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PRESS RELEASE For Immediate Release - 02/02/2001
Alliance Capital Announces Fourth Quarter and 2000 Financial Results And Intention to Purchase Units for Deferred Compensation Plans NEW YORK, February 2, 2001 -- Alliance Capital Management Holding L.P. ("Alliance Holding") (NYSE: AC) today declared a $0.78 per Unit cash distribution, including $0.03 per Unit attributable to the sale by Alliance Capital Management L.P. ("Alliance Capital") of its interest in its Polish joint venture companies. The distribution is payable on February 23, 2001 to holders of Alliance Holding Units at the close of business on February 13, 2001. Alliance Holding announced fourth quarter 2000 net operating earnings (net income excluding amortization of intangibles and non-recurring items) of $0.76 per Unit, which include the financial results of the business of Sanford C. Bernstein Inc. ("Bernstein") from the date of the October 2, 2000 acquisition. "Alliance Capital experienced mixed results in the fourth quarter," said Bruce W. Calvert, Chief Executive Officer. "Among the positives, we outperformed client benchmarks in all of our major investment services and achieved positive net asset inflows. Conversely, as we reported on January 9, 2001, the decline in the stock market, and growth stocks in particular, resulted in lower year-end assets under management compared to October 2, 2000. For the quarter, Bernstein was accretive to Alliance Holding's net operating earnings by approximately $0.06 per Unit, demonstrating the benefits of a more balanced product mix, one of the key reasons for the Bernstein acquisition. Performance fee earnings declined significantly for fourth quarter 2000, caused by the decline in growth and technology stocks. Despite market-driven declines in assets under management, we believe our business is fundamentally sound and we will continue to selectively invest for our long- term growth." BUSINESS HIGHLIGHTS OF ALLIANCE CAPITAL MANAGEMENT L.P. THE OPERATING PARTNERSHIP Alliance Capital's core growth and value oriented equity investment disciplines outperformed, for fourth quarter and the year, their respective benchmarks. For the quarter and the year, growth stocks underperformed the broader stock market with negative investment results, while value stocks outperformed the broader stock market with positive investment results. Alliance Capital continued to exceed benchmark performance for its major fixed income investment disciplines. Assets under management were $454 billion at December 31, 2000, increasing 23% from December 31, 1999 and decreasing 4% from October 2, 2000 levels. The acquisition of the business of Bernstein contributed assets under management of approximately $86 billion on October 2, 2000. For the quarter, Alliance Capital had positive retail and institutional money management net asset inflows, partially offset by private client net outflows. However, the market related decline in assets under management more than offset the net new asset inflows. Net sales of retail products were $7.6 billion, down 7% from fourth quarter 1999. Net sales in the U.S. were comprised of $4.0 billion of long-term products and $2.8 billion of cash management products. Net sales outside the U.S. totaled $0.8 billion. In the United States, Alliance Capital ranks fourth in non-proprietary mutual fund net sales for the eleven-month period through November 2000.
4Q 2000 Net Sales
(Billions)
Mutual Funds $1.6
Wrap Product 0.8
Variable Annuity Product 2.4
Cash Management 2.8
Total $7.6
Institutional money management gross new business inflows were $7.8 billion for fourth quarter 2000, up more than 160% compared to fourth quarter 1999. Institutional money management separate account wins contributed $7.4 billion in assets under management during fourth quarter 2000, representing 102 new client accounts across a broad range of investment disciplines; institutional separate account net asset inflows were $2.3 billion, a 100% increase over fourth quarter 1999. Private client net outflows for fourth quarter 2000 were $795 million, as private clients reacted to the relative underperformance of value investing during 1999 and the first two months of 2000. However, value investing outperformed the broader stock market for full year 2000 and Alliance Capital's growth product is now available to private clients. Institutional research services contributed $56 million in revenues for the quarter. FINANCIAL RESULTS OF ALLIANCE CAPITAL MANAGEMENT L.P. THE OPERATING PARTNERSHIP
SUMMARY OF FINANCIAL RESULTS
(millions)
Three Three Twelve Twelve
Months Months Months Months
Ended Ended Ended Ended
12/31/00 12/31/99 12/31/00 12/31/99
Change Change
Assets Under Management
(billions) $454 $368 23% $454 $368 23%
Revenues $793 $585 35% $2,522 $1,869 35%
NET INCOME $148 $168 (12)% $669 $495 35%
Amortization of Intangibles 44 1 440 46 4 105
Non-recurring Items, Net 23 0 N/A (1) 0 N/A
NET OPERATING EARNINGS(a) $215 $169 27% $714 $499 43%
Base Fee Earnings $194 $130 50% $677 $433 57%
Performance Fee Earnings 21 39 (48) 37 66 (44)
NET OPERATING EARNINGS(a) $215 $169 27% $714 $499 43%
NET OPERATING EARNINGS
per Unit(a) $0.84 $0.95 (12)% $3.42 $2.80 22%
Units Outstanding(b) 251,839 176,779 206,724 176,308
(a) Net Operating Earnings: Net Income excluding amortization of
intangibles and non-recurring items.
