Thank you for standing by. And welcome to the AllianceBernstein first quarter 2009 earnings review. At this time, all participants are in a listen-only mode. After the formal remarks, there will be a question-and-answer session, and I will give you instructions on how to ask a question at that time. As a reminder, this conference is being recorded and will be replayed for one week. I would now like to turn the conference over to the host for this call, the Director of Investor Relations for AllianceBernstein, Mr. Philip Talamo. Please go ahead.

Thank you, Julia. Good afternoon, everyone. And welcome to our first quarter 2010 earnings review. As a reminder, this conference call is being webcast and supported by a slide presentation that can be found in the Investor Relations section of our website at www.alliancebernstein.com/investor relations. Presenting our results today are our Chairman and Chief Executive Officer, Peter Kraus; our Chief Operating Officer, David Steyn; and our Chief Financial Officer, John Howard. I would like to take this opportunity to note that some of the information we present today is forward-looking in nature, and is subject to certain SEC rules and regulations regarding disclosure. Our cautionary language regarding forward-looking statements can be found on page two of our presentation, as well as in the MD&A section of our 2009 10-K. In light of the SEC's regulation FD, management may only address inquiries of the material nature from the investment community in a public forum. Therefore we encourage you to ask all such questions on this call. Now, with that, I’ll turn the call over to Peter.

Thank you, Phil. This afternoon, we'd like to talk a little bit about performance in slightly different way than we traditionally do. You'll find in the presentation that the appendix pages 21 to 24 our traditional presentation for performance, which shows you first Q – first quarter performance for value growth fixed income and also shows you annual performance for each of those services in the traditional manner. What we have talked about, I guess, quite consistently over the last year with regard to our businesses and our services, is some of the significant performance that we experience in 2008, and the impact that that's had on the business. So we decided to show you in this quarter was peak-to-trough performance that is October, excuse me, October 9, 2007, which is the peak through March 9, 2009, the bottom i.e. the trough and then March 9, 2009 through March 31, 2010, so showing the relative outperformance and the relative underperformance. We recognize that our clients do look at our performance overtime, they do, actually, look at how much our outperformance has out run our underperformance and this is another way for us to explain to all of you why we are confident about where we’re going in the future. So if you look at the first page, which shows you Lipper Percentile Ranks, which is different then the institutional rankings in precise amount but not in directional – not from a directional point of view. You'll see for global value, international value and the U.S. value, the bottom diamond, which reflects the peak-to-trough underperformance and the relatively poor competitive rankings. You'll see then the trough to present rankings for the same services as being at the top decile or top quartile performance or in the U.S. value almost top third…

Thank you, Peter. As Peter said, the conventional way of our showing performance is included in the appendix and what that shows for Q1 is a generally flat quarter. Off the back of a stunning ‘09 almost across the board, where performance was good or great, particularly noteworthy being value and fixed income performance. So when we look at the flow picture, which Peter's just been talking about, an improvement in value and a very positive fixed income flow story. The numbers on page eight and then in the subsequent pages for each of the channels are sort of consistent with that message as we look at the channels of institutions retail and private clients. What I'll try to do is give some flavor of what's happening within or behind these numbers. But at the sort of macro level, the story we’ve been talking about for the past three or four quarters continues to be borne out, with a turn around in the channels led by retail, closely followed by private clients with institutions still being challenged. So let me talk about private clients, which is on slide nine. And at the risk of boring, there is going to be a sort of consistency to the themes what I'm talking about today because they really haven't changed from the last quarter or the quarter before or indeed the quarter before that. Within private clients, a story of slower out flows and higher sales, now when I say higher sales, there is a caveat to that. The dollar number of sales is actually down. It is pretty constant from Q3 ‘09, Q4 ‘09 and first quarter of 2010. The number of sales, number of new accounts, number of new relationships has actually been improving materially. What the logical conclusion of that…

