Client. Net fixed income asset inflows include nearly $7 billion from
AXA affiliates.
* Long-term net asset inflows for the twelve months ended December 31,
2004 were $8.3 billion. Institutional Investment Management and
Private Client experienced net asset inflows of $7.7 billion and $4.7
billion, respectively, which were partially offset by Retail net asset
outflows of $4.0 billion. Cash Management outflows were approximately
$2.0 billion.
"On the most important parameter, investment returns for our clients, 2004 was a good year, aided by particularly strong market results in the fourth quarter. Equity returns for the year were excellent, especially in services focused on smaller capitalization and non-U.S. securities. Fixed income returns, while lower, were close to long-term expectations for this asset class. Many services achieved returns better than benchmarks for the year, with an especially strong showing in Mid-Cap and Multi-Cap Growth, and Emerging Markets Growth as well as International Value, Global Value, Emerging Markets Value and Emerging Style Blend services," said Lewis Sanders, Chairman and Chief Executive Officer.
"Fourth quarter earnings increased substantially, primarily reflecting a sharp increase in performance-based fees as well as the benefits to revenue from rising capital markets. However, general and administrative expenses remained quite high in the fourth quarter as expected, in part a function of a $7 million write down of capitalized software and $5 million of rent acceleration and related charges for vacated office facilities. We anticipate that G&A expenses will decline from recent run rates in 2005," Mr. Sanders added.
"Organic growth improved in the fourth quarter. Net flows of long-term funds turned modestly positive in the retail channel owing to accelerated growth of managed account services and an upturn in net flows into equity funds by non-U.S. clients. Market share in U.S. retail mutual funds, however, remained depressed.
"Net inflows in the institutional channel were much higher than previous quarters, primarily attributable to new fixed income mandates from MONY, recently acquired by AXA. Apart from MONY, new business inflows in the institutional channel continued to benefit from a high level of client interest in global and style blend equity services, partially offset by continued attrition in U.S. large cap growth services.
"Although quite strong for the full year, private client net inflows slowed somewhat in the fourth quarter, a function mostly of an increased rate of attrition. We anticipate a return to stronger net inflows in 2005," Mr. Sanders said.
"On the litigation front, although subject to appeal, we won partial summary judgment in the case involving The Florida State Board of Administration, which should have the effect of substantially narrowing the scope and financial significance of the claims against us. We continue to believe that we have meritorious defenses for the remaining claims in this case," Mr. Sanders noted.
"We approach 2005 resolute in our mission: to use and share our knowledge to help our clients achieve investment success and peace of mind. Toward this end, our energies will be focused on expanding the scope and character of our knowledge along with the development of new methods to use knowledge more effectively. This is the essence of research excellence. Defining the state of the art on this score is our over-arching goal," Mr. Sanders concluded.
SUMMARY FINANCIAL RESULTS OF ALLIANCE CAPITAL MANAGEMENT L.P.
($ millions)
Three Months Ended %
12/31/04 12/31/03 Change
Revenues $826 $769 7.4%
Expenses:
Operating Expenses 581 567 2.4
Charge for Mutual Fund Matters
& Legal Proceedings - 140(1) -100.0
581 707 -17.9
Income Before Taxes 245 62 n/m
Income Taxes 12 8 41.7
Net Income $233 $54(1) n/m
Pre-tax Margin (2) 29.7% 8.1%
(1) The charge, net of taxes and other offsets, reduced net income by
$138 million.
(2) Pre-tax income as a percentage of revenues.
Note: Percentages are calculated using revenues and expenses rounded to
the nearest thousand.
* Revenues increased 7.4% to $826 million primarily as a result of higher
investment advisory fees reflecting higher average AUM and higher
performance fees, partially offset by fee reductions in U.S. retail
long-term open-end mutual funds.
* Operating Expenses increased 2.4% to $581 million, excluding charges
for mutual fund matters and legal proceedings, mainly as a result of
higher compensation and general and administrative expenses.
CONFERENCE CALL INFORMATION RELATING TO FOURTH QUARTER 2004 RESULTS
Alliance Capital's management will review fourth quarter 2004 financial and operating results on Thursday, January 27, 2005 during a conference call at 10:00 a.m. (New York Time). The call will be hosted by Gerald M. Lieberman, President and Chief Operating Officer. Parties interested in listening to the conference call may access it by either telephone or webcast.
