45 slides from Alliancebernstein Holding L.p's earnings presentation, Feb 13, 2012
Slide 1: Fourth Quarter 2011 Review
February 10, 2012 Fourth Quarter 2011 Review Peter S. Kraus Chairman & Chief Executive Officer Edward J. Farrell Interim Chief Financial Officer & Controller ALLIANCEBERNSTEIN
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements Certain statements provided by management in this presentation 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 fac
Slide 3: Peter S. Kraus
Peter S. Kraus Chairman & Chief Executive Officer B 2
Slide 4: Firmwide Overview: Fourth Quarter and Full Year 2011
Firmwide Overview: Fourth Quarter and Full Year 2011 In US $ Billions End of Period AUM Average AUM $56 ‘$60 $15 $11 40:11 3011 2011 2010 40:11 30:11 2011 2010 S(13) $(15) $(63) (56) $406 $402 $406 Roll 40:11 30:11 2011 2010 $475 satt $438 $452 40:11 3Q:11 2011 2010
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend In US $ Billions 67 35 | 7 25.9) Inst. Ret 42.10 Total Gross Sales $12.1 Gross Redemptions $(41.4) Net Outflows $(29.3) Pe. = Gross Sales 82 52 2.3 G0) (9.0) (18.1) Inst Ret. PC. 1011 $15.7 $(30.1) 9(14.4) "Gross Redemptions as 37 15 yk (4.1) 4 (1
Slide 6: Institutional Highlights
Institutional Highlights 2011 Gross Sales by Investment Service 2011 Gross Sales by Region $17B in Total Equity Fixed Income Index / Other* CRS Asia ex-Japan Japan CEMEA UK 2% Canada us With Large CRS Fundings, 4Q Pipeline Down New 4Q Adds to the Pipeline in CRS and Fixed Income $7.08 $4.38 End 3011
Slide 7: Strong Performance in Fixed Income and Diverse Equity Services
Strong Performance in Fixed Income and Diverse Equity Services Relative Returns — One Year Fixed Longer Time Horizon Shorter Time Horizon Income* Equity Equity 8.0% 7.3% 5.4% 1.2% 9 2.2% = LI i | | 7 Global Fixed Global Plus Small SMID Equity US Market Global Select US Income Cap Cap Income Neutral
Slide 8: Retail Highlights
Retail Highlights 2011 Gross Sales by Asset Class 2011 Gross Sales by Geography $31B in Total Taiwan us é Value | | Asia: 53% Fixed Income Stout \ Hong Kong Other 2% LatAm 4% te EMEA Korea A Year of Successful New Product Launches New Products Driving Sales sn New Products as Percent of Gross Sales
Slide 9: Private Client: DAA Works
Private Client: DAA Works With DAA We Continuously Adapt to Rapidly Changing Markets 120 Adjusting Equity Allocations... 004 = xepuj = 20 Etro Area Crisis | Japanese Earthquake. Euro Area Crisis I! = Quickly reduced equity weight Risk remained localized Underweight and partial Euro hedge 5 E 10 z oO
Slide 10: Bernstein Research Services Highlights
Bernstein Research Services Highlights Decrease in Revenues... 2011 Accomplishments sm % Change ] 4011/4010: (14)% | 4011/3011: (22)% 118 107 L Lo 4a10 3a11 4ait ..-Driven by Steep Decline in Volume and Volatility 25 50 20 40 15 30 10 20 5 10 0 0 FS KK Ee CH SO Mal FF "NYSE & Nasdaq Shares Traded (8
Slide 11: Progress on Our Strategy in 2011
Progress on Our Strategy in 2011 Firmwide Initiative Progress Improve investment performance and restore client confidence Diversify our business across channels, investment services and geographies ® Three-year run of outperformance in Global Fixed Income — top quartile rankings in US Core, Emergin
Slide 12: Evolution of Our Business
Evolution of Our Business Dec-08: $221 Billion 49% of Firm Total Food Equities ex- Income Large Cap* Asset ‘Allocation [ Large Cap | $5 Alternatives Equities: $2288 Dec-08: $703 Million 36% of Firm Total Fixed Equities ex- Income Large Cap* Asset ™ Allocation Large Cap '$32 Alternatives Equities: $1
Slide 13: Continuing Our Strategy in 2012
