Alliance Capital Management L.P. Announces Third Quarter Financial Results.NEW YORK--(BUSINESS WIRE)--November 2, 1998--Alliance Capital Management L.P. (NYSE NYSE See: New York Stock Exchange : "AC") today announced third quarter financial results and declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a $0.39 distribution payable on November November: see month. 23, 1998 to holders of Units at the close of business on November 16, 1998. Financial Highlights (US$ in millions except for per Unit amounts) -0-
Quarter Quarter Quarter
Ended Ended % Ended %
9/30/98 9/30/97 Change 6/30/98 Change
------- ------- ------ ------- ------
Assets Under Management $241,865 $217,320 11% $262,516 -8%
Revenues $326.9 $250.8 30% $333.5 -2%
Net Income $70.2 $66.2 6% $75.8 -7%
Diluted Net Income Per Unit $0.40 $0.38 5% $0.43 -7%
Distributions Per Unit $0.39 $0.37 5% $0.42 -7%
Chairman Dave H. Williams commented, "Following several years of above-average capital market gains, recent conditions have posed pose 1 v. posed, pos·ing, pos·es v.intr. 1. To assume or hold a particular position or posture, as in sitting for a portrait. 2. To affect a particular mental attitude. challenges for investors and asset managers alike. Many stock and bond markets worldwide posted declines for the quarter ended September September: see month. 30, 1998. Alliance's assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. and financial results also declined from record second quarter 1998 levels, primarily due to negative quarterly market performance. Offsetting some of these declines was the strong continued demand for Alliance's investment management services by both institutional and individual investors. Alliance's business fundamentals business fundamentals The general background within which an economy operates including earnings, sales, wage rates, taxes, and inflation. Improving business fundamentals are generally viewed as bullish for stocks, although stock prices at any given point remain strong. Our superior long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investment performance, diverse client base, broad array of investment management disciplines, and commitment to client service are the foundation of our global business. We are prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. building our global investment management franchise, as management is confident of continued long-term growth in investor demand for investment management services worldwide." Recent Business Highlights: -- Mutual Fund Sales: Total mutual fund sales (excluding money market funds) for the third quarter increased 52% over third quarter 1997, but were 22% lower than second quarter 1998 record levels. In the domestic arena, Alliance continued to see market share improvement in non-proprietary mutual fund sales, according ac·cord v. ac·cord·ed, ac·cord·ing, ac·cords v.tr. 1. To cause to conform or agree; bring into harmony. 2. to Investment Company Institute data. Offshore fund sales were 25% higher than third quarter 1997 figures, but declined 50% from second quarter 1998, primarily on weakness in fund sales in Japan. Total mutual fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. under management at September 30, 1998 were more than $99 billion, up from $82 billion at September 30, 1997, but down from $107 billion at June June: see month. 30, 1998. -- New Separately Managed Account Assets: Alliance Capital was awarded mandates mandates, system of trusteeships established by Article 22 of the Covenant of the League of Nations for the administration of former Turkish territories and of former German colonies. totaling $2.1 billion in new separately managed account assets during the third quarter of 1998, bringing total awards to $5.9 billion for the nine months ended September 30, 1998. Mandates were awarded across twenty of Alliance's investment management strategies. Total separately managed account assets under management at September 30, 1998 were $142 billion, up from $136 billion at September 30, 1997, but down from $155 billion at June 30, 1998. -- Agreement in Principle to Acquire Whittingdale Holdings Limited: Alliance Capital reached an agreement in principle to acquire Whittingdale Holdings Limited ("Whittingdale"), an independent investment manager based in London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. (pound)850 million (US$1.4 billion) in assets under management. Whittingdale is a market leader in fixed income management for insurance companies and syndicates at Lloyd's of London Not to be confused with Lloyds Bank or Lloyd's Register. Lloyd's of London is a British insurance market. It serves as a meeting place where multiple financial backers or “members”, whether individuals (traditionally known as . This transaction is expected to close during fourth quarter of 1998. -- New San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. Service Site: Alliance Fund Services announced it has entered into a lease agreement in San Antonio, Texas “San Antonio” redirects here. For other uses, see San Antonio (disambiguation). San Antonio is the second most populous city in Texas, the third most populous metropolitan area in Texas, and is the seventh most populous city in the United States. As of the 2006 U.S. to open its second mutual fund servicing location. The new site will provide Alliance's domestic mutual funds with shareholder servicing, transaction processing Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time. Transaction processing systems are the backbone of an organization because they update constantly. , and fund accounting. -- Business Relationship with The Sumitomo Trust and Banking Sumitomo Trust & Banking Co., Ltd. (住友信託銀行株式会社 Co., Ltd.: Alliance Capital entered into a