AllianceBernstein Annual Report 2009

FY2009 Annual Report · AllianceBernstein
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ANNUAL REPORT 2009

2009 Financial Highlights

AllianceBernstein Holding (The Publicly Traded Partnership)
(USD Thousands, Except per Unit Data)

Equity in Earnings of Operating Partnership
Net Income
Diluted Net Income per Unit
Distributions per Unit

AllianceBernstein (The Operating Partnership)

Assets Under Management (USD Millions)
Revenues (USD Thousands)
Net Income (USD Thousands)
Employees

Assets Under Management (USD Billions)

Years Ended December 31

2009

$192,513

$167,189

$1.80
$1.77

2008

$278,636

$244,726

$2.79
$2.68

2007

$415,256

$376,152

$4.32
$4.33

Years Ended December 31

2009

$495,502

$2,906,879

$556,127

4,369

2008

$461,951

$3,514,159

$839,240

4,997

2007

$800,390

$4,525,317

$1,260,444

5,580

By Investment Service

By Channel

By Client Location

Growth Equities
11%

Other†
9%

$46

$52

Private Client
15%

$75

Fixed Income*
37%

$185

Retail
24%

$121

$300

Non-US 
36%

$178

$318

Blend
Strategies
$90*

Growth
Component 8%

 Value
Component 9%

$42

$43

$128

Value Equities
26%

*Includes $5 billion of Fixed Income AUM utilized in Blend Strategies
† Includes index, structural, asset-allocation services and other non-actively managed AUM

Institutional Investments
61%

US
64%

AllianceBernstein—Letter from the Chairman

In the wake of the most difﬁ cult market environment in a generation, our ﬁ rm made signiﬁ cant 

progress in the three most critical aspects of our business in 2009: we improved investment 

performance for our clients; we made a series of organizational enhancements to attract, 

develop and retain exceptional investment and research talent; and we materially improved the 

operating leverage of the ﬁ rm. I believe that these initiatives, which I will describe in more detail, 

position the ﬁ rm to reward our clients and, consequently, our Unitholders in the years ahead. 

Strong Investment Results amid Historic Rally
The year 2009 was one of historic recovery in equity and 
ﬁ xed-income markets around the globe. Global equities, 
as represented by the MSCI World Index, were up 30% 
for the year, while high-yield bonds—one of the hardest-
hit markets in 2008—were up nearly 60%. Despite 
the seesaw market environment in 2008 and 2009, 
we remained committed to our long-term, consistent 
investment process and continued to take prudent risks 
in our portfolios where our research identiﬁ ed attractive 
investment opportunities. 

In that environment, most of our investment services 
outperformed their benchmarks or peer averages, 
materially so in many cases. Our Global Value portfolio 
and Global Research Growth portfolio—two of our largest 
institutional mandates—outperformed their benchmarks 
by more than 600 and 300 basis points, respectively. Our 
four largest institutional Blend Strategies portfolios—which 
reﬂ ect the best ideas of our value and growth equity 
services—outperformed their benchmarks by nearly 300 to 
more than 1,000 basis points. Fixed-income services also 
had a stellar year, with three of our ﬁ ve largest institutional 
services outperforming their benchmarks by more than 

1,000 basis points. Based on these strong results last year, 
six of our nine largest ﬁ xed-income portfolios restored their 
premiums with positive relative returns for the 2008–2009 
period. Additionally, our private client portfolios—which 
are rooted in long-term planning and asset-allocation 
advice—rebounded strongly. 

Our strong performance across all asset classes coupled 
with a decrease in risk aversion among clients has resulted 
in a reduction in outﬂ ows across our asset-management 
businesses. The trend in net ﬂ ows improved from the lows 
experienced in the second quarter of 2009 due primarily to 
increased sales. 

Many of our private clients aggressively shifted their 
risk proﬁ les over the past 18 months away from our 
traditional equity-sensitive asset-allocation model, leading 
to both asset outﬂ ows and an increase in ﬁ xed-income 
investments at the expense of equities. Encouragingly, 
we began to see a re-risking of assets among our private 
clients toward the end of 2009. 

Our retail business began to rebound in 2009, driven 
largely by higher sales of ﬁ xed-income funds outside the 

1

US. While our equity sales have lagged ﬁ xed income, 
reﬂ ecting an industry-wide trend, we believe that our 
improved performance and the introduction of innovative 
new services in 2010—such as Inﬂ ation Strategies, 
Market-Neutral Portfolios and Dynamic Asset Allocation—
should result in higher sales. Additionally, after a period 
of de-risking, we saw an improvement in our subadvisory 
business, with the environment beginning to look much 
more robust, particularly in Europe and Japan. 

Our institutional channel remains our most challenging. 
Our 2008 underperformance and other factors, including 
clients reducing positions in equities to create liquidity 
and the general de-risking of pension plans, have resulted 
in signiﬁ cant asset outﬂ ows in this channel. We believe 
that sustained outperformance will attract client assets 
to our equity services, although the timing is difﬁ cult to 
determine. On the ﬁ xed-income side, most industry ﬂ ows 
have been into lower-risk core services. As client risk 
appetites increase, our very strong performance in both 
core and more credit-sensitive ﬁ xed-income services should 
result in strong asset growth. 

Despite this turbulent environment, I am pleased to report 
that we had several critical wins in our institutional channel 
this year. In July, we had the distinction of being selected 
by the US Department of the Treasury as one of the nine 
managers in the government-sponsored Public-Private 
Investment Program. Working closely with our partners 
Greenﬁ eld Partners, Rialto Capital Management and Altura 
Capital Group, we were successful in raising the most capital 
of the nine chosen ﬁ rms. This was a signiﬁ cant endorsement 
of the ﬁ rm’s research excellence. Additionally, we announced 
a new effort focusing on commercial real estate, which will 
allow the ﬁ rm and our institutional and private clients to 
capitalize on compelling real estate investment opportunities 
around the world. 

Despite net outﬂ ows in 2009, I am optimistic that the 
progress we made last year, coupled with continued strong 
performance this year, will result in net inﬂ ows for the ﬁ rm 
before the end of 2010. 

An Organization Dedicated to Research 
Research is the driving force of our ﬁ rm: it is the common 
denominator between our sell-side and buy-side businesses. 
Nothing exempliﬁ es excellence in research to meet client 
needs more clearly than our sell-side research business, 
Sanford C. Bernstein & Co. Its excellence in research is widely 
acknowledged: in 2009, for the second year in a row, every 
single one of our eligible US analysts was recognized in the 
Institutional Investor All-America survey. These exceptional 
results are unmatched by other ﬁ rms. Our European analysts 
have also fared remarkably well in comparable surveys, and 
we expect to build a similar track record in our new Asian 
business. Moreover, in response to client demand, we have 
begun assisting with new share offerings of companies to 
our sell-side research clients. 

Excellence in research is also crucial in our investment-
management business. Most obviously, it can result in an 
information advantage that makes it possible for us to deliver 
superior returns by selecting securities that outperform. To 
this end, excellent research must be deep, it must have a 
broad scope and it must be innovative. That’s why our ﬁ rm 
has built global teams of fundamental company, industry and 
economic analysts devoted to supporting our equity, ﬁ xed-
income and multi-asset portfolios. 

Finally—and most important for our private client business 
and for a growing share of our retail and institutional 
businesses—great quantitative research into how various 
asset classes behave enables us to devise asset-allocation 
solutions that meet client needs, given their required 
income, other assets and liabilities, and tax position. 

2

Attracting, Developing and Retaining Top Talent
Attracting, developing and retaining high-quality talent is 
mission-critical for our management team. To achieve this 
goal, we have made several organizational changes that 
will help us fortify our senior ranks, align our talent with 
the highest-impact roles and ensure a meritocracy through 
competitive compensation.

In late 2009, we established a partnership that marks 
a major step in our efforts to cultivate a culture of 
collaboration, as well as to directly link the compensation 
of senior business leaders with ﬁ rmwide success. Each 
of the 24 partners has distinguished him- or herself by 
making decisions and setting leadership examples that are 
in the best interest of our clients, our staff, our ﬁ rm and 
our Unitholders.

Through the partnership, we intend to set a new bar for 
people management, leadership and performance. The 
partners are personally responsible for developing our staff, 
while inviting open communication at all levels. We are at 
the beginning of a process. The partnership is dynamic, and 
we will elect more partners in the years to come.

Continuing in our effort to extend the spirit of partnership 
among our entire staff and to better align their interests 
with those of our Unitholders and clients, all eligible 
employees will now receive their deferred compensation 
awards in the form of AllianceBernstein Holding Units, 
with multiple-year vesting periods. I ﬁ rmly believe that 
compensating key employees with equity ownership fosters 
a true partnership community, one that will help us grow 
and achieve our ﬁ rm’s goals.

Our emphasis on partnership is also evident in our 
investment oversight. At the beginning of the year, we 
began a biweekly meeting between our investment leaders 

and me. This meeting, which we call “Better Risk, Better 
Alpha,” provides an opportunity for the leaders of our 
investment platforms to share their respective research 
insights, helping us to become better global investors.

We have also made key appointments to our risk-
management and trading functions. In an effort to 
enhance our understanding of market risk and its impact 
on our investment portfolios, we consolidated the ﬁ rm’s 
quantitative research and associated investment risk-
management resources into one team, allowing for greater 
in-depth analysis of factors contributing to returns and risk. 
We also hired a Global Head of Trading to leverage the 
ﬁ rm’s knowledge of liquidity, price discovery and trading 
technology across equity and ﬁ xed-income platforms, 
providing portfolio managers with greater insights into 
market dynamics. Moreover, we consolidated our entire 
global buy-side trading operation across equities and ﬁ xed 
income to ensure best practices across our investment teams. 

We continue to work hard to create an intellectually 
challenging environment for all members of the ﬁ rm. 
Consequently, voluntary turnover among our staff, including 
investment professionals, declined by 30% in 2009 
compared with the prior year. AllianceBernstein remains a 
place where top talent in the industry wants to work.

Restructuring
Having built an infrastructure to support more than $800 
billion in assets under management (AUM), the severe 
reduction in our AUM due to the ﬁ nancial crisis required 
us to restructure the ﬁ rm to reﬂ ect our lower revenue. 
The most difﬁ cult aspect of this restructuring effort, 
which began in the fourth quarter of 2008, was the 23% 
reduction in headcount from its peak in the third quarter of 
2008, with more than half of the ﬁ nancial impact occurring 
in 2009. These actions and other measures resulted 

3

in a reduction in ﬁ xed-compensation costs and other 
controllable expenses by more than $200 million. 

Barring further severe capital-markets turmoil, our 
restructuring efforts are largely over. We are committed 
to maintaining tight control on noncompensation expense 
and to retaining and improving our operating margin. 
Furthermore, we continue to invest in those areas of 
our ﬁ rm where we see signiﬁ cant potential to accelerate 
growth in AUM, revenues and earnings. Importantly, we 
began 2010 positioned to support substantial asset growth 
without the need to materially increase headcount and 
other infrastructure-related costs. Increasing our revenues 
with a sustainable lower headcount will amplify our ability 
to compensate our talent.

I would like to recognize the dedication and commitment of 
our employees, which was never more evident than during 
these past two years. They remained singularly focused 
on helping our clients achieve their goals, while enduring 
many difﬁ culties during this challenging time, and I am 
very grateful for their hard work. The quality, longevity and 
commitment of our human capital have been, and remain, 
the most important asset of our ﬁ rm.

Operating expenses declined by 11% due to lower 
compensation and beneﬁ ts, and lower promotion 
and servicing expenses. Net income attributable to 
AllianceBernstein Unitholders fell 34% year over year, 
and our operating margin declined by approximately 
650 basis points to 19.6%. However, we are conﬁ dent 
that our improved potential for asset growth—due to 
very competitive 2009 investment performance and the 
introduction of new investment services, combined with the 
signiﬁ cant operating leverage provided by our lower expense 
base—will result in improved ﬁ nancial results in 2010.

Looking to 2010 and Beyond
Our future success depends on our ability to provide 
outstanding investment insight and thoughtful product 
innovation to our clients around the world. A continued 
commitment to research and a renewed focus on product 
development are critical to delivering on this goal. In July 
2009, we formed a Product Development Committee, 
with representation across our sales, marketing and 
investment teams. The mission of this team is to focus
our research capabilities on client needs as they evolve 
and to develop innovative investment solutions that will 
meet those needs. 

Financial Results
As a consequence of the substantial reduction in AUM that 
occurred during the ﬁ nancial crisis of 2008, our ﬁ nancial 
performance suffered in 2009. Although year-end AUM 
grew by 7% during 2009, a 31% decline in full-year average 
AUM resulted in a decrease of more than $900 million, or 
32%, in advisory fee revenues. Importantly, while revenues 
for our sell-side business declined 8% compared with record 
revenues in 2008, the proﬁ tability of that unit provided 
ballast to the downturn in our asset-management business. 

In early 2010, we began offering Dynamic Asset Allocation 
to private clients. The goal of this service is to mitigate the 
impact of extreme market environments by dynamically 
adjusting the portfolio’s asset mix in response to changing 
risk and return signals across asset classes. We are able to 
implement this as an overlay for our private clients, thereby 
preserving the customization offered in our private client 
accounts. Although it is still early, I am pleased with the 
enthusiasm this has generated among both long-time and 
prospective clients. 

4

Other services that we expect to launch in the near 
term to ﬁ t client needs include opportunistic real estate, 
inﬂ ation protection, retirement-income products and 
other alternative investments. Our goal is to have 
an alternatives platform that packages our research 
capabilities in new and provocative ways and that, 
depending on the investment mandate, can be offered 
to clients in both hedge funds and mutual funds globally. 
Focused on absolute performance, these investments 
will have a lower correlation to traditional long-only 
portfolios, providing greater diversiﬁ cation and reducing 
volatility for our clients. 

Our core business remains focused on outperforming the 
respective benchmarks across our equity, ﬁ xed-income 
and multi-asset portfolios. As always, we are focused on 
generating wealth for our clients, expanding our product 
and solutions offerings, acquiring new clients, engaging 
and motivating our employees, and improving returns for 
Unitholders—in short, executing our strategy.

We thank you for your continued investment in 
AllianceBernstein. Everyone at our ﬁ rm will be working 
diligently on your behalf to enhance the value of your 
investment in the company.

Peter S. Kraus
Chairman and Chief Executive Ofﬁ cer

5

AllianceBernstein Directors and Executive Ofﬁ cers

Board of Directors

Peter S. Kraus (1) (3) (4)
Chairman of the Board and 
Chief Executive Ofﬁ cer 

Dominique Carrel-Billiard
Chief Executive Ofﬁ cer,
AXA Investment Managers

Christopher M. Condron (1) (3) (4)
Director, President and 
Chief Executive Ofﬁ cer, 
AXA Financial, Inc.
Chairman of the Board, 
Chief Executive Ofﬁ cer and 
President, AXA Equitable 
Life Insurance Company
Member of the Management 
Board, AXA

Henri de Castries
Chairman of the
Management Board, AXA 
Chairman of the Board,
AXA Financial, Inc. 
Director, AXA Equitable Life
Insurance Company

Denis Duverne (1)
Oversees Strategy, Finance and Operations, AXA
Director, AXA Financial, Inc.
Director, AXA Equitable Life
Insurance Company

Richard S. Dziadzio
Senior Executive Vice President,
AXA Equitable Life Insurance Company
Chief Financial Ofﬁ cer,
AXA Financial, Inc. and AXA Equitable 

Deborah S. Hechinger (3)
Independent Consultant on
Non-proﬁ t Governance

Weston M. Hicks (2)
Director, President and 
Chief Executive Ofﬁ cer,
Alleghany Corporation

Nick Lane
Head of Group Strategy, AXA

Lorie A. Slutsky (1) (3) (4)
President and 
Chief Executive Ofﬁ cer,
The New York Community Trust
Director, AXA Financial, Inc.
Director, AXA Equitable
Life Insurance Company

A.W. (Pete) Smith, Jr. (2) (4)
President, Smith Consulting

Peter J. Tobin (1) (2)
Director, AXA Financial, Inc.
Director, AXA Equitable 
Life Insurance Company

Executive Officers

Peter S. Kraus
Chairman of the Board and 
Chief Executive Ofﬁ cer 

David A. Steyn
Chief Operating Ofﬁ cer

Laurence E. Cranch 
General Counsel 

James A. Gingrich
Chairman and CEO of
Sanford C. Bernstein & Co., LLC

Robert H. Joseph, Jr.
Chief Financial Ofﬁ cer

Lori A. Massad
Chief Talent Ofﬁ cer, 
Talent Development and Human Capital

(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Corporate Governance Committee
(4) Member of the Compensation Committee

6

AllianceBernstein Holding L.P.
Form 10-K 2009

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

FORM 10-K

For the Fiscal Year Ended December 31, 2009
OR

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from

to

Commission file number 001-09818

ALLIANCEBERNSTEIN HOLDING L.P.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

1345 Avenue of the Americas, New York, N.Y.
(Address of principal executive offices)

13-3434400
(I.R.S. Employer
Identification No.)

10105
(Zip Code)

Registrant’s telephone number, including area code: (212) 969-1000
Securities registered pursuant to Section 12(b) of the Act:

Title of Class

units representing assignments of beneficial ownership
of limited partnership interests

Name of each exchange on which registered

New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes È No ‘

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes ‘ No È

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ‘ No ‘
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is

not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller

reporting company. See definitions of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):

Large accelerated filer È

Smaller reporting company ‘
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ‘ No È
The aggregate market value of the units representing assignments of beneficial ownership of limited partnership interests held

Non-accelerated filer ‘

Accelerated filer ‘

by non-affiliates computed by reference to the price at which such units were last sold on the New York Stock Exchange as of
June 30, 2009 was approximately $1.73 billion.

The number of units representing assignments of beneficial ownership of limited partnership interests outstanding as of
December 31, 2009 was 101,351,749. (This figure includes 100,000 units of general partnership interest having economic interests
equivalent to the economic interests of the units representing assignments of beneficial ownership of limited partnership interests.)

DOCUMENTS INCORPORATED BY REFERENCE
This Form 10-K does not incorporate any document by reference.

Table of Contents

Glossary of Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ii

Part I

Item 1.

Item 1A.

Item 1B.

Item 2.

Item 3.

Item 4.

Part II

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Institutional Services
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Retail Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Private Client Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Bernstein Research Services
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets Under Management, Revenues and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Custody and Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Service Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
History and Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Properties
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Item 7.

Item 6.

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
AllianceBernstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . 37
Executive Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
AllianceBernstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
AllianceBernstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
AllianceBernstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . .105
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106
Item 9A.
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107

Item 9.

Item 8.

Part III

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Part IV

Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . .131
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . .137
Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140

Item 15.
Signatures

Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143

Glossary of Certain Defined Terms

“AllianceBernstein” – AllianceBernstein L.P. (Delaware limited partnership formerly known as Alliance Capital Management L.P.,
“Alliance Capital”), the operating partnership, and its subsidiaries and, where appropriate, its predecessors, Holding and ACMC,
Inc. and their respective subsidiaries.

“AllianceBernstein Investments” – AllianceBernstein Investments, Inc. (Delaware corporation), a wholly-owned subsidiary of
AllianceBernstein that services retail clients and distributes company-sponsored mutual funds.

“AllianceBernstein Partnership Agreement” – the Amended and Restated Agreement of Limited Partnership of
AllianceBernstein, dated as of October 29, 1999 and as amended February 24, 2006.

“AllianceBernstein Units” – units of limited partnership interest in AllianceBernstein.

“AUM” – assets under management for clients.

“AXA” – AXA (société anonyme organized under the laws of France), the holding company for an international group of insurance
and related financial services companies engaged in the financial protection and wealth management businesses.

“AXA Equitable” – AXA Equitable Life Insurance Company (New York stock life insurance company), an indirect wholly-
owned subsidiary of AXA Financial, and its subsidiaries other than AllianceBernstein and its subsidiaries.

“AXA Financial” – AXA Financial, Inc. (Delaware corporation), a wholly-owned subsidiary of AXA.

“Bernstein GWM” – Bernstein Global Wealth Management, a unit of AllianceBernstein that services private clients.

“Bernstein Transaction” – on October 2, 2000, AllianceBernstein’s acquisition of the business and assets of SCB Inc., formerly
known as Sanford C. Bernstein Inc., and assumption of the liabilities of that business.

“Exchange Act” – the Securities Exchange Act of 1934, as amended.

“ERISA” – the Employee Retirement Income Security Act of 1974, as amended.

“General Partner” – AllianceBernstein Corporation (Delaware corporation), the general partner of AllianceBernstein and Holding
and a wholly-owned subsidiary of AXA Equitable, and, where appropriate, ACMC, Inc., its predecessor.

“Holding” – AllianceBernstein Holding L.P. (Delaware limited partnership).

