AllianceBernstein Holding L.P. Announces Third Quarter Results

        AllianceBernstein Holding L.P. Announces Third Quarter Results

Including Impact of $168 Million Real Estate Charge, GAAP Diluted Net Loss of
$(0.23) per Unit

Adjusted Diluted Net Income of $0.36 per Unit

Cash Distribution of $0.36 per Unit

PR Newswire

NEW YORK, Oct. 24, 2012

NEW YORK, Oct. 24, 2012 /PRNewswire/ --AllianceBernstein L.P.
("AllianceBernstein") and AllianceBernstein Holding L.P. ("AllianceBernstein
Holding") (NYSE: AB) today reported financial and operating results for the
quarter ended September 30, 2012.

"After the difficult market conditions of the second quarter, global equity
and fixed income trends turned more favorable during the third quarter, and
our performance improved as a result," said Peter S. Kraus, Chairman and Chief
Executive Officer. "The already strong sales momentum in our Retail business
accelerated, we continued to win diverse new Institutional fixed income and
equity mandates, and our outflows moderated in Private Client."

                                                      3Q                 3Q
                                                      2012               2012
Financial Results              3Q 2012    2Q 2012    vs      3Q 2011    vs

                                                      2Q                 3Q
                                                      2012               2011
($ millions except per Unit
amounts)
AllianceBernstein L.P.
GAAP basis:
Net Revenues                    $708       $642       10%     $642       10%
Operating (Loss) Income        ($56)      $79        n/m     $78        n/m
Operating Margin, excl.         n/m        12.5%              15.0%
non-controlling interests
Adjusted basis: ^(1)
Net Revenues ^(2)               $574       $546       5%      $602       (5%)
Operating Income ^(3)           $116       $88        32%     $107       8%
Operating Margin                20.2%      16.1%              17.7%
AllianceBernstein Holding L.P.
GAAP Diluted Net (Loss) Income  ($0.23)    $0.21      n/m     $0.26      n/m
per Unit
Distribution per Unit           $0.36      $0.21      71%     $0.26      38%
Adjusted Diluted Net Income per $0.36      $0.24      50%     $0.30      20%
Unit^(1)
^(1)See pages 9-11for reconciliations of GAAP Financial Results to Adjusted
Financial Results
^(2)Adjusted net revenues exclude investment gains and losses and dividends
and interest on deferred compensation-related investments, and 90% of the
investment gains and losses of our consolidated venture capital fund
attributable to non-controlling interests. In addition, adjusted net revenues
offset distribution-related payments to third parties as well as amortization
of deferred sales commissions against distribution revenues. They also exclude
certain revenues that are reimbursements of pass-through expenses (primarily
through our transfer agency).
^(3)Adjusted operating income represents operating income on a GAAP basis
excluding (1) the impact on net revenues and compensation expense of the
mark-to-market gains and losses (as well as the dividends and interest)
associated with employee deferred compensation-related investments, (2) the
deferred compensation charge, (3) real estate charges, (4) insurance proceeds,
and (5) the net loss or income of consolidated entities attributable to
non-controlling interests.



Kraus continued: "We demonstrated once again this quarter that our long-term
strategy to improve our investment performance, diversify our business,
innovate for clients with new offerings and strengthen our financials is
working. In fixed income, we not only continued to outperform across
strategies and time periods, we also successfully completed the liquidation of
the Public-Private Investment Partnership (PPIP) fund, at a significant return
for the US Treasury and other investors. In equities, we delivered better
investment performance in US large cap and emerging markets growth in the
third quarter, while maintaining our outperformance in areas like small and
mid-cap growth and Select US Equities. Our Retail business had another stellar
quarter – both net inflows and gross sales were our highest since 2000. While
sales in Asia and Europe were particularly strong, we had sequential sales
increases across regions and asset classes, and in both long-standing products
and new offerings – where sales have nearly doubled year-to-date versus the
same period in 2011. In Private Client, we continued to enhance our client
offerings. This quarter, we successfully completed the roll-out of Strategic
Equities, our new multi-style, all-cap approach to equity allocation, and
launched a registered investment company (RIC) that makes alternative services
available to a broader client base. Finally, I'm pleased to report we are
ahead of schedule in executing the real estate consolidation plan we announced
last quarter. During the third quarter, we were able to exit and market space
for lease more quickly than anticipated. As a result, we wrote down leases and
wrote off assets totaling about $168 million in the third quarter, which
allowed us to realize occupancy expense savings. We remain focused on real
estate and other expense reduction efforts as we aim to improve our margin,
which was 20% on an adjusted basis in the third quarter, our highest since
early 2011. Looking ahead, while prospects for both the Eurozone and the
post-election US economy remain uncertain, it's increasingly clear that the
strategy we are executing is positioning AB for a stronger future."