Thanks, David. Before we begin, I would like to highlight one change that we have made within our financial slides and an effort to make our earnings calls more informative. As we review the financial results of the current quarter, we will now compare these results to both the year-over-year and quarter-over-quarter period on prior calls. We have primarily focused on reviewing the year-over-year trend. Let's begin on slide 13. Earlier today, we reported GAAP earnings per holding unit of $0.46, which included a $0.04 charge for real estate write off, excluding the real estate charge of $0.04, our earnings were $0.50 per unit during the quarter. GAAP earnings in the first quarter 2009 were $0.07 per unit and we earned $0.62 in Q4. Net income at the operating partnership level was $148 million this quarter, compared to $37 million earned in the first quarter of 2009 and $192 million earned in the fourth quarter of 2009. Let's first compare this quarter's results with the first quarter of last year. Net income at the operating partnership level increased by 300%, driven by a 21% increase in net revenues and an increase in operating expenses of only 4%. Operating margins increased to almost 22%, from about 7% in the prior year quarter. The improvement in our financial performance was largely driven by an 18% increase if base advisory fees and keeping the growth in our expenses to a minimum. Now let's compare the first quarter's result with the fourth quarter of last year. Net income of the operating partnership level fell by 23% from Q4, driven by a 7% decrease in net revenues and a 1% increase from operating expenses. The majority of the decline in our net income was a result of the following three items. A 3% decrease in…

Thank you. (Operator instructions) Your first question is from the line of Craig Siegenthaler with Credit Suisse. Craig Siegenthaler – Credit Suisse: Thanks. Good afternoon, everyone.

Hi, Craig. Craig Siegenthaler – Credit Suisse: First, just on the institutional channel, given the kind of still low level sales which you commented is a little lumpy with the improvement on the pipeline and redemption, when do you expect to turn to positive flows in this channel? And also what are products and distribution segments of this challenge do you think will lead the way?

Well, the first part of that question, I wish I could answer but I most certainly cannot. I don't have a crystal ball to inform us when this one will turn into positive at the. The second par of your question, I can give guidance on. I mean, clearly, we've seen some meaningful traction emerging in fixed income, global emerging market debt. We are seeing flows coming out of a broadening part of the world, so flows coming out of the Middle East, continent of Europe, Japan and activity here in the United States of America. So it's again, you are absolutely right. I did say things are lumpy at the minute in both retail and institutional. But the lumpiness is easing. We are seeing a broadening out of where we are seeing activity. And I would expect that to continue. Craig Siegenthaler – Credit Suisse: And while the lumpiness on the institutional side sounds more like a negative adjustment now, was the lumpiness on the retail channel more of a positive helping, maybe benefiting mutual fund flows or retail flows in the first quarter? Or is that not true?

Yes. There is a degree of truth in that. The first quarter was lumpy on the retail side, in a positive and nice way. But, the increased levels of activity, which we have been talking about over the past few quarters in retail, we expect to see continue into second and third quarter. But it does mean we are going to have some fluctuations around the trend line, which again, I would encourage you not to read too much into. I would look at the longer term trend line rather than one quarter over the last. But yeah, Q1 retail was very good. Craig Siegenthaler – Credit Suisse: And real quick, just on the 2010 strategic initiatives like the Asian research business, derivatives, European ECM. Will this have any impact on the income statement, meaning kind of higher costs back end loaded this year?

Yeah. I think that you'll encourage or you will have in the income statements some additional expenses, relative to the build out of those activities. And you won't see revenues attached to that for, 12 months or so. So you should expect that there is some investment going on here in the business, in many different places, as we see significant worth demand for the kinds of things we do, not just in the Bernstein business and the research business but also in the investment business. Craig Siegenthaler – Credit Suisse: Great. Thanks Peter. Thanks David.

Pleasure,

Your next question is from the line of Robert Lee with KBW. Robert Lee – KBW: Thanks. Good afternoon. I guess my first question, just looking at the growth franchise and I guess one of my observations is that you are notwithstanding the improvement from the recent trough in performance, if you kind of look back over I don't know maybe the last decade seems almost, that part of the business you never really seemed to I think fully recover, if you will, from the tech bubble days? At least that is one perception I have. When you look at that, how does that play into your thoughts around use of capital, potential acquisitions? You have talked a little bit since he came on board, Peter about one of the modest sized small strategic things that may make sense. But in all, do you see any need to make more changes in the growth franchise, or somehow complement it in some way with possibly a third party business?

