52 slides from Alliancebernstein Holding L.p's earnings presentation, Aug 1, 2011
Slide 1: Second Quarter 2011 Review
July 29, 2014 Second Quarter 2011 Review Peter S. Kraus Chairman & Chief Executive Officer David A. Steyn Chief Operating 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 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: = Improve investment performance and restore client confidence = Diversify our business across channels, investment services and geographies = Develop innovative new products and services to meet clients’ evolving needs m= Ach
Slide 5: 2Q 2011 Accomplishments
2Q 2011 Accomplishments | Performance: m= Top 5 manager of global Fixed Income mandates, with continued outperformance = Ongoing strength in diverse Equity services - US Small and SMID Cap, Japan Strategic Value, Global REITs = Top-performing new product launches ™ Globalization and Diversification:
Slide 6: Momentum across services
Momentum across services Dec-08 — Jun-11 Dec-08 — Jun-11 Change in AUM Change in AFB (US $ Billions) (US $ Millions) 267.5 51.0 23.2 18.5 86.3 68.7 84 iol} = — Fixed Income Equities ex- Asset Allocation Altematives Fixed Income Equities ex- Asset Allocation _Altematives Large Cap* Large Cap* “Includ
Slide 7: Recent growth offsetting contraction
Recent growth offsetting contraction Dec-08 — Jun-11 Dec-08 — Jun-11 Change in AUM Change in AFB (US $ Billions) (US $ Millions) 4277 101.1 (88.9) (342.6) New and Growing Core US, Global & Non- New and Growing Core US, Global & Non- Services” US Large Cap Equity Services* US Large Cap Equity “Includ
Slide 8: Evolution of AUM and AFB
Evolution of AUM and AFB Dec-08: $221 Billion AUM Jun-11: $322 Billion 49% of Firm Total (Sin Billions) 70% of Firm Total Fixed Equities ex- Fixed Equities ex- Income Large Cap* heene Large Cap* Asset Asset Allocation Allocation Large Cap $5 Alternatives "Large Cap | Equities: Equities: $13 Alternat
Slide 9: Core Equity Services — Ongoing Initiatives to Strengthen our Platform
Core Equity Services — Ongoing Initiatives to Strengthen our Platform m= Properly sized the platform @ Significantly reduced headcount = Scaled down to core focus — exited certain ancillary services like Venture Capital = Cut discretionary spending — e.g., T&E, market data services mlmproved Investm
Slide 10: David A. Steyn
David A. Steyn Chief Operating Officer
Slide 11: Assets Under Management: Second Quarter
Assets Under Management: Second Q' In US $ Billions End of Period AUM 20:11 10:11 20:11 20:10 $48 sara $474 472 20:11 10:11 2011 20:10 $14 $16 $19 $14 20:11 10:11 20:11 20:10 20:11 10:11 20:11 20:10 (6) $(14) $(20) $(20)
Slide 12: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend In US $ Billions Net Totals: $14.7) Gross Sales m Gross Redemptions @ Net Flows 2 82 52 42 35 16 19 23 oe | fe (2.1) (28) 6.0) (11.9) (10.5) po (12.7) (16.1) [(22.4)} (18.1) (25.9) Inst Ret PC. Inst Ret PC. Inst Ret PC. 30 10 4Q10 1011 $(15.6) $(2
Slide 13: Institutional Flows
Institutional Flows mmm Gross Sales mam Gross Redemptions ¢ NetFlows 52 42 35 bg 37 (118) Ew « 2010 3Q10 4Q10 1011 2011
Slide 14: Institutional Highlights
Institutional Highlights Growing Pipeline... With 2Q Wins Across Diverse Strategies = $1.9B CRS Mandate $6.2B = $700MM Emerging Markets Fixed Income $4.08 = $400MM Real Asset Strategies = $185MM Global Bond Allocation = $120MM Real Estate Opportunities End 1011 End 2011 Momentum Continues in Fixed I
Slide 15: Ongoing Outperformance in Fixed Income
Ongoing Outperformance in Fixed Income Fixed Income Relative Composite Performance as of 6/30/2011 Product 1 Year 3 Year 5 Year US Strategic Core Plus (USD) aT 2.0 0.9 US Core (USD) 07 19 0.8 US High Yield Composite (USD) 1.6 14 0.4 Global Plus Hedged to USD (USD) 3.5 23 1.6 Global Fixed Income (USD
Slide 16: Diverse Pockets of Strength in Equities
Diverse Pockets of Strength in Equities Equities Relative Composite Performance as of 6/30/2011 Product 1 Year 3 Year 5 Year Value: US Small Cap Value (USD) 65 62 47 US Small/Mid Cap Value (USD) 0.5 2.0 2.9 Japan Strategic Value (JPY) 3.9 1.0 1.6 Special Equities: US Thematic Research (USD) 9.5 a8 1
Slide 17: Institutional Equities: Strong Premiums Since the Market Bottom
Institutional Equities: Strong Premiums Since the Market Bottom Cumulative Returns vs. Peers Percentage Returns: February 28, 2009, through June 30, 2011 MAllianceBernstein mi eVestment Peer Group* 169 ice the Market Bottom 165 147 142 128 125 115 100 92 90 il 87 85 85 Strategic Value SMID Cap Growt
Slide 18: Retail Flows
Retail Flows In US $ Billions lm Gross Sales mmm Gross Redemptions NetFlows 86 82 85 : : 03 - 30 @8) (105) 7 ° (108) (12.7) 2010 3Q10 4Q10 1Q11 2011
Slide 19: Retail Sales Momentum...