1. To listen by telephone, please dial 888-428-4470 in the U.S. or
612-332-0530 outside the U.S., ten minutes before the 10:00 a.m. (New
York Time) scheduled start time. Please indicate access code
"Alliance" when dialing in.
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 1:30 p.m. (New York Time) January 27, 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 764306. 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 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 and Sanford C. Bernstein Limited subsidiaries, Alliance provides in-depth research, portfolio strategy and trade execution to the institutional investment community.
At December 31, 2004, Alliance Holding owned approximately 31.7% of the issued and outstanding Alliance Capital Units. AXA Financial was the beneficial owner of approximately 60.9% of the issued and outstanding Alliance Capital Units at December 31, 2004 (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 61.3% 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 http://www.alliancecapital.com .
Forward-Looking Statements
Certain statements made by Alliance Capital and Alliance Holding 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, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The more significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment performance of Alliance Capital's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions, and government regulations, including changes in tax rates. The forward-looking statements we make in this news release include statements regarding the outcome of litigation and expected levels of general and administrative expenses. Litigation is inherently unpredictable, and excessive judgments do occur. Any settlement or judgment on the merits of a legal proceeding could be significant, and could have a material adverse effect on Alliance Capital's and Alliance Holding's results of operations or financial condition. General and administrative expenses, including occupancy costs, legal fees (net of partially offsetting insurance recoveries), compliance with the Sarbanes-Oxley Act of 2002, and various other expenses, fluctuate from period to period due to changes in business needs and other factors.
Alliance Capital and Alliance Holding caution readers to carefully consider these forward-looking statements. Further, these forward-looking statements speak only as of the date on which such statements are made; Alliance Capital and Alliance Holding 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, please refer to the Risk Factors section in Part I of Form 10-K for the year ended December 31, 2003. 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. It is important to remember that other factors besides those listed in the Risk Factors section of Form 10-K could also adversely affect our business, operating results or financial condition.
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)
Three Months Ended Twelve Months Ended
12/31/04 12/31/03 12/31/04 12/31/03
Revenues:
Investment Advisory & Services
Fees $592,488 $546,849 $2,113,351 $1,882,399
Distribution Revenues 110,372 114,725 447,283 436,037
Institutional Research Services 78,982 68,964 303,609 267,868
Shareholder Servicing Fees 19,497 20,795 87,478 94,276
Other Revenues, Net 24,550 17,732 75,211 52,241
825,889 769,065 3,026,932 2,732,821
Expenses:
Employee Compensation &
Benefits 287,327 269,631 1,085,163 914,529
Promotion & Servicing:
Distribution Plan Payments 93,851 94,906 374,184 370,575
Amortization of Deferred
Sales Commissions 38,881 50,771 177,356 208,565
Other 41,039 45,650 173,826 164,972
General & Administrative 109,245 94,564 421,389 339,706
Interest 5,094 6,349 24,232 25,286
Amortization of Intangible
Assets 5,175 5,175 20,700 20,700
Charge for Mutual Fund Matters
& Legal Proceedings -- 140,000 330,000
580,612 707,046 2,276,850 2,374,333
Income Before Income Taxes 245,277 62,019 750,082 358,488
Income Taxes 12,072 8,518 39,932 28,680
NET INCOME $233,205 $53,501 $710,150 $329,808
Pre-tax Margin(1) 29.7% 8.1% 24.8% 13.1%
(1) Pre-tax income as a percentage of total revenues.
ALLIANCE CAPITAL MANAGEMENT HOLDING L.P.
(THE PUBLICLY TRADED PARTNERSHIP)
SUMMARY STATEMENTS OF INCOME
(unaudited, in thousands except per Unit amounts)
Three Months Ended Twelve Months Ended
12/31/04 12/31/03 12/31/04 12/31/03
Equity in Earnings of Operating
Partnership $73,078 $16,321 $221,540 $100,424
Income Taxes 6,834 6,227 24,798 21,819
NET INCOME $66,244 $10,094 $196,742 $78,605
Additional Equity in Earnings of
Operating Partnership (1) 930 234 2,675 1,830
NET INCOME - Diluted (2) $67,174 $10,328 $199,417 $80,435
DILUTED NET INCOME PER UNIT $0.82 $0.13 $2.45 $1.01
DISTRIBUTIONS PER UNIT $0.82 $0.00 $2.01 $1.45
(1) To reflect higher ownership in the Operating Partnership resulting
from application of the treasury stock method to outstanding options.