business agreement and investment advisory relationship with The Sumitomo Trust and Banking Co., Ltd. ("Sumitomo"), a leading international financial institution headquartered in Osaka Osaka (ō`säkä), city (1990 pop. 2,623,801), capital of Osaka prefecture, S Honshu, Japan, on Osaka Bay, at the mouth of the Yodo River. , Japan. Under this agreement, Alliance will provide U.S. equity investment research and portfolio advice to a team of Sumitomo investment professionals. About Alliance Capital Alliance Capital Management L.P. is the nation's largest publicly traded asset manager, as measured by assets under management, with $242 billion in client assets under management. Alliance Capital manages retirement assets for many of the largest public and private employee benefit plans (including 34 of the nation's Fortune 100 companies), for public employee retirement funds in 34 of the 50 states, and for foundations, endowments, banks, and insurance companies. Alliance Capital is one of America's largest mutual fund sponsors, with a diverse family of fund portfolios and over 3.5 million shareholder accounts. As of September 30, 1998, Alliance Capital Management L.P.'s general partner, Alliance Capital Management Corporation (a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of The Equitable equitable adj. 1) just, based on fairness and not legal technicalities. 2) refers to positive remedies (orders to do something, not money damages) employed by the courts to solve disputes or give relief. (See: equity) EQUITABLE. Companies Incorporated), owned a 1% general partnership interest in Alliance Capital Management L.P.; approximately 57% of Alliance Capital Management L.P.'s outstanding Units are beneficially owned by The Equitable Companies Incorporated. -Two Pages of Tables Follow- -0-
ALLIANCE CAPITAL MANAGEMENT L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands except per Unit amounts)
Three Months Ended Nine Months Ended
9/30/98 9/30/97 9/30/98 9/30/97
------- ------- ------- -------
Revenues:
Investment advisory and
services fees:
Alliance mutual funds $ 148,108 $ 102,957 $ 435,813 $275,698
Separately managed
accounts:
Affiliated clients 13,258 12,665 43,444 38,509
Third party clients 69,392 62,363 224,761 181,393
Distribution revenues 79,698 57,569 221,987 155,575
Shareholder servicing fees 11,677 9,524 31,258 27,405
Other revenues 4,730 5,770 17,737 16,855
--------- --------- --------- --------
326,863 250,848 975,000 695,435
--------- --------- --------- --------
Expenses:
Employee compensation and
benefits 81,835 66,061 251,865 188,899
Promotion and servicing:
Distribution plan
payments to financial
intermediaries:
Affiliated 22,008 15,407 58,734 39,448
Third party 47,161 30,655 133,289 88,889
Amortization of deferred
sales commissions 29,296 19,266 77,792 52,651
Other 22,418 14,959 67,287 44,808
General and administrative 37,707 31,709 121,104 83,005
Interest 1,698 713 5,852 2,005
Amortization of intangible
assets 1,115 881 3,035 6,124
Reduction in recorded
value of intangible
assets ---- ---- ---- 120,900
--------- --------- --------- --------
243,238 179,651 718,958 626,729
--------- --------- --------- --------
Income before income taxes 83,625 71,197 256,042 68,706
Income taxes 13,377 4,988 40,969 13,270
--------- --------- -------- --------
Net income $70,248 $66,209 $215,073 $55,436
======= ======= ======== =======
Basic net income per Unit $ 0.41 $0.39 $1.25 $0.33
====== ===== ===== =====
Diluted net income per
Unit $0.40 $0.38 $1.22 $0.32
===== ===== ===== =====
Net income before
reduction in recorded
value of intangible
assets $70,248 $66,209 $215,073 $176,336
======= ======= ======== ========
Diluted net income per
Unit before reduction in
recorded value of
intangible assets $0.40 $0.38 $1.22 $1.02
===== ===== ===== =====
Distributions per Unit $0.39 $0.37 $1.19 $0.99
===== ===== ===== =====
Weighted average Units
outstanding - Basic 170,204 168,638 169,810 168,307
======= ======= ======= =======
Weighted average Units
outstanding - Diluted 175,229 172,388 175,049 171,471
======= ======= ======= =======
September 30, December 31,
1998 1997 1997
Assets Under Management (millions) $241,865 $217,320 $218,654
======== ======== ========
Unit and per Unit information for the three and nine months ended
September 30, 1997, reflects the two-for-one Unit split, paid to
Unitholders of record as of March 11, 1998.
Certain prior period amounts have been reclassified to conform to
the current period presentation.
Analysis of Assets Under Management
Three Months Ended September 30, 1998
(Millions)
Separately
Managed
Accounts Mutual Funds Total
----------- ------------ ---------
Beginning of period $155,391 $107,125 $262,516
New business/sales 973 8,006 8,979
Terminations/redemptions (234) (4,171) (4,405)
Net cash management sales ---- (1,370) (1,370)
Cash flow (772) (235) (1,007)
Appreciation (depreciation) (12,921) (9,939) (22,860)
Change in joint venture
companies (25) 37 12
--------- -------- --------
Net change $(12,979) $(7,672) $(20,651)
--------- -------- --------
End of period $142,412 $99,453 $241,865
======== ======== ========
Analysis of Assets Under Management
Nine Months Ended September 30, 1998
(Millions)
Separately
Managed
Accounts Mutual Funds Total
---------- ------------ --------
Beginning of period $133,706 $84,948 $218,654
New business/sales 5,795 25,947 31,742
Terminations/redemptions (3,288) (10,881) (14,169)
Net cash management sales --- 2,626 2,626
Cash flow 951 (841) 110
Appreciation (depreciation) 5,059 (2,576) 2,483
Change in joint venture
companies 189 230 419
------ ------ ------
Net change $8,706 $14,505 $23,211
------ ------- -------
End of period $142,412 $99,453 $241,865
======== ======= ========
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