Retail Sales Momentum... Growth in Gross Sales ‘Strength in Gross Mutual Fund Sales and Net Flows $10 mQ4 2010 « s10 os wQ1 2011 $8 22 2011 Gross $6 bd $5 $4 © b 4 2 ‘ wal Pm ae oe = ($5) in 109 Q209 309 Q409 A110 G20 a310 Qt10 att1 211 Total Fixed Value Growth Index Income Fixed Income Franchise Co
Slide 20: Growth Driven by Top Performing New and Legacy Products
iven by Top Performing New and Legacy Products New Retail Product Launches ’08 - 2Q11 Outperformance of New Products "09-2014 5 te rund Performance vs. 77 on Pdi (i-Year)" Peer Avg Neen te, US Strategic Research 36.8% 14% in New Assets Real Asset Strategy 35.5% 16.0% uu Euro High Yield 14.1% 3.2% Bo
Slide 21: Private Client Flows
Private Client Flows In US $ Billions smmmGross Sales mmm Gross Redemptions © Net Flows 23 24 i 16 15 (0.7) (2.2) (2.1) (28) 80) (4.1) 2Q10 3Q10 4Q10 1Q11 2011
Slide 22: Product Success and Fee Stability
Product Success and Fee Stability DAA AUM: Over $24 Billion** Private Client Fee Realization Rate mms Assets w/ DAA Overlay” (Left) ‘Cient relationships in DAA (Fight) ——Private Client ~®—Firmwide 30,000 14,000 876 or4 84.9 85.5 86.1 25,000 12,000 ———~_._*— 10,000 4p 20.000 2 8,000 3 15.00 915000 43
Slide 23: Bernstein Research Services
ernstein Research Services BRS Revenues were Challenged... European Research Recognition $MM | % Change 2011/2010: (8)% 2Q11/1011: (10)% 117 119 108 2010 1011 2011 m= Strength of European research product was recognized by clients in two surveys: ‘© Bemstein ranked top five in nine sectors in Thomso
Slide 24: Edward J. Farrell
Edward J. Farrell Interim Chief Financial Officer & Controller
Slide 25: Financial Highlights: Second Quarter 2011
cial Highlights: Second Quarter 2011 aig a7¢ 35 35 Adjusted ss s et a || 20:11 10:11 20:11 20:10 (1)% || Adjusted Revenue/ Mssnses ainice = i rende fevenues (3% expenses Expense @y (1% % Change Q2 vs. Q1 % Change 0211 vs. 0210 21.9% 19.7% 19.7% feted Adjusted Operating Margins 20:11 19:11 20:11 20:1
Slide 26: Second Quarter 2011 Income Statement
Second Quarter 2011 Income Statement ™ Operating income down 16% sequentially and up 7% versus 2Q10 m= GAAP EPU of 34 cents, down 8 cents from the prior quarter and up 3 cents from the prior year quarter m Adjusted EPU of 35 cents, down 6 cents sequentially and 2 cents from 2Q10 2Q 19 2a In US Dolla
Slide 27: Second Quarter 2011 Revenues
Second Quarter 2011 Revenues = Bernstein Research down versus both prior periods, due to lower market volumes = Current quarter deferred compensation losses versus prior quarter gains and lower losses versus the prior year quarter 2a 1a 2a Revenues (in US dolla millions) 2011 2011 %A 2010 % A Base F
Slide 28: Second Quarter 2011 Operating Expenses
Second Quarter 2011 Operating Expenses = Incentive compensation dropped 8% sequentially, partially due to lower MTM vesting on prior years’ deferred compensation awards = Promotion & Servicing higher versus both prior periods due to increases in trade & execution costs, distribution costs and higher
Slide 29: Second Quarter 2011 GAAP to Adjusted Reconciliation
Second Quarter 2011 GAAP to Adjusted Reconciliation = GAAP Operating Income declined 16% sequentially and was up 7% versus the prior year m= GAAP & Adjusted operating margins declined versus both prior periods 2a 1Q 2Q 2011 2011 %A 2010 %A AllianceBernstein L.P. GAAP Operating Income $ 116 $ 138 (16
Slide 30: AllianceBernstein.com