“Holding Partnership Agreement” – the Amended and Restated Agreement of Limited Partnership of Holding, dated as of
October 29, 1999 and as amended February 24, 2006.

“Holding Units” – units representing assignments of beneficial ownership of limited partnership interests in Holding.

“Investment Advisers Act” – the Investment Advisers Act of 1940, as amended.

“Investment Company Act” – the Investment Company Act of 1940, as amended.

“NYSE” – the New York Stock Exchange, Inc.

“Partnerships” – AllianceBernstein and Holding together.

“SCB” – SCB LLC and SCBL together.

“SCB LLC” – Sanford C. Bernstein & Co., LLC (Delaware limited liability company), a wholly-owned subsidiary of
AllianceBernstein that provides Bernstein research services in the United States.

“SCBL” – Sanford C. Bernstein Limited (U.K. company), a wholly-owned subsidiary of AllianceBernstein that provides Bernstein
research services primarily in Europe.

“SEC” – the United States Securities and Exchange Commission.

“Securities Act” – the Securities Act of 1933, as amended.

ii

PART I

Item 1.

Business

The words “we” and “our” in this Form 10-K refer collectively to Holding and AllianceBernstein, or to their officers and employ-
ees. Similarly, the words “company” and “firm” refer to both Holding and AllianceBernstein. Where the context requires dis-
tinguishing between Holding and AllianceBernstein, we identify which of them is being discussed. Cross-references are in italics.

We use “global” in this Form 10-K to refer to all nations, including the United States; we use “international” or “non-U.S.” to
refer to nations other than the United States.

We use “emerging markets” in this Form 10-K to refer to countries considered to be developing countries by the international
financial community and countries included in the Morgan Stanley Capital International (“MSCI”) emerging markets index. As of
December 31, 2009, examples of such countries were Brazil, Chile, China, Columbia, Czech Republic, Egypt, Hungary, India,
Indonesia, Israel, Malaysia, Mexico, Morocco, Peru, the Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand
and Turkey.

We use the term “hedge funds” in this Form 10-K to refer to private investment partnerships we sponsor that utilize various alter-
native strategies such as leverage, short selling of securities, and utilizing forward contracts, currency options and other derivatives.

General

Clients

AllianceBernstein provides research, diversified investment management and related services globally to a broad range of clients,
including:

•

•

institutional clients, including unaffiliated corporate and public employee pension funds, endowment funds, domestic and for-
eign institutions and governments, and various affiliates;

retail clients, including U.S. and offshore mutual funds, variable annuities, insurance products and sub-advisory relationships;

• private clients, including high-net-worth individuals, trusts and estates, charitable foundations, partnerships, private and family

corporations, and other entities; and

•

institutional investors seeking high-quality research and related services, and issuers of publicly-traded securities seeking equity
capital markets services.

We also provide distribution, shareholder servicing and administrative services to our sponsored mutual funds.

Our firm’s mission is to be the most trusted investment firm in the world by placing our clients’ interests first and foremost, utilizing
our research capabilities to have more knowledge than any other investment firm, and using and sharing knowledge better than our
competitors to help our clients achieve financial peace of mind and investment success.

Research

Our high-quality, in-depth, fundamental research is the foundation of our business. We believe that our global team of research
professionals gives us a competitive advantage in achieving investment success for our clients.

Our research disciplines include fundamental, quantitative and economic research, as well as currency forecasting. In addition, we
have created several specialized research units, including one that examines global strategic changes that can affect multiple industries
and geographies, and another dedicated to identifying potentially successful innovations within early-stage companies.

Products and Services

We offer a broad range of investment products and services to our clients:

• To our institutional clients, we offer separately-managed accounts, sub-advisory relationships, structured products, collective

investment trusts, mutual funds, hedge funds and other investment vehicles (“Institutional Services”);

Annual Report 2009

1

• To our retail clients, we offer retail mutual funds sponsored by AllianceBernstein, our subsidiaries and our affiliated joint ven-
ture companies, sub-advisory services to mutual funds sponsored by third parties, separately-managed account programs spon-
sored by various financial intermediaries worldwide (“Separately-Managed Account Programs”) and other investment vehicles
(collectively, “Retail Services”);

• To our private clients, we offer diversified investment management services through separately-managed accounts, hedge funds,

mutual funds and other investment vehicles (“Private Client Services”); and

• To institutional investors, we offer research, portfolio strategy and brokerage-related services, and, to issuers of publicly-traded

securities, we offer equity capital markets services (“Bernstein Research Services”).

These services are provided by teams of investment professionals with significant expertise in their respective disciplines (see
“Employees” in this Item 1). Our buy-side research analysts support our portfolio managers and, together, they oversee a number of
different types of investment services within various vehicles (discussed above) and strategies (discussed below). Our sell-side research
analysts provide the foundation for our Bernstein Research Services.

Our services include:

• Value equities, generally targeting stocks that are out of favor and considered undervalued;

• Growth equities, generally targeting stocks with under-appreciated growth potential;

• Fixed income securities, including taxable and tax-exempt securities;

• Blend strategies, combining style-pure investment components with systematic rebalancing;

• Passive management, including index and enhanced index strategies;

• Alternative investments, such as hedge funds, currency management strategies, venture capital and, beginning in 2010, direct

real estate investing; and

• Asset allocation services, by which we offer blend strategies specifically-tailored for our clients (e.g., customized target-date fund

retirement services for defined contribution plan sponsors).

We manage these services using various investment disciplines, including market capitalization (e.g., large-, mid- and small-cap
equities), term (e.g., long-, intermediate- and short-duration debt securities), and geographic location (e.g., U.S., international,
global and emerging markets), as well as local and regional disciplines in major markets around the world.

Blend strategies are a key component of our product line. As of December 31, 2009, blend strategies AUM was $90 billion
(representing 18% of our company-wide AUM), an increase of 6% from $85 billion as of December 31, 2008 and a decrease of 49%
from $175 billion as of December 31, 2007.

We market and distribute alternative investment products (which include hedge funds, venture capital and currency management
strategies) globally to high-net-worth clients and institutional investors. Alternative product AUM totaled $3.9 billion as of
December 31, 2009, $2.5 billion of which was private client AUM (primarily hedge funds) and $1.4 billion of which was institu-
tional AUM (primarily currency services).

Sub-advisory client mandates span our investment strategies, including growth, value, fixed income and blend. We serve as
sub-adviser for retail mutual funds, insurance products, retirement platforms and institutional investment products.

In August 2008, we created an initiative called AllianceBernstein Defined Contribution Investments (“ABDC”) focused on expand-
ing our firm’s capabilities in the defined contribution (“DC”) market. ABDC seeks to provide the most effective DC investment
solutions in the industry, as measured by product features, reliability, cost and flexibility, to meet specialized client needs by
integrating research and investment design, product strategy, strategic partnerships (e.g., record-keeper partnerships and operations
collaboration), and client implementation and service. As of December 31, 2009, our DC assets under management, which are dis-
tributed in all three of our buy-side distribution channels, totaled $25 billion.

2

AllianceBernstein

In April 2009, we were selected by the U.S. Treasury Department as one of only three firms to manage its portfolio of assets issued
by banks and other institutions taking part in the Capital Purchase Program of the Troubled Assets Relief Program. In addition, we
were selected by the U.S. Treasury Department as one of nine pre-qualified fund managers under the Public-Private Investment
Program and, during the fourth quarter of 2009, we were one of five firms that closed an initial Public-Private Investment Fund of
at least $500 million.

Global Reach

We serve clients in major global markets through operations in 45 cities in 24 countries. Our client base includes investors through-
out the Americas, Europe, Asia, Africa and Australia. We utilize an integrated global investment platform that provides our clients
with access to local (country-specific), international, and global research and investment strategies.

Assets under management by client domicile and investment service as of December 31, 2009, 2008 and 2007 were as follows:

By Client Domicile ($ in billions):

U.S.

Non-U.S.

$178
36%

$318
64%

$179
39%

$283
61%

$316
40%

$484
60%

December 31, 2009

December 31, 2008

December 31, 2007

By Investment Service ($ in billions):

U.S.

$275
55%

$221
45%

Global
& Int’l

$259
56%

$203
44%

$489
61%

$311
39%

December 31, 2009

December 31, 2008

December 31, 2007

Our international client base stabilized during 2009, decreasing by 1% compared to a decrease of 43% during 2008. Our global and
international AUM increased by 6% during 2009 compared to a decrease of 47% during 2008. Approximately 62%, 76% and 80% of
our gross asset inflows (sales/new accounts) during 2009, 2008 and 2007, respectively, were invested in global and international
investment services.

Revenues

We earn revenues primarily by charging fees for managing the investment assets of, and providing research to, our clients.

We generally calculate investment advisory fees as a percentage of the value of AUM at a specific point in time or as a percentage of
the value of average AUM for the applicable billing period, with these percentages varying by type of investment service, size of
account and total amount of assets we manage for a particular client. Accordingly, fee income generally increases or decreases as
AUM increases or decreases. Increases in AUM generally result from market appreciation, positive investment performance for cli-
ents or net asset inflows from new and existing clients. Similarly, decreases in AUM generally result from market depreciation, neg-
ative investment performance for clients, or net asset outflows due to client redemptions, account terminations or asset withdrawals.

Annual Report 2009

3

We are eligible to earn performance-based fees on hedge fund services, as well as some long-only services provided to our institu-
tional clients. In these situations, we charge a base advisory fee and are eligible to earn an additional performance-based fee or
incentive allocation that is calculated as either a percentage of absolute investment results or a percentage of investment results in
excess of a stated benchmark over a specified period of time. In addition, some performance-based fees include a high-watermark
provision, which generally provides that if a client account underperforms relative to its performance target (whether absolute or
relative to a specified benchmark), it must gain back such underperformance before we can collect future performance-based fees.
Therefore, if we fail to achieve our performance target for a particular period, we will not earn a performance-based fee for that
period and, for accounts with a high-watermark provision, our ability to earn future performance-based fees will be impaired. If the
percentage of our AUM subject to performance-based fees grows, seasonality and volatility of revenue and earnings are likely to
become more significant. Our performance-based fees in 2009, 2008 and 2007 were $29.8 million, $13.4 million and $81.2 million,
respectively. For additional information about performance-based fees, see “Risk Factors” in Item 1A and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in Item 7.

We sometimes experience periods when the number of new accounts or the amount of AUM increases or decreases significantly.
These changes result from wide-ranging factors, including conditions of financial markets, our investment performance for clients
and changes in our clients’ investment preferences.

We earn revenues from clients to whom we provide fundamental research and brokerage-related services, primarily in the form of
transaction fees calculated as either “cents per share” (generally in the U.S. market) or a percentage of the value of the securities
traded (generally in the European market) for these clients. In 2009, we re-launched our equity capital markets business, through
which we earn revenues from issuers of publicly-traded securities to which we provide these services in the form of underwriting
fees, management fees and/or selling concessions, depending on our role in the offering.

Our revenues may fluctuate for a number of reasons; see “Risk Factors” in Item 1A and “Management’s Discussion and Analysis of Finan-
cial Condition and Results of Operations” in Item 7.

Employees

The substantial decrease in our assets under management and the resulting decrease in fee revenues from levels during the first nine
months of 2008 led us to undertake initiatives in 2008 and 2009 that resulted in significant reductions in operating expenses and
capital expenditures.

We reduced our headcount by 628, or 13%, during 2009 to 4,369 which, along with the reduction in force that occurred during
the fourth quarter of 2008, represents a total reduction of nearly 1,300 staff members, or 23%, from our headcount peak during the
third quarter of 2008. These actions reduced our fixed compensation costs (salaries and fringe benefits) by approximately $130 mil-
lion. Despite these measures, we believe we have retained the intellectual capital required to service our clients and grow our busi-
ness.

Our firm’s 4,369 full-time employees, who are located in 24 countries, include 300 research analysts, 158 portfolio managers, 46
traders and 23 professionals with other investment-related responsibilities. We have employed these professionals for an average
period of approximately eight years, and their average investment experience is approximately 17 years. We consider our employee
relations to be good.

Institutional Services

We serve our institutional clients primarily through AllianceBernstein Institutional Investments (“Institutional Investments”), a unit
of AllianceBernstein, and through other units in our international subsidiaries and one of our joint ventures (institutional relation-
ships of less than $25 million are generally serviced by Bernstein GWM, our Private Client channel, discussed below). Institutional
Services include actively managed equity accounts (including growth, value and blend accounts), fixed income accounts and bal-
anced accounts (which combine equity and fixed income), as well as passive management of index and enhanced index accounts.

4

AllianceBernstein

These services are provided through separately-managed accounts, sub-advisory relationships, structured products, collective invest-
ment trusts, mutual funds and other investment vehicles. As of December 31, 2009, institutional AUM was $300 billion, or 61% of
our company-wide AUM as compared to $291 billion, or 63%, as of December 31, 2008 and $508 billion, or 63%, as of
December 31, 2007. For more information concerning institutional AUM, revenues and fees, see “Assets Under Management, Rev-
enues and Fees” in this Item 1.

Our institutional client base includes unaffiliated corporate and public employee pension funds, endowment funds, domestic and
foreign institutions and governments, and certain of our affiliates (AXA and its subsidiaries), as well as certain sub-advisory
relationships with unaffiliated sponsors of various other investment products. We manage approximately 1,762 mandates for these
clients, which are located in 42 countries. As of December 31, 2009, we managed employee benefit plan assets for 42 of the
Fortune 100 companies, and we managed public pension fund assets for 39 states and/or municipalities in those states.

Retail Services

We provide investment management and related services to a wide variety of individual retail investors, both in the U.S. and inter-
nationally, through retail mutual funds sponsored by our company, our subsidiaries and affiliated joint venture companies; mutual
fund sub-advisory relationships; Separately-Managed Account Programs; and other investment vehicles (“Retail Products and
Services”). As of December 31, 2009, retail AUM was $121 billion, or 24% of our company-wide AUM as compared to $102 bil-
lion, or 22%, as of December 31, 2008 and $183 billion, or 23%, as of December 31, 2007. For more information concerning retail
AUM, revenues and fees, see “Assets Under Management, Revenues and Fees” in this Item 1.

Our Retail Products and Services are designed to provide disciplined, research-based investments that contribute to a well-
diversified investment portfolio. We distribute these products and services through financial intermediaries, including broker-
dealers, insurance sales representatives, banks, registered investment advisers and financial planners.

Our Retail Products and Services include open-end and closed-end funds that are either (i) registered as investment companies
under the Investment Company Act (“U.S. Funds”), or (ii) not registered under the Investment Company Act and generally not
offered to United States persons (“Non-U.S. Funds” and, collectively with the U.S. Funds, “AllianceBernstein Funds”). They
provide a broad range of investment options, including local and global growth equities, value equities, blend strategies and fixed
income securities. They also include Separately-Managed Account Programs, which are sponsored by financial intermediaries and
generally charge an all-inclusive fee covering investment management, trade execution, asset allocation, and custodial and
administrative services. We also provide distribution, shareholder servicing and administrative services for our Retail Products and
Services.

Our U.S. Funds, which include retail funds, our variable products series fund (a component of an insurance product) and the retail
share classes of the Sanford C. Bernstein Funds (principally Private Client Services products, “SCB Funds”), currently offer 99
different portfolios to U.S. investors. As of December 31, 2009, retail U.S. Funds AUM was approximately $45 billion, or 37% of
total retail AUM as compared to $39 billion, or 38%, as of December 31, 2008 and $66 billion, or 36%, as of December 31, 2007.
Because of the way they are marketed and serviced, we report substantially all of the AUM in the SCB Funds, which totaled $26
billion as of December 31, 2009, as private client AUM.

Our Non-U.S. Funds are distributed internationally by local financial intermediaries to non-U.S. investors in most major interna-
tional markets by means of distribution agreements. As of December 31, 2009, these funds consisted of 70 different portfolios and
AUM in these funds was $20 billion. We also offer local-market funds that we distribute in Japan through financial intermediaries.
As of December 31, 2009, retail AUM in these funds was $3 billion.

AllianceBernstein Investments serves as the principal underwriter and distributor of the U.S. Funds. AllianceBernstein Investments
employs approximately 140 sales representatives who devote their time exclusively to promoting the sale of U.S. Funds and certain
other Retail Products and Services offered by financial intermediaries.

Annual Report 2009

5

AllianceBernstein (Luxembourg) S.A. (“AllianceBernstein Luxembourg”), a Luxembourg management company and one of our
wholly-owned subsidiaries, generally serves as the placing or distribution agent for the Non-U.S. Funds. AllianceBernstein Lux-
embourg employs approximately 60 sales representatives who devote their time exclusively to promoting the sale of Non-U.S.
Funds and other Retail Products and Services offered by financial intermediaries.

Private Client Services

Through Bernstein GWM, we provide Private Client Services to high-net-worth individuals, trusts and estates, charitable
foundations, partnerships, private and family corporations, and other entities by means of separately-managed accounts, hedge funds,
mutual funds and other investment vehicles, with a minimum initial account size of $500,000. As of December 31, 2009, private
client AUM was $75 billion, or 15% of our company-wide AUM as compared to $69 billion, or 15%, as of December 31, 2008 and
$109 billion, or 14%, as of December 31, 2007. For more information concerning private client AUM, revenues and fees, see
“Assets Under Management, Revenues and Fees” in this Item 1.

Our Private Client Services are built on a sales effort that involves 292 financial advisors based in 18 cities in the U.S. and in
London, England. These advisors do not manage money, but work with private clients and their tax, legal and other advisors to
assist them in determining a suitable mix of U.S. and non-U.S. equity securities and fixed income investments. The diversified
portfolio created for each client is intended to maximize after-tax investment returns, in light of the client’s individual investment
goals, income requirements, risk tolerance, tax situation and other relevant factors. In creating these portfolios, we utilize our
research reports, investment planning services and the Wealth Management Group, which has in-depth knowledge of trust, estate
and tax planning strategies.

Bernstein Research Services

Bernstein Research Services consist of fundamental research, quantitative services and brokerage-related services in equities and
listed options provided to institutional investors such as pension fund, hedge fund and mutual fund managers, and other institutional
investors. Brokerage-related services are provided by SCB LLC in the United States and SCBL primarily in Europe, with research
services also provided by Sanford C. Bernstein, a unit of AllianceBernstein Hong Kong Limited (a wholly-owned subsidiary of Alli-
anceBernstein, “AB Hong Kong”), in Asia. For more information concerning the revenues we derive from Bernstein Research
Services, see “Assets Under Management, Revenues and Fees” in this Item 1.

We provide fundamental company and industry research along with disciplined research into securities valuation and factors affect-
ing stock-price movements. Our analysts are consistently among the highest ranked research analysts in industry surveys conducted
by third-party organizations.

Additionally, we provide equity capital markets services to issuers of publicly-traded securities, primarily in initial public offerings
and follow-on offerings, acting as manager, syndicate member or selling group member.

6

AllianceBernstein

Assets Under Management, Revenues and Fees

The following tables summarize our AUM and revenues by distribution channel:

Assets Under Management(1)

Institutional Services

Retail Services

Private Client Services

Total

(1) Excludes certain non-discretionary client relationships.

Institutional Services

Retail Services

Private Client Services

Bernstein Research Services

Other(1)

Total Revenues

Less: Interest Expense

Net Revenues

December 31,

% Change

2009

2008

2007

2009-08

2008-07

(in millions)

$ 300,052

$ 291,361

$ 508,081

3.0%

(42.7)%

120,697

74,753

101,643

68,947

183,165

109,144

$495,502

$461,951

$800,390

18.7

8.4

7.3

(44.5)

(36.8)

(42.3)

Revenues

Years Ended December 31,
2008

2009

2007

2009-08

2008-07

% Change

$

811,164

888,256

589,665

434,605

187,600

2,911,290

4,411

(in thousands)

$ 1,240,636

1,227,538

849,830

471,716

(239,037 )

3,550,683

36,524

$ 1,481,885

1,521,201

960,669

423,553

332,441

4,719,749

194,432

$2,906,879

$3,514,159

$4,525,317

(34.6)%

(16.3)%

(27.6)

(30.6)

(7.9 )

n/m

(18.0)

(87.9)

(17.3)

(19.3)

(11.5)

11.4

n/m

(24.8)

(81.2)

(22.3)

(1) Other revenues primarily consist of dividend and interest income, investment gains (losses) and shareholder servicing fees. For additional information, see

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7.

AXA and its subsidiaries, whose AUM consists primarily of fixed income investments, together constitute our largest client. Our
affiliates represented approximately 22%, 21% and 15% of our company-wide AUM as of December 31, 2009, 2008 and 2007,
respectively. We earned approximately 4%, 5% and 5% of our company-wide net revenues from our affiliates for each of 2009,
2008 and 2007, respectively. This AUM is included in our Institutions and Retail buy-side distribution channels.