(b) Diluted weighted average units outstanding for each period,
units reported in thousands.
Net operating earnings (net income excluding amortization of intangibles and non-recurring items) were $215 million (including $75 million from the Bernstein business) in fourth quarter 2000, an increase of 27%, compared to net operating earnings for fourth quarter 1999. Base fee earnings contributed $194 million (including $60 million from the Bernstein business) to total net operating earnings for fourth quarter 2000, compared to $130 million for fourth quarter 1999. Performance fee earnings contributed $21 million (including $15 million from the Bernstein business) for fourth quarter 2000, compared to $39 million for fourth quarter 1999. The decrease in performance fee earnings was the result of negative returns of certain growth-oriented hedge funds. Net operating earnings per Unit for fourth quarter 2000 were $0.84 per Alliance Capital Unit (including $0.06 per Unit from the Bernstein business), decreasing 12% compared to $0.95 per Alliance Capital Unit for fourth quarter 1999. Revenues for fourth quarter 2000 were $793 million (including $242 million from the Bernstein business), increasing 35% from fourth quarter 1999 revenues. Pre-tax operating earnings margin was 35.1% for the fourth quarter 2000, decreasing from 39.4% for fourth quarter 1999. The decrease is attributed to the market-related decline in assets under management, which resulted in lower revenues. Pre-tax operating earnings margin is calculated after netting distribution revenues with distribution expenses, as detailed on page 12. Fourth quarter 2000 non-recurring items were a net charge of $23 million. Non-recurring charges for the year were $779,000, with the fourth quarter charge largely offset by the first quarter settlement of the Alliance North American Government Income Trust litigation. The fourth quarter items included the write-off of certain leasehold improvements attributable to the Bernstein acquisition and the remaining Cursitor intangible asset, partially offset by the cash proceeds received from the sale of Alliance Capital's interest in its Polish joint venture companies. 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. SUMMARY OF PER UNIT FINANCIAL INFORMATION
Three Three Twelve Twelve
Months Months Months Months
Ended Ended Ended Ended
12/31/00 12/31/99 12/31/00 12/31/99
Change Change
DILUTED NET INCOME $0.50 $0.86 (42)% $2.93 $2.53 16%
Amortization of
Intangibles 0.17 0.01 1,600 0.22 0.02 1,000
Non-recurring
Items, Net 0.09 -- N/A -- -- N/A
NET OPERATING
EARNINGS(a) $0.76 $0.87 (13)% $3.15 $2.55 24%
Base Fee Earnings $0.69 $0.67 3% $3.00 $2.22 35%
Performance Fee Earnings 0.07 0.20 (65) 0.15 0.33 (55)
NET OPERATING
EARNINGS(a) $0.76 $0.87 (13)% $3.15 $2.55 24%
UNIT HOLDER DISTRIBUTIONS $0.78 $0.85 (8)% $3.11 $2.49 25%
(a) 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.