Continuing Our Strategy in 2012 Firmwide Initiative Strategy Improve investment performance and restore client confidence Diversify our business across channels, investment services and geographies (1) Lipper Fund Awards 2012 B ® Maintain our strong commitment to long-standing services while evolvin
Slide 14: Edward J. Farrell
Edward J. Farrell Interim Chief Financial Officer & Controller B 13
Slide 15: Financial Highlights: Fourth Quarter and Full Year 2011
Financial Highlights: Fourth Quarter and Full Year 2011 0.1% (1.1)% Adjusted Revenue/ peas xpenses Expense Trends Adjusted Revenues (5.4)% (12.4)% 64} % Change Q4 vs. Q3 % Change 2011 vs. 2010 177% 21.6% 17.0% 7.0% 4:11 30:11 2011 2010 $1.60 30¢ $1.14 Adjusted EPU 7¢ | et 40:14 30:11 2011 2010 752 2
Slide 16: Fourth Quarter and Full Year 2011 Income Statement
Fourth Quarter and Full Year 2011 Income Statement = Current quarter and full year includes $587 million one-time, non-cash deferred compensation charge = Prior quarter includes $7 million real estate charge related to the consolidation of London office space ® Adjusted fourth quarter EPU of 7 cents
Slide 17: Fourth Quarter and Full Year 2011 Revenues
Fourth Quarter and Full Year 2011 Revenues m= Lower base fees sequentially and year-over-year due to lower average AUM ® Bernstein Research declined sequentially as market volumes dropped from prior quarter highs ® Current quarter gains in deferred comp investments and lower venture fund losses; cur
Slide 18: Fourth Quarter and Full Year 2011 Operating Expenses
Fourth Quarter and Full Year 2011 Operating Expenses = Full year compensation ratio of 50.3% vs. 49.7% in prior year m= Promotion & Servicing down sequentially due to lower distribution plan payments; increase versus the prior year due to higher travel and entertainment, trade and execution costs an
Slide 19: Fourth Quarter and Full Year 2011 GAAP to Adjusted Reconciliation
Fourth Quarter and Full Year 2011 GAAP to Adjusted Reconciliation = GAAP Operating Loss for both the quarter and full year due to one-time, non-cash deferred compensation charge m= Adjusted Operating Margin declined for both the quarter and full year, due primarily to lower revenues 4Q 3a 2011 2011
Slide 20: AllianceBernstein.com
AllianceBernstein.com
Slide 21: AllianceBernstein.com
AllianceBernstein.com
Slide 22: Institutional Value Equity: Relative Performance
Institutional Value Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Periods Ended December 31, 2011 4Q One —‘ Three Five Ten Service 2011 Year _Years_ _‘Years__Years Benchmark US Diversified Value (1.0) (34) (1.7) (2.9) (1.4) Russell 1000 Value US Strategic Value (28) (79
Slide 23: Institutional Growth Equity: Relative Performance
Institutional Growth Equity: Relative Performance ‘ional Equity Composites vs. Benchmarks Periods Ended December 31, 2011 4Q One — Three Five Ten Service 2011 Year _Years ‘Years _Years Benchmark Global Research Growth (0.3) (68) (28) (6.0) (23) MSCIWorld (Cap, UH, net) US Large Cap Growth 08 (4.9) (
Slide 24: Institutional Blend Strategies: Relative Performance
Institutional Blend Strategies: Relative Performance Institutional Blend Strategies Equity Composites vs. Benchmarks Periods Ended December 31, 2011 4Q One Three Five Ten Service 2011 Year Years _Years Years Benchmark Global Blend Strategies (08) (7.0) (3.2) (58) N/A MSCI World (Cap, UH, net) Intern
Slide 25: Institutional Fixed Income: Relative Performance
Institutional Fixed Income: Relative Performance Institutional Fixed Income Composites vs. Benchmarks* Periods Ended December 31, 2011 4Q One Three — Five Ten Service 2011 Year _—Years _—‘Years _Years Benchmark Corporate Bonds 0.4 02 3.9 04 03 Barclays Capital US Credit index Strategic Core Plus (0.