The firm's cash distribution per unit of $0.36 is payable on November 21,
2012, to holders of record of AllianceBernstein Holding Units at the close of
business on November 5, 2012.

Market Performance

The global equity markets rebounded in the third quarter of 2012, with the S&P
500 returning 6.4% and the MSCI World Index up 6.7%. In fixed income, the
Barclays U.S. Aggregate Index returned 1.6% during the quarter, and the
Barclays Global Aggregate Index's total return was 3.3%.

Assets Under Management ($ Billions)

Total assets under management as of September 30, 2012 were $418.9 billion, up
2.9% from June 30, 2012, and up $16.9 billion, or 4.2%, compared to September
30, 2011.

                                  Institutions  Retail  Private Client  Total
 Assets Under Management 9/30/12  $214.4        $136.4  $68.1           $418.9
 Net Flows for Three Months Ended ($7.7)        $5.0    ($1.7)          ($4.4)
 9/30/12

Total net outflows of $4.4 billion were $1.6 billion higher than the prior
quarter and $11.0 billion lower versus the prior year period. Net outflows in
the Institutions channel were $7.7 billion, compared to net outflows of $3.7
billion in the second quarter, primarily due to the loss of one large
Institutional value mandate during the quarter, as well as the completion of
the liquidation of the firm's Public-Private Investment Partnership (PPIP)
fund, which accounted for $1.8 billion in outflows. Institutions gross sales
decreased 7% sequentially, to $5.2 billion from the prior quarter's $5.6
billion. The pipeline of awarded but unfunded Institutional mandates decreased
from $11.3 billion to $8.5 billion at September 30, 2012, with new fixed
income and equity additions more than offset by fundings, revisions and
removed mandates during the third quarter. The Retail channel experienced
third quarter 2012 net inflows of $5.0 billion, up from the prior quarter's
$3.5 billion. Retail gross sales increased 27% sequentially to $15.2 billion
from $11.9 billion in the second quarter. In the Private Client channel, net
outflows were $1.7 billion versus $2.6 billion in the prior quarter. Private
Client gross sales of $1.0 billion in the third quarter of 2012 were up 25%
from the prior quarter's $0.8 billion.

Third Quarter Financial Results

Revenues:

Net revenues of $708 million increased 10% compared to the third quarter of
2011 and the second quarter of 2012. The primary drivers of the increase were
current period gains on investments held versus prior-period losses,
performance fees from the Public-Private Investment (PPIP) fund that was
liquidated during the third quarter of 2012, and higher distribution revenues
from non-US markets. These were partially offset by lower Bernstein Research
Services revenues. PPIP performance fees had a greater effect on the
sequential increase than the year-over-year increase. Bernstein Research
Services revenues declined 14% from the third quarter of 2011, and 2% from the
second quarter of 2012, as overall market volumes continued to decline.

Adjusted net revenues of $574 million were down 5% compared to the third
quarter of 2011, driven primarily by lower base fees on lower average assets
and lower Bernstein Research Services revenues, partially offset by PPIP
performance fees and current period investment gains, primarily in seed
capital, versus prior period losses. Sequentially, adjusted net revenues
increased 5%, driven by PPIP performance fees and higher base fees and current
quarter seed gains versus prior quarter losses, partially offset by lower
Bernstein Research Services revenues.