AllianceBernstein.com 29
Slide 31: AllianceBernstein.com
AllianceBernstein.com 30
Slide 32: Institutional Value Equity: Relative Performance
Institutional Value Equi : Relative Performance Institutional Equity Composites vs. Benchmarks Periods Ended June 30, 2011 2a One Three —- Five Ten Service 2011 Year__Years _Years _Years Benchmark US Diversified Value (0.7) (1.7) (1.6) (2.3) (0.6) Russell 1000 Value US Strategic Value (1.9) (4.1) (4
Slide 33: Institutional Growth Equity: Relative Performance
Institutional Growth Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Periods Ended June 30, 2011 2Q One Three — Five. Ten Service 2011 Year _Years _‘Years _Years Benchmark Global Research Growth (2.0) (37) (7.1) (6.0) (2.0) MSCIWorid (Cap, UH, net) US Large Cap Growth (34
Slide 34: Institutional Blend Strategies: Relative Performance
Institutional Blend Strategies: Relative Performance Institutional Blend Strategies Equity Composites vs. Benchmarks Periods Ended June 30, 2011 2Q One Three Five Ten Service 2011 Year Years Years Years Benchmark Global Blend Strategies (2.2) (43) (7) (0) NA MSCIWorld (Cap, UH, net) Intemational Ble
Slide 35: Institutional Fixed Income: Relative Performance
ional Fixed Income: Relative Performance Institutional Fixed Income Composites vs. Benchmarks* Periods Ended June 30, 2011 2Q One Three Five —‘Ten Service 2011 Year _‘Years__‘Years _Years Benchmark Corporate Bonds 02) 06 12 05 03 Custom Corporate Index Strategic Core Plus 02) 24 18 06 08 Barclays US
Slide 36: Private Client: Absolute Performance
Private Client: Absolute Performance Periods Ended June 30, 2011 2Q One Three Five Ten Service 2011 Year Years Years Years Fully Diversified Simulation* (0.3) 168 10 18 42 S&P 500 04 30.7 33 29 27 MSCI World index - Net 0s 30.5 05 23 40 Lipper Short/int Blended Muni Fund Avg 24 29 3.9 3.6 34 Perform
Slide 37: Retail Value Equity: Relative Performance
Retail Value Eq : Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended June 30, 2011 2a One Three Five ‘Ten Service 2011 Year _—‘Years Years _Years Lipper Average Intemational Value (14) (22) (53) 40) Intemational Large Cap Value Growth & Income 18 59 04 05 (15) Large Cap Value
Slide 38: Retail Growth Equity: Relative Performance
Retail Growth Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended June 30, 2011 2Q One Three Five =‘ Ten Service 2011 Year _Years _Years _Years Lipper Average Global Growth (14) 44) (68) (6.0) NA Global Large-Cap Growth Global Thematic Growth (5) (0.2) 27 18 (22) Globa
Slide 39: Retail Fixed Income: Relative Performance
Retail Fixed Income: Relative Performance Retail Fixed Income Funds vs. Lipper Averages Periods Ended June 30, 2011 2Q One Three Five Ten Service 2011 Year Years Years Years Lipper Average Global High Yield Portfolio (0.5) (84) 3.4 14 (0.1) Bond Global High Yield ‘American Income Portfolio 0.1 44 37
Slide 40: Wealth Strategies: Relative Performance
Wealth Strategies: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended June 30, 2011 2a One Three — Five. Ten Service 2011 Year _Years ‘Years _Years Lipper Average Conservative Wealth (08) (07) (1.0) (06) NA _ Mixed-Asset Target Alloc Consv Balanced Wealth (1.2) 25 (05) (05) N
Slide 41: Three Months Ended 6/30/11: AUM Roll-Forward by Distribution Channel