Slide 26: Private Client: Absolute Performance
Private Client: Absolute Performance Periods Ended December 31, 2011 4Q One Three Five Ten Service 2014 Year Years Years Years Fully Diversified Simulation” 46 G4) 90 (13) 37 S&P 500 118 24 14.1 (0.2) 29 MSCI World index - Net 76 (65) W4 (24) 36 Lipper Short/nt Blended Muni Fund Avg 15 64 56 37 36 P
Slide 27: Retail Value Equity: Relative Performance
Retail Value Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended December 31, 2011 4Q One Three Five 10 Service 2011 Year _‘Years ‘Years _Years Lipper Average Intemational Value (10) 67) =—(22)— 5.0) (0.7) Intemational Large Cap Value Growth & income 24 63 03 12 (07) L
Slide 28: Retail Growth Equity: Relative Performance
Retail Growth Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended December 31, 2011 4Q One Three Five 10 Service 2011 Year _‘Years Years _Years Lipper Average Global Growth LIQUIDATED ON 10/04/11 Global Large-Cap Growth Global Thematic Growth (29) (122) (241) 08 (3.2)
Slide 29: Retail Fixed Income: Relative Performance
Retail Fixed Income: Relative Performance Retail Fixed Income Funds vs. Lipper Averages Periods Ended December 31, 2011 4Q One Three Five 10 Service 2011 Year _‘Years Years _Years Lipper Average Global High Yield Portfolio 1.5 14 64 2.0 15 Bond Global High Yield American Income Portfolio 22 05 76 13
Slide 30: Wealth Strategies: Relative Performance
Wealth Strategies: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended December 31, 2011 4Q One _— Three Five 10 Service 2011 Year __ Years _Years _Years Lipper Average Conservative Wealth (08) (22) (1.5) (1.2) N/A Mixed-Asset Target Alloc Consv Balanced Wealth (0.0) (3.8) 08
Slide 31: Three Months Ended 12/31/11: AUM Roll-Forward by Distribution Channel
Three Months Ended 12/31/11: AUM Roll-Forward by Distribution Channel In US $ Billions Institutions Retail Private Client Total Client Domicile: US Non-US Total US Non-US Total US Non-US Total US Non-US __Total Beginning of Period $123.6 $100.5 $224.1 | $70.0 $39.8 $109.8 | $66.6 $1.5 $68.1 | $260.2
Slide 32: Three Months Ended 12/31/11: AUM Roll-Forward by Investment Service
Three Months Ended 12/31/11: AUM Roll-Forward by Investment Service In US $ Billions Value Equity Growth Equity Fixed Income Other” Total Client Domicile: US Non-US Total US Non-US Total US Non US Total US Non-US Total US Non-US —_Total Beginning of Period $559 $311 $870 | $340 $108 $448 | $1183 $95
Slide 33: Twelve Months Ended 12/31/11: AUM Roll-Forward by Distribution Channel
Twelve Months Ended 12/31/11: AUM Roll-Forward by Distribution Channel In US $ Billions Institutions Retail Private Client Total Client Domicile: US Non-US Total US Non-US Total US Non-US Total US Non-US _ Total Beginning of Period $149.7 $123.2 $2729 | $83.6 $43.4 «$127.0 | $76.3 $1.8 $78.1 | $3096
Slide 34: Twelve Months Ended 12/31/11: AUM Roll-Forward by Investment Service
Twelve Months Ended 12/31/11: AUM Roll-Forward by Investment Service In US $ Billions Value Equity Growth Equity Fixed Income Other"? Total Gliont Domicile: US Non-US Total US Non-US Total US Non-US Total US Non-US Total US Non-US _Total Beginning of Period soso $554 $1443 | $537 $206 $743 | $1169 $
Slide 35: AUM by Region
