48 slides from Alliancebernstein Holding L.p's earnings presentation, May 3, 2011
Slide 1: 2011 Review
011 Review Peter S. Kraus Chairman & Chief Executive Officer David A. Steyn Chief Operating Officer Edward J. Farrell Interim Chief Financial Officer & Controller ALLIANCEBERNSTEIN May 2, 2011
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements Certain statements provided by management in this news release 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
Slide 4: Positioning AllianceBernstein for Long Term Success
Positioning AllianceBernstein for Long Term Success Firmwide Initiatives: m=lmprove investment performance and restore client confidence @ Diversify our business across channels, investment services and geographies m= Develop innovative new products and services to meet clients’ evolving needs mAchi
Slide 5: Progress On Our Long-Term Strategic Initiatives
Progress On Our Long-Term Strategic Initiatives Cumulative Returns vs. Peers Since the Market Bottom ‘AB Outperformance Relative to Peer Avg: February 28, 2009, trough March 31, 2011 (Percentage points) 40 39 2 i 9 i 6 ‘Strategic SMD C2p SMDCx Gobel _Goobal_ntematonal Emerging Value Growth Value The
Slide 6: 1Q 2011 Accomplishments
AllianceBernstein.com 5 1Q 2011 Accomplishments 1 AsianInvestor Magazine 2 Asia Asset Management Magazine’s 2010 Best of the Best Awards. 3 Transaction to be completed by early June 2011
Slide 7: Enhancements to Our Growth Investment Practice
Enhancements to Our Growth Investment Practice m= What makes a great Growth Investment Practice? = Consistent discipline grounded in core beliefs = Superior insight generation | The ability to act quickly and decisively = Strong, independent thinking m Where we are strong = Getting local insights in
Slide 8: David A. Steyn
David A. Steyn Chief Operating Officer
Slide 9: Assets Under Management: First Quarter 2011
Assets Under Management: First Quarter 2011 In US $ Billions End of Period AUM $481 $480 $481 $481 10:11 40:10 10:11 10:10 $16 $16 $16 | - | i 10:11 40:10 10:11 10:10 10:11 40:10 10:11 10:10 = $7) $(14) $(14) $(29)
Slide 10: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend In US $ Billions Gross Sales m Gross Redemptions # Net Flows Int Ret PC. Int Ret PC. In Ret PC, Int Ret PC. Int Ret Pec. 1010 2010 3Q.10 42.10 1011 Net Totals: $(6.6) $(4.7) (15.6) $(29.3) (14.4)
Slide 11: Institutional Flows
Institutional Flows In US $ Billions ines Srcsc'Sine TemmCrossiiadimfiine LR Hl Flows sm 1055 90186 MG FO SS ReveMMMONS SHENStFTOWS 8 38.5 52 35 42 35 [| 282 me oe (63.7) = (25.9) (69.7) (66.1) 1010 2010 3010 4Q10 1am 2008 2009 2010
Slide 12: Ongoing Outperformance in Fixed Income
Ongoing Outperformance in Fixed Income Fixed Income Relative Composite Performance as of 3/31/2011 Product 1 Year 3 Year 5 Year US Strategic Core Plus (USD) 2.5 2.3 1.0 US Core (USD) 1.6 LY 04 US High Yield Composite (USD) (0.1) 1.4 0.7 Global Plus Hedged to USD (USD) 3.3 2.4 15 Global Fixed Income
Slide 13: Institutional Equities: Strong Premiums Since the Market Bottom
Institutional Equities: Strong Premiums Since the Market Bottom Cumulative Returns vs. Peers Since the Market Bottom Percentage Retums: February 28, 2009, through March 31, 2011 MAllianceBernstein ll eVestment Peer Group 175 169 149 150 129 128 123 104 96 87 86 87 i ia 81 Strategic Value SMID Cap Gr
Slide 14: Defined Contribution: Success with CRS
