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Operating Highlights Of Alliance Capital Management L.P. ("Alliance Capital")
The Operating Partnership
Alliance Capital Management Holding L.P. ("Alliance Holding")
(NYSE: "AC") today declared a $0.84 per Unit distribution payable on November 22, 2000 to holders of its Units
at the close of business on November 13, 2000. Alliance Holding announced third quarter 2000 net operating
earnings (net income excluding amortization of intangibles and non-recurring items) of $0.86 per Unit, an
increase of 51% compared to $0.57 per Unit for third quarter 1999. Base fee earnings contributed $0.84 per Unit
to net operating earnings for third quarter 2000 and $0.55 per Unit for third quarter 1999. Performance fee
earnings contributed $0.02 per Unit to net operating earnings for both third quarter 2000 and third quarter 1999.
- Assets under management were $388 billion at September 30, 2000, increasing 22% from September 30,
1999. Growth was the result of net new business flows in both mutual funds and separately managed
institutional accounts and investment results. Compared to June 30, 2000, assets under management were
unchanged; increases in assets as a result of net new business in separately managed institutional accounts,
sales of Alliance mutual fund shares and cash management services were offset by negative investment
results, which reduced assets under management by $7.7 billion for the quarter.
- Investment performance for the quarter was mixed. The stock market and large capitalization growth
stocks, in particular, declined; and Alliance Capital’s large capitalization growth funds underperformed.
Nevertheless, performance in these portfolios remains competitive on a long-term basis. Meanwhile, third quarter and year-to-date investment results for several other important investment disciplines were very
positive. Our relative value, research managed and small capitalization growth portfolios all experienced
excellent results. Several important fixed income disciplines also performed well.
- Mutual fund gross sales grew 68% over third quarter 1999 and were 71% higher than second quarter
2000 levels. Net mutual fund sales for third quarter 2000 were $9.2 billion, with cash management net asset
inflows contributing $5 billion.
Reviewing the mutual fund sales trends, President and Chief Operating Officer John D. Carifa said,
"During the third quarter, our global mutual fund sales increased compared to the prior quarter. In the United
States, Alliance Capital maintained its number three ranking in non-proprietary net sales. We recently
launched a new savings initiative with the State of Rhode Island’s college savings plan to greater diversify
our U.S. fund sales; the CollegeBoundfund sm is being marketed to investors across the United States. Outside
the United States through September 30 of this year, we continue to make significant progress. Net sales of
our Luxembourg registered mutual funds are up 227% for the first nine months of this year compared to the
same period last year, with combined net sales in Germany and Austria increasing 270% for the same period
compared to last year. We continue to invest in our business by opening up new offices worldwide. We
recently established several new marketing locations in Europe, and this week, we opened a new customer
service center in Scranton, Pennsylvania, enhancing our capability to provide superior service to our clients."
- New separately managed account wins added $3.5 billion in assets under management during third
quarter 2000, representing 52 new client accounts across multiple disciplines. Alliance Capital recently
signed a memorandum of understanding with AXA Asia Pacific Holdings Limited to establish new asset
management companies in Australia and New Zealand, adding to Alliance Capital’s global initiatives.
- Alliance Capital acquired the business of Sanford C. Bernstein Inc. ("Bernstein") on October 2, 2000.
Total Alliance Capital assets under management following the acquisition on October 2, 2000 were
approximately $474 billion. The acquisition combines Alliance Capital’s strength as a recognized leader in
the growth style of investing with Bernstein’s recognized strength in the value style, allowing Alliance
Capital to effectively compete for virtually any investment assignment worldwide. And, Alliance Capital now serves a broader range of clients with the addition of Bernstein’s business. With 530 investment
professionals, including 260 research analysts, Alliance Capital is one of the premier providers of equity and
fixed income investment services in the world.
Financial Results Of Alliance Capital Management L.P.
The Operating Partnership
Net operating earnings (net income excluding amortization of intangibles and non-recurring items) were
$196 million for third quarter 2000, an increase of 74% compared to pro forma net operating earnings for
third quarter 1999. Base fee earnings contributed $191 million to total net operating earnings for third quarter
2000 and $108 million for third quarter 1999. Performance fee earnings contributed $5 million for both third
quarter 2000 and third quarter 1999.
Revenues for third quarter 2000 reached $616 million, increasing 38% from $445 million pro forma
revenues for third quarter 1999. Revenue growth resulted primarily from increased average assets under
management, including a larger proportion of higher-fee mutual fund assets.
ALLIANCE CAPITAL MANAGEMENT L.P.
