AllianceBernstein Holding 8K Results of Operations and Financial Condition | AB 26 Apr 07

AllianceBernstein

First Quarter 2007 Review

First Quarter 2007 Review

Gerald M. Lieberman
President & Chief Operating Officer

Lewis A. Sanders
Chairman & Chief Executive Officer

Any forecasts in this material may not be realized. Information or opinions should not be construed as investment advice.

April 25, 2007

AllianceBernstein

First Quarter 2007 Review

Forward-Looking Statements

In light of Regulation FD, management will be limited in responding to inquiries from investors or analysts in a non-public forum.

Introduction

Certain statements in this presentation and the accompanying oral remarks are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial markets; the investment performance we achieve for our clients; general economic conditions; future acquisitions; competitive conditions; and government regulations, including changes in tax rates. We caution readers to carefully consider our forward-looking statements in light of these factors. Further, these forward-looking statements speak only as of the date on which such statements are made; we undertake no obligation to update any forward-looking statements to reflect subsequent events or circumstances. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see “Risk Factors” in Item 1A of Form 10-K for the year ended December 31, 2006. Any or all of the forward-looking statements that we make in Form 10-K, this presentation, or any other public statements we issue may turn out to be wrong. Of course, factors other than those listed in “Risk Factors” could also adversely affect our revenues, financial condition, results of operations, and business prospects.

The forward-looking statements we make in this presentation include estimated earnings guidance and related assumptions provided for full year 2007. The earnings guidance is based on a number of assumptions, including, but not limited to, the following: net inflows of client assets under management continuing at levels similar to recent rates, and equity and fixed income market returns at annual rates of 8% and 5%, respectively, for the balance of the year. Net inflows of client assets are subject to domestic and international securities market conditions, competitive factors, and relative performance, each of which may have a negative effect on net inflows; capital market performance is inherently unpredictable. In view of these factors, and particularly given the volatility of capital markets (and the effect of such volatility on performance fees and the value of investments in respect of incentive compensation) and the difficulty of predicting client asset inflows and outflows, our earnings estimates should not be relied on as predictions of actual performance, but only as estimates based on assumptions, which may or may not be correct. There can be no assurance that we will be able to meet the investment and service goals and needs of our clients or that, even if we do, it will have a positive effect on the company’s financial performance.

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AllianceBernstein

First Quarter 2007 Review

<
            
U.S. capital markets up modestly, with better performance outside the U.S.

<
            
Most equity services came in below benchmarks while fixed income modestly
    outperformed

<
            
AUM at March 31, 2007 - $742 billion

=
            
Strong inflows combined with market appreciation across all channels

<
            
Financial performance vs. 1Q06

=
            
AllianceBernstein (Operating)

Ø
            
Net Revenues up 16.6% to $1.04 billion

Ø
            
Operating Income up 19.4% to $286 million

Ø
            
Net Income up 17.6% to $268 million

=
            
AllianceBernstein Holding distribution up 16.7% to $0.91 per Unit

AllianceBernstein - First Quarter Highlights

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AllianceBernstein

First Quarter 2007 Review

*12 months ending March 31, 2007.

Source: MSCI (Morgan Stanley Capital International).

Market Performance - U.S.

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

*12 months ending March 31, 2007.

Source: MSCI (Morgan Stanley Capital International).

Market Performance - Non-U.S.

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

<
            
Value and Growth Equities generally underperformed

<
            
Fixed Income outperformed, with particular strength in certain retail services

Relative Performance Summary

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AllianceBernstein

First Quarter 2007 Review

Three Months Ended March 31, 2007

$ Millions

Changes in Assets Under Management By Channel

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AllianceBernstein

First Quarter 2007 Review

Twelve Months Ended March 31, 2007

$ Millions

Changes in Assets Under Management By Channel

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AllianceBernstein

First Quarter 2007 Review

Three Months Ended March 31, 2007

$ Millions

Changes in Assets Under Management By Investment Service

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AllianceBernstein

First Quarter 2007 Review

Twelve Months Ended March 31, 2007

$ Millions

Changes in Assets Under Management By Investment Service

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AllianceBernstein

First Quarter 2007 Review

<
            
Value Equity and Blend Strategies
    services generated bulk of new
    assets - approximately 64%

<
            
Fixed Income services accounted for
   nearly one-third of new assets

<
            
Global & International services
    comprised approximately 79% of all
    new assets

<
            
Pipeline of won but unfunded new
    mandates remains substantial

(1) Transfers of certain client accounts were made among distribution channels resulting from changes in how these accounts are serviced by the firm.

Institutional Investments — First Quarter Highlights

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AllianceBernstein

First Quarter 2007 Review

<
            
Positive net inflows for seventh
    consecutive quarter

<
            
Significant year-over-year
    increases in U.S. Fund sales (gross
    and net) and market share; offset
    by lower non-U.S. sales

<
            
Wealth Strategies reached $10
    billion AUM milestone

Retail — First Quarter Highlights

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AllianceBernstein

First Quarter 2007 Review

(1) Transfers of certain client accounts were made among distribution channels resulting from changes in how these accounts are serviced by the firm.