Distribution per Alliance Holding Unit is $0.78 for fourth quarter 2000, an 8% decrease from the $0.85 per Unit distributed for fourth quarter 1999. The fourth quarter 2000 distribution includes $0.03 per Unit attributed to the sale of Alliance Capital's interest in its Polish joint venture companies. Net operating earnings (net income excluding amortization of intangibles and non-recurring items) decreased 13% to $0.76 per Unit for fourth quarter 2000 from $0.87 per Unit for fourth quarter 1999. Alliance Holding's share of Alliance Capital's base fee earnings contributed $0.69 per Unit for fourth quarter 2000 compared to $0.67 per Unit for fourth quarter 1999. Alliance Holding's share of performance fee earnings contributed $0.07 per Unit for fourth quarter 2000 compared to $0.20 per Unit for fourth quarter 1999. The Bernstein business contributed approximately $0.02 per Unit in base fee earnings and $0.04 per Unit in performance fee earnings for fourth quarter 2000. UNIT PURCHASE Alliance Capital announced that it expects to engage in open-market purchases of up to approximately $40 million Alliance Holding Units from time-to-time at its discretion to fund obligations under certain deferred compensation plans. ABOUT ALLIANCE CAPITAL Alliance Capital is a leading global investment management firm with approximately $454 billion in assets under management at December 31, 2000. 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. As one of the world's leading global investment management organizations, Alliance Capital is able to compete for virtually any portfolio assignment in any developed capital market in the world. 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 53% of the outstanding Alliance Capital Units, representing an approximate 53% economic interest in Alliance Capital. AXA Financial, Inc. is a wholly-owned subsidiary of AXA. FORWARD-LOOKING STATEMENTS Certain statements provided by Alliance Capital and Alliance Holding in this report 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 factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of such 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. Alliance Capital and Alliance Holding caution readers to carefully consider such factors. Further, such 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. MANAGEMENT CONFERENCE CALL RELATING TO FOURTH QUARTER 2000 RESULTS Alliance Capital's management will review fourth quarter 2000 financial and operating results on Friday, February 2, 2001. Chief Executive Officer, Bruce W. Calvert; President and Chief Operating Officer, John D. Carifa; and Chief Investment Officer, Lewis A. Sanders, will lead a discussion during a live conference call beginning at 3:00 P.M. (Eastern Time). Parties interested in listening to the conference call live may access the call by either: 1. Dialing 800-230-1093 in the U.S. or dialing 612-288-0329 for international callers approximately 15 minutes prior to the call. Please indicate you are calling for the Alliance Capital conference call. OR 2. Via webcast, by accessing Alliance Capital's website at www.alliancecapital.com , and link to "About Alliance," then "Alliance Capital 4th Quarter Earnings." Listeners accessing the call via internet should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. A presentation will be given during the conference call. The presentation slides will be available for download prior to the call on Alliance Capital's website at www.alliancecapital.com , under "About Alliance," followed by "Alliance Capital 4th Quarter Earnings." An audio replay of the conference call will be available beginning at 6:30 P.M, Friday, February 2, 2001 through Friday, February 9, 2001 by calling 800-475-6701 for U.S. callers or 320-365-3844 for international callers and providing code 566428.
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)
Three Months Ended Twelve Months Ended
12/31/00 12/31/99(a) 12/31/00 12/31/99(a)
Revenues:
Investment Advisory &
Services Fees $543,808 $428,100 $1,689,817 $1,331,758
Distribution Revenues 151,922 127,459 621,622 441,772
Institutional Research
Services 56,289 -- 56,289 --
Shareholder Servicing
Fees 23,203 17,263 85,645 62,332
Other Revenues, Net 17,949 12,637 68,726 33,443
793,171 585,459 2,522,099 1,869,305
Expenses:
Employee Compensation
& Benefits 253,024 174,073 651,884 508,566
Promotion & Servicing:
Distribution Plan
Payments 118,461 94,345 476,039 338,676
Amortization of Deferred
Sales Commissions 59,053 46,254 219,664 163,942
Other 46,967 33,050 148,740 118,110
General & Administrative 78,990 49,190 226,710 184,754
Interest 11,723 8,086 44,244 22,585
568,218 404,998 1,767,281 1,336,633
Operating Income 224,953 180,461 754,818 532,672
Amortization of
Intangibles 43,315 962 46,252 3,852
Non-recurring Items 23,074 -- (779) --
Income Before Income
Taxes 158,564 179,499 709,345 528,820
Income Taxes 10,305 11,334 40,596 34,067
NET INCOME $148,259 $168,165 $668,749 $494,753
Base Fee Earnings $194,005 $129,579 $677,519 $432,829
Performance Fee Earnings 20,643 39,548 36,703 65,776
NET OPERATING
EARNINGS(b) $214,648 $169,127 $714,222 $498,605
(a) Amounts assume the Alliance Holding Reorganization occurred on
January 1, 1999.