Annual Report 2009

7

Institutional Services

The following tables summarize our Institutional Services AUM and revenues:

Institutional Services Assets Under Management(1)
(by Investment Service)

Value Equity:

U.S.
Global and International

Growth Equity:

U.S.

Global and International

Fixed Income:

U.S.

Global and International(2)

Other(3):

U.S.

Global and International(2)

Total:

U.S.

Global and International

Total

2009

December 31,
2008

(in millions)

2007

2009-08

2008-07

% Change

$ 19,028
88,758

107,786

$ 22,598
84,787

107,385

$ 49,235
192,472

241,707

(15.8)%
4.7

0.4

(54.1)%
(55.9)

(55.6)

18,124

34,762

52,886

71,832

41,083

112,915

9,677

16,788

26,465

118,661

181,391

16,075

38,034

54,109

66,151

37,900

104,051

6,617

19,199

25,816

111,441

179,920

31,908

88,691

120,599

73,240

44,066

117,306

12,426

16,043

28,469

166,809

341,272

$300,052

$291,361

$508,081

12.7

(8.6)

(2.3)

8.6

8.4

8.5

46.2

(12.6)

2.5

6.5

0.8

3.0

(49.6)

(57.1)

(55.1)

(9.7)

(14.0)

(11.3)

(46.7)

19.7

(9.3)

(33.2)

(47.3)

(42.7)

(1) Excludes certain non-discretionary client relationships.

(2) Certain client assets were reclassified among investment services to more accurately reflect how these assets are managed by our firm.

(3)

Includes index, structured, asset allocation services and other non-actively managed AUM.

8

AllianceBernstein

Revenues from Institutional Services
(by Investment Service)

Years Ended December 31,
2008

2009

2007

2009-08

2008-07

% Change

(in thousands)

$ 57,596

$

108,921

$

153,747

375,914

433,510

51,017

150,612
201,629

90,798

73,316

164,114

1,895

9,343

11,238

201,306

609,185

810,491

—

673

607,431

716,352

70,119

276,676
346,795

85,333

77,640

162,973

2,883

11,633

14,516

267,256

973,380

1,240,636

—

—

747,957

901,704

108,691

311,727
420,418

91,144

53,533

144,677

4,441

10,353

14,794

358,023

1,123,570

1,481,593

292

—

$811,164

$1,240,636

$1,481,885

(47.1)%

(38.1)

(39.5)

(29.2)%

(18.8)

(20.6)

(27.2)

(45.6)
(41.9)

6.4

(5.6)

0.7

(34.3)

(19.7)

(22.6)

(24.7)

(37.4)

(34.7)

—

n/m

(34.6)

(35.5)

(11.2)
(17.5)

(6.4)

45.0

12.6

(35.1)

12.4

(1.9)

(25.4)

(13.4)

(16.3)

(100.0)

—

(16.3)

Investment Advisory and Services Fees:

Value Equity:

U.S.

Global and International

Growth Equity:

U.S.

Global and International

Fixed Income:

U.S.

Global and International

Other(1):

U.S.

Global and International

Total Investment Advisory and Services Fees:

U.S.

Global and International

Distribution Revenues(2)

Shareholder Servicing Fees(2)

Total

(1)

Includes index, structured, asset allocation services and other non-actively managed AUM.

(2) For a description of distribution revenues and shareholder servicing fees, see “Retail Services” below.

As of December 31, 2009, 2008 and 2007, Institutional Services represented approximately 61%, 63% and 63%, respectively, of our
company-wide AUM. The fees we earned from these services represented approximately 28%, 35% and 33% of our company-wide
net revenues for 2009, 2008 and 2007, respectively.

AXA and its subsidiaries together constitute our largest institutional client. Their AUM accounted for approximately 26%, 25% and
16% of our total institutional AUM as of December 31, 2009, 2008 and 2007, respectively, and approximately 10%, 8% and 7% of
our total institutional revenues for 2009, 2008 and 2007, respectively.

The institutional AUM we manage for our affiliates, along with our nine other largest institutional accounts, accounted for approx-
imately 40% of our total institutional AUM as of December 31, 2009 and approximately 19% of our total institutional revenues for
the year ended December 31, 2009. No single institutional client other than AXA and its subsidiaries accounted for more than
approximately 1% of our company-wide net revenues for the year ended December 31, 2009.

We manage the assets of our institutional clients through written investment management agreements or other arrangements, all of
which are generally terminable at any time or upon relatively short notice by either party. In general, our written investment man-
agement agreements may not be assigned without client consent.

Annual Report 2009

9

We are compensated principally on the basis of investment advisory fees calculated as a percentage of assets under management. The
percentage we charge varies with the type of investment service, the size of the account and the total amount of assets we manage
for a particular client.

We are eligible to earn performance-based fees on approximately 13% of institutional assets under management, which are primarily
invested in long-only equity and fixed income services. Performance-based fees provide for a relatively low asset-based fee plus an
additional fee based on investment performance. For additional information about performance-based fees, see “General—Revenues”
in this Item 1 and “Risk Factors” in Item 1A.

Retail Services

The following tables summarize our Retail Services AUM and revenues:

Retail Services Assets Under Management
(by Investment Service)

Value Equity:

U.S.

Global and International

Growth Equity:

U.S.

Global and International

Fixed Income:

U.S.

Global and International

Other(1):

U.S.

Global and International

Total:

U.S.

Global and International

Total

2009

December 31,
2008

(in millions)

2007

2009-08

2008-07

% Change

$ 11,253

$ 12,086

$ 33,488

26,232

37,485

9,552

14,339

23,891

9,635

30,263

39,898

16,416

3,007
19,423

46,856

73,841

28,053

40,139

8,494

11,544

20,038

9,857

20,178

30,035

9,851

1,580
11,431

40,288

61,355

56,560

90,048

24,637

23,530

48,167

10,627

29,855

40,482

4,468

—
4,468

73,220

109,945

$120,697

$101,643

$183,165

(6.9)%

(6.5)

(6.6)

(63.9)%

(50.4)

(55.4)

12.5

24.2

19.2

(2.3)

50.0

32.8

66.6

90.3
69.9

16.3

20.4

18.7

(65.5)

(50.9)

(58.4)

(7.2)

(32.4)

(25.8)

120.5

n/m
155.8

(45.0)

(44.2)

(44.5)

(1)

Includes index, structured, asset allocation services and other non-actively managed AUM.

10

AllianceBernstein

Revenues from Retail Services
(by Investment Service)

Years Ended December 31,
2008

2009

% Change

2007

2009-08

2008-07

(in thousands)

$ 45,211

$

88,394

$

129,125

(48.9)%

(31.5)%

121,514

166,725

46,672

85,583
132,255

30,219

175,595

205,814

8,972

9,429

18,401

131,074

392,121

523,195

275,372

89,689

216,561

304,955

84,651

130,247
214,898

30,888

195,373

226,261

3,702

1,297

4,999

207,635

543,478

751,113

376,372

100,053

262,369

391,494

119,880

168,817
288,697

39,644

224,335

263,979

1,868

—

1,868

290,517

655,521

946,038

471,031

104,132

$888,256

$1,227,538

$1,521,201

(43.9)

(45.3)

(44.9)

(34.3)
(38.5)

(2.2)

(10.1)

(9.0)

142.4

627.0

268.1

(36.9)

(27.8)

(30.3)

(26.8)

(10.4)

(27.6)

(17.5)

(22.1)

(29.4)

(22.8)
(25.6)

(22.1)

(12.9)

(14.3)

98.2

n/m

167.6

(28.5)

(17.1)

(20.6)

(20.1)

(3.9)

(19.3)

Investment Advisory and Services Fees:

Value Equity:

U.S.

Global and International

Growth Equity:

U.S.

Global and International

Fixed Income:

U.S.

Global and International

Other(1):

U.S.

Global and International

Total Investment Advisory and Services Fees:

U.S.

Global and International

Distribution Revenues(2)

Shareholder Servicing Fees(2)

Total

(1)

Includes index, structured, asset allocation services and other non-actively managed AUM.

(2) For a description of distribution revenues and shareholder servicing fees, see below.

Investment advisory fees and distribution fees for our Retail Products and Services are generally charged as a percentage of average
daily AUM. In the past, as certain of the U.S. Funds grew, we revised our fee schedules to provide lower incremental fees above
certain asset levels. Fees paid by the U.S. Funds, EQ Advisors Trust (“EQAT”), AXA Enterprise Multimanager Funds Trust (“AXA
Enterprise Trust”) and AXA Premier VIP Trust are reflected in the applicable investment management agreement, which generally
must be approved annually by the boards of directors or trustees of those funds, including by a majority of the independent directors
or trustees. Increases in these fees must be approved by fund shareholders; decreases need not be, including any decreases
implemented by a fund’s directors or trustees. In general, each investment management agreement with the AllianceBernstein
Funds, EQAT, AXA Enterprise Trust and AXA Premier VIP Trust provides for termination by either party at any time upon 60
days’ notice.

Fees paid by Non-U.S. Funds are reflected in investment management agreements that continue until they are terminated. Increases
in these fees generally must be approved by the relevant regulatory authority, depending on the domicile and structure of the fund,
and Non-U.S. Fund shareholders must be given advance notice of any fee increases.

Revenues from Retail Services represented approximately 31%, 35% and 34% of our company-wide net revenues for the years
ended December 31, 2009, 2008 and 2007, respectively.

Annual Report 2009

11

Our Retail Products and Services include open-end mutual funds designed to fund benefits under variable annuity contracts and
variable life insurance policies offered by unaffiliated life insurance companies (“Variable Product Series Fund”), and we sub-advise
variable product mutual funds sponsored by affiliates. As of December 31, 2009, we managed or sub-advised approximately $36 bil-
lion of Variable Product Series Fund AUM.

The mutual funds we sub-advise for AXA and its subsidiaries together constitute our largest retail client. They accounted for approx-
imately 25%, 21% and 22% of our total retail AUM as of December 31, 2009, 2008 and 2007, respectively, and approximately 5%,
7% and 7% of our total retail revenues for 2009, 2008 and 2007, respectively.

Our mutual fund distribution system (the “System”) includes a multi-class share structure that permits open-end AllianceBernstein
Funds to offer investors various options for the purchase of mutual fund shares, including both front-end load shares and back-end
load shares. For front-end load shares, AllianceBernstein Investments generally pays sales commissions to financial intermediaries
distributing the funds from the front-end sales charge it receives from investors at the time of the sale. For back-end load shares,
AllianceBernstein Investments pays sales commissions to financial intermediaries at the time of sale and also receives higher ongoing
distribution services fees from the mutual funds. In addition, investors who redeem back-end load shares before the expiration of
the minimum holding period (which ranges from one year to four years) pay a contingent deferred sales charge (“CDSC”) to Alli-
anceBernstein Investments. We expect to recover sales commissions for back-end load shares over periods not exceeding five and
one-half years through receipt of a CDSC and/or the higher ongoing distribution services fees we receive from holders of back-end
load shares. Payments of sales commissions made to financial intermediaries in connection with the sale of back-end load shares
under the System, net of CDSC received of $18.7 million, $33.7 million and $31.1 million, totaled approximately $31.6 million,
$9.1 million and $84.1 million during 2009, 2008 and 2007, respectively. We have not offered back-end load shares to new invest-
ors in U.S. Funds since January 31, 2009.

The rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) effectively cap the aggregate sales charges that may be
received from each open-end U.S. Fund by AllianceBernstein Investments at 6.25% of cumulative gross sales (plus interest at the
prime rate plus 1% per annum).

Most open-end U.S. Funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay, out
of assets of the fund, distribution and service fees for the distribution and sale of its shares (“Rule 12b-1 Fees”). The open-end Alli-
anceBernstein Funds have entered into agreements with AllianceBernstein Investments under which they pay a distribution services
fee to AllianceBernstein Investments. AllianceBernstein Investments has entered into selling and distribution agreements pursuant to
which it pays sales commissions to the financial intermediaries that distribute our open-end U.S. Funds. These agreements are
terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount
of fund shares.

In addition to Rule 12b-1 Fees, AllianceBernstein Investments, at its own expense, currently provides additional payments under
distribution services and educational support agreements to financial intermediaries that sell shares of our funds, a practice sometimes
referred to as revenue sharing. Although the amount of payments made in any given year may vary, the total amount paid to a
financial intermediary in connection with the sale of shares of U.S. Funds will generally not exceed the sum of (i) 0.25% of the
current year’s fund sales by that firm, and (ii) 0.10% of average daily net assets attributable to that firm over the course of the year.

Financial intermediaries that provide accounting or record-keeping services with respect to their customers’ investments in Alliance-
Bernstein Funds may receive specified payments from these funds or from affiliates of AllianceBernstein, including AllianceBernstein
Investor Services, Inc. (one of our wholly-owned subsidiaries, “AllianceBernstein Investor Services”) and AllianceBernstein Invest-
ments.

During 2009, the 10 financial intermediaries responsible for the largest volume of sales of open-end AllianceBernstein Funds were
responsible for 36% of such sales. AXA Advisors, LLC (“AXA Advisors”), a wholly-owned subsidiary of AXA Financial that utilizes
members of AXA Equitable’s insurance sales force as its registered representatives, was responsible for approximately 2%, 4% and 2%
of total sales of shares of open-end AllianceBernstein Funds in 2009, 2008 and 2007, respectively. AXA Advisors is under no obliga-
tion to sell a specific amount of AllianceBernstein Fund shares and also sells shares of mutual funds sponsored by other affiliates and
unaffiliated organizations.

12

AllianceBernstein

Morgan Stanley Smith Barney LLC (formed in 2009 by the combination of the Global Wealth Management group of Morgan Stan-
ley & Co. Inc. and the Smith Barney division of Citigroup Global Markets Inc., “MSSB”) was responsible for approximately 5% of
our open-end AllianceBernstein Fund sales in 2009. Merrill Lynch & Co., Inc. (and its subsidiaries, “Merrill Lynch”), which was
acquired by Bank of America Corporation in 2008, was responsible for approximately 5%, 8% and 7% of open-end AllianceBern-
stein Fund sales in 2009, 2008 and 2007, respectively. Citigroup Inc. (and its subsidiaries, “Citigroup”) was responsible for approx-
imately 4%, 7% and 7% of open-end AllianceBernstein Fund sales in 2009, 2008 and 2007, respectively. MSSB, Merrill Lynch and
Citigroup are not under any obligation to sell a specific amount of AllianceBernstein Fund shares and each also sells shares of mutual
funds that it sponsors and that are sponsored by unaffiliated organizations.

No dealer or agent has in any of the last three years accounted for more than 10% of total sales of shares of our open-end Alliance-
Bernstein Funds.

Based on industry sales data reported by the Investment Company Institute, our market share in the U.S. mutual fund industry was
approximately 1% of total industry assets in the U.S. during 2009. The investment performance of the U.S. Funds is an important
factor in the sale of their shares, but there are also other factors, including the level and quality of our shareholder services (see below)
and the amounts and types of distribution assistance and administrative services payments we make to financial intermediaries, which
we believe are competitive with others in the industry.

AllianceBernstein Investor Services, which operates in San Antonio, Texas, provides transfer agency and related services for each
open-end U.S. Fund (except the SCB Funds) and provides shareholder servicing for each open-end U.S. Fund’s shareholder
accounts (approximately 3.5 million accounts in total), for which it receives a monthly fee under servicing agreements with each
open-end U.S. Fund based on the number and type of shareholder accounts serviced. Each servicing agreement must be approved
annually by the relevant open-end U.S. Fund’s board of directors or trustees, including a majority of the independent directors or
trustees, and may be terminated by either party without penalty upon 60 days’ notice.

AllianceBernstein Funds utilize our personnel to perform most legal, clerical and accounting services. Payments to us by the U.S.
Funds and certain Non-U.S. Funds for these services, which approximate $7 million per year, must be specifically approved in
advance by each fund’s board of directors or trustees.

A unit of AllianceBernstein Luxembourg (“ABIS Lux”) is the transfer agent for substantially all of the Non-U.S. Funds. ABIS Lux,
based in Luxembourg and supported by operations in Singapore, Hong Kong and the United States, receives a monthly fee for its
transfer agency services and a transaction-based fee under various services agreements with the Non-U.S. Funds. Each agreement
may be terminated by either party upon 60 days’ notice.

Annual Report 2009

13

Private Client Services

The following tables summarize Private Client Services AUM and revenues:

Private Client Services Assets Under Management
(by Investment Service)

Value Equity:

U.S.
Global and International

Growth Equity:

U.S.

Global and International

Fixed Income:

U.S.

Global and International

Other(1):

U.S.

Global and International

Total:

U.S.

Global and International

Total

2009

December 31,
2008

(in millions)

2007

2009-08

2008-07

% Change

$ 14,137
11,751

25,888

$ 13,254
11,627

24,881

$ 25,259
25,497

50,756

6.7%
1.1

4.0

(47.5)%
(54.4)

(51.0)

10,384

6,941

17,325

30,862

621

31,483

15

42

57

8,425

5,709

14,134

29,287

606

29,893

21

18

39

16,004

12,175

28,179

29,498

676

30,174

25

10

35

55,398

19,355

50,987

17,960

70,786

38,358

$74,753

$68,947

$109,144

23.3

21.6

22.6

5.4

2.5

5.3

(28.6)

133.3

46.2

8.7

7.8

8.4

(47.4)

(53.1)

(49.8)

(0.7)

(10.4)

(0.9)

(16.0)

80.0

11.4

(28.0)

(53.2)

(36.8)

(1)

Includes index, structured, asset allocation services and other non-actively managed AUM.

14

AllianceBernstein

Revenues From Private Client Services
(by Investment Service)

Years Ended December 31,
2008(1)

2007(1)

2009

% Change

2009-08

2008-07

(in thousands)

$ 143,390

$ 232,662

$ 286,851

(38.4)%

(18.9)%

113,908

257,298

106,131

68,693
174,824

152,205

2,126

154,331

17

176

193

401,743

184,903

586,646

1,956

1,063

191,805

424,467

159,622

106,358
265,980

154,936

2,336

157,272

15

43

58

547,235

300,542

847,777

2,053

—

244,492

531,343

161,078

121,628
282,706

142,078

2,316

144,394

23

91

114

590,030

368,527

958,557

2,112

—

$589,665

$849,830

$960,669

(40.6)

(39.4)

(33.5)

(35.4)
(34.3)

(1.8)

(9.0)

(1.9)

13.3

309.3

232.8

(26.6)

(38.5)

(30.8)

(4.7)

n/m

(30.6)

(21.5)

(20.1)

(0.9)

(12.6)
(5.9)

9.0

0.9

8.9

(34.8)

(52.7)

(49.1)

(7.3)

(18.4)

(11.6)

(2.8)

—

(11.5)

Investment Advisory and Services Fees:

Value Equity:

U.S.

Global and International

Growth Equity:

U.S.

Global and International

Fixed Income:

U.S.

Global and International

Other(2):

U.S.

Global and International

Total Investment Advisory and Services Fees:

U.S.

Global and International

Distribution Revenues(3)

Shareholder Servicing Fees(3)

Total

(1) Certain 2008 and 2007 investment advisory fee amounts have been reclassified to confirm to our 2009 product classification.

(2)

Includes index, structured, asset allocation services and other non-actively managed AUM.

(3) For a description of distribution revenues and shareholder servicing fees, see “Retail Services” above.

Private client accounts generally are managed pursuant to a written investment advisory agreement among the client, AllianceBernstein
and SCB LLC, which usually is terminable at any time or upon relatively short notice by any party. In general, these contracts may not
be assigned without the consent of the client. We are compensated under these contracts by fees calculated as a percentage of AUM at
a specific point in time or as a percentage of the value of average assets under management for the applicable billing period, with these
fees varying based on the types of investment services and the size of the account. The aggregate fees we charge for managing hedge
funds may be higher than the fees we charge for managing other assets in private client accounts because hedge fund fees include
performance-based fees, incentive allocations or carried interests in addition to asset-based fees. We are eligible to earn performance-
based fees on approximately 4% of private client AUM, substantially all of which is held in hedge funds.

Revenues from Private Client Services represented approximately 20%, 24% and 21% of our company-wide net revenues for the
years ended December 31, 2009, 2008 and 2007, respectively.

Annual Report 2009

15

Bernstein Research Services

The following table summarizes Bernstein Research Services revenues:

Revenues From Bernstein Research Services

Years Ended December 31,
2008

2009

2007

% Change

2009-08

2008-07

(in thousands)

Bernstein Research Services

$434,605

$471,716

$423,553

(7.9)%

11.4%

We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These clients
compensate us principally by directing SCB LLC and SCBL to execute brokerage transactions on their behalf, for which we earn
transaction charges. These services accounted for approximately 15%, 13% and 9% of our company-wide net revenues for the years
ended December 31, 2009, 2008 and 2007, respectively.

Fee rates charged for brokerage transactions have declined significantly in recent years, but increases in transaction volume in both
the U.S. and Europe have more than offset these decreases. For additional information, see “Risk Factors” in Item 1A and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7.

We also earn revenues from the equity capital markets services we provide to issuers of publicly-traded securities. Depending on our
role in a particular equity issuance, these revenues may take the form of underwriting fees, management fees and/or selling
concessions.

Custody and Brokerage

Custody

SCB LLC acts as custodian for the majority of AllianceBernstein’s private client AUM and some of AllianceBernstein’s institutional
AUM. Other custodial arrangements are maintained by client-designated banks, trust companies, brokerage firms or custodians.

Brokerage

AllianceBernstein generally has the discretion to select the broker-dealers that execute securities transactions for client accounts.
When selecting brokers, we are required to obtain “best execution”. Although there is no single statutory definition, SEC releases
and other legal guidelines make clear that the duty to obtain best execution requires us to seek “the most advantageous terms
reasonably available under the circumstances for a customer’s account”. In addition to commission rate, we take into account such
factors as current market conditions, the broker’s financial strength, and the ability and willingness of the broker to commit capital
by taking positions in order to execute transactions.

While we select brokers primarily on the basis of their execution capabilities, we may also take into consideration the quality and
amount of research services a broker provides to us for the benefit of our clients. These research services, which are paid for with
client commissions and which we purchase to augment our own research capabilities, are governed by Section 28(e) of the
Exchange Act. We use broker-dealers that provide these services in consideration for commissions paid for the execution of client
trades, subject at all times to our duty to seek best execution, and with respect to which we reasonably conclude, in good faith, that
the value of the execution and other services we receive from the broker-dealer is reasonable in relation to the amount of commis-
sions paid. The commissions charged by these full-service brokers are generally higher than those charged by electronic trading
networks and other “low-touch” trading venues.

16

AllianceBernstein

We regularly execute transactions for our private clients through SCB LLC or SCBL, our affiliated broker-dealers, because these
clients have generally subscribed to an all-inclusive package of services that includes brokerage, custody and investment advice. We
sometimes execute institutional client transactions through SCB LLC or SCBL. We do so only when our clients have consented to
our use of affiliated broker-dealers or we are otherwise permitted to do so, and only when we can execute these transactions in
accordance with applicable law (i.e., our obligation to obtain best execution).

We may use third-party brokers to effect client transactions that also sell shares of AllianceBernstein Funds or third party funds we
sub-advise; however, we prohibit our investment professionals who place trades from considering these other relationships or the
sale of fund shares as a factor when selecting brokers to effect transactions.

Our Brokerage Allocation Committee has principal oversight responsibility for evaluating equity-related brokerage matters, includ-
ing how to use research services we receive in a manner that is in the best interests of our clients and consistent with current regu-
latory requirements.

Service Marks

We have registered a number of service marks with the U.S. Patent and Trademark Office and various foreign trademark offices,
including an “AB” design logo and the combination of such logo with the mark “AllianceBernstein”.

In connection with the Bernstein Transaction, we acquired all of the rights and title in, and to, the Bernstein service marks, includ-
ing the mark “Bernstein”.

Regulation

Virtually all aspects of our business are subject to various federal and state laws and regulations, rules of various securities regulators
and exchanges, and laws in the foreign countries in which our subsidiaries and joint ventures conduct business. These laws and
regulations are primarily intended to benefit clients and fund shareholders and generally grant supervisory agencies broad admin-
istrative powers, including the power to limit or restrict the carrying on of business for failure to comply with such laws and regu-
lations. In such event, the possible sanctions that may be imposed include the suspension of individual employees, limitations on
engaging in business for specific periods, the revocation of the registration as an investment adviser or broker-dealer, censures and
fines.

AllianceBernstein, Holding, the General Partner, SCB LLC, AllianceBernstein Global Derivatives Corporation (a wholly-owned
subsidiary of AllianceBernstein, “Global Derivatives”) and Alliance Corporate Finance Group Incorporated (a wholly-owned sub-
sidiary of AllianceBernstein) are investment advisers registered under the Investment Advisers Act. SCB LLC and Global Derivatives
are also registered with the Commodity Futures Trading Commission as commodity pool operators.

Each U.S. Fund is registered with the SEC under the Investment Company Act and the shares of most U.S. Funds are qualified for
sale in all states in the United States and the District of Columbia, except for U.S. Funds offered only to residents of a particular
state. AllianceBernstein Investor Services is registered with the SEC as a transfer and servicing agent.

SCB LLC and AllianceBernstein Investments are registered with the SEC as broker-dealers, and both are members of FINRA. SCB
LLC is also a member of the NYSE and other principal U.S. exchanges. SCBL is a broker regulated by the Financial Services
Authority of the United Kingdom (“FSA”) and is a member of the London Stock Exchange. Sanford C. Bernstein, a unit of AB
Hong Kong, is regulated by the Hong Kong Securities and Futures Commission.

AllianceBernstein Trust Company, LLC (“ABTC”), a wholly-owned subsidiary of AllianceBernstein, is a non-depository trust
company chartered under New Hampshire law as a limited liability company. ABTC is authorized to act as trustee, executor, trans-
fer agent, assignee, receiver, custodian, investment adviser and in any other capacity authorized for a trust company under New
Hampshire law. As a state-chartered trust company exercising fiduciary powers, ABTC must comply with New Hampshire laws
applicable to trust company operations (such as New Hampshire Revised Statutes Annotated Part 392), certain federal laws (such as

Annual Report 2009

17

ERISA and sections of the Bank Secrecy Act), and New Hampshire banking laws. The primary fiduciary activities of ABTC consist
of serving as trustee to a series of collective investment funds, the investors of which currently are defined benefit and defined con-
tribution retirement plans.

Many of our subsidiaries around the world are subject to minimum net capital requirements by the local laws and regulations to
which they are subject. As of December 31, 2009, each of our subsidiaries subject to a minimum net capital requirement satisfied
the applicable requirement.

Holding Units are listed on the NYSE and trade publicly under the ticker symbol “AB”. As a listed company, Holding is subject to
applicable regulations promulgated by the NYSE.

Our relationships with AXA and its subsidiaries are subject to applicable provisions of the insurance laws and regulations of New
York and other states. Under such laws and regulations, the terms of certain investment advisory and other agreements we enter
into with AXA or its subsidiaries are required to be fair and equitable, charges or fees for services performed must be reasonable,
and, in some cases, are subject to regulatory approval.

Some of our subsidiaries are subject to the oversight of regulatory authorities in Europe, including the FSA in the U.K., and in Asia,
including the Financial Services Agency in Japan, the Securities and Futures Commission in Hong Kong and the Monetary Author-
ity of Singapore. While the requirements of these foreign regulators are often comparable to the requirements of the SEC and other
U.S. regulators, they are sometimes more restrictive and may cause us to incur substantial expenditures of time and money in our
efforts to comply.

Taxes

Holding, having elected under Section 7704(g) of the Internal Revenue Code of 1986, as amended (“Code”), to be subject to a
3.5% federal tax on partnership gross income from the active conduct of a trade or business, is a “grandfathered” publicly-traded
partnership for federal income tax purposes. Holding is also subject to the 4.0% New York City unincorporated business tax
(“UBT”), net of credits for UBT paid by AllianceBernstein. In order to preserve Holding’s status as a “grandfathered” publicly-
traded partnership for federal income tax purposes, management ensures that Holding does not directly or indirectly (through
AllianceBernstein) enter into a substantial new line of business. A “new line of business” would be any business that is not closely
related to AllianceBernstein’s historical business of providing research and diversified investment management and related services to
its clients. A new line of business is “substantial” when a partnership derives more than 15% of its gross income from, or uses more
than 15% of its total assets in, the new line of business.

AllianceBernstein is a private partnership for federal income tax purposes and, accordingly, is not subject to federal and state corpo-
rate income taxes. However, AllianceBernstein is subject to the 4.0% UBT. Domestic corporate subsidiaries of AllianceBernstein,
which are subject to federal, state and local income taxes, are generally included in the filing of a consolidated federal income tax
return with separate state and local income tax returns also being filed. Foreign corporate subsidiaries are generally subject to taxes at
higher rates in the foreign jurisdictions where they are located so, as our business increasingly operates in countries other than the
U.S., our effective tax rate continues to increase.

For additional information, see “Risk Factors” in Item 1A.

History and Structure

We have been in the investment research and management business for approximately 40 years. Alliance Capital was founded in
1971 when the investment management department of Donaldson, Lufkin & Jenrette, Inc. (since November 2000, a part of Credit
Suisse Group) merged with the investment advisory business of Moody’s Investor Services, Inc. Bernstein was founded in 1967.

In April 1988, Holding “went public” as a master limited partnership. Holding Units, which trade under the ticker symbol “AB”,
have been listed on the NYSE since that time.

18

AllianceBernstein

In October 1999, Holding reorganized by transferring its business and assets to AllianceBernstein, a newly-formed operating partner-
ship, in exchange for all of the AllianceBernstein Units (“Reorganization”). Since the date of the Reorganization, AllianceBernstein
has conducted the business formerly conducted by Holding and Holding’s activities have consisted of owning AllianceBernstein
Units and engaging in related activities. As stated above, Holding Units trade publicly; AllianceBernstein Units do not trade publicly
and are subject to significant restrictions on transfer. The General Partner is the general partner of both AllianceBernstein and
Holding.

In October 2000, our two legacy firms, Alliance Capital and Bernstein, combined, bringing together Alliance Capital’s expertise in
growth equity and corporate fixed income investing, and its family of retail mutual funds, with Bernstein’s expertise in value equity
and tax-exempt fixed income management, and its Private Client and Bernstein Research Services businesses. For additional details
about this business combination, see Note 2 to AllianceBernstein’s consolidated financial statements in Item 8.

As of December 31, 2009, the condensed ownership structure of AllianceBernstein was as follows (for a more complete description
of our ownership structure, see “Principal Security Holders” in Item 12):

Public

Directors,
Officers,
Employees1

77.4%

21.1%

1.4%

AXA

98.5%

Holding

100%

60.6%

0.1%

General
Partner

Unaffiliated
Holders

36.5%

1.0%

1.9%

AllianceBernstein

(1) Direct and indirect ownership including unallocated Holding Units held in a trust for our long-term incentive compensation plans.

The General Partner, an indirect wholly-owned subsidiary of AXA, owns 100,000 general partnership units in Holding and a 1%
general partnership interest in AllianceBernstein. Including the general partnership interests in Holding and AllianceBernstein and its
1.4% equity interest in Holding, AXA, through certain of its subsidiaries (see “Principal Security Holders” in Item 12), had an approx-
imate 62.1% economic interest in AllianceBernstein as of December 31, 2009.

AXA and its subsidiaries own all of the issued and outstanding shares of the common stock of AXA Financial. AXA Financial
indirectly owns all of the issued and outstanding shares of AXA Equitable. See “Principal Security Holders” in Item 12.

AXA, a société anonyme organized under the laws of France, is the holding company for an international group of insurance and
related financial services companies engaged in the financial protection and wealth management businesses. AXA’s operations are
diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific regions and, to a lesser
extent, in other regions including the Middle East and Africa. AXA has five operating business segments: life and savings, property
and casualty, international insurance, asset management and other financial services.

Competition

The financial services industry is intensely competitive and new entrants are continually attracted to it. No single or small group of
competitors is dominant in the industry.

Annual Report 2009

19

We compete in all aspects of our business with numerous investment management firms, mutual fund sponsors, brokerage and
investment banking firms, insurance companies, banks, savings and loan associations, and other financial institutions that often pro-
vide investment products that have similar features and objectives as those we offer. Our competitors offer a wide range of financial
services to the same customers that we seek to serve. Some of our competitors are larger, have a broader range of product choices
and investment capabilities, conduct business in more markets, and have substantially greater resources than we do. These factors
may place us at a competitive disadvantage, and we can give no assurance that our strategies and efforts to maintain and enhance our
current client relationships, and create new ones, will be successful.

AXA and its subsidiaries provide financial services, some of which are competitive with those offered by AllianceBernstein. The
AllianceBernstein Partnership Agreement specifically allows AXA Financial and its subsidiaries (other than the General Partner) to
compete with AllianceBernstein and to exploit opportunities that may be available to AllianceBernstein. AXA, AXA Financial,
AXA Equitable and certain of their respective subsidiaries have substantially greater financial resources than we do and are not obli-
gated to provide resources to us.

To grow our business, we must be able to compete effectively for assets under management. Key competitive factors include:

• our investment performance for clients;

• our commitment to place the interests of our clients first;

•

the quality of our research;

• our ability to attract, retain, and motivate highly skilled, and often highly specialized, personnel;

•

•

the array of investment products we offer;

the fees we charge;

• Morningstar/Lipper rankings for the AllianceBernstein Funds;

• our operational effectiveness;

• our ability to further develop and market our brand; and

• our global presence.

Increased competition could reduce the demand for our products and services, which could have a material adverse effect on our
financial condition, results of operations and business prospects.

Competition is an important risk that our business faces and should be considered along with the other risk factors we discuss in
Item 1A below.

Other Information

AllianceBernstein and Holding file or furnish annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and other reports required to comply with federal securities laws. The public may read and copy any materials filed with
the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549, on official business days during the
hours of 10:00 a.m. to 3:00 p.m. The public may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC.

AllianceBernstein and Holding maintain an Internet site (http://www.alliancebernstein.com). The portion of the site at “Investor &
Media Relations” and “Reports & SEC Filings” links to both companies’ annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act. These reports are available through the site free of charge as soon as reasonably practicable after such material is filed
with, or furnished to, the SEC.

20

AllianceBernstein

Item 1A. Risk Factors

Please read this section along with the description of our business in Item 1, the competition section just above and
AllianceBernstein’s financial information contained in Items 6, 7 and 8. The majority of the risk factors discussed below directly affect
AllianceBernstein. These risk factors also affect Holding because Holding’s principal source of income and cash flow is attributable
to its investment in AllianceBernstein. See also “Cautions Regarding Forward-Looking Statements” in Item 7.

Poor investment performance may lead to loss of clients and a decline in AUM and revenues.

Our ability to achieve investment returns for clients that meet or exceed investment returns for comparable asset classes and compet-
ing investment services is a key consideration when clients decide to keep their assets with us or invest additional assets, as well as a
prospective client’s decision to invest with us. Our inability to meet or exceed relevant investment benchmarks could result in cli-
ents withdrawing assets and in prospective clients choosing to invest with competitors. This could also result in lower investment
management fees, including minimal or no performance-based fees, which could result in a decline in our revenues.

Throughout 2008, and in particular during the fourth quarter, we underperformed benchmarks in virtually all of our services, in
some cases by substantial amounts. In so doing, we failed to meet client expectations, which contributed to net outflows across each
of our three buy-side distribution channels in 2008 and 2009. Although our investment performance improved significantly in
2009, we continued to experience net outflows in each of our three buy-side distribution channels, particularly in the Institutions
channel. Although we are hopeful that our net outflows will continue to decline, this will depend on a number of factors, including
our ability to sustain our improved investment performance, which cannot be assured, and the view that clients have of us as
investment managers. Continuation of substantial net outflows for an extended period may have a significantly adverse effect on our
results of operations and business prospects.

Changes in financial market levels have a direct and significant impact on our assets under management; a significant reduc-
tion in assets under management has a material adverse effect on our results of operations and business prospects.

Performance of financial markets (both domestic and international), global economic conditions, industry trends, interest rates,
inflation rates, tax regulation changes and other factors that are difficult to predict affect the mix, market value and level of assets
under management. Investment advisory and services fees, the largest component of revenues, are generally calculated as a percent-
age of the value of assets under management and vary with the type of account managed. Accordingly, fee income generally
increases or decreases as assets under management increase or decrease and is affected by market appreciation or depreciation, inflow
of new client assets (including purchases of mutual fund shares) and outflow of client assets (including redemption of mutual fund
shares). In addition, changing market conditions and investment trends, particularly with respect to retirement savings, may reduce
interest in certain of our investment products and may result in a reduction in assets under management

Significant weakness and volatility in global credit markets, particularly the rapid deterioration of the mortgage markets in the
United States and Europe, during the second half of 2007 and early in 2008 was followed by global economic turmoil during the
second half of 2008 and early in 2009. These conditions had a significant adverse affect on our 2009 and 2008 results of oper-
ations. Although global markets improved during 2009, there can be no assurance that such improvement will continue or that
market conditions will not deteriorate again, which may have a significant adverse effect on our results of operations and business
prospects.

Prolonged weakness in asset values may result in impairment of goodwill, intangible assets and the deferred sales commis-
sion asset.

If market conditions deteriorate significantly and securities valuations are depressed for prolonged periods of time (factors that are
beyond our control), our AUM, revenues, profitability and unit price may be adversely affected. As a result, goodwill, intangible
assets and/or the deferred sales commission asset may become impaired. The occurrence of an impairment would require a material
charge to our earnings. For additional information about our impairment testing, see Item 7.

Our business is dependent on investment advisory, selling and distribution agreements that are subject to termination or
non-renewal on short notice.

We derive most of our revenues pursuant to written investment management agreements (or other arrangements) with institutional
investors, mutual funds and private clients, and selling and distribution agreements between AllianceBernstein Investments and

Annual Report 2009

21

financial intermediaries that distribute AllianceBernstein Funds. Generally, the investment management agreements (and other
arrangements) are terminable at any time or upon relatively short notice by either party. The selling and distribution agreements are
terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount
of fund shares. In addition, investors in AllianceBernstein Funds can redeem their investments without notice. Any termination of,
or failure to renew, a significant number of these agreements, or a significant increase in redemption rates, could have a material
adverse effect on our results of operations and business prospects.

Furthermore, the investment management agreements pursuant to which we manage the U.S. Funds must be renewed and
approved by the Funds’ boards of directors or trustees annually. A significant majority of the directors/trustees are
independent. Consequently, there can be no assurance that the board of directors or trustees of each fund will approve the fund’s
investment management agreement each year, or will not condition its approval on revised terms that may be adverse to us.

Our ability to establish new client relationships and maintain existing ones is partly dependent on our relationships with
various financial intermediaries and consultants that are not obligated to continue to work with us.

Our ability to market our Retail Products and Services, sub-advisory services and certain other investment services is partly depend-
ent on our access to securities firms, brokers, banks and other intermediaries. These intermediaries generally offer their clients
investment products in addition to, and in competition with, our products. In addition, certain institutional investors rely on con-
sultants to advise them on the choice of investment adviser, and our Institutional Services are not always considered among the best
choices by consultants. Also, our Private Client Services group relies on referrals from financial planners, registered investment
advisers and other professionals. We cannot be certain that we will continue to have access to, or receive referrals from, these third
parties. Loss of such access or referrals could have a material adverse effect on our results of operations and business prospects. For
example, one or more investment consultants could advise their clients to move their assets away from us to other investment
advisers, which could result in significant net outflows.

We may be unable to continue to attract and retain key personnel.

Our business depends on our ability to attract, retain and motivate highly skilled, and often highly specialized, technical, managerial
and executive personnel; there is no assurance that we will be able to do so.

The market for qualified research analysts, portfolio managers, financial advisers, traders and other professionals is extremely com-
petitive and is characterized by frequent movement of these investment professionals among different firms. Portfolio managers and
financial advisers often maintain strong, personal relationships with their clients so their departure could cause us to lose client
accounts, which could have a material adverse effect on our results of operations and business prospects.

We may enter into more performance-based fee arrangements with our clients in the future, which could cause greater
fluctuations in our revenues.

We sometimes charge our clients performance-based fees. In these situations, we charge a base advisory fee and are eligible to earn
an additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute investment results or
a percentage of investment results in excess of a stated benchmark over a specified period of time. In addition, some performance-
based fees include a high-watermark provision, which generally provides that if a client account underperforms relative to its per-
formance target (whether absolute or relative to a specified benchmark), it must gain back such underperformance before we can
collect future performance-based fees. Therefore, if we fail to achieve the performance target for a particular period, we will not
earn a performance-based fee for that period and, for accounts with a high-watermark provision, our ability to earn future
performance-based fees will be impaired. We are eligible to earn performance-based fees on approximately 13% of the assets we
manage for institutional clients and approximately 4% of the assets we manage for private clients (in total, approximately 9% of our
company-wide AUM). If the percentage of our AUM subject to performance-based fees grows, seasonality and volatility of revenue
and earnings are likely to become more significant. Our performance-based fees in 2009, 2008 and 2007 were $29.8 million, $13.4
million and $81.2 million, respectively.

Approximately 72% of our hedge fund AUM is subject to high-watermarks, and we ended the fourth quarter of 2009 with approx-
imately 89% of this AUM below high-watermarks by 10% or more. This will make it very difficult for us to earn performance-
based fees in most of our hedge funds in 2010.

22

AllianceBernstein

If we are unable to maintain our fee levels, or if our mix of assets under management changes, our results of operations
may be adversely affected.

A shift from active equity services towards fixed income services and passive services may result in a corresponding decline in rev-
enues and income because we generally earn higher fees from assets invested in our active equity services than in our fixed income
services or passive services. A shift from global and international services to U.S. services may have a similar effect. The global eco-
nomic turmoil experienced during the second half of 2008 and early in 2009 caused some investors to shift their investment prefer-
ences from active equities to fixed income, passive and money market products (some of which we do not offer), and this trend
may continue or accelerate.

In addition, we may be required to reduce our fee levels, or restructure the fees we charge, because of, among other things, regu-
latory initiatives (whether industry-wide or specifically targeted), court decisions and competitive considerations. A reduction in fees
will reduce our revenues. A reduction in revenues, without a commensurate reduction in expenses, will adversely affect our results
of operations.

We may engage in strategic transactions that could pose risks.

As part of our business strategy, we consider potential strategic transactions, including acquisitions, dispositions, consolidations, joint
ventures and similar transactions, some of which may be material. These transactions, if undertaken, may involve a number of risks
and present financial, managerial and operational challenges, including:

• adverse effects on our earnings if acquired intangible assets or goodwill become impaired;

• existence of unknown liabilities or contingencies that arise after closing; and

• potential disputes with counterparties.

Acquisitions also pose the risk that any business we acquire may lose customers or employees or could underperform relative to
expectations. Furthermore, strategic transactions may require us to increase our leverage or, if we issue AllianceBernstein Units or
Holding Units to fund an acquisition, dilute the holdings of our existing Unitholders.

Because many of our subsidiary operations are located outside of the United States and have functional currencies other
than the U.S. dollar, changes in exchange rates to the U.S. dollar affect our reported financial results from one period to
the next.

Although the largest components of our net revenues and expenses, as well as our AUM, are presently derived from the United
States, we have subsidiaries outside of the United States whose functional currencies are not the U.S. dollar. As a result, fluctuations
in exchange rates to the U.S. dollar affect our reported financial results from one period to the next. We may not be successful in
our efforts to hedge our exposure to such fluctuations, which could have a negative effect on our reported financial results.

The individuals, counterparties or issuers on which we rely in the course of performing services for us or our clients may
be unable or unwilling to honor their contractual obligations to us.

We rely on various third party counterparties and other vendors to fulfill their obligations to us, whether specified by contract,
course of dealing or otherwise. Default rates, downgrades and disputes with counterparties as to the valuation of collateral increase
significantly in times of market stress. Furthermore, disruptions in the financial markets and other economic challenges, like those
presented by the recent global financial crisis, may cause our counterparties and other vendors to experience significant cash flow
problems or even render them insolvent, which may expose us to significant costs.

Maintaining adequate liquidity for our general business needs depends upon certain factors, including operating cash flows
and our access to credit on reasonable terms.

Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets,
our ability to maintain and grow client assets under management and other factors beyond our control. Our ability to issue public or
private debt on reasonable terms may be limited by adverse market conditions, our profitability, our creditworthiness as perceived
by lenders and changes in government regulations, including tax rates and interest rates. Furthermore, our access to bank credit or

Annual Report 2009

23

the debt markets depends significantly on our credit ratings. A downgrade to our credit ratings could increase our borrowing costs
and limit our access to the capital markets. If we are unable to obtain funds and/or financing, we may be forced to incur
unanticipated costs or revise our strategic plans, which could have a material adverse effect on our financial condition, results of
operations and business prospects.

Unpredictable events, including natural disaster, technology failure and terrorist attack, may adversely affect our ability to
conduct business.

War, terrorist attack, power failure, natural disaster and rapid spread of serious disease could interrupt our operations by:

• causing disruptions in U.S. or global economic conditions, thereby decreasing investor confidence and making investment

products generally less attractive;

inflicting loss of life;

triggering massive technology failures or delays; and

requiring substantial capital expenditures and operating expenses to remediate damage and restore operations.

•

•

•

Our operations require experienced, professional staff. Loss of a substantial number of such persons or an inability to provide prop-
erly equipped places for them to work may, by disrupting our operations, adversely affect our financial condition, results of oper-
ations and business prospects.

We depend on various systems and technologies for our business to function properly and to safeguard confidential
information.

We utilize software and related technologies throughout our business, including both proprietary systems and those provided by
outside vendors. Although we have established and tested business continuity plans, we may experience systems delays and inter-
ruptions and it is not possible to predict with certainty all of the adverse effects that could result from our failure, or the failure of a
third party, to efficiently address these problems. These adverse effects could include the inability to perform critical business func-
tions or failure to comply with financial reporting and other regulatory requirements, which could lead to loss of client confidence,
harm to our reputation, exposure to disciplinary action and liability to our clients. Accordingly, potential system failures and the cost
necessary to correct those failures could have a material adverse effect on our results of operations and business prospects.

In addition, we could be subject to losses if we fail to properly safeguard sensitive and confidential information. As part of our
normal operations, we maintain and transmit confidential information about our clients as well as proprietary information relating to
our business operations. Our systems could be damaged by unauthorized users or corrupted by computer viruses or other malicious
software code, or authorized persons could inadvertently or intentionally release confidential or proprietary information. Such dis-
closure could, among other things, allow competitors access to our proprietary business information and require significant time and
expense to investigate and remediate the breach.

Our own operational failures or those of third parties we rely on, including failures arising out of human error, could dis-
rupt our business, damage our reputation and reduce our revenues.

Weaknesses or failures in our internal processes or systems could lead to disruption of our operations, liability to clients, exposure to
disciplinary action or harm to our reputation. Our business is highly dependent on our ability to process, on a daily basis, large
numbers of transactions, many of which are highly complex, across numerous and diverse markets. These transactions generally
must comply with investment guidelines, as well as stringent legal and regulatory standards.

Despite the contingency plans and facilities we have in place, our ability to conduct business may be adversely affected by a dis-
ruption in the infrastructure that supports our operations and the communities in which they are located. This may include a dis-
ruption involving electrical, communications, transportation or other services we may use or third parties with which we conduct
business. If a disruption occurs in one location and our employees in that location are unable to occupy our offices or communicate
with or travel to other locations, our ability to conduct business with and on behalf of our clients may suffer, and we may not be
able to successfully implement contingency plans that depend on communication or travel.

24

AllianceBernstein

Our obligations to clients require us to exercise skill, care and prudence in performing our services. Despite our employees being
highly trained and skilled, the large number of transactions we process makes it highly likely that errors will occasionally occur.
Should we make a mistake in performing our services that costs our clients money, we have a duty to act promptly to put the cli-
ents in the position they would have been in had we not made the error. The occurrence of mistakes, particularly significant ones,
can have a material adverse effect on our reputation, results of operations and business prospects.

We may not accurately value the securities we hold on behalf of our discretionary clients or our company investments.

In accordance with applicable regulatory requirements, our obligations under investment management agreements with our clients
and, if the client is a U.S. Fund, the approval and direction of the U.S. Fund’s board of directors or trustees, we employ procedures
for the pricing and valuation of securities and other positions held in client accounts or for company investments. We have estab-
lished a Valuation Committee, composed of senior officers and employees, which oversees pricing controls and valuation processes.
Where market quotations for a security are not readily available, the Valuation Committee determines a fair value for the security.

Extraordinary volatility in financial markets, significant liquidity constraints or our not adequately accounting for one or more fac-
tors when fair valuing a security based on information with limited market observability could result in our failing to properly value
securities we hold for our clients or investments accounted for on our balance sheet. Improper valuation would likely result in our
basing fee calculations on inaccurate AUM figures, our striking incorrect net asset values for company-sponsored mutual funds or, in
the case of company investments, our inaccurately calculating and reporting our financial condition and operating results. Although
the overall percentage of our AUM that we fair value based on information with limited market observability is not significant,
inaccurate fair value determinations can harm our clients and create regulatory issues.

Our business is based on the trust and confidence of our clients; any damage to that trust and confidence can cause assets
under management to decline.

We are dedicated to earning and maintaining the trust and confidence of our clients; the good reputation created thereby is essential
to our business. Damage to our reputation could substantially impair our ability to maintain or grow our business.

Our substantial underperformance in virtually all of our investment services during 2008 injured our reputation among many cli-
ents, prospects and consultants. We are focused on continuing the improved investment performance we delivered in 2009 and, in
so doing, rebuilding our reputation. Failure in this endeavor, however, could have a material adverse effect on our reputation,
results of operations and business prospects.

We may not always successfully manage actual and potential conflicts of interest that arise in our business.

Our reputation is one of our most important assets. As our business and client base expands, we increasingly must manage actual and
potential conflicts of interest, including situations where our services to a particular client conflict, or are perceived to conflict, with
the interests of another client, as well as situations where certain of our employees have access to material non-public information
that may not be shared with all employees of our firm. Failure to adequately address potential conflicts of interest could adversely
affect our reputation, results of operations and business prospects.

We have procedures and controls that are designed to address and manage conflicts of interest, including those designed to prevent
the improper sharing of information. However, appropriately managing conflicts of interest is complex and difficult, and our reputa-
tion could be damaged and the willingness of clients to enter into transactions in which such a conflict might arise may be affected if
we fail, or appear to fail, to deal appropriately with conflicts of interest. In addition, potential or perceived conflicts could give rise
to litigation or regulatory enforcement actions.

Rates we charge for brokerage transactions have declined significantly in recent years, and we expect those declines to
continue. In addition, recent capital markets and economic turmoil may reduce market volumes. Combined, these two
factors may adversely affect Bernstein Research Services revenue.

Electronic, or “low-touch”, trading approaches represent a growing percentage of buy-side trading activity and produce transaction
fees for execution-only services that are a small fraction of traditional full service fee rates. As a result, blended pricing for the
industry and SCB has declined in recent years. In addition, fee rates charged by SCB and other brokers for traditional brokerage

Annual Report 2009

25

services have also historically experienced price pressure, and we expect these trends to continue. While increases in transaction
volume and market share have in the past more than offset decreases in rates, this may not continue. Recent economic and market
turmoil has severely impacted much of SCB’s client base, which in the near-term may adversely affect transaction volume generally.

Despite our efforts to manage exposures from principal positions taken by our sell-side business, these positions are subject
to market risk.

Our sell-side business may use the firm’s capital to facilitate customer transactions, primarily relating to our trading activities in listed
options. The resulting principal positions are exposed to market risk. We seek to manage this risk both by engaging in transactions
designed to hedge the market risk and by maintaining a risk platform that includes the measurement and monitoring of financial
exposures and operational processes. Our ability to manage this risk may be limited, however, by adverse changes in the liquidity of
the security or the hedging instrument and in the correlation of price movements between the security and the hedging instru-
ment. Similarly, the risk monitoring and risk mitigation techniques we employ and the related judgments we make cannot antici-
pate every possible economic and financial circumstance and outcome. Consequently, we may incur losses, which would adversely
affect our results of operations and require us to increase our regulatory capital.

The costs of insurance are substantial and may increase.

Our insurance expenses are significant and can fluctuate significantly from year to year. Although these expenses slightly decreased
in 2009, future increases are possible. In addition, certain insurance coverage may not be available or may only be available at pro-
hibitive costs. As we renew our insurance policies, we may be subject to additional costs resulting from rising premiums, the
assumption of higher deductibles and/or co-insurance liability. Also, there can be no assurance that a claim or claims will be covered
by our insurance policies or, if covered, will not exceed the limits of available insurance coverage, or that our insurers will remain
solvent and meet their obligations.

Our business is subject to pervasive global regulation, the compliance with which could involve substantial expenditures of
time and money, and the violation of which may result in material adverse consequences.

Virtually all aspects of our business are subject to federal and state laws and regulations, rules of securities regulators and exchanges,
and laws in the foreign countries in which our subsidiaries conduct business. If we violate these laws or regulations, we could be
subject to civil liability, criminal liability or sanction, including revocation of our and our subsidiaries’ registrations as investment
advisers or broker-dealers, revocation of the licenses of our employees, censures, fines, or temporary suspension or permanent bar
from conducting business. A regulatory proceeding, even if it does not result in a finding of wrongdoing or sanction, could require
substantial expenditures of time and money. Any such liability or sanction could have a material adverse effect on our financial
condition, results of operations and business prospects. These laws and regulations generally grant supervisory agencies and bodies
broad administrative powers, including, in some cases, the power to limit or restrict doing business for failure to comply with such
laws and regulations. Moreover, regulators in non-U.S. jurisdictions could change their policies or laws in a manner that might
restrict or otherwise impede our ability to market, distribute or register investment products in their respective markets. These local
requirements could increase the expenses we incur in a specific jurisdiction without any corresponding increase in revenues from
operating in the jurisdiction.

Due to the extensive laws and regulations to which we are subject, we devote substantial time and effort to legal and regulatory
compliance issues.

Regulation of the financial services industry is evolving.

As an investment firm, we are subject to financial services laws, regulations, corporate governance requirements, administrative
actions and policies in each location in which we operate. In 2009, as many emergency government programs slowed or wound
down, global regulatory and legislative focus generally moved to a second phase of broader reform and a restructuring of financial
institution regulation. Legislators and regulators, particularly in the United States and Europe, are currently considering a wide range
of proposals that, if enacted, may result in changes to the manner in which our global operations are regulated.

26

AllianceBernstein

The financial services industry is intensely competitive.

We compete on the basis of a number of factors, including our array of investment services, our investment performance for our
clients, innovation, reputation and price. By having a global presence, we may face competitors with more experience and more
established relationships with clients, regulators and industry participants in the relevant market, which could adversely affect our
ability to expand. Furthermore, our poor investment performance during 2008, and what may be diminished confidence in our
services on the part of clients and consultants, may make it more difficult for us to compete effectively. For additional information
regarding competitive factors, see “Competition” in Item 1.

We are involved in various legal proceedings and regulatory matters and may be involved in such proceedings in the
future, any one or combination of which could have a material adverse effect on our financial condition, results of oper-
ations and business prospects.

We are involved in various matters, including regulatory inquiries, administrative proceedings and litigation, some of which allege
substantial damages, and we may be involved in additional matters in the future. Litigation is subject to significant uncertainties,
particularly when plaintiffs allege substantial or indeterminate damages, or when the litigation is highly complex or broad in scope.
We have described pending material legal proceedings in Item 3.

Structure-related Risks

The partnership structure of Holding and AllianceBernstein limits unitholders’ abilities to influence the management
and operation of AllianceBernstein’s business and is highly likely to prevent a change in control of Holding and
AllianceBernstein.

The General Partner, as general partner of both Holding and AllianceBernstein, generally has the exclusive right and full authority
and responsibility to manage, conduct, control and operate their respective businesses, except as otherwise expressly stated in their
respective Amended and Restated Agreements of Limited Partnership. Holding and AllianceBernstein Unitholders have more lim-
ited voting rights on matters affecting AllianceBernstein than do holders of common stock in a corporation. Both Amended and
Restated Agreements of Limited Partnership provide that unitholders do not have any right to vote for directors of the General
Partner and that unitholders can only vote on certain extraordinary matters (including removal of the General Partner under certain
extraordinary circumstances). Additionally, the AllianceBernstein Partnership Agreement includes significant restrictions on transfers
of AllianceBernstein Units and provisions that have the practical effect of preventing the removal of the General Partner, which are
highly likely to prevent a change in control of AllianceBernstein’s management.

AllianceBernstein Units are illiquid.

There is no public trading market for AllianceBernstein Units and AllianceBernstein does not anticipate that a public trading market
will ever develop. The AllianceBernstein Partnership Agreement restricts our ability to participate in a public trading market or any-
thing substantially equivalent to one by providing that any transfer which may cause AllianceBernstein to be classified as a “publicly-
traded partnership” as defined in Section 7704 of the Code shall be deemed void and shall not be recognized by AllianceBernstein. In
addition, AllianceBernstein Units are subject to significant restrictions on transfer; all transfers of AllianceBernstein Units are subject to
the written consent of AXA Equitable and the General Partner pursuant to the AllianceBernstein Partnership Agreement. Generally,
neither AXA Equitable nor the General Partner will permit any transfer that it believes would create a risk that AllianceBernstein
would be treated as a corporation for tax purposes. AXA Equitable and the General Partner have implemented a transfer policy that
requires a seller to locate a purchaser, and imposes annual volume restrictions on transfers. You may request a copy of the transfer pro-
gram from our corporate secretary (corporate_secretary@alliancebernstein.com). Also, we have filed the transfer program as Exhibit 10.06 to
this Form 10-K.

Changes in the partnership structure of Holding and AllianceBernstein and/or changes in the tax law governing partner-
ships would have significant tax ramifications.

Holding, having elected under Section 7704(g) of the Code, to be subject to a 3.5% federal tax on partnership gross income from
the active conduct of a trade or business, is a “grandfathered” publicly-traded partnership (“PTP”) for federal income tax purposes.

Annual Report 2009

27

Holding is also subject to the 4.0% UBT, net of credits for UBT paid by AllianceBernstein. In order to preserve Holding’s status as
a “grandfathered” publicly-traded partnership for federal income tax purposes, management ensures that Holding does not directly
or indirectly (through AllianceBernstein) enter into a substantial new line of business. A “new line of business” would be any busi-
ness that is not closely related to AllianceBernstein’s historical business of providing research and diversified investment management
and related services to its clients. A new line of business is “substantial” when a partnership derives more than 15% of its gross
income from, or uses more than 15% of its total assets in, the new line of business.

AllianceBernstein is a private partnership for federal income tax purposes and, accordingly, is not subject to federal and state corpo-
rate income taxes. However, AllianceBernstein is subject to the 4.0% UBT. Domestic corporate subsidiaries of AllianceBernstein,
which are subject to federal, state and local income taxes, are generally included in the filing of a consolidated federal income tax
return with separate state and local income tax returns being filed. Foreign corporate subsidiaries are generally subject to taxes at
higher rates in the foreign jurisdiction where they are located. As our business increasingly operates in countries other than the U.S.,
our effective tax rate may increase because our international subsidiaries are subject to corporate level taxes in the jurisdictions
where they are located.

In order to preserve AllianceBernstein’s status as a private partnership for federal income tax purposes, AllianceBernstein Units must
not be considered publicly traded. The AllianceBernstein Partnership Agreement provides that all transfers of AllianceBernstein
Units must be approved by AXA Equitable and the General Partner; AXA Equitable and the General Partner approve only those
transfers permitted pursuant to one or more of the safe harbors contained in relevant treasury regulations. If such units were consid-
ered readily tradable, AllianceBernstein would be subject to federal and state corporate income tax on its net income. Furthermore,
as noted above, should AllianceBernstein enter into a substantial new line of business, Holding, by virtue of its ownership of
AllianceBernstein, would lose its status as a grandfathered publicly-traded partnership and would become subject to corporate
income tax as set forth above.

In 2007 and again in 2009, Congress proposed tax legislation that would cause certain PTPs to be taxed as corporations, thus subject-
ing their income to a higher level of income tax. Holding is a PTP that derives its income from asset manager or investment man-
agement services through its ownership interest in AllianceBernstein. The legislation, in the form proposed, would not affect
Holding’s tax status. However, we cannot predict whether, or in what form, the proposed tax legislation will pass, and are unable to
determine what effect any new legislation might have on us. If Holding were to lose its federal tax status as a grandfathered PTP, it
would be subject to corporate income tax, which would reduce materially its net income and quarterly distributions to Holding
Unitholders.

In its current form, the proposed legislation would not affect AllianceBernstein because it is a private partnership.

28

AllianceBernstein

Item 1B. Unresolved Staff Comments

Neither AllianceBernstein nor Holding has unresolved comments from the staff of the SEC to report.

Annual Report 2009

29

Item 2.

Properties

Our principal executive offices at 1345 Avenue of the Americas, New York, New York are occupied pursuant to a lease which
extends until 2029. We currently occupy approximately 882,770 square feet of space at this location. We also occupy approximately
312,301 square feet of space at 135 West 50th Street, New York, New York under a lease expiring in 2029 and approximately
249,217 square feet of space at One North Lexington, White Plains, New York under a lease expiring in 2031. AllianceBernstein
Investments and AllianceBernstein Investor Services occupy approximately 92,067 square feet of space in San Antonio, Texas under
a lease expiring in 2029. We also lease space in 18 other cities in the United States.

Our subsidiaries and joint venture companies lease space in 27 cities outside the United States, the most significant of which are in
London, England under leases expiring between 2010 and 2022, and in Tokyo, Japan under a lease expiring in 2018.

30

AllianceBernstein

Item 3.

Legal Proceedings

With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of
a negative outcome is probable, and the amount of the loss can be reasonably estimated, we record an estimated loss for the
expected outcome of the litigation. If the likelihood of a negative outcome is reasonably possible and we are able to determine an
estimate of the possible loss or range of loss, we disclose that fact together with the estimate of the possible loss or range of loss.
However, it is difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to significant
uncertainties, particularly when plaintiffs allege substantial or indeterminate damages, or when the litigation is highly complex or
broad in scope.