Private Client — First Quarter Highlights

<
            
Gross and Net inflows set new
    records for 3 and 12 month
    periods

<
            
Net inflows up 33% versus 1Q06
    and 31% versus twelve months
    ended 3/31/2006

<
            
Financial Advisor headcount
    increased to 315 - up 5.7% from
    December 2006 and 15.8% from
    March 2006

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

<
            
Revenue of $99 million second strongest quarter ever

<
            
Revenue up 3.3% versus the year ago quarter, driven entirely by our European
    business, and up 11.5% sequentially

<
            
U.S. business up sequentially, but down slightly versus a strong 1Q06

<
            
Continue to invest in Europe:

=
            
Number of publishing analysts increased to 16 from 9 in 1Q06

=
            
Algorithmic trading platform remains on track for client rollout in second
    half 2007

Institutional Research Services — First Quarter Highlights

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AllianceBernstein

First Quarter 2007 Review

by Client Domicile

by Investment Service

$ Billions

Non-U.S.

  up 38%

Global &

Int’l

up 41%

Total AUM at

March 31, 2007
$742 Billion

Total AUM at

March 31, 2006
$618 Billion

Total AUM

up 20%

Growth in Global Assets

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AllianceBernstein

First Quarter 2007 Review

(1)

   Blend
Strategies

Index/Structured 
$31

Assets Under Management by
Investment Service

$742 Billion

Blend Strategies AUM

$145 Billion

(+40% vs. 03/31/06)

(1) Includes approximately $5 billion of Blend Fixed Income AUM.

25%

38%

10%

9%

14%

4%

(1)

$ Billions

Growth in Blend Strategies Assets

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

Assets Under Management
$ Billions

+35%

+18%

+50%

The information in this display is provided solely for use in connection with this presentation and is not directed towards existing or potential hedge

+23%*

*Growth in Hedge Fund AUM from 12/31/2006 to 3/31/2007; data does not include Venture Capital Fund AUM

Hedge Fund AUM Growing Rapidly

fund investors or investment advisory clients of AllianceBernstein.

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AllianceBernstein

First Quarter 2007 Review

(1)
            
 Includes Shareholder Servicing, Investment Gains (Losses) and Other Revenues.

NOTE: Percentages are calculated using revenues and expenses rounded to the nearest thousand.

$ Millions

AllianceBernstein First Quarter Revenues

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

NOTE: Percentages are calculated using revenues and expenses rounded to the nearest thousand.

AllianceBernstein First Quarter Advisory Fees

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AllianceBernstein

First Quarter 2007 Review

NOTE: Percentages are calculated using revenues and expenses rounded to the nearest thousand.

$ Millions

AllianceBernstein First Quarter Operating Expenses

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AllianceBernstein

First Quarter 2007 Review

NOTE: Percentages are calculated using revenues and expenses rounded to the nearest thousand.

$ Millions

AllianceBernstein First Quarter Compensation & Benefits

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AllianceBernstein

First Quarter 2007 Review

(1) Operating Income as a percentage of net revenues.

NOTE: Percentages are calculated using revenues and expenses rounded to the nearest thousand.

$ Millions

AllianceBernstein First Quarter Net Income

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

NOTE: Percentages are calculated using revenues and expenses rounded to the nearest thousand.

$ Millions (except per unit amounts)

AllianceBernstein Holding Financial Results

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

<
            
Delivered good results despite turbulent capital markets throughout much of the first
    quarter

<
            
Strong organic growth in all channels

<
            
AUM continued to become increasingly global, as Global and International services and
   non-U.S. client assets grew at faster rates than total AUM

<
            
Full year 2007 earnings guidance estimate of approximately $4.65 - $5.00 per Unit at
    the holding company level

=
            
Fourth quarter will account for a disproportionate share of full year earnings

AllianceBernstein - 1Q07 Earnings Conference Call Summary

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Q&A

Appendix

AllianceBernstein

First Quarter 2007 Review

Market Environment

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AllianceBernstein

First Quarter 2007 Review

(1)

Relative Performance: Institutional Growth Equity (After Fees)

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AllianceBernstein

First Quarter 2007 Review

Relative Performance: Institutional Value Equity (After Fees)  (1)

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AllianceBernstein

First Quarter 2007 Review

(1)

Relative Performance: Blend Strategies Services (After Fees)

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

(1)

Relative Performance: Institutional Fixed Income (After Fees)

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

(1)

Absolute Performance: Private Client (After Fees)

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AllianceBernstein

First Quarter 2007 Review

(1)

Relative Performance: Retail Growth Equity (After Fees)

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

(1)

Relative Performance: Retail Value Equity (After Fees)

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

(1)

Relative Performance: Retail Fixed Income (After Fees)

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

(1)

Relative Performance: Wealth Strategies (After Fees)

Proprietary - For AllianceBernstein L.P. use only

AllianceBernstein

First Quarter 2007 Review

Bernstein Value Equities

Inception
Date

  Inception-
Mar 2007

Alliance Growth Equities

Inception
Date

AllianceBernstein. Past performance is no guarantee of future results. Source: Bloomberg, Citigroup, FTSE, JPMorgan Chase, Lehman Brothers,
Merrill Lynch, MSCI, Nomura, Russell Investment Group, Scotia Capital, S&P, TOPIX, and AllianceBernstein.

AllianceBernstein Style Blend

AllianceBernstein Fixed Income

Net-of-Fee Annualized Relative Performance Premiums

  Inception-
Mar 2007

Investment Performance: Delivering Results for Clients

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AllianceBernstein

First Quarter 2007 Review

In $ Thousands, Unaudited

AllianceBernstein Consolidated Balance Sheet

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AllianceBernstein

First Quarter 2007 Review

In $ Thousands, Unaudited

AllianceBernstein Consolidated Statement of Cash Flows

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AllianceBernstein

First Quarter 2007 Review

AllianceBernstein® and the AB AllianceBernstein Logo are trademarks and service marks owned by AllianceBernstein L.P.

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AllianceBernstein Holding (AB) 8-KResults of Operations and Financial Condition