Expenses:

Operating expenses were $764 million for the third quarter, a year-over-year
increase of 35%. Higher general and administrative expenses were the primary
driver. Within G&A, we recorded a $168 million non-cash real estate charge to
write down leases and write off assets associated with our real estate
consolidation plan. Also within G&A, sub-advisory and administrative fees
increased as a result of performance fee payments made to our PPIP
sub-advisors, and legal expenses were higher, as the prior-year period
included insurance proceeds. Promotion and servicing expenses were up from the
prior-year period due to higher distribution-related payments in non-US
markets. Employee compensation and benefits costs increased 6% versus the
prior year period, due to higher deferred compensation mark-to-market expense.
On a sequential basis, operating expenses were up 36%, also driven by the
current quarter real estate non-cash charge and PPIP sub-advisor performance
fee payments in G&A, higher distribution-related payments in non-US markets in
promotion and servicing, and higher incentive compensation expense as a result
of higher revenues and higher deferred compensation mark-to-market expense.
The current quarter's real estate charge compares with a $7 million charge
taken in the second quarter of 2012 associated with consolidating and
subleasing space in New York City.

Adjusted operating expenses were $458 million for the third quarter, down 7%
versus the prior-year period, with reductions in compensation and benefits,
promotion and servicing and G&A expense. Lower travel and entertainment and
trade execution costs drove the year-over-year decline in promotion and
servicing expenses. In G&A, occupancy costs, technology-related expenses and
professional fees were lower versus the prior-year period. Sequentially,
adjusted operating expenses were flat, as higher compensation expense was
offset by lower promotion and servicing and G&A. The sequential decline in
promotion and servicing was due primarily to lower marketing and advertising
costs. In G&A, the primary drivers were occupancy savings associated with the
third quarter real estate charge and lower professional fees.

Operating income and margin:

The Company reported an operating loss of ($56) million for the third quarter
of 2012, compared to operating income of $78 million and an operating margin
of 15.0% for the third quarter of 2011. Sequentially, the operating loss
compares with the prior quarter's operating income of $79 million and
operating margin of 12.5%.

Adjusted operating income of $116 million increased 8% from the third quarter
of 2011, and the adjusted operating margin increased to 20.2% from 17.7%, as
expense reductions outpaced the year-over-year decline in revenues. On a
sequential basis, adjusted operating income increased 32% from $88 million,
and the adjusted operating margin increased from 16.1% on higher revenues and
flat expenses.

Net income and cash distribution per Unit:

Diluted net income per Unit for the third quarter of 2012 was ($0.23) compared
to $0.26 for the third quarter of 2011 and $0.21 for the second quarter of
2012.

Adjusted diluted net income per Unit for the publicly-traded partnership
increased to $0.36 from $0.30 in the third quarter of 2011 and $0.24 in the
second quarter of 2012. Of the adjusted diluted net income per Unit of $0.36
for the third quarter of this year, approximately $0.06 represents two
non-recurring items: PPIP performance fees ($0.04) and a New York City
unincorporated business tax (UBT) benefit ($0.02).

Typically in the past, the quarterly cash distribution has been the GAAP
diluted earnings per Unit except when, as was the case in the fourth quarter
of 2011, the impact of an extraordinary non-cash charge was eliminated. For
the current quarter, the cash distribution is the adjusted diluted net income
per Unit and, in future periods, the Company anticipates that quarterly cash
distributions typically will be the adjusted diluted net income per Unit,
unless the Company determines that one or more adjustments from GAAP should
not be reflected in the distribution. Accordingly, the cash distribution per
Unit for the publicly-traded partnership is $0.36 for the third quarter of
2012.

Unit Repurchases

AllianceBernstein engages in open-market purchases of Holding Units to help
fund anticipated obligations under its incentive compensation award program
and for other corporate purposes under a plan pursuant to Rule 10b5-1 under
the Securities Exchange Act of 1934, as amended. The amount of Holding Units
AllianceBernstein buys each quarter is subject to SEC regulations, the terms
of the 10b5-1 plan and the trading volume of Holding Units on the New York
Stock Exchange. In addition, AllianceBernstein purchases Holding Units from
employees to allow them to fulfill statutory tax requirements at the time of
distribution of long-term incentive compensation awards. During the third
quarter of 2012, AllianceBernstein purchased 2.9 million Holding Units for
$39.8 million. These amounts reflect open-market purchases of 2.8 million
Holding Units for $38.8 million, with the remainder primarily relating to
employee tax withholding purchases, offset by Holding Units purchased by
employees as part of a distribution reinvestment election.