Defined Contribution: Success with CRS In US $ Billions Growth in CRS Assets Attribution of $7B Asset Increase $11 $9 $7 $4 New Clients ® Existing Client Cashfiows Performance 2008 2009 2010 Mar-11
Slide 15: Retail Flows
In US $ Billions mmm Gross Sales mmm Gross Redemptions —¢—Net Flows lm Gross Sales mm Gross Redemptions —¢—Net Flows 33.2 23.3 23.0 10.5 (8.0) Os) (12.7) 1010 2010 3010 4a. 10 1a 11 (48.3) 2008 2009 2010
Slide 16: Retail Sales Trends
Retail Sales Trends Growth in Gross Sales Top Selling Funds Performance Sales Growth in1Q11 (1 Year) vs. 4Q10 $0 Wak moran Real Asset Strategy 25.4% +750% $8 mati ‘Small Mid Cap Growth 47.7% +242% $6 Large Cap Growth 16.9% +112% am Strategic Research 26.7% +66% Small Cap Growth 40.4% +42% ® Small Mi
Slide 17: Private Client Flows
Private Client Flows In US $ Billions mmm Gross Sales mmm Gross Redemptions —@—Net Flows mmm Gross Sales fmm Gross Redemptions —+ Net Flows: 110 24 om 23, (28) (3.0) 2008 2009 2010 1010 2Q 10 3010 4a 10 1011
Slide 18: Growth in Client Relationships and Dynamic Asset Allocation
Growth in Client Relationships and Dynamic Asset Allocation Overall Asset DAA AUM: Over $23 Billion** Cient relationships in DAA (Right) mums Assets w/ DAA Overlay* (Left) 25,000 12,000 32% 29% 20,000 spgng oh 21% ee 8,000 5,000 5 6,000 a 8 40.000 4,000 5,000 2,000 3% ° ° 2008, 2009 2010 192011 Feb-
Slide 19: Bernstein Research Services
Bernstein Research Services m 1Q revenue increased 12% versus prior quarter and 8% year-over-year, driven by strength in the U.S. and Europe. Market volumes improved sequentially but remain muted in the U.S. m Success with new initiatives during the quarter: e Record results in our new electronic tr
Slide 20: Edward J. Farrell
Edward J. Farrell Interim Chief Financial Officer & Controller
Slide 21: Financial Highlights: First Quarter 2011
Financial Highlights: First Quarter 2011 47 41g Adjusted EPU 10:11 40:10 10:11 10:10 Adjusted Revenue/ Expense Trends Adjusted 1% Adjusted Revenues 0% _ Expenses % Change Q1 vs. 04 % Change Q1-11 vs. Q1-10 24.5% r 21.9% 21.9% Adjusted 21.3% Operating Margins | im 10:11 40:10 10:11 10:10 88.9 498 498
Slide 22: First Quarter 2011 Income Statement
First Quarter 2011 Income Statement ™ Operating income down 10% sequentially and 1% versus the prior year quarter im GAAP EPU of 42 cents, flat from the prior quarter down versus 1Q10 EPU of 46 cents m Adjusted EPU of 41 cents, up from 4Q10 and down 13% from the prior year quarter 1Q 4Q 1a In US Dol
Slide 23: First Quarter 2011 Revenues
First Quarter 2011 Revenues = Base fees down slightly from the prior quarter and flat versus 1Q10 = Bernstein Research up versus both prior periods, due to higher volumes = Lower investment gains in the current quarter 1a 4a 1a Revenues (in US dolar milions) 2011 2010 %A 2010 MA Base Fees $510 § 514
Slide 24: First Quarter 2011 Operating Expenses
First Quarter 2011 Operating Expenses = Base compensation higher versus both prior periods = Promotion & servicing fell 2% versus the prior quarter, due to lower T&E and increased 14% versus prior year, due to higher distribution-related payments and T&E expenses = G&A in the current quarter include
Slide 25: First Quarter 2011 GAAP to Adjusted Reconciliation
First Quarter 2011 GAAP to Adjusted Reconc = GAAP Operating Income down versus both prior periods = Margin expansion versus 4Q10; decline versus 1Q10 attributed to increased expenses 1Q 4Q 1a 2011 2010 %A 2010 %A AllianceBernstein L.P. GAAP Operating Income $138 $ 154 (10%) | $ 140 (1%) Net P&L impa