THE OPERATING PARTNERSHIP
SUMMARY FINANCIAL RESULTS
(millions)
|
Three
Months
Ended
(9/30/00) |
Pro Forma
Three
Months
Ended
(9/30/99)(1) |
Change |
Nine
Months
Ended
(9/30/00) |
Pro Forma
Nine Months
Ended
(9/30/99)(1) |
Change |
| Assets Under Management (billions) |
$388 |
$317 |
22% |
$388 |
$317 |
22% |
| Revenues |
$616 |
$445 |
38% |
$1,729 |
$1,284 |
35% |
| NET INCOME |
$195 |
$112 |
75% |
$520 |
$326 |
59% |
| Amortization of Intangibles |
1 |
1 |
2 |
3 |
3 |
2 |
| Non-recurring Items |
— |
— |
— |
(24) |
— |
N/A |
| NET OPERATING EARNINGS (2) |
$196 |
$113 |
74% |
$499 |
$329 |
52% |
| Base Fee Earnings |
$191 |
$108 |
78% |
$483 |
$303 |
59% |
| Performance Fee Earnings |
5 |
5 |
(1) |
16 |
26 |
(39) |
| NET OPERATING EARNINGS (2) |
$196 |
$113 |
74% |
$499 |
$329 |
52% |
(1) — Pro forma amounts assume the Alliance Holding Reorganization
occurred on January 1, 1999. The pro forma financial information reflects the
Operating Partnership as a private partnership that is not subject to a federal tax of 3.5% on
partnership gross income from the active conduct of a
trade or business.
(2) — Net Operating Earnings: Net Income excluding amortization
of intangibles and non-recurring items.
FINANCIAL RESULTS OF ALLIANCE HOLDING
THE PUBLICLY TRADED PARTNERSHIP
Alliance Holding’s principal sources of income and cash flow are attributable to its ownership interest in
Alliance Capital, the operating partnership. Alliance Holding is required to distribute the cash distributions it
receives from Alliance Capital, less taxes and other amounts its general partner determines should be retained.
- Distributions per Alliance Holding Unit increased to $0.84 for third quarter 2000, a 50% increase over the
$0.56 per Unit distributed for third quarter 1999 and an increase of $0.09 from the $0.75 per Unit distributed
in second quarter 2000.
- Net operating earnings (net income excluding amortization of intangibles and non-recurring items)
rose to $0.86 for third quarter 2000 from $0.57 per Unit for third quarter 1999, an increase of 51%. Base fee
earnings contributed $0.84 per Unit to total net operating earnings for third quarter 2000 and $0.55 per Unit
for third quarter 1999. Performance fee earnings contributed $0.02 per Unit for both third quarter 2000 and
third quarter 1999.
ALLIANCE HOLDING
THE PUBLICLY TRADED PARTNERSHIP
PER UNIT SUMMARY FINANCIAL INFORMATION
|
Three
Months
Ended
(9/30/00) |
Pro Forma
Three
Months
Ended
(9/30/99)(1) |
Change |
Nine
Months
Ended
(9/30/00) |
Pro Forma
Nine Months
Ended
(9/30/99)(1) |
Change |
| DILUTED NET INCOME |
$0.85 |
$0.57 |
49% |
$2.49 |
$1.67 |
49% |
| Amortization of Intangibles |
0.01 |
— |
N/A |
0.02 |
0.01 |
100 |
| Non-recurring Items |
— |
— |
N/A |
(0.13) |
— |
N/A |
| NET OPERATING EARNINGS(2) |
$0.86 |
$0.57 |
51% |
$2.38 |
$1.68 |
42% |
| Base Fee Earnings |
$0.84 |
$0.55 |
53% |
$2.30 |
$1.55 |
48% |
| Performance Fee Earnings |
0.02 |
0.02 |
— |
0.08 |
0.13 |
(38) |
| NET OPERATING EARNINGS(2) |
$0.86 |
$0.57 |
51% |
$2.38 |
$1.68 |
42% |
| UNITHOLDER DISTRIBUTIONS |
$0.84 |
$0.56 |
50% |
$2.33 |
$1.64 |
42% |
(1) — Pro forma amounts assume the Alliance Holding reorganization occurred on January 1, 1999.
(2) — Net Operating Earnings per Unit: Diluted Net Income excluding Alliance Holding’s proportionate share of Alliance Capital’s amortization of
intangibles and non-recurring items.
ABOUT ALLIANCE CAPITAL
Alliance Capital is a leading global investment management firm. Alliance Capital had approximately $474
billion in assets under management at October 2, 2000, after the close of the Bernstein acquisition. Alliance
Capital is one of the largest asset managers in the world. Alliance Capital provides 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. Alliance Capital is also one of the largest mutual fund sponsors, with a diverse family of globally
distributed mutual fund portfolios.
At October 2, 2000, Alliance Holding owns approximately 30% of the units of limited partnership interest in
Alliance Capital. AXA Financial, Inc. owns approximately 2% of the outstanding Alliance Holding Units and
approximately 52% of the outstanding Alliance Capital Units, amounting to an approximate 53% economic
interest in Alliance Capital. AXA, which has operations in approximately 60 countries, holds a 60% interest in
AXA Financial, Inc.
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