Third Quarter 2012 Earnings Conference Call Information

Management will review third quarter 2012 financial and operating results
during a conference call beginning at 5:00 p.m. (ET) onWednesday, October 24,
2012. The conference call will be hosted by Peter S. Kraus, Chairman and Chief
Executive Officer and John C. Weisenseel, Chief Financial Officer.

Parties may access the conference call by either webcast or telephone:

1.To listen by webcast, please visit AllianceBernstein's Investor Relations
    website at http://ir.alliancebernstein.com/investorrelations at least 15
    minutes prior to the call to download and install any necessary audio
    software.
2.To listen by telephone, please dial (866) 556-2265 in the U.S. or (973)
    935-8521 outside the U.S. 10 minutes before the scheduled start time. The
    conference ID# is 37425629.

The presentation that will be reviewed during the conference call will be
available on AllianceBernstein's Investor Relations website shortly after the
release ofthird quarter 2012 financialand operating results after market
close onOctober 24, 2012.

A replay of the webcast will be made available beginning approximately one
hour after the conclusion of the conference call and will be available on
AllianceBernstein's website for one week. An audio replay of the conference
call will also be available for one week. To access the audio replay, please
call (855)859-2056 in the U.S., or (404)537-3406 outside the U.S., and
provide the conference ID #: 37425629.

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 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 of sponsored investment products and
separately-managed accounts, general economic conditions, industry trends,
future acquisitions, competitive conditions, and current and proposed
government regulations, including changes in tax regulations and rates and the
manner in which the earnings of publicly-traded partnerships are taxed.
AllianceBernstein cautions readers to carefully consider such factors.
Further, such forward-looking statements speak only as of the date on which
such statements are made; AllianceBernstein undertakes no obligation to update
any forward-looking statements to reflect events or circumstances after the
date of such statements. For further information regarding these
forward-looking statements and the factors that could cause actual results to
differ, see "Risk Factors" and "Cautions Regarding Forward-Looking Statements"
in AllianceBernstein's Form 10-K for the year ended December 31, 2011 and
subsequent Forms 10-Q. Any or all of the forward-looking statements made in
this news release, Form 10-K, Forms 10-Q, other documents AllianceBernstein
files with or furnishes to the SEC and any other public statements issued by
AllianceBernstein, may turn out to be wrong. It is important to remember that
other factors besides those listed in "Risk Factors" and "Cautions Regarding
Forward-Looking Statements", and those listed below, could also adversely
affect AllianceBernstein's financial condition, results of operations and
business prospects.

The forward-looking statements referred to in the preceding paragraph include
statements regarding:

  oOur belief that our real estate consolidation plan will be effective in
    meaningfully improving our cost structure and in positioning our firm for
    a stronger future. Any charges we record during the second half of 2012
    and our estimates of reduced occupancy costs in future years are based on
    our current assumptions regarding sublease marketing periods, costs to
    prepare the properties to market, market rental rates, broker commissions
    and subtenant allowances/incentives, all of which are factors largely
    beyond our control. If our assumptions prove to be incorrect, we may be
    forced to record an additional charge and/or our estimated occupancy cost
    reduction may be less than we currently project.
  oThe pipeline of new institutional mandates not yet funded: Before they
    are funded, institutional mandates do not represent legally binding
    commitments to fund and, accordingly, the possibility exists that not all
    mandates will be funded in the amounts and at the times currently
    anticipated, or that mandates ultimately will not be funded.
  oOur intention to continue to engage in open market purchases of Holding
    Units to help fund anticipated obligations under our incentive
    compensation award program: The number of Holding Units needed in future
    periods to make incentive compensation awards is dependent upon various
    factors, some of which are beyond our control, including the fluctuation
    in the price of a Holding Unit.
  oOur belief that, while the outlook for both the Eurozone and the
    post-election US economy remains uncertain, it's increasingly clear that
    the long-term strategy we are executing is positioning AllianceBernstein
    for a stronger future: Changes and volatility in political, economic,
    capital market or industry conditions can result in changes in demand for
    our products and services or impact the value of our assets under
    management, all of which may adversely affect our results of operations.
    The actual performance of the capital markets and other factors beyond our
    control will affect our investment success for clients and asset flows.
    Furthermore, improved flows depend on a number of factors, including our
    ability to deliver consistent, competitive investment performance, which
    cannot be assured, conditions of financial markets, consultant
    recommendations, and changes in our clients' investment preferences, risk
    tolerances and liquidity needs.

Qualified Tax Notice

This announcement is intended to be a qualified notice under Treasury
Regulation §1.1446-4(b). Please note that 100% of AllianceBernstein Holding's
distributions to foreign investors is attributable to income that is
effectively connected with a United States trade or business. Accordingly,
AllianceBernstein Holding's distributions to foreign investors are subject to
federal income tax withholding at the highest applicable tax rate, currently
35%.

About AllianceBernstein

AllianceBernstein is a leading global investment management firm that offers
high-quality research and diversified investment services to institutional
investors, individuals and private clients in major world markets.

At September 30, 2012, AllianceBernstein Holding L.P. owned
approximately37.9% of the issued and outstanding AllianceBernstein Units and
AXA, one of the largest global financial services organizations, owned an
approximate64.2% economic interest in AllianceBernstein.

Additional information about AllianceBernstein may be found on our website,
www.alliancebernstein.com.

AllianceBernstein L.P. (The Operating
Partnership)
SUMMARY CONSOLIDATED STATEMENTS OF
INCOME | Sept. 30, 2012
                                          Three Months Ended
 $ thousands, unaudited                   9/30/12        6/30/12      9/30/11
 Revenues:
    Base fees                             $426,363       $422,001     $469,517
    Performance fees                      39,931         3,842        611
    Bernstein research                    100,637        103,008      118,134
    services
    Distribution revenues                 103,643        95,157       87,913
    Dividend and interest                 5,071          4,981        4,958
    income
    Investment gains                      7,210          (10,852)     (66,286)
    (losses)
    Other revenues                        26,154         24,844       27,204
     Total revenues                     709,009        642,981      642,051
    Less: Interest expense                851            818          522
     Net revenues                       708,158        642,163      641,529
 Expenses:
    Employee compensation &               300,869        272,821      283,226
    benefits
    Promotion & servicing
     Distribution-related              94,779         86,120       76,323
    payments
     Amortization of deferred sales    10,658         10,171       9,186
    commissions
     Other                             47,514         51,775       52,821
    General & administrative
     General &                         135,729        129,310      129,299
    administrative
     Real estate charge                168,086        6,787        6,905
    Interest on borrowings                877            892          610
    Amortization of                       5,467          5,540        5,443
    intangible assets
     Total expenses                     763,979        563,416      563,813
 Operating (loss) income                 (55,821)       78,747       77,716
 Income taxes                            (7,572)        5,838        5,180
 Net (loss) income                       (48,249)       72,909       72,536
 Net (loss) income of consolidated
 entities attributable to                 (4,003)        (1,276)      (18,445)
 non-controlling interests
 Net (Loss) Income Attributable to        ($44,246)      $74,185      $90,981
 AllianceBernstein Unitholders
 Operating margin^(1)                     n/m            12.5%        15.0%
 ^(1)Operating income excluding net (loss) income attributable to
 non-controlling interests as a percentage of net revenues.
AllianceBernstein Holding L.P. (The
Publicly-Traded Partnership)
SUMMARY STATEMENTS OF
INCOME
                                          Three Months Ended
 $ thousands except per Unit amounts,     9/30/12        6/30/12      9/30/11
 unaudited
 Equity in Net (Loss) Income Attributable ($16,595)      $27,803      $34,074
 to AllianceBernstein Unitholders
 Income Taxes                             6,547          6,464        7,071
 Net (Loss) Income                        ($23,142)      21,339       27,003
 Additional Equity in Earnings of         -              -            -
 Operating Partnership ^(1)
 Net (Loss) Income - Diluted              ($23,142)      $21,339      $27,003
 Diluted Net (Loss) Income                ($0.23)        $0.21        $0.26
 per Unit
 Distribution per Unit                    $0.36          $0.21        $0.26
 ^(1)To reflect higher ownership in the Operating Partnership resulting from
 application of the treasury stock method to outstanding options.
AllianceBernstein L.P. and
AllianceBernstein Holding L.P.
UNITS OUTSTANDING AND WEIGHTED AVERAGE
UNITS OUTSTANDING
                                          Weighted Average Units
                             Period End   Three Months Ended 9/30/12
                             Units        Basic          Diluted
 AllianceBernstein L.P.      277,609,101  277,612,294    277,612,294
 AllianceBernstein Holding   105,173,342  101,333,296    101,333,296
 L.P.



AllianceBernstein L.P.
ASSETS UNDER MANAGEMENT | Sep 30, 2012
($ billions)
Ending and Average                                        Three Months Ended
                                                          9/30/12      9/30/11
   Ending Assets Under                                    $418.9       $402.0
   Management
   Average Assets Under                                   $411.0       $437.9
   Management
Three-Month Changes By Distribution
Channel
                                    Institutions  Retail  Private      Total
                                                          Client
   Beginning of Period              $214.9        $124.8  $67.6        $407.3
   Sales/New accounts               5.2           15.2    1.0          21.4
   Redemptions/Terminations         (12.0)        (8.6)   (2.2)        (22.8)
   Net Cash Flows                   (0.9)         (1.6)   (0.5)        (3.0)
   Net Flows                        (7.7)         5.0     (1.7)        (4.4)
   Transfers                        (0.2)         0.2     -            -
   Investment Performance           7.4           6.4     2.2          16.0
   End of Period                    $214.4        $136.4  $68.1        $418.9
Three-Month Changes By Investment
Service
                            Value   Growth        Fixed   Other   ^(2) Total
                                                  Income
   Beginning of Period      $69.6   $38.7         $230.4  $68.6        $407.3
   Sales/New accounts       0.9     1.1           16.7    2.7          21.4
   Redemptions/Terminations (10.4)  (2.4)         (8.8)   (1.2)        (22.8)
   Net Cash Flows           (1.5)   (0.1)         (0.9)   (0.5)        (3.0)
   Net Flows                (11.0)  (1.4)         7.0     1.0          (4.4)
   Investment Performance   2.8     2.5           7.2     3.5          16.0
   End of Period^(1)        $61.4   $39.8         $244.6  $73.1        $418.9
   ^(1)Approximately $40 billion in Blend Strategies AUM are reported
   in their respective services.
   ^(2)Includes index, structured, asset allocation services and certain other
   alternative investments.
By Client Domicile
                                    Institutions  Retail  Private      Total
                                                          Client
   U.S. Clients                     $126.9        $ 78.5  $66.9        $272.3
   Non-U.S. Clients                 87.5          57.9    1.2          146.6
   Total                            $214.4        $136.4  $68.1        $418.9



AllianceBernstein L.P.
RECONCILIATION OF GAAP
FINANCIAL RESULTS TO
ADJUSTED FINANCIAL
RESULTS
                                   Three Months Ended
 $ thousands,            9/30/12   6/30/12   3/31/12   12/31/11   9/30/11   6/30/11
 unaudited
 Net Revenues, GAAP      $         $         $         $          $         $
 basis                   708,158  642,163  681,809  624,978   641,529  727,994
  Exclude:
   Deferred
  compensation-related   (6,374)   7,619     (15,570)  (9,386)    37,840    1,588
  investment (gains)
  losses
   Deferred
  compensation-related   (300)     (344)     (380)     (2,226)    (982)     (524)
  dividends and interest
   90% of consolidated
  venture capital fund   3,634     907       (7,686)   3,116      18,306    6,302
  investment losses
  (gains)
  
  Distribution-related   (94,779)  (86,120)  (79,869)  (73,048)   (76,323)  (78,557)
  payments
   Amortization of
  deferred sales         (10,658)  (10,171)  (8,267)   (8,292)    (9,186)   (9,871)
  commissions
   Pass-through fees   (25,617)  (7,917)   (7,738)   (7,598)    (8,894)   (9,987)
  & expenses
 Adjusted Net Revenues   $         $         $         $          $         $
                         574,064  546,137  562,299  527,544   602,290  636,945
 Operating (Loss)        $        $        $         $          $        $
 Income, GAAP basis      (55,821)  78,747   101,245  (540,246)  77,716   115,626
  Exclude:
   Deferred
  compensation-related   (6,374)   7,619     (15,570)  (9,386)    37,840    1,588
  investment (gains)
  losses
   Deferred
  compensation-related   (300)     (344)     (380)     (2,226)    (982)     (524)
  dividends and interest
   Deferred
  compensation-related   5,986     (7,030)   14,009    (2,925)    (24,302)  908
  mark-to-market vesting
  expense (credit)
   Deferred
  compensation-related   582       711       152       806        1,572     1,196
  dividends and interest
  expense
   Deferred            -         -         -         587,131    -         -
  compensation charge
   Net impact of
  deferred               (106)     956       (1,789)   573,400    14,128    3,168
  compensation-related
  items
   Real estate         168,086   6,787     9,269     294        6,905     18
  charges
   Insurance           -         -         -         -          (10,691)  -
  proceeds
   Sub-total of     167,980   7,743     7,480     573,694    10,342    3,186
  non-GAAP adjustments
   Less: Net (loss)
  income of consolidated
  entities attributable  (4,003)   (1,276)   7,264     (3,552)    (18,445)  (6,756)
  to non-controlling
  interests
 Adjusted Operating      $         $        $         $         $         $
 Income                  116,162  87,766   101,461  37,000    106,503  125,568
 Operating Margin, GAAP
 basis excl.             n/m       12.5%     13.8%     n/m        15.0%     16.8%
 non-controlling
 interests
 Adjusted Operating      20.2%     16.1%     18.0%     7.0%       17.7%     19.7%
 Margin
AllianceBernstein
Holding L.P.
RECONCILIATION OF GAAP
EPU TO ADJUSTED EPU
                                   Three Months Ended
 $ thousands except per
 Unit amounts,           9/30/12   6/30/12   3/31/12   12/31/11   9/30/11   6/30/11
 unaudited
 Net (Loss) Income -     $        $        $        $          $        $ 
 Diluted, GAAP basis     (23,142)  21,339   26,699   (199,463)  27,003   35,653
 Impact on net income of
 AllianceBernstein       59,589    2,838     2,741     206,341    3,773     1,162
 non-GAAP adjustments
 Adjusted Net Income -   $        $        $        $        $        $ 
 Diluted                 36,447   24,177   29,440   6,878     30,776   36,815
 Diluted Net (Loss)      $      $      $      $       $      $   
 Income per Holding      (0.23)    0.21     0.26     (1.97)     0.26     0.34
 Unit, GAAP basis
 Impact of
 AllianceBernstein       0.59      0.03      0.03      2.04       0.04      0.01
 non-GAAP adjustments
 Adjusted Diluted Net    $      $      $      $       $      $   
 Income per Holding      0.36     0.24     0.29     0.07      0.30     0.35
 Unit



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 compensation-related investments, and 90% of the
investment gains and losses of our consolidated venture capital fund
attributable to non-controlling interests. In addition, adjusted net revenues
offset distribution-related payments to third parties as well as amortization
of deferred sales commissions against distribution revenues. We believe the
offset of distribution-related payments from net revenues is useful for our
investors and other users of our financial statements because such
presentation appropriately reflects the nature of these costs as pass-through
payments to third parties who perform functions on behalf of our sponsored
mutual funds and/or shareholders of these funds. Amortization of deferred
sales commissions is offset against net revenues because such costs, over
time, essentially offset distribution revenues earned by the company. We also
exclude additional pass-through expenses we incur (primarily through our
transfer agency) that are reimbursed and recorded as fees in revenues. During
the third quarter of 2012, we offset sub-advisory payments to third parties
against performance fees earned on the Public-Private Investment Partnership
(PPIP) fund we managed. These fees have no impact on operating income, but
they do have an impact on our operating margin. As such, we exclude these
fees from adjusted net revenues.

Adjusted Operating Income

Adjusted operating income represents operating income on a GAAP basis
excluding (1) the impact on net revenues and compensation expense of the
mark-to-market gains and losses (as well as the dividends and interest)
associated with employee deferred compensation-related investments, (2) the
deferred compensation charge, (3) real estate charges, (4) insurance proceeds,
and (5) the net loss or income of consolidated entities attributable to
non-controlling interests.

Prior to 2009, a large proportion of employee compensation was in the form of
deferred awards that were notionally invested in AllianceBernstein investment
services and generally vested over a period of four years. AllianceBernstein
has economically hedged the exposure to market movements by purchasing and
holding these investments on its balance sheet. The full value of the
investments' appreciation (depreciation) is recorded within investment gains
and losses on the income statement in the current period. U.S. GAAP requires
the appreciation (depreciation) in the compensation liability to be expensed
over the award vesting period in proportion to the vested amount of the award
as part of compensation expense. This creates a timing difference between the
recognition of the compensation expense and the investment gain or loss
impacting operating income, which will fluctuate over the life of the award
and net to zero at the end of the multi-year vesting period. Although during
periods of high market volatility these timing differences have an impact on
operating income and operating margin, over the life of the award any impact
is ultimately offset. Because these plans are economically hedged, management
believes it is useful to reflect the offset ultimately achieved from hedging
the investments' market exposure in the calculation of adjusted operating
income, adjusted operating margin and adjusted diluted net income per Holding
Unit, which will produce core operating results from period to period. The
non-GAAP measures exclude gains and losses and dividends and interest on
deferred compensation-related investments included in revenues and
compensation expense, thus eliminating the timing differences created by
different treatment under U.S. GAAP of the market movement on the expense and
the investments. In the fourth quarter of 2011, we implemented changes to our
employee long-term incentive compensation award program. As a result,
mark-to-market investment gains or losses recognized in compensation expense
will closely approximate mark-to-market investment gains and losses recognized
in revenues.

Real estate charges have been excluded because they are not considered part of
our core operating results when comparing financial results from period to
period and to industry peers.

In the third quarter of 2011, we received significant insurance proceeds from
the settlement of a claim that are not considered part of our core operating
results.

Most of the net income or loss of consolidated entities attributable to
non-controlling interests relates to the 90% limited partner interests held by
third parties in our consolidated venture capital fund. We own a 10% limited
partner interest in the fund. Because we are the general partner of the
venture capital fund and are deemed to have a controlling interest, U.S. GAAP
requires us to consolidate the financial results of the fund. However,
recognizing 100% of the gains or losses in operating income while only
retaining 10% is not reflective of our underlying financial results at the
operating income level. As a result, we are excluding the 90% limited partner
interests we do not own from our adjusted operating income. Similarly, net
income of joint ventures attributable to non-controlling interests, although
not significant, is excluded because it does not reflect the economic interest
attributable to AllianceBernstein.

Adjusted Operating Margin

Adjusted operating margin allows us to monitor our financial performance and
efficiency from period to period and to compare our performance to industry
peers without the volatility noted above in our discussion of adjusted
operating income. Adjusted operating margin is derived by dividing adjusted
operating income by adjusted net revenues.

SOURCE AllianceBernstein L.P.

Website: http://www.alliancebernstein.com
Contact: Andrea Prochniak, Investors, +1-212-756-4542,
Andrea.Prochniak@alliancebernstein.com; Jonathan Freedman, Media,
+1-212-823-2687, Jonathan.Freedman@alliancebernstein.com
 
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