Slide 26: AllianceBernstein.com
AllianceBernstein.com 25
Slide 27: AllianceBernstein.com
AllianceBernstein.com 26
Slide 28: Institutional Value Equity: Relative Performance
onal Value Equity: Relative Performance ‘ional Equity Composites vs. Benchmarks Periods Ended March 31, 2011 1a One Three —- Five. Ten Service 2011 Year _Years _Years _Years Benchmark US Diversified Value (0.0) (3.7) (2.2) (2.3) (0.4) Russell 1000 Value US Strategic Value 05 (2) (4) (43) 02 S&P 500
Slide 29: Institutional Growth Equity: Relative Performance
Institutional Growth Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Periods Ended March 31, 2011 1a One Three _——Five Ten Service 2011 Year _Years _Years _Years Benchmark Global Research Growth (1.3) (27) (63) (2) (1.5) MSCI World (Cap, UH, net) US Large Cap Growth 09 (3
Slide 30: Institutional Blend Strategies: Relative Performance
Institutional Blend Strategies: Relative Performance Institutional Blend Strategies Equity Composites vs. Benchmarks Periods Ended March 31, 2011 10 One Three Five Ten Service 2011 Year Years _Years Years Benchmark Global Blend Strategies (06) (39) 4) (48) NA MSCIWorld (Cap, UH, net) Intemational Bl
Slide 31: Institutional Fixed Income: Relative Performance
Institutional Fixed Income: Relative Performance Institutional Fixed Income Composites vs. Benchmarks* Periods Ended March 31, 2011 10 One Three Five —‘Ten Service 2011 Year __—‘Years ‘Years _Years Benchmark Corporate Bonds o.4 04 05 00 o4 Custom Corporate Index Strategic Core Plus 06 22 2.0 o7 NA C
Slide 32: Private Client: Absolute Performance
Private Client: Absolute Performance Periods Ended March 31, 2011 1Q One Five Ten Service 2011 Year Three Years Years Years Fully Diversified Simulation* 3.0 86 05 14 46 S&P 500 59 15.6 24 26 33 MSCI World Index - Net 48 13.4 (0.2) 24 42 Lipper Short/int Blended Muni Fund Avg 05 18 34 32 33 Performa
Slide 33: Retail Value Equity: Relative Performance
Retail Value Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended March 31, 2011 1Q One Three Five 10 Service 2011 Year _Years ‘Years __Years Lipper Average Intemational Value (18) (46) = (53) (3.7) 08 Intemational Large Cap Value Growth & Income 23 39 0.4 (02) (1.4) La
Slide 34: Retail Growth Equity: Relative Performance
Retail Growth Eq Retail Mutual Funds vs. Lipper Averages Periods Ended March 31, 2011 1Q One Three Five 10 Service 2011 Year Years Years Years Lipper Average Global Growth (13) (48) = (69) (5.3) NA Global Large-Cap Growth Global Thematic Growth 7) 32 55 14 (2.4) Global Multi-Cap Growth International
Slide 35: Retail Fixed Income: Relative Performance
Retail Fixed Income: Relative Performance Retail Fixed Income Funds vs. Lipper Averages Periods Ended March 31, 2011 1Q One Three Five 10 Service 2011 ‘Year _‘Years Years _Years Lipper Average Global High Yield Portfolio (3.3) (1.8) 35 03 04 Bond Global High Yield American Income Portfolio 0.9 45 40
Slide 36: Wealth Strategies: Relative Performance
Wealth Strategies: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended March 31, 2011 1Q One ‘Three — Five. 10 Service 2011 Year __ Years _Years _Years Lipper Average Conservative Wealth (0.0) (0.8) (1.1) (0.5) 0.0 Mixed-Asset Target Alloc Consv Balanced Wealth 04 06 (03) (04)
Slide 37: AUM Roll-Forward by Distribution Channel