(b) Net Operating Earnings: Net Income excluding amortization of
intangibles and non-recurring items.
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT(a)
THREE MONTHS ENDED DECEMBER 31, 2000
($ millions)
Institutional
Money Private
Retail Management Client Total
Beginning of Period $173,676 $210,483 $4,235 $388,394
Bernstein Acquisition -- 55,006 30,790 85,796
Sales/new accounts 15,987 7,754 964 24,705
Redemptions/
terminations (11,226) (5,286) (1,251) (17,763)
Net cash management
sales 2,802 (615) -- 2,187
Cash flow -- (458) (508) (966)
Unreinvested dividends (1,194) (13) -- (1,207)
Net new business 6,369 1,382 (795) 6,956
Market appreciation
(depreciation) (16,739) (13,332) 2,604 (27,467)
Net change (10,370) 43,056 32,599 65,285
End of Period $163,306 $253,539 $36,834 $453,679
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT(a)
TWELVE MONTHS ENDED DECEMBER 31, 2000
($ millions)
Institutional
Money Private
Retail Management Client Total
Beginning of Period $155,243 $207,583 $5,495 $368,321
Bernstein Acquisition -- 55,006 30,790 85,796
Sales/new accounts 73,332 18,810 1,467 93,609
Redemptions/
terminations (48,967) (11,525) (1,857) (62,349)
Net cash management
sales 2,935 2,819 -- 5,754
Cash flow -- (5,955) (535) (6,490)
Unreinvested dividends (1,887) (29) -- (1,916)
Net new business 25,413 4,120 (925) 28,608
Market appreciation
(depreciation) (17,350) (13,170) 1,474 (29,046)
Net change 8,063 45,956 31,339 85,358
End of Period $163,306 $253,539 $36,834 $453,679
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
($ millions)
Three Months Ended Twelve Months Ended
12/31/00 12/31/99 12/31/00 12/31/99
Average Assets Under
Management $460,566 $338,755 $399,912 $314,641
Ending Assets Under
Management $453,679 $368,321 $453,679 $368,321
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY INVESTMENT ORIENTATION
AT DECEMBER 31, 2000
($ millions)
Institutional
Money Private
Retail Management Client Total
Equity
Growth
Domestic Growth $76,760 $86,856 $3,302 $166,918
Global &
International Growth 18,096 12,342 10 30,448
94,856 99,198 3,312 197,366
Value
Domestic Value 11,456 41,213 19,878 72,547
Global &
International Value 330 12,478 5,531 18,339
11,786 53,691 25,409 90,886
Total Equity 106,642 152,889 28,721 288,252
Fixed Income
Domestic 43,149 58,603 7,394 109,146
Global & International 10,480 10,139 293 20,912
53,629 68,742 7,687 130,058
Passive
Domestic 3,035 26,754 188 29,977
Global & International -- 5,154 238 5,392
3,035 31,908 426 35,369
Total
Domestic 134,400 213,426 30,762 378,588
Global & International 28,906 40,113 6,072 75,091
$163,306 $253,539 $36,834 $453,679
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY INVESTMENT VEHICLE
AT DECEMBER 31, 2000
($ millions)
Institutional
Money Private
Retail Management Client Total
Separately Managed
Accounts
Parent $-- $28,694 $-- $28,694
Other(a) 14,514 209,954 25,156 249,624
14,514 238,648 25,156 278,318
Mutual Funds
Parent -- 272 -- 272
Other 148,792 14,619 11,678 175,089
148,792 14,891 11,678 175,361
Total $163,306 $253,539 $36,834 $453,679
(a) Retail separately managed accounts represent assets managed in wrap
products.
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ASSETS UNDER MANAGEMENT
BY LOCATION(a)
AT DECEMBER 31, 2000
($ millions)
Institutional
Money Private
Retail Management Client Total
U.S. Clients $144,738 $214,786 $34,838 $394,362
International Clients
(non-U.S.) 18,568 38,753 1,996 59,317
$163,306 $253,539 $36,834 $453,679
(a) Categorized by country domicile of client.
ALLIANCE CAPITAL MANAGEMENT L.P.
(THE OPERATING PARTNERSHIP)
ANALYSIS OF PRE-TAX OPERATING EARNINGS MARGIN (a)
($ thousands)
Three Months Ended Twelve Months Ended
12/31/00 12/31/99(b) 12/31/00(b) 12/31/99(b)
Total Revenues $793,171 $585,459 $2,492,277 $1,869,305
Less: Distribution
Revenues (151,922) (127,459) (621,622) (441,772)
Net Revenues 641,249 458,000 1,870,655 1,427,533
Total Operating
Expenses 568,218 404,998 1,767,281 1,336,633
Less: Distribution
Revenues (151,922) (127,459) (621,622) (441,772)
Net Operating Expenses 416,296 277,539 1,145,659 894,861
Operating Income $224,953 $180,461 $724,996 $532,672
Pre-tax Operating
Earnings Margin 35.1% 39.4% 38.8% 37.3%
(a)Income before income taxes as a percentage of revenues (excluding
distribution revenues).
(b) Assumes the Alliance Holding Reorganization occurred on
January 1, 1999.Revenues for the year ended December 31, 2000
exclude the interest income (approximately $29.8 million) earned from
the investment of the proceeds from the issuance of approximately
32.6 million units to AXA Financial.Operating expenses are total
expenses less amortization of intangibles and non-recurring items
(NAGIT litigation settlement, leaseholds write-off, Cursitor write-off
and cash proceeds received from sale of Alliance Capital's interest in
its Polish joint venture companies).
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
12/31/00 12/31/99(a) 12/31/00 12/31/99(a)
Equity in Earnings of
Operating Partnership $43,027 $69,768 $244,922 $204,338
Income Taxes 6,159 5,994 20,952 18,217
NET INCOME $36,868 $63,774 $223,970 $186,121
DILUTED NET INCOME
PER UNIT $0.50 $0.86 $2.93 $2.53
Amortization of
Intangibles 0.17 0.01 0.22 0.02
Non-recurring Items,
Net 0.09 -- -- --
NET OPERATING EARNINGS
PER UNIT(b) $0.76 $0.87 $3.15 $2.55
Base Fee Earnings
per Unit 0.69 0.67 3.00 2.22
Performance Fee Earnings
per Unit 0.07 0.20 0.15 0.33
NET OPERATING EARNINGS
PER UNIT(b) $0.76 $0.87 $3.15 $2.55
DISTRIBUTION PER UNIT $0.78 $0.85 $3.11 $2.49
(a) Amounts assume the Alliance Holding Reorganization occurred on
January 1, 1999.
(b) Net Operating Earnings per Unit: Diluted Net Income per Unit excluding
Alliance Holding's proportionate share of Alliance Capital's
amortization of intangibles and non-recurring items.
ALLIANCE CAPITAL AND ALLIANCE HOLDING
UNITS OUTSTANDING AND WEIGHTED AVERAGE UNITS
(in thousands)
Weighted Average Units Outstanding as of December 31, 2000
Period Basic Diluted Basic Diluted
Ending Three Three Twelve Twelve
Units Months Months Months Months
Outstanding Ended Ended Ended Ended
Alliance Capital 246,993 244,058 251,839 198,862 206,724
Alliance Holding 73,184 70,693 78,474 71,168 79,030
SOURCE: Alliance Capital Management Holding L.P. |
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