So, Robert I think the growth business certainly has some challenges as a result of coming out of the early 2000s, whether it was the tech bubble or whether it was some of the other challenges the company faces at that time which affected the detailed distribution of the business. There is no doubt that that's the case. We still believe, however, that the growth research process, which we bolstered in the last six to nine months and the performance that we've actually been able to create in that peak to trough analysis that I discussed at the outset, I recognize that that's a little bit different. But again, if you look at the growth performance in that chart, the peak to trough analysis showed, particular in the international growth, where there is substantial demand, as well as in the global growth, much stronger performance than what we obviously saw at the bottom. So clients are looking at that and saying well that's pretty interesting in terms of prospects, as to where we are going to go. So I agree with you the business was negatively impacted at the beginning of the 2000s. I think we continue to be focused on how can we improve that business by adding people to it that we think are substantial, important and alpha generating personnel? And will continue to be focused on doing that as we think that this franchise has room to grow. And we think the recent performance actually gives some support to that. So that encompasses your comment about acquisitions, meaning that we'll look at and continue to look at those people and businesses that make sense. But as I have said consistently, it is going to be much more in light of people than it will be in terms acquiring franchises. Robert Lee – KBW: Okay. Great. I do have a follow-up question I think maybe too David. I'm just curious in the private client business as I think you highlighted kind of the new relationships are growing at a nice rate, but you are not necessarily seeing that translate into more growth sales, because of maybe it is coming more on the smaller, midsized relationships. Why do you think that maybe you know larger, you are seeing less you know, fewer flows from larger sized, potentially larger sized relationship. Is that that Ultra high network clients or are just doing less thing, in a staying put more or less willing to make a change? I mean, how should I think about you know, about that compared to at least a couple of years ago? Where a lot of year incremental growth was coming from the ultra high income segment?

That is a really interesting question and not an easy one to answer in sort of two lines. Let me give you a few thoughts on it. In no particular order, first and foremost, we are certainly seeing the phenomenon of a private client who for the sake of the argument has $20 million and two years ago they were doing a beauty parade and award $20 million, now they are doing eye beauty parade and awarding $10 and keeping $10 million on the sidelines. So that phenomenon is under way. And I think that is true of the entire industry. Now being slightly more parochial in terms of talking about us, I think the character of our business, which is a proprietary architecture, based upon trust, based upon wealth forecasting, planning, analysis, very much the holistic service to the private client. When I say proprietary architecture, what I mean is we do the asset management. We do tax managements. We do financial planning, et cetera for our clients. That today, post 2008 and the credit crunch and the financial crisis, that particularly resonates with that end of the marketplace. By that end of the marketplace, I mean the 5, $10 million end of the marketplace rather than the 50, $100 million end of the marketplace. So I', giving sort of two reasons. First of all clients your clients are money on the sidelines and making an allocation. And then secondly, what you might call the sweet spot of the Bernstein private client business is particularly active right now. Now of course, you framed your question slightly differently, what's happening at the top end of the marketplace. And I'm giving you an answer by talking about what's happening at the lower end of the marketplace. I think the top end…

Robert. You recognized that if we are not paying our employees in cash and we are paying them in shares, we are obviously saving that cash? Robert Lee – KBW: True. So that is principally where the share repurchases are coming from. So for $1 of compensation just to use an example, if that $1 was entirely stock and we expensed that and we don't pay that out in distribution, then we saved that cash. Now of course the price at which we buy the stock back could be equal to or greater than or less than at which we issued it. An therefore half of those shares get paid back by effectively by or bought by effectively holding them for taxes or whatever the tax rate is, depending upon the individual's earning rate. So, most of the cash that's being used to buy the stock back is actually coming from what would otherwise be compensation. And most of the cash that's been use buy the stock back is actually coming from, what would otherwise be compensation and you'll find that actually being pretty parsimonious in the amount of debt we want to take on, on the balance sheet. We like running a lower levered organization. We have got plenty of leverage operating leverage in the company and plenty of leverage in the half a trillion dollars of assets that we are also managing. Robert Lee – KBW: That was it. Thank you very much.

Your next question is from the line of fill Bill Katz with Citigroup. Bill Katz – Citigroup: Thank you. Just a couple of questions. Just trying to reconcile your discussion, reinvestment in the business versus your guidance around base compensation and G&A. Where would we expect to see the step up of investment spending around new products?

Well, I think Bill that you'll see base compensation go down less slow less quickly. But obviously, we've got a much smaller headcount today than we had a year ago or a year and a half ago. So you would expect keep base compensation lower and obviously incentive compensation will be impacted similarly, which means to say that it will go down less quickly as well. And in fact, quarter-to-quarter it's up, but that is for different reasons. So, I think that we are not going to encumber the income statements hugely by investing, but we are going to invest. We see significant opportunities in the research business. We see significant opportunities in some of the investment businesses. We have talked about real estate for a year, obviously that's place where we are investing. So those things continue to be places that we are going to allocate costs, not capital effectively, because we are not buying something there, but costs to higher individuals before revenues will be in the P&L.

Bill, most of those expenses are going to be in the incentive comp line item and not in base salaries. Bill Katz – Citigroup: Okay. Second question, just to go back to your new slides, so as to look at that way and so as to step back from that, are you looking for the volatility on the way down and the volatility on the way up. What does consultants focus on more now at this point, is it the cumulative return across the cycle or the volatility of return across the cycle? And how may that affect the pipeline going forward?

You all have asked us questions about how our consultant dialog is going and what we can tell you about that. I think in the last few months the consultants dialog has turned decidedly more positive with us. They are asking us questions about how do we help them solve their problems, their client's problems and that was a dialog, quite frankly, that we weren't getting to because people were very focused on performance. So the reason for showing you this peak to trough numbers and trough to peak numbers or trough to present numbers is to give you some sense that consultants are gaining comfort in our ability to perform and for the organization to do exactly what we have said the organization can do. So we are not trying to make projections, because we can't. Not just we can't because we don't know because we can't. But what we are trying to give you a sense is that the dialogs around the institutional marketplace and the consultant marketplace is decidedly different than what was in the past and part of the reason for that is the numbers we were showing new performance. Bill Katz – Citigroup: Okay. It just one last question, if I may. I'll get back into queue, because I have a few others. I notice and maybe I'm just not watching the calendar appropriately, I think it seems to me your distribution declaration dates or payable date, excuse me, seem to be slipping a little bit, I just wondering if there is sort of change the strategy or is it just a function of the calendar?

I think it's the calendar, Bill. Bill Katz – Citigroup: Okay. Thank you.

Your next question is from the line of Michael Kim with Sandler O’Neill. Michael Kim – Sandler O’Neill: Thank you. Good afternoon. First, can you maybe give us some additional color on the sub advisory side of the retail channel? Are the outflow is sill kind of centered in variable annuities and maybe driven by kind of this ongoing transition to passive strategies and then just where do you think we stand in that whole process?

Basically, yes. I said in my remarks that we continue to see de-risking. The sub advisory channel, we’re largely talking about the U.S., but largely talking about insurance companies and we’re largely talking about variable annuity. And we and much of the rest of the industry have seen the same response by the variable annuity business post 2008, which was to de-risk and shift some meaningful assets into passive. I have said in the past, that many of the flows we've seen, we've known but I should we known about. It's part of a process, which has been underway for a sustained period of time. So it's for the coming, it's not a new leg of a process; it’s not a new phenomenon which is happening. I would standby that remark. There is nothing in the sub advisory flows which looks different or is unexpected. Now, we are also it has to be said, talking to many of our counter parties in the sub advisory world about re-risking by which I don't simply mean a shift from passive to active, but what would be the appropriate type of active products and what type of characteristics would they want long-term, as an alternative to passive. And those debates are ongoing. I wouldn't begin to sort of predict when we are going to see asset flows from them. I do not – we do not necessarily think the shift into passive is a one way street or necessarily even a permanent street. So it's more complex picture. Michael Kim – Sandler O’Neill: Okay. And then I know you talked about this earlier. But maybe to come at the share repurchase discussion a bit differently. How should we be thinking about buybacks more broadly just in light of the recent equity grants? And then the $3 million unit buyback authorization, would you expect to work through that authorization relatively quickly to minimize that delusion?

I think our view on share repurchases is to buyback shares as and when we can without affecting the marker and we'll continue to do that as we have in the past. Michael Kim – Sandler O’Neill: Okay. Great. Thanks.

Your next question is from the line of Cynthia Mayer with Bank of America. Cynthia Mayer – Bank of America: Hi, good afternoon. Maybe just to clarify little bit, I think you said there were two significant fund launches in Asia in the quarter. What were those products and what assets did those contribute? I assume that’s also what you meant by lumpy?

We don’t tend to disclose that information at a client-by-client level. But there were two launches and they were lumpy in the sense they were meaningfully sized launches, which we were very happy with. Cynthia Mayer – Bank of America: Okay. And I think you said, it's really global fixed income that was selling outside the U.S. and it drove retail if the quarter?

And emerging debts and high yields, I mean it's not just global fixed income but global fixed income has been one of the products, which has had particular attraction. Cynthia Mayer – Bank of America: Okay. Do you have any capacity constraints on the emerging debt or the high yield?

We don't feel there are capacity issues at the minute. Cynthia Mayer – Bank of America: Okay. And what are the trends on those this quarter? Is that I think you said they are still meaningfully strong, is there any signs of that peaking?

Sorry, Cynthia. Do you say flow trends? Cynthia Mayer – Bank of America: Yeah. Glow trends.

Continue to be strong in those fixed income services. It's very hard to call a peak in advance. But the attraction we have seen over recent quarter is continuing? Cynthia Mayer – Bank of America: Okay. And just a couple more, let's see in terms of the headcount, are you expecting that to stabilize here?

Yeah. I wouldn't each of these quarters, I look 4400 and change. We don't have a hard target as to what the headcount is now. We certainly have a target when it was 5600 to materially reduce it. And 4400 was a ballpark number. But whether the headcount firm is 4200 or 4400 or 4500, I wouldn't read that much into those numbers. What I can show you is, it’s not going up to by fast. Cynthia Mayer – Bank of America: Okay. And in terms of the sub letting charge, what's the expense associated with that? Is that why G&A guidance is going to 125 to 130?

It’s about a $3 million save annually hereafter. If starting with the second quarter of this year, you can start modeling about a $3 million annual run rate save on rental expense. Cynthia Mayer – Bank of America: Okay. Is there more space to be sub let at this point or is that?

We have nothing to disclose at this point. We certainly do as we discussed on prior calls. We do have some excess real estate with relating to consolidation of some space amongst some our offices, especially in the New York region. But we have nothing to disclose at this point with respect to sub let space. And then one other comment Cynthia about your first question, with respect to lower G&A guidance in prior quarters, prior to 12 of ’09. We had included all of our transaction costs associated with ourselves by business within G&A. That’s on the bottom of slide 16, there is a footnote there. So we re-class set up to promotion servicing expenses. So that’s if you are looking at it, over prior guidance you need to adjust for that re-class. Cynthia Mayer – Bank of America: Right. Because I think the old guidance is 140, right?

Right. Cynthia Mayer – Bank of America: So, okay. All right. And then if I could just ask one more. Your exhibit on page 15 shows institutional fees declined 7% sequentially. But they declined 4%, is that due to two fewer days? Or is that a mix shift of some kind?

It’s the combination of both. Cynthia Mayer – Bank of America: And what would the mix shift be due to? Is that toward fixed income or the other category?

Marginally, I think you asked this question last quarter. We talked about fixed income. Marginally, our success at fixed income has a bit of an impact on realization rates. And that's probably what the – that’s probably what that shows. Cynthia Mayer – Bank of America: Great. All right. Thank you.

Your next question is a follow-up from the line of Bill Katz with Citigroup. Bill Katz – Citigroup: Okay. There might be some moving parts to this question. I apologize. Just trying to reconcile your last comment on G&A versus promotion, if you look sequentially it doesn't seem like there is a one for one increase if you will, in terms of your distribution expenses relative to your discussion around G&A. So I'm wondering if there's been a more permanent reduction in your infrastructure expense loss being equal.

So Bill, your specific questions are on G&A or promotion servicing. Bill Katz – Citigroup: Actually to two. You given guidance here I guess the longer term of about $11, $12 million prior G&A versus current G&A.

Right. Bill Katz – Citigroup: If I look at your promotion line, at least relative to where we were last quarter and again I guess there is an average impact in here, et cetera. But it doesn't seem like there is a corresponding step up here as well. I am sort of wondering all those being equal are you just more profitable today than yesterday?

Well, let me speak generally about G&A for a second. If you looked at our G&A expenses in the current quarter, if you go back out the real estate charge that number falls to about 126, which is within the range that we previously discussed. When you move the transaction costs up to promotion servicing fees that you are saying the trend in prior quarters versus Q1, you are not seeing the – you believe there is other declines in other expenses? Bill Katz – Citigroup: I'm wondering, yes. Basically I'm wondering.

Yeah. There’s not all – let me just talk about the trends in promotion servicing. I think that’s what your question is about. I think there was a decline of about 5% in distribution plan payments versus the prior periods, which are generally trending with a retail asset a management. We did have some cuts in our travel and entertainment costs versus prior quarters was about a $2.5 million improvement. And our G&A expenses versus the fourth quarter, which is probably netting against that transaction cost number. Bill Katz – Citigroup: Okay. And then just sort follow-up when you look at the ancillary businesses with some of these product innovations and it seems like you are more focused on people versus, I guess either process or platform at this point in time. Is there anything out there that you are looking at, that could accelerate the market share opportunity here? Is there sort of an opportunity cost of doing things de novo rather than potentially looking outside the firm to accelerate the opportunity?

Bill, we will continue to look at both people, platforms and broader opportunities as we have in the past. We are going to take our time, we are going to look at what we think is interesting. We have had a leaning toward hiring people as opposed to – buying businesses, because they are just more complex to merge together. And my guess is we'll continue to lean in that direction. Bill Katz – Citigroup: Again, just my last follow-up. Thanks for taking all the questions. When you look at your headcount sequentially just sort of wonder what sort of dynamic might be, I know you said year-over-year about 4% low in the sort of 4 to 6% range we looked over the last several years, for example ’09, but where are you seeing some of the sequential change? And what does that mean for sort of incremental hiring needs in the most immediate term?

I don't think there is any particular message behind the numbers. I just thought it was interesting to point out that the first quarter over fourth quarter number was totally consistent or better than our experience in ’05, ‘08. In fact, if I drill even deeper into it and slip it out between voluntary and involuntary departures on both of those two criteria, it’s also been better than or equal to past experience. So there is nothing happening on the headcount, which is in any way painting a pick or telling a story. So it’s the normal Q1 attrition or better than normal Q1 attrition of recent years. Bill Katz – Citigroup: Okay. Thanks very much, guys.

Julianne, we have time for one more question.

Your final question is also a follow-up from the line of Robert Lee with KBW. Robert Lee – KBW: Thanks. Good afternoon. And I appreciate everyone's patience taking all these questions. I'm really just curious if the possibly get some update on the initiative in the 401(k) market. I mean if you went back in starring a few years back that had been, I think a fairly important and large initiative for the firm to build up, I guess flat to better way of putting it kind of an open architecture 401(k) platform. We can manage supply past and have third-party products in there and all kinds of things. And I think for a period of time, that was also accounting for a reasonable amount of the firm’s wins or unfunded wins when they were reported quarterly. You don’t – not talking about that too much, I think more recently – you kind of update us. Is that still a key priority for the firm? Has there been kind of a shift more maybe away from that? You think there is better opportunities to focus management's time and resources?

A pleasure to answer that question. It's just that I'm very modest and we haven't been talking about it. It continues to be a strategic priority of the firm. If you look at ‘08 and immediate aftermath into ‘09, one of the interesting phenomena was that the DC, the 401(k) industry here in the states almost sort of froze. There was just no activity. As people set back and tried to work out what was happening as the dust settled. We are undoubtedly seeing the unfreezing of that. And activity in DC is increasing. There are many conversations underway with DC plans right now. And the very initiatives you highlight in your question are at the forefront of it. So for example, customized retirement strategies, which was a very big initiative of this firm a few years ago, that is one of the areas where we are having some of the most interesting conversations with our prospects and our clients today. So it was a strategic priority, it continues to be a strategic priority; there undoubtedly was a pause in ‘09 in DC activity almost across the board. We see that area hotting up now. There is of course, a great deal of debate in Washington about the DC industry and there could be changes and ramifications there, which we are keeping an eye on. But it's definitely something which is a high priority for us and even more than happy to talk in greater detail in subsequent earnings calls about it. Robert Lee – KBW: Great. That was it. Thank you very much.

Thanks, everyone, for participating on our call. If you have any further questions reach out to the IR team whenever you would like. Enjoy the rest of your evening.

Thank you all for participating in today’s conference call. You may now disconnect.