Three Months Ended 3/31/11: 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 $272.9 $83.6 $43.4 $127.0 | $76.3 18 ‘$78.1 $309.6 $168.4
Slide 38: AUM Roll-Forward by Investment Service
Three Months Ended 3/31/11: AUM Roll-Forward by Investment Service In US $ Billions Value Equity Growth Equity Fixed Income Other” Total Client Domicit US Non-US Total US Non-US Total US Non-US Total US Non-US Total US —_—Non-US_Total Beginning of Period $889 $55.4 $144.3 | $53.7 $206 $74.3 | $1169
Slide 39: AUM by Region
AUM by Region In US $ Billions As of March 31, 2011 Institutions Retail Private Client 1 Other Europe Other Eur BCU es, 7% 3% Non-US —_ 6% Australia x 6% . Asia Pac us 25% 6% / us NA. ex- 56% us J us 8% g 65% Japan 10% us 98% $266.8 $131.0 $79.5
Slide 40: First Quarter 2011 Advisory Fees
First Quarter 2011 Advisory Fees In US Dollars 1Q 4Q 1Q 2011 2010 % A 2010 %A Ending AUM ($ Bi $477 $478 (0%) $492 (3%) Average AUM ($ Billions) $481 $480 0% $481 0% By Fee Type ($ Millions): Base Fees $510 $514 (1%) $509 0% Performance Fees 5 9 (44%) 3 91% Total $515 $523 (2%) $512 1% Base Fees By
Slide 41: Six-Quarter Deferred Compensation Net P&L Trend
Six-Quarter Deferred Compensation Net P&L Trend In US $ Millions 4Q 1Q 2a 3Q 4Q 1Q 2009 2010 2010 2010 2010 2011 Revenues Investment Gains (Losses) $15 su ($37) $36 $17 $10 Dividends 4 1 - 1 4 - Total Revenues $19 $12 ($37) $37 $24 $10 Expenses Amortization of Original Awards $36 $31 $31 $27 $31 $19
Slide 42: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets Mar 31, 2011 Dec 31, 2010 Casi and cash equiaients $ as 650 Cash and securities, segregated 1,329 4,110 Receivables, net 1,328 1,389 Investments: Deferred compensation - related 267 299 Other 620 458 Goodwill 2,939 2,939 Intangible assets, net 200 2
Slide 43: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions ‘Three Months Ended Mar 31, 2014 Mar 31, 2010 Net income $ $s 73 Non-cash items: Amortization of deferred sales commissions 10 2 ‘Amortization of non-cash deferred compensation 43 26 Depreciation and other amortization 24 24 Unrealized (gains) on
Slide 44: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In US § Millions (excluding per unit amounts) 1a 4a 1a 2011 2010 %A 2010 % A AllianceBernstein Net income Attributable to AllianceBemstein $136 $137 (0%) $148 (8%) Weighted Average Equity Ownership Interest 374% 367% 36.6% AllianceBernstein Holding See ace
Slide 45: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein Adjusted Earnings Reconciliation ‘Three Months Ended $ thousands Ea T2si10 ‘3730710 130/10 SiO 12131709 Net Revenues, GAAP basis $ 755,390 § 777,561 § 757,567 $ 688,343 § 725,086 § 781,861 Exclude: Deferred compensation-related investment (gains) losses 9,740) (16,677) (36,013) 36,
Slide 46: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein Holding Adjusted Earnings Reconciliation ‘Three Months Ended $ thousands except per unit amounts 3344 42/34/40 9/30/40 6/30/40 3134140 12/31109 Diluted Net Income, GAAP basis, $ 43,923 $ 43,289 $ 12,384 $ 32,256 $ 47,858 $ 60,402 Impact on net income of AllianceBemstein L.P. non-GA
Slide 47: 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 48: Region: Global Division: Global Name: Screenshow End Page Use: < Between speakers and as
Region: Global Division: Global Name: Screenshow End Page Use: < Between speakers and as an end page for a Screenshow presentation < Not used for a standard print book < Do not re-size logo Other: