40 slides from Alliancebernstein Holding L.p's earnings presentation, May 1, 2014
Slide 1: First Quarter 2014 Review
April 30, 2014 First Quarter 2014 Review Peter S. Kraus Chairman & Chief Executive Officer John C. Weisenseel Chief Financial Officer 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
Slide 4: Firmwide Overview: First Quarter
Firmwide Overview: First Quarter In US §$ Billions $23.7 $149 $148 $149 1014 4013 1014 1013 $26 = = i=] Outflows saa) S44) related to AXA (10.3) dispositions 1014 4013 1014 1013 $454.1 $450.4 $454.1 $443.2 1014 4013 1014 1013 $452.0 $447.0 $452.0 $436.7 1014 4a1s 1014 1013 "4013 net flows include $8
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend In US $ Billions 146 73 (4.0) (14.4) Inst. Ret. 10.13 Total Gross Sales $23.7 Gross Redemptions $(21.1) Net Flows $26 =Gross Sales "Gross Redemptions 1013 net flows include $8.88 in MONY Insttutior @Net Flows 99 78 55 28 18 22 (2.3) [ (1.7) (66) (
Slide 6: Institutional Highlights
Institutional Highlights Gross Sales Declined in 1Q14... ...Yet RFP Activity Grew in Every Asset Class $B % Change 1014/1013 110 40 38 (60) 66) os (14.4) 4 1013 2013 3013 4013" 1014 eres seies = Gross Redemptions Net Flows Fixed Income Multi-Asset Alternatives Equity Total Diverse Pipeline by Servic
Slide 7: Fixed Income Investment Performance
Fixed Income Investment Performance Relative Performance Through 3/31/14 (%) us: 1014 1Year 3 Year 5 Year Strategic Core Plus 0.6 0.6 0.5 3.3 Core Fixed Income 0.1 0.2 0.3 2.2 High Yield 0.4 1.9 0.8 2.0 Diversified Yield Plus 1.5 0.9 3.4 78 US Income 1.5 2.2 3.1 63 Insurance — US Bond 0.3 1.0 05 1.9
Slide 8: Fixed Income: The Four Pillars of Our Illiquid Credit Strategy
Fixed Income: The Four Pillars of Our Illiquid Credit Strategy Commercial Mortgage US Housing recovery = ~$1 trillion of maturities. Demand for financing by —_™ Strained public resources Pullback of US ‘over next 3 years middle market borrowers Up to $200B needed Opportunity government footprint in
Slide 9: Equities Investment Performance
Equities Investment Performance Relative Performance Through 3/31/14 (%) us: 1Q14 4 Year 3 Year 5 Year US SMID Cap Value (0.6) 3.2 0.1 2.2 US Strategic Value 0.1 67 (1.5) (1.2) US SMID Cap Growth 0.0 01 0.5 3.5 US Large Cap Growth (1.8) 27 (0.7) (1.5) Select US Equity (0.9) (1.7) 18 3.3 US Growth &
Slide 10: Retail Highlights
Retail Highlights Improved Gross Sales and Net Flows in 1014... ...As Gross Sales Increased in All Major Asset Classes... $B 146 144 12.4 99 (14.4) (13.0) (11.7) (11.0) (176) 1013 2013 3013 413 1014 mmmGross Sales mmm Gross Redemptions —*=Net Flows % Change 1014/4013 33 29 28 ] if | Equity Fixed Inc
Slide 11: Private Client Highlights
Private Client Highlights Greater Stability in Our Private Client Business 1Q14 Milestones $B (1.7) (27) (25) (25) (23) 1013 2013 3013 4013 1014 Gross Sales mmm Gross Redemptions —»—Net Flows Continued Evolution of Our Private Client Offering Gross sales of $2.2B highest since 1011 First net flow po
Slide 12: Bernstein Research Services Highlights
Bernstein Research Services Highlights BRS Quarterly Revenues Up vs. Prior Quarter and Year Higher Industry Trading Volumes* Across Regions SM % Change 1014 / 1013: +12% 1014 / 4Q13: +9% 123 113, 110 1013 4Q13 1014 Global Industry Trading Volumes* (% Change) 220 «22 (4) us Europe Asia = 1014/1013 10
Slide 13: Progress on Our Strategy in 1Q14
Progress on Our Strategy in 1Q14 Firmwide Initiative Progress = 82% of Fixed Income assets in outperforming services for 3-yr period; 81% for 5-yr period = Unconstrained Bond, US Income and Global High Income outperformed by 3+ ppts for 3-yr = Broad global recognition — 34 fixed income awards YTD =
Slide 14: John C. Weisenseel
John C. Weisenseel Chief Financial Officer
Slide 15: Financial Highlights: First Quarter 2014