We have previously reported the filing of a purported class action complaint entitled Hindo, et al. v. AllianceBernstein Growth &
Income Fund, et al. and our involvement in various other market timing-related matters. There have been no significant develop-
ments in these matters since we filed our Form 10-Q for the quarter ended September 30, 2009, in which these matters are more
completely described. These matters are also described in Note 7 to Holding’s financial statements in Item 8.

We are involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of which
allege substantial damages. While any inquiry, proceeding or litigation has the element of uncertainty, management believes that the
outcome of any one of the other regulatory inquiries, administrative proceedings, lawsuits or claims that is pending or threatened, or
all of them combined, will not have a material adverse effect on our financial condition, results of operations or business prospects.

Annual Report 2009

31

Item 4.

Submission of Matters to a Vote of Security Holders

Neither AllianceBernstein nor Holding submitted a matter to a vote of security holders during the fourth quarter of 2009.

32

AllianceBernstein

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities

Market for Holding Units and AllianceBernstein Units; Cash Distributions

Holding Units are listed on the NYSE and trade publicly under the ticker symbol “AB”.

There is no established public trading market for AllianceBernstein Units, which are subject to significant restrictions on transfer. In
general, transfers of AllianceBernstein Units will be allowed only with the written consent of both AXA Equitable and the General
Partner. Generally, neither AXA Equitable nor the General Partner will permit any transfer that it believes would create a risk that
AllianceBernstein would be treated as a corporation for tax purposes. AXA Equitable and the General Partner have implemented a
transfer policy, a copy of which you may request from our corporate secretary (corporate_secretary@alliancebernstein.com). Also, we
have filed the transfer program as Exhibit 10.06 to this Form 10-K.

Each of Holding and AllianceBernstein distributes on a quarterly basis all of its Available Cash Flow, as defined in the Holding Part-
nership Agreement and the AllianceBernstein Partnership Agreement, to its unitholders and the General Partner. For additional
information concerning distribution of Available Cash Flow by Holding, see Note 2 to Holding’s financial statements in Item 8. For
additional information concerning distribution of Available Cash Flow by AllianceBernstein, see Note 2 to AllianceBernstein’s con-
solidated financial statements in Item 8.

Holding’s principal source of income and cash flow is attributable to its limited partnership interests in AllianceBernstein.

The tables set forth below provide the distributions of Available Cash Flow made by AllianceBernstein and Holding during 2009
and 2008 and the high and low sale prices of Holding Units reflected on the NYSE composite transaction tape during 2009 and
2008:

Cash distributions per AllianceBernstein Unit(1)

Cash distributions per Holding Unit(1)

Holding Unit prices:

High

Low

Cash distributions per AllianceBernstein Unit(1)

Cash distributions per Holding Unit(1)

Holding Unit prices:

High

Low

(1) Declared and paid during the following quarter.

December 31

September 30

June 30

March 31

Quarters Ended 2009

$ 0.70

$ 0.62

$28.91

$24.40

$ 0.74

$ 0.67

$27.81

$17.83

$ 0.48

$ 0.41

$22.62

$14.28

$ 0.14

$ 0.07

$23.27

$10.12

December 31

September 30

June 30

March 31

Quarters Ended 2008

$ 0.37

$ 0.29

$38.90

$11.49

$ 0.70

$ 0.60

$57.11

$32.00

$ 1.06

$ 0.96

$67.75

$54.50

$ 0.94

$ 0.83

$78.00

$53.63

Total

$2.06

$1.77

Total

$3.07

$2.68

On December 31, 2009, the closing price of a Holding Unit on the NYSE was $28.10 per Unit and there were 1,148 Holding
Unitholders of record for approximately 80,000 beneficial owners. On December 31, 2009, there were 507 AllianceBernstein
Unitholders of record, and we do not believe there are substantial additional beneficial owners.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

We did not engage in any unregistered sales of our securities during the last three years.

Annual Report 2009

33

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information relating to any Holding Units bought by us or one of our affiliates in the fourth quarter of
the fiscal year covered by this report:

Issuer Purchases of Equity Securities

Total Number
of Holding Units
Purchased
(a)

3,167

—

292,350

295,517

Average Price
Paid
Per Holding
Unit, net of
Commissions
(b)

$ 24.74

—

25.92

$25.91

Total Number of
Holding Units
Purchased as
Part of Publicly
Announced Plans
or Programs
(c)

—

—

—

—

Maximum
Number
(or Approximate
Dollar Value) of
Holding Units that
May Yet Be
Purchased Under
the Plans or
Programs
(d)

—

—

—

—

Period

10/1/09-10/31/09(1)

11/1/09-11/30/09

12/1/09-12/31/09(2)

Total

(1) On October 2 and 16, 2009, we purchased from employees 2,932 Holding Units and 235 Holding Units, respectively, to allow them to fulfill statutory with-

holding tax requirements at the time of distribution of long-term incentive compensation awards.

(2) On December 1 and 18, 2009, we purchased from employees 12,086 Holding Units and 280,264 Holding Units, respectively, to allow them to fulfill statutory

withholding tax requirements at the time of distribution of long-term incentive compensation awards.

Neither AllianceBernstein nor any of our affiliates purchased AllianceBernstein Units during the fourth quarter of the fiscal year
covered by this report.

34

AllianceBernstein

Item 6.

Selected Financial Data

AllianceBernstein Holding L.P.

Selected Financial Data

2009

2008

Years Ended December 31,
2007

2006

2005

(in thousands, except per unit amounts)

Income Statement Data:

Equity in net income attributable to AllianceBernstein Unitholders

$ 192,513

$ 278,636

$ 415,256

$ 359,469

$ 275,054

Income taxes

Net income

Basic net income per unit

Diluted net income per unit

Cash Distributions Per Unit(1)

Balance Sheet Data at Period End:

Total assets

Partners’ capital

25,324

33,910

39,104

34,473

26,990

$ 167,189

$ 244,726

$ 376,152

$ 324,996

$ 248,064

$

$

$

1.80

1.80

1.77

$1,912,301

$1,910,118

$

$

$

2.79

2.79

2.68

$1,601,442

$1,596,155

$

$

$

4.35

4.32

4.33

$1,575,234

$1,567,460

$

$

$

3.85

3.82

4.02

$1,568,034

$1,559,188

$

$

$

3.04

3.02

3.00

$1,377,054

$1,368,846

(1) Holding is required to distribute all of its Available Cash Flow, as defined in the Holding Partnership Agreement, to its unitholders.

Annual Report 2009

35

Selected Consolidated Financial Data

2009

2008(1)

Years Ended December 31,
2007(1)

2006(1)

2005(1)

(in thousands, except per unit amounts and unless otherwise indicated)

AllianceBernstein L.P.

Income Statement Data:
Revenues:

Investment advisory and services fees
Distribution revenues
Bernstein research services
Dividend and interest income
Investment gains (losses)
Other revenues
Total revenues
Less: interest expense

Net revenues
Expenses:

Employee compensation and benefits
Promotion and servicing:

Distribution plan payments
Amortization of deferred sales commissions
Other

General and administrative
Interest on borrowings
Amortization of intangible assets

Total expenses
Operating income
Non-operating income
Income before income taxes
Income taxes
Net income
Net income of consolidated entities attributable to non-controlling interests
Net income attributable to AllianceBernstein Unitholders

Basic net income per AllianceBernstein Unit

Diluted net income per AllianceBernstein Unit

Operating margin(2)

Cash Distributions Per AllianceBernstein Unit(3)

Balance Sheet Data at Period End:
Total assets
Debt
Total capital
Assets Under Management at Period End (in millions)

$1,920,332
277,328
434,605
26,730
144,447
107,848
2,911,290
4,411
2,906,879

$2,839,526
378,425
471,716
91,752
(349,172)
118,436
3,550,683
36,524
3,514,159

$ 3,386,188
473,435
423,553
284,014
29,690
122,869
4,719,749
194,432
4,525,317

$ 2,890,229
421,045
375,075
266,520
62,200
123,171
4,138,240
187,833
3,950,407

$2,259,392
397,800
352,757
152,781
29,070
116,788
3,308,588
95,863
3,212,725

1,298,053

1,454,691

1,833,796

1,547,627

1,262,198

207,643
54,922
173,250
558,361
2,696
21,126
2,316,051
590,828
33,657
624,485
45,977
578,508
(22,381)
$ 556,127

274,359
79,111
207,506
539,198
13,077
20,716
2,588,658
925,501
18,728
944,229
95,803
848,426
(9,186)
$ 839,240

335,132
95,481
252,468
574,506
23,970
20,716
3,136,069
1,389,248
15,756
1,405,004
127,845
1,277,159
(16,715)
$1,260,444

292,886
100,370
218,944
574,904
23,124
20,710
2,778,565
1,171,842
20,196
1,192,038
75,045
1,116,993
(8,392)
$ 1,108,601

291,953
131,979
198,004
378,856
25,109
20,700
2,308,799
903,926
34,446
938,372
64,571
873,801
(5,483)
$ 868,318

$

$

$

2.07

2.07

19.6%

2.06

$

$

$

3.18

3.18

26.1%

3.07

$

$

$

4.80

4.77

30.3%

4.77

$

$

$

4.26

4.22

29.5%

4.42

$

$

$

3.37

3.35

28.0%

3.33

$7,214,940
$ 248,987
$4,701,955
$ 495,502

$8,503,459
$ 284,779
$4,486,826
$ 461,951

$ 9,368,754
533,872
$
$ 4,688,878
$ 800,390

$10,601,105
334,901
$
$ 4,624,512
$ 716,921

$9,490,480
$ 407,291
$4,312,042
$ 578,552

(1) Certain prior-year amounts have been reclassified to conform to our 2009 presentation. See Note 2 to AllianceBernstein’s consolidated financial statements in

Item 8 for a discussion of reclassifications.

(2) Operating income less net income attributable to non-controlling interests as a percentage of net revenue.

(3) AllianceBernstein is required to distribute all of its Available Cash Flow, as defined in the AllianceBernstein Partnership Agreement, to its unitholders and the

General Partner.

36

AllianceBernstein

Item 7.

Management’s Discussion and Analysis of
Financial Condition and Results of Operations

Executive Overview

Our firm rebounded from a very difficult 2008, posting strong relative investment returns for clients across our global plat-
form. While we enhanced our investment process using the lessons learned last year, we stayed true to our philosophy of fusing
our high-quality, in-depth fundamental research with innovative quantitative tools to deliver outperformance to our clients.

The strong capital markets of 2009, coupled with our broad-based relative outperformance, enabled us to grow client assets under
management (“AUM”) in 2009, despite increased client outflows for the full year. These outflows peaked in the second quarter of
2009, and we are confident that the trend of improving sales over the second half of 2009 will continue into 2010. The successful
launch of new services in all our buy-side distribution channels, which we are aggressively pursuing, will aid in achieving this goal.

For the fourth quarter of 2009, the performance of our investment services relative to benchmarks or peer averages was strong in
non-U.S. growth equities and fixed income but mixed in our value services. For the full year 2009, most of our services out-
performed, materially so in many cases, exemplified by the exceptional returns in our blend strategies portfolios, with our top four
institutional blend services outperforming their benchmarks by 280 to over 1,000 basis points for the year. Furthermore, fixed
income services had a stellar year, with three of our five largest institutional services outperforming benchmarks by more than 1,000
basis points. In addition, three of our four largest retail fixed income services generated returns of more than 1,500 basis points
above peer averages.

Our total AUM increased $33.5 billion, or 7.3% during 2009, driven by market appreciation of $107.4 billion, partly offset by net
outflows of $73.9 billion. Net outflows occurred primarily in our value and growth equity services, while our fixed income services
experienced modest net outflows and our other investment services achieved modest net inflows.

Institutional AUM increased $8.6 billion, or 3.0%, to $300.0 billion during 2009, due to strong investment returns of $66.1 billion,
largely offset by net outflows of $57.7 billion. While our pipeline of won but unfunded mandates decreased by 52.2% to $3.6 billion
from $7.6 billion during 2009, our pipeline increased by 27.6% during the second half of 2009 from $2.8 billion at the end of the
second quarter. Strong relative performance led to some notable account wins in the latter part of the year, most notably in fixed
income and regional value services.

Retail AUM increased $19.1 billion, or 18.7%, to $120.7 billion during 2009, led by market appreciation of $28.3 billion, partly
offset by net outflows of $9.2 billion. Virtually all of the year’s net outflows occurred during the first three quarters of 2009. Gross
sales continued to improve throughout the year to $7.8 billion in the fourth quarter of 2009 as compared to $5.9 billion during the
previous quarter.

Private Client AUM increased $5.8 billion, or 8.4%, to $74.8 billion during 2009, as market appreciation of $13.0 billion was partly
offset by net outflows of $7.0 billion. Gross sales of $2.4 billion and net outflows of $0.8 billion in the fourth quarter compared
favorably to the first three quarters of 2009.

Despite lower Bernstein Research Services revenues in 2009 compared to 2008, due primarily to market forces, our sell-side busi-
ness made important strides in gaining market share and launching new products. We anticipate this trend will continue as we fur-
ther globalize our research footprint and expand our array of client services in 2010. Specifically, we aim to increase our U.S. and
European research market share, build out our newly-established Asia research platform, expand equity derivatives and electronic
trading services, and develop our nascent equity capital markets business.

Our full year 2009 net revenues decreased $607.3 million, or 17.3%, compared to 2008, led by a $919.2 million, or 32.4%, decrease
in investment advisory and services fees and a $101.1 million decrease in distribution revenues. Conversely, investment gains (losses)
had a positive effect on net revenues of $493.7 million, primarily the result of 2009 gains of $120.5 million on investments related
to employee deferred compensation awards, as compared to 2008 losses of $325.0 million. Full year operating expenses declined
$272.6 million, or 10.5%, compared to 2008 driven mostly by lower employee compensation and benefits of $156.6 million, a
reflection of the 22.9% reduction in headcount during the last 15 months, and lower promotion and servicing expenses of $125.2
million principally resulting from lower average Retail Services AUM. Accordingly, 2009 diluted net income per Holding Unit fell
to $1.80, down 35.5% compared to $2.79 for 2008. In addition, our operating margin decreased 650 basis points from 26.1% in
2008 to 19.6% in 2009, due primarily to the decrease in investment advisory and services fees, partially offset by positive investment
gains and lower operating expenses.

Annual Report 2009

37

Global equity markets are still only halfway back to their October 2007 peak. Furthermore, cumulative 10-year returns for the S&P
500 and MSCI World indices are both still negative. With profitability at 30-year lows, we expect corporate earnings to rise and to
see significant opportunities emerge for active asset managers.

Our firm experienced a transitional year in 2009. We began the year with three main objectives: improving investment perform-
ance, reducing net asset outflows and right sizing our firm. We believe we succeeded on all three fronts. We are now focused on
continuing to provide solid investment returns and world class service for our clients, expanding our product offerings, acquiring
new clients, engaging and motivating our employees, and improving returns for Unitholders.

Holding

Holding’s principal source of income and cash flow is attributable to its investment in AllianceBernstein limited partnership
Units. Holding’s financial statements and notes and management’s discussion and analysis of financial condition and results of oper-
ations (“MD&A”) should be read in conjunction with those of AllianceBernstein.

Results of Operations

Years Ended December 31,
2008

2007

2009

% Change

2009-08

2008-07

(in thousands, except per unit amounts)

Net income attributable to AllianceBernstein Unitholders

$556,127

$839,240

$1,260,444

(33.7)%

(33.4)%

Weighted average equity ownership interest

Equity in net income attributable to AllianceBernstein Unitholders

Net income of Holding

Diluted net income per Holding Unit

Distribution per Holding Unit(1)

34.6%

33.2%

32.9%

$192,513

$167,189

$

$

1.80

1.77

$278,636

$244,726

$

$

2.79

2.68

$ 415,256

$ 376,152

$

$

4.32

4.33

(30.9)

(31.7)

(35.5)

(34.0)

(32.9)

(34.9)

(35.4)

(38.1)

(1) 2008 distribution excludes a $35.3 million insurance reimbursement.

In 2009 and 2008, net income and diluted net income per unit decreased from prior years due to lower equity in net income attrib-
utable to AllianceBernstein Unitholders.

Proposed Tax Legislation

See “Risk Factors” in Item 1A.

38

AllianceBernstein

Capital Resources and Liquidity

The following table identifies selected items relating to capital resources and liquidity:

Years Ended December 31,
2008

2009

2007

% Change

2009-08

2008-07

Partners’ capital, as of December 31

Distributions received from AllianceBernstein

Distributions paid to unitholders

Proceeds from exercise of compensatory options to buy Holding Units

Investment in AllianceBernstein with proceeds from exercise of compensatory options to buy

Holding Units

Purchases of Holding Units by AllianceBernstein to fund deferred compensation plan awards,

net

Issuance of Holding Units to fund deferred compensation plan awards

Available Cash Flow

(in millions)

$1,910.1

$1,596.2

$1,567.5

19.7%

1.8%

160.1

(133.1)

—

—

(7.0)

272.2

169.3

338.4

(301.4)

13.5

449.3

(408.7)

50.1

(52.7)

(55.8)

(100.0)

(13.5)

(50.1)

(100.0)

(2.4)

70.9

235.1

(50.9)

—

374.3

196.1

284.1

(28.0)

(24.7)

(26.3)

(73.0)

(73.0)

(95.4)

n/m

(37.2)

Cash and cash equivalents were zero as of December 31, 2009, 2008 and 2007. Cash inflows from AllianceBernstein distributions
received were offset by cash distributions paid to unitholders and income taxes paid. Holding is required to distribute all of its
Available Cash Flow, as defined in the Holding Partnership Agreement, to its unitholders (including the General Partner).
Management believes that the cash flow from its investment in AllianceBernstein will provide Holding with the resources to meet
its financial obligations. See “Statements of Changes in Partners’ Capital and Comprehensive Income” and “Statements of Cash Flows” in
Holding’s financial statements in Item 8. Issuances of Holding Units increased significantly in 2009 due to the grant of restricted Hold-
ing Units as long-term incentive compensation (see Note 16 to AllianceBernstein’s consolidated financial statements in Item 8 and
“Compensation Elements for Executive Officers—Long-term Incentive Compensation” in Item 11 for a further description of restricted
Holding Unit Awards).

Commitments and Contingencies

See Note 7 to Holding’s financial statements in Item 8.

AllianceBernstein

Assets Under Management

Assets under management by distribution channel were as follows:

Institutions

Retail

Private Client

Total

As of December 31,
2008

2009

(in billions)

2007

2009-08

2008-07

% Change

$ 300.0

$ 291.4

$ 508.1

3.0%

(42.7)%

120.7

74.8

101.6

69.0

183.2

109.1

$495.5

$462.0

$800.4

18.7

8.4

7.3

(44.5)

(36.8)

(42.3)

Annual Report 2009

39

Assets under management by investment service were as follows:

Equity

Value:

U.S.

Global & international

Growth:

U.S.
Global & international

Total Equity

Fixed Income:

U.S.

Global & international(1)

Other (2):

U.S.

Global & international(1)

Total:

U.S.

Global & international

Total

As of December 31,
2008

2009

(in billions)

2007

2009-08

2008-07

% Change

$ 44.4

$ 47.9

$ 108.0

126.8

171.2

38.1
56.0

94.1

265.3

112.3

72.0

184.3

26.1

19.8

45.9

220.9

274.6

124.5

172.4

33.0
55.3

88.3

260.7

105.3

58.7

164.0

16.5

20.8

37.3

202.7

259.3

274.5

382.5

72.5
124.4

196.9

579.4

113.4

74.6

188.0

16.9

16.1

33.0

310.8

489.6

$495.5

$462.0

$800.4

(7.3)%

1.8

(0.7)

(55.6)%

(54.7)

(54.9)

15.4
1.4

6.6

1.8

6.7

22.6

12.4

58.3

(4.6)

23.2

9.0

5.9

7.3

(54.5)
(55.6)

(55.2)

(55.0)

(7.1)

(21.3)

(12.8)

(2.5)

29.6

13.1

(34.8)

(47.0)

(42.3)

(1) Certain client assets were reclassified among investment services to more accurately reflect how these assets are managed by our firm.

(2)

Includes index, structured, asset allocation services and other non-actively managed AUM.