(2) For calculation of Diluted Net Income per Unit.
ALLIANCE CAPITAL AND ALLIANCE HOLDING
UNITS AND WEIGHTED AVERAGE UNITS OUTSTANDING
DECEMBER 31, 2004
(in thousands)
Weighted Average
Three Months Twelve Months
Period End Basic Diluted Basic Diluted
Alliance Capital 253,880 253,657 255,356 253,121 254,765
Alliance Holding 80,487 80,264 81,962 79,727 81,371
ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
THREE MONTHS ENDED DECEMBER 31, 2004
($ millions)
Institutional
Investment
Management Retail Private Client Total
Beginning of Period $277,539 $152,855 $59,065 $489,459
Long-Term Flows
Sales/New accounts 16,241 6,248 1,823 24,312
Redemptions/Terminations (4,841) (5,950) (1,087) (11,878)
Cash flow (2,910) (61) (216) (3,187)
Unreinvested dividends -- (201) (68) (269)
Net Long-Term Inflows 8,490 36 452 8,978
Cash management, net -- (211) 16 (195)
Market appreciation 25,229 10,872 4,421 40,522
End of Period $311,258 $163,552 $63,954 $538,764
ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
TWELVE MONTHS ENDED DECEMBER 31, 2004
($ millions)
Institutional
Investment
Management Retail Private Client Total
Beginning of Period $267,796 $155,878 $53,593 $477,267
Long-Term Flows
Sales/New accounts 35,524 23,435 8,432 67,391
Redemptions/Terminations (22,908) (25,798) (2,967) (51,673)
Cash flow (4,899) (866) (595) (6,360)
Unreinvested dividends (1) (816) (217) (1,034)
Net Long-Term Inflows/
(Outflows) 7,716 (4,045) 4,653 8,324
Cash management, net (2) (1,982) (3) (1,987)
Market appreciation 35,748 13,701 5,711 55,160
End of Period $311,258 $163,552 $63,954 $538,764
ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
($ millions)
Three Month Periods Twelve Month Periods
12/31/04 12/31/03 12/31/04 12/31/03
Average Assets Under Management $509,461 $457,790 $489,545 $423,257
Ending Assets Under Management $538,764 $477,267 $538,764 $477,267
ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
BY INVESTMENT ORIENTATION
AT DECEMBER 31, 2004
($ millions)
Institutional
Investment
Management Retail Private Client Total
Equity:
Growth
U.S. $ 39,600 $ 33,436 $ 7,022 $ 80,058
Global & International 24,394 14,814 4,001 43,209
63,994 48,250 11,023 123,267
Value
U.S. 51,006 32,113 22,411 105,530
Global & International 68,595 8,600 9,874 87,069
119,601 40,713 32,285 192,599
Total Equity 183,595 88,963 43,308 315,866
Fixed Income:
U.S. 77,314 45,418 20,465 143,197
Global & International 26,166 23,926 75 50,167
103,480 69,344 20,540 193,364
Passive:
U.S. 19,297 4,203 106 23,606
Global & International 4,886 1,042 -- 5,928
24,183 5,245 106 29,534
Total:
U.S. 187,217 115,170 50,004 352,391
Global & International 124,041 48,382 13,950 186,373
$311,258 $163,552 $63,954 $538,764
ALLIANCE CAPITAL MANAGEMENT L.P.
ASSETS UNDER MANAGEMENT
BY LOCATION (1)
AT DECEMBER 31, 2004
($ millions)
Institutional
Investment
Management Retail Private Client Total
U.S. Clients $208,225 $131,733 $61,871 $401,829
Non-U.S. Clients 103,033 31,819 2,083 136,935
$311,258 $163,552 $63,954 $538,764
(1) Categorized by country domicile of client.
SOURCE Alliance Capital Management Holding L.P.
Investor Relations: Valerie Haertel,
+1-212-969-6414,
investor_relations@acml.com,
Media: John Meyers,
+1-212-969-2301,
john_meyers@acml.com,
Both of Alliance Capital Management Holding L.P.