Financial Highlights: First Quarter 2014 In US $ Millions $598 $636 $598 $877 1014 4a13 1014 1013 ‘$467 $453 ‘$467 $451 Adjusted Expenses 1014 4013 1014 1013 29.0% 21.9% 21.9% 21.9% 1014 4013 1014 1013 60¢ 30¢ 39¢ 38¢ Adjusted " | | | 1014 4013 1014 1013 Please refer to pages 36-38 for additonal inf
Slide 16: First Quarter 2014 GAAP to Adjusted Reconciliation
First Quarter 2014 GAAP to Adjusted Reconciliation In US dollar milions Adjustments Distribution- Pass Long-Term Inc. Venture Real Acquisition Related Through Compensation Capital Estate Related Adjusted GAAP _Payments_ Expenses __MTM __—‘Fund _—_Charges_—_Expenses__(Non-GAAP) Net Revenues $ 715 $ (
Slide 17: First Quarter 2014 Adjusted Income Statement
First Quarter 2014 Adjusted Income Statement 1a 4Q 1a In US dollar millions (except EPU) 2014 2013 SA 2013 % A Adjusted Net Revenues 598 638 (6%) 877 4% Adjusted Operating Expenses 467 453 3% 451 4% Adjusted Operating Income 131 185 (29%) 126 4% Adjusted Operating Margin 21.9% 29.0% 21.9% 'AB Holdin
Slide 18: First Quarter 2014 Adjusted Revenues
First Quarter 2014 Adjusted Revenues = Base Fees were essentially flat sequentially as lower Retail were offset by increases in both Institutions and Private Client; the 3% increase versus the prior year quarter is due primarily to an increase in average Private Client AUM = Performance fees are dow
Slide 19: First Quarter 2014 Adjusted Operating Expenses
First Quarter 2014 Adjusted Operating Expenses = Adjusted Compensation Ratio was 50.0% in 1Q14 versus 45.3% in 4Q13, and 50.0% in 1Q13 = Total Compensation & Benefits increased 4% sequentially due to the increase in the comp ratio, and increased 3% versus the prior year due to higher revenues = Prom
Slide 20: First Quarter 2014 Adjusted Operating Results
First Quarter 2014 Adjusted Operating Results = Adjusted Operating Income declined by 29% sequentially driven by lower performance fee revenues and an increase in compensation expense attributed to a higher comp ratio in the current quarter ™ The 4% increase in Operating Income versus 1Q13 is due to
Slide 21: AllianceBernstein.com
AllianceBernstein.com
Slide 22: AllianceBernstein.com
AllianceBernstein.com
Slide 23: Institutional Equity: Relative Performance
Institutional Equity: Relative Performance Institutional Equity Composites vs. Benchmarks Periods Ended March 31, 2014 1Q One Three Five Ten Service 2014 Year Years Years _Years Benchmark Value Emerging Markets Value 0.0 (2.8) (4.8) (1.9) (1.3) MSCI EM Global Value 09 59 (27) (1.7) (1.9) MSCI World
Slide 24: Institutional Fixed Income: Relative Performance
Institutional Fixed Income: Relative Performance Institutional Fixed Income Composites vs. Benchmarks* Periods Ended March 31, 2014 1a One Three Five —‘Ten Service 2014 —-Year__—‘Years_~_—‘Years _‘Years Benchmark Global High Income 05 65 29 66 16 (38% ee eee ei cole EMBI Global Fixed Income 1) (15)
Slide 25: Retail Equity: Relative Performance
Retail Equity: Relative Performance Retail Mutual Funds vs. Lipper Averages Periods Ended March 31, 2014 1Q One Three — Five Ten Service 2014 Year _—Years ‘Years _‘Years Lipper Average Value International Value (06) (07) (31) (24) (2.4) International Multi-Cap Value Growth & Income (0.7) 18 25 06 (0
Slide 26: Retail Fixed Income: Relative Performance
Retail Fixed Income: Relative Performance Retail Fixed Income Funds vs. Lipper Averages Periods Ended March 31, 2014 1a One Three Five —‘Ten Service 2014 —-Year_—‘Years ‘Years __‘Years Lipper Average Global High Yield Portfolio 06 (33) 08 24 14 Bond Global High Yield American Income Portfolio 15 0.4
Slide 27: Private Client: Absolute Performance
Private Client: Absolute Performance Periods Ended March 31, 2014 1Q One Three Five Ten Service 2014 Year Years Years Years Fully Diversified Simulation* 06 99 55 10.9 44 SaP 500 18 21.9 14.7 21.2 74 MSCI World Index - Net 13 194 10.2 18.3 68 Lipper Short/Int Blended Muni Fund Avg 15 (0.2) 3.2 35 28