AUM by Region As of December 31, 2011 Institutions Other 9% Eur. ex-UK 5% Australia 5%, UK 5% N.A. ex: US Ooo 5% US $ Billions $223.9 Retail Sf Europe 7% Other 3% US 63% $112.6 Private Client Non-US 2% US 98% $69.4
Slide 36: Quarter 2011 Advisory Fees
jarter 2011 Advisory Fees In US Dollars 4Q 3Q rey ont wa (FY2011 FY2010 Ending AUM ($ Billions) $406 $402 1% | $406 $478 (15%) Average AUM ($ Billions) $411 $438 (6%) $452 $475 (5%) By Fee Type ($ Millions): Base Fees $416 $469 (11%) | $1,900 $2,031 (6%) Performance Fees z 1 om 16 21 (19%) Total $42
Slide 37: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets Dec. 31, 2011 Dec 31, 2010 Cashrand cash equivalents ¥ oo Ss 650 Cash and securities, segregated 1,280 4,110 Receivables, net 1,339 1,389 Investments: Deferred compensation - related 176 299 Other 619 458 Goodwill 2,955 2,939 Intangible assets, net
Slide 38: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US § Millions ‘Twelve Months Ended “Dec. 31,2011 Dec. 31, 2010 Net (Coss) income ¥ ey aor Non-cash items: Amortization of deferred sales commissions 38 ar ‘Amortization of non-cash deferred compensation 474 123 Depreciation and other amortization 83 82 Unreali
Slide 39: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In US § Millions (excluding per unit amounts) 4Q 3Q 2011 2011 % A _|FY2011 FY2010 %A AllianceBernstein Net (Loss) Income Attributable to AlianceBemstein ($516) $91 nim | ($175) $442, sm Weighted Average Equity Ownership Interest 375% 37.5% a75% 367% Allian
Slide 40: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein Adjusted Earnings Reconciliation ‘Three Months Ended $ thousands sas 9130114 6130/11 siti 423110 9/30/10 Net Revenues, GAAP basis: 3” 624,978 $641,529 $727,994 $755,390 $ 777,561 § 757,567 Exclude: Deferred compensation related investment (gains) losses (9,386) 37,840 1,588 (9740)
Slide 41: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein Holding Adjusted Earnings Reconciliation ‘Three Months Ended $ thousands except per unit amounts 4234/14 9/30/11 6/30/11 334/11 12134110 9/30/10 Diluted Net (Loss) Income, GAAP basis $ (199,463) $ 27,003 35,653 43,923 $ 43,289 «$ 12,384 impact on net income of AllianceBemstein L.P.
Slide 42: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein Adjusted Earnings Reconciliation ‘Twelve Months Ended $ thousands 1231/14 42/31/10 Net Revenues, GAAP basis $ 2,749,891 = $ ~—-2,948,557 Exclude: Deferred compensation-related investment (gains) losses 20,302 (27,053) Deferred compensation-related dividends and interest (4,364) (6.
Slide 43: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein Holding Adjusted Earnings Reconciliation ‘Twelve Months Ended $ thousands except per unit amounts 12341 12/3110 Diluted Net (Loss) Income, GAAP basis $ (93,268) $~=—«(135,798 Impact on net income of AllianceBemstein L.P. non-GAAP adjustments 210,891 28,378 Adjusted Diluted Net Inco
Slide 44: AllianceBernstein Adjusted Financial Results Reconciliation
AllianceBernstein Adjusted Financial Results Reconciliation AllianceBernstein L.P. Notes to Condensed Consolidated Statements of Income and Supplemental Information (Unaudited) Adjusted Net Revenues ‘Adjusted net revenues exclude investment gains and losses and dividends and interest on deferred com
Slide 45: ALLIANCEBERNSTEIN
7B ALLIANCEBERNSTEIN