is Ended 6/30/11: AUM Roll-Forward by Distribution Channel In US $ Billions Institutions Retail Private Client Total US Non-US Total US Non-US Total US Non-US Total US Non-US _ Total Beginning of Period $149.1 $117.7 $266.8 | $85.5 $45.5 $131.0 | $77.6 $1.9 $79.5 | $3122 $165.1 $47.3 Sales/New Accou
Slide 42: Three Months Ended 6/30/11: AUM Roll-Forward by Investment Service
Three Months Ended 6/30/11: AUM Roll-Forward by Investment Service In US §$ Billions Value Equity Growth Equity Fixed Income Other” Total Client Domicile: Us __NonUS Total US Non-US Total US Non US Total US Non-US Total US Non-US Total Beginning of Period $864 $51.0 $1374 | $529 $185 $714 | $1178 $9
Slide 43: AUM by Region
AUM by Region In US $ Billions As of June 30, 2011 Institutions Retail Private Client Eurex Other Other 3% Non-US 2% uK6% % US 56% Europe 7% Australia 6% UK 5% Asia Pac 26% NA. ex- USTs us 64% Japan : 4 "US 98% 11% $254.5 $129.4 $77.1
Slide 44: Second Quarter 2011 Advisory Fees
Second Quarter 2011 Advisory Fees In US Dollars 2Q 1Q 2a 2014 2011 %A 2010 % A Ending AUM (S Billions) $461 $477 (3%) $448 3% Average AUM ($ Billions) $474 $484 (1%) $472 0% By Fee Type (§ Millions): Base Fees $505, $510 (1%) $510 (1%) Performance Fees 4 5 (27%) 3 27% Total $509 $515 (1%) $513 (1%)
Slide 45: Six-Quarter Deferred Compensation Net P&L Trend
Six-Quarter Deferred Compensation Net P&L Trend In US $ Millions 10 2Q 3Q 4Q 1Q 2Q 2010 2010 2010 2010 2011 2011 Revenues Investment Gains (Losses) $11 ($37) $36 $17 $10 (62) Dividends a! * 1 4 - 1 Total Revenues $12 ($37) $37 $21 $10 (61) Expenses Amortization of Original Awards $31 $31 $27 $31 $19
Slide 46: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets Jun 30, 2014 Dec 31, 2010 ‘Casivand cash equivalents SSSR FBT Cash and securities, segregated 1,015 4,110 Receivables, net 1,321 1,389 Investments: Deferred compensation - related 253 299 Other 670 458 Goodwill 2,945 2,939 Intangible assets, net 200
Slide 47: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions ‘Six Months Ended ‘Jun 30, 2011 ‘Jun 30, 2010 Net income $ BS 2B Non-cash items: Amortization of deferred sales commissions 20 24 ‘Amortization of non-cash deferred compensation a 53 Depreciation and other amortization 42 at Unrealized (gains) lo
Slide 48: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In US § Millions (excluding per unit amounts) 2a 1a 2a 2011 2011 % A 2010 % A AllianceBernstein Net Income Attributable to AllianceBemstein $114 $136 (16%) $106 8% Weighted Average Equity Ownership Interest 374% 37.4% 36.7% AllianceBernstein Holding sone w
Slide 49: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein Adjusted Earnings Reconciliation ‘Three Months Ended $ thousands e307" watt 72131710 ‘9730710 er30770 3STA0 Net Revenues, GAAP basis S$ 727,994 $755,390 $777,861 $ 757,567 688,343 § 725,086 Exclude’ Deferred compensation-related investment losses (gains) 1,588 (9,740) (16,677) (36,
Slide 50: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein Holding Adjusted Earnings Reconciliation ‘Three Months Ended $ thousands except per unit amounts 6/30/14 3134/14 12/31/10 9/30/10 6/30/10 313410 Diluted Net Income, GAAP basis $ 35,653 $ 43,923 $ 43,289 «$ =«12,384 «$32,256 $ 47,858 Impact on net income of AllianceBemstein L.P. no
Slide 51: AllianceBernstein Adjusted Financial Results Reconciliation
AllianceBernstein Adjusted Financial Results Reconciliation AllianceBernstein LP. 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 comp
Slide 52: ALLIANCEBERNSTEIN
7B ALLIANCEBERNSTEIN