Changes in assets under management during 2009 were as follows:

Distribution Channel

Institutions

Retail

Private
Client

Total

Value
Equity

Growth
Equity

Investment Service
Fixed
Income(1)

Other(1)(2)

Total

(in billions)

Balance as of December 31, 2008

$ 291.4

$ 101.6

$ 69.0

$ 462.0

$ 172.4

$ 88.3

$ 164.0

$ 37.3

$ 462.0

Long-term flows:

Sales/new accounts

Redemptions/terminations

Cash flow/unreinvested dividends

Net long-term (outflows) inflows

Transfers

Market appreciation

Net change

16.2

(56.2)

(17.7)
(57.7)

0.2

66.1

8.6

23.0

(25.8)

(6.4)
(9.2)

—

28.3

19.1

7.5

(8.0)

(6.5)
(7.0)

(0.2)

13.0

5.8

46.7

(90.0)

(30.6)
(73.9)

—

107.4

33.5

8.7

(46.3)

(11.8)
(49.4)

—

48.2

(1.2)

6.4

(22.2)

(6.1)
(21.9)

—

27.7

5.8

24.6

(19.9)

(7.9)
(3.2)

—

23.5

20.3

7.0

(1.6)

(4.8)
0.6

—

8.0

8.6

46.7

(90.0)

(30.6)
(73.9)

—

107.4

33.5

Balance as of December 31, 2009

$300.0

$120.7

$74.8

$495.5

$171.2

$ 94.1

$184.3

$45.9

$495.5

(1) Certain client assets were reclassified among investment services to more accurately reflect how these assets are managed by our firm.

(2)

Includes index, structured, asset allocation services and other non-actively managed AUM.

40

AllianceBernstein

Changes in assets under management during 2008 were as follows:

Distribution Channel

Institutions

Retail

Private
Client

Total

Value
Equity

Growth
Equity

Investment Service
Fixed
Income(1)

Other(1)(2)

Total

(in billions)

Balance as of December 31, 2007

$ 508.1

$ 183.2

$109.1

$ 800.4

$ 382.5

$ 196.9

$ 188.0

$ 33.0

$ 800.4

Long-term flows:

Sales/new accounts

Redemptions/terminations

Cash flow/unreinvested dividends

Net long-term (outflows) inflows
Transfers

Market depreciation
Net change

38.5

(34.9)

(18.0)

(14.4)
(10.6)

(191.7)
(216.7)

23.3

(39.8)

(8.6)

(25.1)
10.6

(67.1)
(81.6)

11.0

(8.3)

(7.4)

(4.7)
—

(35.4)
(40.1)

72.8

(83.0)

(34.0)

(44.2)
—

(294.2)
(338.4)

30.9

(41.1)

(19.1)

(29.3)
—

(180.8)
(210.1)

16.3

(23.0)

(11.5)

(18.2)
—

(90.4)
(108.6)

21.8

(18.6)

(11.5)

(8.3)
—

(15.7)
(24.0)

3.8

(0.3)

8.1

11.6
—

(7.3)
4.3

72.8

(83.0)

(34.0)

(44.2)
—

(294.2)
(338.4)

Balance as of December 31, 2008

$291.4

$101.6

$ 69.0

$462.0

$172.4

$ 88.3

$164.0

$37.3

$462.0

(1) Certain client assets were reclassified among investment services to more accurately reflect how these assets are managed by our firm.

(2)

Includes index, structured, asset allocation services and other non-actively managed AUM.

Average assets under management by distribution channel and investment service were as follows:

Years Ended December 31,
2008

2009

2007

% Change

2009-08

2008-07

DistributionChannel:

Institutions

Retail

Private Client

Total

InvestmentService:

Value Equity

Growth Equity

Fixed Income(1)

Other(1)(2)

Total

(in billions)

$ 284.9

$ 426.5

$ 491.1

(33.2)%

(13.1)%

105.1

68.6

145.4

93.2

180.5

104.8

$458.6

$665.1

$776.4

(27.7)

(26.4)

(31.1)

(19.4)

(11.1)

(14.3)

$ 160.6

$ 297.9

$ 373.3

(46.1)%

(20.2)%

86.1

170.8

41.1

152.6

182.2

32.4

186.0

179.0

38.1

$458.6

$665.1

$776.4

(43.6)

(6.2)

26.6

(31.1)

(17.9)

1.8

(14.8)

(14.3)

(1) Certain client assets were reclassified among investment services to more accurately reflect how these assets are managed by our firm.

(2)

Includes index, structured, asset allocation services and other non-actively managed AUM.

Annual Report 2009

41

Consolidated Results of Operations

Net revenues

Expenses

Operating income

Non-operating income

Income before income taxes

Income taxes

Net income
Net income of consolidated entities attributable to non-controlling interests

Net income attributable to AllianceBernstein Unitholders

Diluted net income per AllianceBernstein Unit

Distributions per AllianceBernstein Unit(1)

Operating margin(2)

Years Ended December 31,
2008

2009

2007

% Change

2009-08

2008-07

(in millions, except per unit amounts)

$4,525.3

(17.3)%

(22.3)%

$2,906.9

2,316.1

$3,514.2

2,588.7

590.8

33.7

624.5

46.0

578.5
(22.4)

925.5

18.7

944.2

95.8

848.4
(9.2)

3,136.1

1,389.2

15.8

1,405.0

127.9

1,277.1
(16.7)

$ 556.1

$ 839.2

$1,260.4

$

$

2.07

2.06

$

$

3.18

3.07

$

$

4.77

4.77

19.6%

26.1%

30.3%

(10.5)

(36.2)

79.7

(33.9)

(52.0)

(31.8)
143.6

(33.7)

(34.9)

(32.9)

(17.5)

(33.4)

18.9

(32.8)

(25.1)

(33.6)
(45.0)

(33.4)

(33.3)

(35.6)

(1) 2008 distribution excludes a $35.3 million insurance reimbursement.

(2) Operating income less net income attributable to non-controlling interests as a percentage of net revenues.

In 2009, net income attributable to AllianceBernstein Unitholders decreased $283.1 million, or 33.7%, to $556.1 million and net
income per AllianceBernstein Unit decreased $1.11, or 34.9%, to $2.07. The decrease was primarily due to lower investment advi-
sory and services fees and distribution revenues, partially offset by investment gains (compared to losses in 2008), lower promotion
and servicing expenses and lower employee compensation and benefits expenses.

In 2008, net income attributable to AllianceBernstein Unitholders decreased $421.2 million, or 33.4%, to $839.2 million, and net
income per AllianceBernstein Unit decreased $1.59, or 33.3%, to $3.18. The decrease was due primarily to lower investment advi-
sory and services fees resulting from lower AUM and significant mark-to-market losses on investments related to deferred
compensation plan obligations, partially offset by lower employee compensation and benefits and promotion and servicing expenses.

Expense Reduction

The substantial decrease in AUM and the resulting decrease in fee revenues from levels during the first nine months of 2008 led us
to undertake initiatives in the fourth quarter of 2008 that resulted in significant reductions in operating expenses and capital
expenditures.

We continued those initiatives in 2009 as we reduced our headcount by 628, or 12.6%, during the year to 4,369, which, along with
the reduction in force that occurred during the fourth quarter of 2008, represents a reduction of nearly 1,300 staff members, a
22.9% decline from our headcount peak during the third quarter of 2008. These actions reduced our fixed compensation costs
(salaries and fringe benefits) by approximately $130 million. Despite taking these measures, we believe we have retained the
intellectual capital required to service our clients and grow our business.

We have also reduced other controllable operating expenses, including print, mail, travel and entertainment, recruitment, seminars,
market data services, communications, temporary help and technology consulting, by approximately $75 million in 2009 as com-
pared to 2008. In addition, we have eliminated or deferred nearly $150 million of planned capital expenditures since the beginning
of 2008.

If AUM increases, higher revenues should result which, when supported by a lower expense base, will generate a greater amount of
income.

42

AllianceBernstein

Units Outstanding

In December 2009, we issued approximately 8.5 million Holding Units to fund the 2009 restricted Holding Unit awards to eligible
employees. The dilutive effect to earnings per Unit (“EPU”) during the fourth quarter of 2009 was not significant due to the timing
of the issuance. However, the dilutive effect to EPU and per Unit distributions in 2010 will be approximately 3%. At the present
time, management has not determined the extent to which we will repurchase units during future periods to minimize this dilutive
impact.

Net Revenues

The following table summarizes the components of net revenues:

Years Ended December 31,
2008

2009

2007

% Change

2009-08

2008-07

Investment advisory and services fees:

(in millions)

Institutions:

Base fees

Performance-based fees

Retail:

Base fees

Performance-based fees

Private Client:

Base fees

Performance-based fees

Total:

Base fees

Performance-based fees

Distribution revenues

Bernstein research services

Dividend and interest income

Investment gains (losses)

Other revenues
Total revenues

Less: Interest expense

Net revenues

$

792.4

$ 1,229.1

$ 1,416.0

(35.5)%

(13.2)%

18.1

810.5

522.8

0.4

523.2

575.3

11.3

586.6

1,890.5

29.8

1,920.3

277.3

434.6

26.7

144.5

107.9
2,911.3

4.4

11.5

1,240.6

65.6

1,481.6

751.0

0.1

751.1

846.0

1.8

847.8

2,826.1

13.4

2,839.5

378.4

471.7

91.8

(349.2)

118.5
3,550.7

36.5

946.0

—

946.0

943.0

15.6

958.6

3,305.0

81.2

3,386.2

473.4

423.5

284.0

29.7

122.9
4,719.7

194.4

$2,906.9

$3,514.2

$4,525.3

56.6

(34.7)

(30.4)

394.6

(30.3)

(32.0)

521.3

(30.8)

(33.1)

121.8

(32.4)

(26.7)

(7.9)

(70.9)

n/m

(8.9)
(18.0)

(87.9)

(17.3)

(82.4)

(16.3)

(20.6)

n/m

(20.6)

(10.3)

(88.3)

(11.6)

(14.5)

(83.4)

(16.1)

(20.1)

11.4

(67.7)

n/m

(3.6)
(24.8)

(81.2)

(22.3)

Investment Advisory and Services Fees
Investment advisory and services fees are the largest component of our revenues. These fees are generally calculated as a percentage
of the value of assets under management as of a specified date, or as a percentage of the value of average assets under management
for the applicable billing period, and vary with the type of investment service, the size of account and the total amount of assets we
manage for a particular client. Accordingly, fee income generally increases or decreases as average assets under management increase
or decrease and is therefore affected by the amount and timing of market appreciation or depreciation, the addition of new client
accounts or client contributions of additional assets to existing accounts, withdrawals of assets from and termination of client
accounts, purchases and redemptions of mutual fund shares, and shifts of assets between accounts or products with different fee
structures.

Annual Report 2009

43

We calculate AUM using established fair valuation methodologies, including market-based valuation methods and fair valuation
methods. Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options
and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid
prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing vendors and
brokers for other derivative products. Fair valuation methods include discounted cash flow models, evaluation of assets versus
liabilities or any other methodology that is validated and approved by our Valuation Committee. Fair valuation methods are used
only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.
Fair valued investments typically make up less than 1% of our total AUM. Market volatility has not had a significant effect on our
ability to acquire market data and, accordingly, our ability to use market-based valuation methods.

The Valuation Committee, which is composed of senior officers and employees, is responsible for overseeing the pricing and valu-
ation of all investments held in client and AllianceBernstein portfolios. The Valuation Committee has adopted a Statement of Pric-
ing Policies describing principles and policies that apply to pricing and valuing investments held in client and AllianceBernstein
portfolios. We have also established a Pricing Group, which reports to the Valuation Committee. The Valuation Committee has
delegated to the Pricing Group responsibility for monitoring the pricing process for all investments.

We sometimes charge our clients performance-based fees. In these situations, we charge a base advisory fee and are eligible to earn
an additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute investment results or
a percentage of investment results in excess of a stated benchmark over a specified period of time. Some performance-based fees
include a high-watermark provision, which generally provides that if a client account underperforms relative to its performance
target (whether absolute or relative to a specified benchmark), it must gain back such underperformance before we can collect
future performance-based fees. Therefore, if we fail to achieve our performance target for a particular period, we will not earn a
performance-based fee for that period and, for accounts with a high-watermark provision, our ability to earn future performance-
based fees will be impaired. We are eligible to earn performance-based fees on approximately 13% of the assets we manage for
institutional clients and approximately 4% of the assets we manage for private clients (in total, approximately 9% of our company-
wide AUM). If the percentage of our AUM subject to performance-based fees grows, seasonality and volatility of revenue and earn-
ings are likely to become more significant. Approximately 72% of our hedge fund AUM is subject to high-watermarks and we
ended the fourth quarter of 2009 with approximately 89% of this AUM below high-watermarks by 10% or more. This will make it
very difficult for us to earn performance-based fees in most of our hedge funds in 2010.

Our investment advisory and services fees decreased 32.4% in 2009, primarily due to a decrease of 31.1% in average assets under
management. For 2008, investment advisory and services fees decreased 16.1%, primarily due to a 14.3% decrease in average assets
under management.

Institutional investment advisory and services fees decreased $430.1 million, or 34.7%, in 2009, primarily as a result of a decrease of
33.2% in average assets under management and the impact of a shift in product mix. For information regarding product mix
changes, see “Risk Factors” in Item 1A. Institutional investment advisory and services fees decreased 16.3% in 2008 as a result of a
decrease in average assets under management of 13.1% and a decrease in performance-based fees of $54.1 million.

Retail investment advisory and services fees decreased $227.9 million, or 30.3%, in 2009, as average assets under management
decreased 27.7% and fee realization rates declined due to product mix changes. Retail investment advisory and services fees
decreased 20.6% in 2008 due primarily to a decrease of 19.4% in average assets under management.

Private Client investment advisory and services fees decreased $261.2 million, or 30.8%, in 2009, primarily as a result of lower base
fees reflecting a decrease in billable assets under management of 27.6% and the impact of product mix changes. Private Client
investment advisory and services fees decreased 11.6% in 2008 as a result of lower base fees from a 7.4% decrease in billable assets
under management and the impact of a change in product mix.

Distribution Revenues
AllianceBernstein Investments and AllianceBernstein (Luxembourg) S.A. (each a wholly-owned subsidiary of AllianceBernstein) act
as distributor and/or placing agent of company-sponsored mutual funds and receive distribution services fees from certain of those
funds as partial reimbursement of the distribution expenses they incur. Distribution revenues decreased $101.1 million, or 26.7%, and
$95.0 million, or 20.1%, in 2009 and 2008, respectively, principally due to lower average mutual fund assets under management.

44

AllianceBernstein

Bernstein Research Services
Bernstein Research Services revenue consists principally of transaction charges received for providing equity research and
brokerage-related services to institutional investors. Bernstein Research Services also earns revenues in the form of underwriting
fees, management fees and/or selling concessions from issuers of publicly-traded securities to which we provide equity capital mar-
kets services. Revenues from Bernstein Research Services decreased $37.1 million, or 7.9%, in 2009. Despite higher volumes in the
U.S. and Europe, reflecting market share gains, and revenues from new services, revenue declined due to a mix shift towards
low-touch trading and lower security valuations in Europe, where trades are priced in basis points. Revenues from Bernstein
Research Services increased 11.4% for 2008 due to significantly higher revenues from U.S. operations partially offset by a decline in
Europe.

Dividend and Interest Income and Interest Expense
Dividend and interest income consists primarily of investment income and interest earned on customer margin balances and U.S.
Treasury Bills. Interest expense principally reflects interest accrued on cash balances in customers’ brokerage accounts. Dividend and
interest income, net of interest expense, decreased $33.0 million, or 59.6%, in 2009 due primarily to lower interest earned on U.S.
Treasury Bill balances and other investments, reflecting lower interest rates and lower average balances, partially offset by lower
interest expense reflecting lower balances in customers’ brokerage accounts and lower interest rates. Dividend and interest income,
net of interest expense, decreased $34.3 million, or 38.3%, in 2008. The decrease was due primarily to lower dividends from our
deferred compensation-related investments as well as lower interest earned on our stock borrow and loan activity resulting from the
outsourcing of our hedge fund prime brokerage operations in the fourth quarter of 2007.

Investment Gains (Losses)
Investment gains (losses) consists primarily of realized and unrealized investment gains or losses on trading investments and invest-
ments owned by our consolidated venture capital fund, realized gains or losses on the sale of available-for-sale investments, and
equity in earnings of investments in limited partnership hedge funds that we sponsor and manage. Investment gains (losses) increased
$493.7 million, primarily due to gains on investments related to deferred compensation plan obligations of $120.5 million in 2009
compared to losses of $325.0 million in 2008, as well as realized and unrealized gains on other investments. Investment gains (losses)
decreased $378.9 million in 2008, due primarily to significant realized and unrealized losses on investments related to deferred
compensation plan obligations in 2008 of $325.0 million as compared to gains in 2007 of $4.8 million, as well as realized and
unrealized losses on other investments.

Other Revenues, Net
Other revenues consist of fees earned for transfer agency services provided to company-sponsored mutual funds, fees earned for
administration and recordkeeping services provided to company-sponsored mutual funds and the general accounts of AXA and its
subsidiaries, and other miscellaneous revenues. Other revenues decreased 8.9% in 2009 and 3.6% in 2008, due primarily to lower
shareholder servicing fees as a result of fewer shareholder accounts.

Expenses

The following table summarizes the components of expenses:

Years Ended December 31,
2008

2009

2007

% Change

2009-08

2008-07

Employee compensation and benefits

Promotion and servicing

General and administrative

Interest

Amortization of intangible assets

Total

(in millions)

$ 1,298.1

$ 1,454.7

$ 1,833.8

(10.8)%

(20.7)%

435.8

558.4

2.7

21.1

561.0

539.2

13.1

20.7

683.1

574.5

24.0

20.7

$2,316.1

$2,588.7

$3,136.1

(22.3)

3.6

(79.4)

2.0

(10.5)

(17.9)

(6.1)

(45.4)

—

(17.5)

Annual Report 2009

45

Employee Compensation and Benefits
We had 4,369 full-time employees as of December 31, 2009 compared to 4,997 as of year-end 2008 and 5,580 as of year-end 2007.
Employee compensation and benefits, which represented approximately 56%, 56% and 58% of total expenses in 2009, 2008 and
2007, respectively, consist of salaries (including severance), annual cash incentive awards, annual expense associated with the accrual
of unvested deferred incentive compensation awards (net of forfeitures), commissions, fringe benefits and other employment costs
(including recruitment, training, temporary help and meals).

In 2009, base compensation, fringe benefits and other employment costs decreased $131.4 million, or 18.3%, compared to 2008
primarily from workforce reductions. Incentive compensation increased $85.5 million, or 23.2%, primarily due to higher deferred
compensation expense resulting from mark-to-market gains on related investments, partially offset by lower cash incentive pay-
ments. Commission expense declined by $110.8 million, or 29.9%, reflecting lower sales volume and revenues across all distribution
channels.

In 2008, base compensation, fringe benefits and other employment costs increased $69.9 million, or 10.8%, compared to 2007
primarily as a result of higher salaries from higher headcount throughout most of the year and $42.7 million in severance and
severance-related items due to workforce reductions primarily in the fourth quarter, partially offset by lower recruitment costs and
lower payroll taxes as a result of lower incentive compensation. Incentive compensation decreased $370.6 million, or 50.2%,
primarily as a result of lower annual cash payments and lower deferred compensation expense resulting from mark-to-market losses
on related investments. Commission expense decreased $78.4 million, or 17.4%, reflecting lower sales volumes and revenues across
our Institutions, Retail and Private Client distribution channels.

Promotion and Servicing
Promotion and servicing expenses, which represented approximately 19%, 22% and 22% of total expenses in 2009, 2008 and 2007,
respectively, include distribution plan payments to financial intermediaries for distribution of AllianceBernstein mutual funds and
amortization of deferred sales commissions paid to financial intermediaries for the sale of back-end load shares of AllianceBernstein
mutual funds. See “Capital Resources and Liquidity” in this Item 7 and Note 11 to AllianceBernstein’s consolidated financial statements in
Item 8 for further discussion of deferred sales commissions. Also included in this expense category are costs related to travel and
entertainment, advertising, promotional materials, and investment meetings and educational seminars for financial intermediaries
that distribute our mutual fund products.

Promotion and servicing expenses decreased 22.3% in 2009 and 17.9% in 2008, primarily due to lower distribution plan payments
(resulting from lower average Retail Services assets under management), lower amortization of deferred sales commissions, and
lower travel and entertainment expenses.

General and Administrative
General and administrative expenses, which represented approximately 24%, 21% and 18% of total expenses in 2009, 2008 and
2007, respectively, include technology, professional fees, occupancy, communications and similar expenses. General and admin-
istrative expenses increased $19.2 million or 3.6% in 2009, and decreased $35.3 million, or 6.1% in 2008.

The increase in 2009 was due to an insurance reimbursement of $35.3 million received in 2008 and foreign exchange losses in 2009
compared to gains in 2008, partially offset by lower office-related and technology expenses.

The decrease in 2008 reflects the insurance reimbursement of $35.3 million, reduced operational errors and higher foreign exchange
gains, partially offset by higher occupancy costs.