Slide 28: Assets Under Management — 1Q
Assets Under Management — 1Q (S billions) At March 31, 2014 At Dec. 31, 2013 Private Institutions Retail Client Total Total Equity Actively Managed $ 30 42 $ 37 «$ 109 108 Passive 19 28 1 48 49 Total Equity 49 70 38 187 157 Fixed Income Taxable 142 61 10 213 211 Tax-Exempt 2 9 19 30 29 Passive : 9 :
Slide 29: Three Months Ended 3/31/14: AUM Roll-Forward by Distribution Channel
Three Months Ended 3/31/14: AUM Roll-Forward by Distribution Channel InUS $ Billions Beginning —Sales/New Redemptions/ Net Cash Net Investment Net End Investment Service: __ of Period _Accounts_ Terminations Flows Flows Transfers Performance Change _of Period Institutions us 107.3 19 (0.5) (0.6) 08
Slide 30: Three Months Ended 3/31/14: AUM Roll-Forward by Investment Service
Three Months Ended 3/31/14: AUM Roll-Forward by Investment Service InUS $ Billions Beginning —_—SalesNew Redemptions! Net Cash Net _ Investment Net End Investment Service: of Period ‘Accounts Terminations Flows. Flows Performance Change of Period Equity Active us 576 30 2a) (05) o4 os 10 58.6 Global
Slide 31: AUM by Region
AUM by Region As of March 31, 2014 Institutions NAexUS 4% Other 1% United Kingdom 5% Asia ex Japan 6% Japan 13% US 57% EMEA 14% $226.4B By client domicile Retail Other 4% EMEA 11% Japan 6% USGS Asia ex Japan 18% $155.0B 30
Slide 32: First Quarter 2014 Adjusted Advisory Fees
First Quarter 2014 Adjusted Advisory Fees In US Dollars 19 4Q 10 2014 2013 %A 2013 %A Ending AUM ($ Billions) $454 $450 1% = $443 2% Average AUM ($ Billions) $452 $447 1% $437 3% By Fee Type ($ Millions): Adjusted Base Fees $452 $453 (0%) $440 3% Adjusted Performance Fees 3 44 (93%) 4 (25%) Total $4
Slide 33: First Quarter 2014 GAAP Income Statement
First Quarter 2014 GAAP Income Statement 1a 4Q 1a In US dolar millions (except EPU) 2014 2013 %A 2013 %A Net Revenues $715 $ 766 (7%) = $ 709 1% Operating Expenses 585 871 2% 585 0% Operating Income 130 195 (33%) 124 5% Net Income Attributable to AB Unitholders 117 182 (36%) 115 2% AB Holding GAAP D
Slide 34: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets March 31, 2014 December 31, 2013 Cash and cash equivalents $ 35.~*S 510 Cash and securities, segregated 900 980 Receivables, net 1,706 4,550 Investments: Long-term incentive compensation-related 7 118 Other 674 662 Goodwill 2,987 2,987 Intangible as
Slide 35: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Nine Months Ended March 31, 2014 March 31, 2013 Net income $ 719 ~«S 173 Non-cash items: Amortization of deferred sales commissions 9 " ‘Amortization of non-cash long-term incentive compensation 6 7 Depreciation and other amortization 16 5 Unreal
Slide 36: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In US $ Millions (excluding per unit amounts) 19 4Q 1a 2014 2013 % A 2013 %A AllianceBernstein Net Income Attributable to AllianceBernstein $117 $182 (36%) $115, 2% Weighted Average Equity Ownership Interest 35.4% 345% 37.5% AllianceBernstein Holding Atrba
Slide 37: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein Adjusted Earnings Reconciliation ‘Throe Months Endod. $ thousands, unaudited aaa EPETEEY EEC (63013. 3s SPECIE Net Revenues, GAAP basis S 714618 $ 765,572 $ 706078 $ 734,275 $ 709,122 $ 704,607 Exclude: Long-term incentive compensation-related investment (gains) losses. (1,297) amy
Slide 38: AllianceBernstein Holding Adjusted Earnings Reconciliation
AllianceBernstein Holding Adjusted Earnings Reconciliation ‘Three Months Ended. $ thousands except per Unit amounts, unaudited 3314 123113 9/3013 BONS «ISHN 12842 Net Income - Diluted, GAAP basis $ 36455 $§ 57,853 $ 29,706 $ 40,617 $ 38474 $ 26,192 Impact on net income of AllianceBemnstein non-GAAP
Slide 39: 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 long-term in
Slide 40: AllianceBernstein.com 212-756-4542
AllianceBernstein.com 212-756-4542