Interest on Borrowings
Interest on our borrowings decreased $10.4 million, or 79.4%, in 2009, primarily as a result of significantly lower interest rates and
lower borrowing levels. Interest on our borrowings for 2008 decreased $10.9 million, or 45.4%, the result of lower interest rates.

Non-Operating Income

Non-operating income consists of contingent purchase price payments earned from the disposition in 2005 of our cash management
services. Non-operating income increased $15.0 million, or 79.7% in 2009, primarily due to a one-time $10.0 million contingent
payment we earned during the third quarter of 2009. We will continue to earn annual contingent payments through March 2010.
Non-operating income for 2008 increased $2.9 million, or 18.9%, due to higher contingent payments earned in 2008.

46

AllianceBernstein

Income Taxes

AllianceBernstein, a private limited partnership, is not subject to federal or state corporate income taxes. However, we are subject to
the New York City unincorporated business tax. Our domestic corporate subsidiaries are subject to federal, state and local income
taxes, and are generally included in the filing of a consolidated federal income tax return. Separate state and local income tax returns
are also filed. Foreign corporate subsidiaries are generally subject to taxes in the foreign jurisdictions where they are located.

Income tax expense decreased $49.8 million, or 52.0% in 2009. The decrease is primarily the result of lower earnings and a lower
effective tax rate, reflecting lower pre-tax earnings of our foreign subsidiaries where tax rates are generally higher. Income tax
expense decreased $32.1 million, or 25.1%, in 2008 reflecting lower pre-tax earnings and the recognition of $12.9 million of net
unrecognized tax benefits during the fourth quarter of 2008 due primarily to the settlement of certain tax audits.

Net Income of Consolidated Entities Attributable to Non-Controlling Interests

Net income of consolidated entities attributable to non-controlling interests consists of 90% limited partner interests in our con-
solidated venture capital fund (of which 10% is owned by AXA and its subsidiaries and 80% is owned by an unaffiliated client) and
our 50% interests in consolidated joint ventures in Australia and New Zealand (of which the remaining 50% is owned by AXA and
its subsidiaries). Net income of consolidated entities attributable to non-controlling interests increased $13.2 million due to higher
gains on investments owned by our consolidated venture capital fund, partly offset by lower joint venture earnings. Net income of
consolidated entities attributable to non-controlling interests decreased $7.5 million in 2008, primarily as a result of lower net
unrealized gains on investments owned by our consolidated venture capital fund.

Capital Resources and Liquidity

The following table identifies selected items relating to capital resources and liquidity:

AsofDecember31:

Total capital

Cash and cash equivalents

FortheyearsendedDecember31:

Cash flow from operations

Proceeds from sales (purchases) of investments, net

Capital expenditures

Distributions paid to General Partners and unitholders

Purchases of Holding Units to fund deferred compensation plan awards, net

Issuance of Holding Units to fund deferred compensation plan awards

Additional investment by Holding with proceeds from exercise of compensatory options to

buy Holding Units

(Repayment) issuance of commercial paper, net

Available Cash Flow

2009

2008

2007

2009-08

2008-07

(in millions, except per unit amounts)

% Change

$4,702.0

614.2

$ 4,486.8

$ 4,688.9

552.6

576.4

4.8%

11.2

(4.3)%

(4.1)

625.5

(3.5)

(53.8)

(464.7)

(7.0)

272.2

—

(36.8)

559.7

1,364.8

21.0

(75.2)

(1,019.7)

(2.4)

70.9

13.5

(260.1)

810.2

1,215.2

26.5

(137.5)

(1,364.6)

(50.9)

—

50.1

175.8

1,253.2

(54.2)

n/m

(28.5)

(54.4)

196.1

284.1

(100.0)

(85.9)

(30.9)

12.3

(20.6)

(45.3)

(25.3)

(95.4)

n/m

(73.0)

n/m

(35.3)

Cash and cash equivalents increased $61.6 million in 2009 and decreased $23.8 million in 2008. Cash inflows are primarily provided
by operations, issuance of commercial paper and proceeds from sales of investments. Significant cash outflows include cash dis-
tributions paid to the General Partner and unitholders, capital expenditures, repayment of commercial paper and purchases of Hold-
ing Units to fund deferred compensation plans. Issuances of Holding Units increased significantly in 2009 due to the grant of
restricted Holding Units as long-term incentive compensation (see Note 16 to AllianceBernstein’s consolidated financial statements in
Item 8 and “Compensation Elements for Executive Officers—Long-term Incentive Compensation” in Item 11 for a further description of
restricted Holding Unit Awards).

Annual Report 2009

47

Contingent Deferred Sales Charge
See Note 11 to AllianceBernstein’s consolidated financial statements in Item 8.

Debt and Credit Facilities
Total credit available, debt outstanding and weighted average interest rates were as follows:

Revolving credit facility(1)

Commercial paper(1)

Total revolving credit facility—AllianceBernstein(1)

Revolving credit facility—SCB LLC(1)

Uncommitted line of credit—SCB LLC

Uncommitted bank facilities—SCB LLC

Total

Credit
Available

$

751.0

249.0

1,000.0

950.0

—

—

2009
Debt
Outstanding

$ —

249.0

249.0

—

—

—

$1,950.0

$249.0

As of December 31,

Interest
Rate

Credit
Available

(in millions)

—%

$

715.2

2008
Debt
Outstanding

Interest
Rate

0.2

0.2

—

—

—

0.2

284.8

1,000.0

950.0

—

—

$ —

284.8

284.8

—

—

—

$1,950.0

$284.8

—%

1.8

1.8

—

—

—

1.8

(1) Commercial paper and amounts outstanding under the revolving credit facility are short-term in nature, and as such, recorded value is estimated to approximate

fair value.

We have a $1.0 billion five-year revolving credit facility with a group of commercial banks and other lenders which expires in
2011. The revolving credit facility is intended to provide back-up liquidity for our $1.0 billion commercial paper program,
although we borrow directly under the facility from time to time. Amounts borrowed under the commercial paper program reduce
amounts available for direct borrowing under the revolving credit facility on a dollar-for-dollar basis. Our interest rate, at our
option, is a floating rate generally based upon a defined prime rate, a rate related to the London Interbank Offered Rate (“LIBOR”)
or the Federal Funds rate. The revolving credit facility contains covenants which, among other things, require us to meet certain
financial ratios. We are in compliance with these covenants.

SCB LLC has a $950 million three-year revolving credit facility with a group of commercial banks to fund its activities resulting
from engaging in certain securities trading (including derivatives) and custody activities on behalf of private clients and participating
in equity capital offerings on behalf of issuers of publicly-traded securities. The facility expires in 2011. Under the revolving credit
facility, the interest rate, at the option of SCB LLC, is a floating rate generally based upon a defined prime rate, a rate related to
LIBOR or the Federal Funds rate. This revolving credit facility contains covenants which, among other things, require
AllianceBernstein, as guarantor, to meet the same financial ratios contained in its $1.0 billion revolving credit facility. We are in
compliance with these covenants.

SCB LLC has four separate uncommitted credit facilities with various banks totaling $525 million, a decrease from five facilities total-
ing $775 million as of December 31, 2008. In addition, SCB LLC has two lines of credit with a commercial bank as of
December 31, 2009 and 2008, one for $75 million secured by pledges of U.S. Treasury Bills and a second for $50 million secured
by pledges of equity securities.

Our financial condition and access to public and private debt markets should provide adequate liquidity for our general business
needs. Management believes that cash flow from operations and the issuance of debt and AllianceBernstein Units or Holding Units
will provide us with the resources necessary to meet our financial obligations. See “Risk Factors” in Item 1A and “Cautions Regarding
Forward-Looking Statements” in this Item 7 for a discussion of credit markets and our ability to renew our credit facilities at expiration.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

We have no off-balance sheet arrangements other than the guarantees and contractual obligations that are discussed below.

48

AllianceBernstein

Guarantees
In January 2008, AllianceBernstein and AXA executed guarantees in connection with the $950 million SCB LLC facility. If SCB
LLC is unable to meet its obligations, AllianceBernstein or AXA will pay the obligations when due or on demand.
AllianceBernstein will reimburse AXA to the extent AXA must pay on its guarantee. This agreement remains in effect until the later
of payment in full of any borrowings under the credit facility has been made or the facility expires.

In February 2002, AllianceBernstein signed a $125 million agreement with a commercial bank, under which we guaranteed certain
obligations in the ordinary course of business of SCBL. In the event SCBL is unable to meet its obligations in full when due, Alli-
anceBernstein will pay the obligations within three days of being notified of SCBL’s failure to pay. This agreement is continuous
and remains in effect until payment in full of any such obligation has been made by SCBL.

We also have three smaller guarantees totaling approximately $12 million, under which we guaranteed certain obligations in the
ordinary course of business of three foreign subsidiaries.

We have not been required to perform under any of the above agreements and currently have no liability in connection with these
agreements.

Aggregate Contractual Obligations
The following table summarizes our contractual obligations as of December 31, 2009:

Commercial paper

Operating leases, net of sublease commitments

Funding commitments

Accrued compensation and benefits

Unrecognized tax benefits

Total

Contractual Obligations

Total

Less than
1 Year

1-3 Years

3-5 Years

(in millions)

$

249.0

2,361.1

55.9

295.7

7.4

$ 249.0

120.0

22.7

166.1

2.6

$ —

269.5

16.0

66.3

4.8

$ —

278.7

14.8

32.3

—

More than
5 Years

$

—

1,692.9

2.4

31.0

—

$2,969.1

$560.4

$356.6

$325.8

$1,726.3

During July 2009, we entered into a subscription agreement under which we committed to invest up to $40 million in a venture
capital fund over a six-year period. As of December 31, 2009, we have not funded any of this commitment. In February 2010, we
received an initial $1.6 million capital call. Also during July 2009, we were selected by the U.S. Treasury Department as one of nine
pre-qualified investment managers under the Public-Private Investment Program. As part of the program, each investment manager
is required to invest a minimum of $20 million in the Public-Private Investment Fund they manage. As of December 31, 2009, we
had funded $4.1 million of this commitment.

Accrued compensation and benefits amounts in the table above exclude our accrued pension obligation. Any amounts reflected on
the consolidated balance sheet as payables (to broker-dealers, securities sold not yet purchased, brokerage clients and company-
sponsored mutual funds) and accounts payable and accrued expenses are excluded from the table above.

We expect to make contributions to our qualified profit sharing plan of approximately $15.0 million in each of the next four years
and to contribute an estimated $6.0 million to our qualified retirement plan during 2010.

Contingencies

See Note 11 to AllianceBernstein’s consolidated financial statements in Item 8 for a discussion of our mutual fund distribution system and
related deferred sales commission asset and certain legal proceedings to which we are a party.

Critical Accounting Estimates

The preparation of the consolidated financial statements and notes to consolidated financial statements requires management to
make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.

Annual Report 2009

49

Management believes that the critical accounting policies and estimates discussed below involve significant management judgment
due to the sensitivity of the methods and assumptions used.

Deferred Sales Commission Asset
Management tests the deferred sales commission asset for impairment quarterly by comparing undiscounted future cash flows to the
recorded value, net of accumulated amortization. Significant assumptions utilized to estimate the company’s future average assets
under management and undiscounted future cash flows from back-end load shares are updated quarterly and include expected
future market levels and redemption rates. Market assumptions are selected using a long-term view of expected average market
returns based on historical returns of broad market indices. As of December 31, 2009, management used average market return
assumptions of 5% for fixed income securities and 8% for equities to estimate annual market returns. Higher actual average market
returns would increase undiscounted future cash flows, while lower actual average market returns would decrease undiscounted
future cash flows. Future redemption rate assumptions, determined by reference to actual redemption experience over the five-year,
three-year, one-year and three-month periods ended December 31, 2009, and calculated as a percentage of the company’s average
assets under management represented by back-end load shares, ranged from 21% to 24% for U.S. fund shares and 27% to 40% for
non-U.S. fund shares. An increase in the actual rate of redemptions would decrease undiscounted future cash flows, while a
decrease in the actual rate of redemptions would increase undiscounted future cash flows. Estimates of undiscounted future cash
flows and the remaining life of the deferred sales commission asset are made from these assumptions and the aggregate undiscounted
future cash flows are compared to the recorded value of the deferred sales commission asset. As of December 31, 2009, management
determined that the deferred sales commission asset was not impaired. However, if redemption rates increase in 2010, this asset may
become impaired. If management determines in the future that the deferred sales commission asset is not recoverable, an impair-
ment condition would exist and a loss would be measured as the amount by which the recorded amount of the asset exceeds its
estimated fair value. Estimated fair value is determined using management’s best estimate of future cash flows discounted to a present
value amount. Any impairment could reduce materially the recorded amount of the deferred sales commission asset with a corre-
sponding charge to our earnings. Effective January 31, 2009, back-end load shares are no longer offered by our U.S. Funds to new
investors.

Goodwill
We test goodwill annually, as of September 30, for impairment. The carrying value of goodwill is also reviewed if facts and circum-
stances, such as significant declines in assets under management, revenues, earnings or our Holding Unit price, occur, suggesting
possible impairment. As of September 30, 2009, the impairment test indicated that goodwill was not impaired.

The impairment analysis is a two-step process. The first step involves determining whether the estimated fair value of AllianceBern-
stein, the reporting unit, exceeds its book value. If the fair value of the company exceeds its book value, goodwill is not impaired.
However, if the book value exceeds the fair value of the company, goodwill may be impaired and additional analysis is required.
The second step compares the fair value of the company to the aggregated fair values of its individual assets and liabilities to
determine the amount of impairment, if any.

There are several methods of estimating AllianceBernstein’s fair value, including valuation techniques such as discounted expected
cash flows and market valuation (the number of AllianceBernstein Units outstanding multiplied by Holding Unit price). Determin-
ing estimated fair value using a discounted cash flow valuation technique consists of applying business growth rate assumptions over
the estimated life of the goodwill asset and then discounting the resulting expected cash flows to arrive at a present value amount
that approximates fair value. In our tests, our discounted expected cash flow model uses management’s current business plan, which
factors in current market conditions and all material events that have impacted, or that we believed at the time could potentially
impact, future expected cash flows for the first four years and a compounded annual growth rate thereafter.

To the extent that securities valuations are depressed for prolonged periods of time, our assets under management, revenues, profit-
ability and unit price would likely be adversely affected. As a result, subsequent impairment tests may be based upon different
assumptions and future cash flow projections, which may result in an impairment of this asset. Any impairment could reduce
materially the recorded amount of goodwill with a corresponding charge to our earnings.

50

AllianceBernstein

Retirement Plan
We maintain a qualified, noncontributory, defined benefit retirement plan covering current and former employees who were
employed by the company in the United States prior to October 2, 2000. The amounts recognized in the consolidated financial
statements related to the retirement plan are determined from actuarial valuations. Inherent in these valuations are assumptions
including expected return on plan assets, discount rates at which liabilities could be settled, rates of annual salary increases and mor-
tality rates. The assumptions are reviewed annually and may be updated to reflect the current environment. Key assumptions are
described in Note 14 to AllianceBernstein’s consolidated financial statements in Item 8. In accordance with U.S. generally accepted account-
ing principles, actual results that differ from those assumed are accumulated and amortized over future periods and, therefore, affect
expense recognized and liabilities recorded in future periods.

As of December 31, 2008, we amended the retirement plan to provide that participants will not accrue any additional benefits (i.e.,
service and compensation after December 31, 2008 will not be taken into account in determining participants’ retirement benefits).

In developing the expected long-term rate of return on plan assets of 8.0%, we considered the historical returns and future expect-
ations for returns for each asset category, as well as the target asset allocation of the portfolio. The expected long-term rate of return
on assets is based on weighted average expected returns for each asset class. We assumed a target allocation weighting of 50% to 70%
for equity securities, 20% to 40% for debt securities, and 0% to 10% for real estate investment trusts. Exposure of the total portfolio
to cash equivalents on average should not exceed 5% of the portfolio’s value on a market value basis. The plan seeks to provide a
rate of return that exceeds applicable benchmarks over rolling five-year periods. The benchmark for the plan’s large cap domestic
equity investment strategy is the S&P 500 Index; the small cap domestic equity investment strategy is measured against the Russell
2000 Index; the international equity investment strategy is measured against the MSCI EAFE Index; and the fixed income invest-
ment strategy is measured against the Barclays Aggregate Bond Index. The actual rates of return on plan assets were 29.4%, (45.8)%
and 4.1% in 2009, 2008 and 2007, respectively. A 25 basis point adjustment, up or down, in the expected long-term rate of return
on plan assets would have decreased or increased the 2009 net pension expense of $1.6 million by approximately $0.1 million.

The objective of our discount rate assumption was to reflect the rate at which our pension obligations could be effectively settled.
In making this determination, we took into account the timing and amount of benefits that would be payable under the plan’s lump
sum option. Our methodology for selecting the discount rate as of December 31, 2009 was to match the plan’s cash flows to that of
a yield curve that provides the equivalent yields on zero-coupon corporate bonds for each maturity. Benefit cash flows due in a par-
ticular year can be “settled” theoretically by “investing” them in the zero-coupon bond that matures in the same year. The discount
rate is the single rate that produces the same present value of cash flows. The selection of the 6.05% discount rate as of
December 31, 2009 represents the Mercer Human Resources yield curve (to the nearest five basis points). The discount rate as of
December 31, 2008 was 6.20%, which was used in developing the 2009 net pension charge. A lower discount rate increases pension
expense and the present value of benefit obligations. A 25 basis point adjustment, up or down, in the discount rate (along with a
corresponding adjustment in the assumed lump sum interest rate) would have decreased or increased the 2009 net pension expense
of $1.6 million by approximately $0.1 million.

Loss Contingencies
Management continuously reviews with legal counsel the status of regulatory matters and pending or threatened litigation. We
evaluate the likelihood that a loss contingency exists and record a loss contingency if it is probable and reasonably estimable as of the
date of the financial statements. See Note 11 to AllianceBernstein’s consolidated financial statements in Item 8.

Accounting Pronouncements

See Note 22 to AllianceBernstein’s consolidated financial statements in Item 8.

Cautions Regarding Forward-Looking Statements

Certain statements provided by management in this report 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

Annual Report 2009

51

significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment per-
formance of sponsored investment products and separately-managed accounts, general economic conditions, industry trends, future
acquisitions, competitive conditions and government regulations, including changes in tax regulations and rates and the manner in
which the earnings of publicly-traded partnerships are taxed. We caution readers to carefully consider such factors. Further, such
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 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” in Item 1A. Any or all of
the forward-looking statements that we make in this Form 10-K, other documents we file with or furnish to the SEC, and any
other public statements we issue, may turn out to be wrong. It is important to remember that other factors besides those listed in
“Risk Factors” and those listed below could also adversely affect our financial condition, results of operations and business prospects.

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

• Our optimism regarding improving sales and declining net outflows: Our ability to sustain our improved investment performance,

as well as the actual performance of the capital markets and other factors beyond our control, will affect our asset flows.

• Our pipeline of new institutional client 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 we currently anticipate.

• Our expectation that we will further globalize our sell-side research footprint and expand our array of client services in 2010: Factors
beyond our control, including the effect of the performance of the financial markets on our results of operations, may adversely
affect our ability to implement our strategic initiatives.

• Our expectation that corporate earnings will rise: The extent to which global economies have recently stabilized is not necessarily
indicative of future earnings growth and there are significant obstacles that may hinder sustained growth. The actual perform-
ance of the capital markets and other factors beyond our control will affect our investment success for clients and asset flows.

• The cash flow Holding realizes from its investment in AllianceBernstein providing Holding with the resources necessary to meet its
financial obligations: Holding’s cash flow is dependent on the quarterly cash distributions it receives from AllianceBernstein.
Accordingly, Holding’s ability to meet its financial obligations is dependent on AllianceBernstein’s cash flow from its operations,
which is subject to the performance of the capital markets and other factors beyond our control.

• Our expectation that increased levels of AUM should lead to increased revenues which, when supported by a lower expense base, will
generate a greater amount of income: Unanticipated events and factors, including pursuit of strategic initiatives, may cause us to
expand our expense base, thus limiting the extent to which we benefit from any positive leverage in future periods. Growth in
our revenues will depend on the level of our assets under management, which in turn depends on factors such as the actual
performance of the capital markets, the performance of our investment products and other factors beyond our control.

• Our financial condition and access to public and private debt providing adequate liquidity for our general business needs: Our financial
condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability
to maintain and grow client assets under management and other factors beyond our control. Our access to public and private
debt, as well as the market for debt or equity we may choose to issue on reasonable terms, may be limited by adverse market
conditions, our profitability and changes in government regulations, including tax rates and interest rates.

• The possibility that prolonged weakness in the value of client assets under management may result in impairment of goodwill,

intangible assets and the deferred sales commission asset: To the extent that securities valuations are depressed for prolonged peri-
ods of time, client assets under management and our revenues, profitability and unit price may be adversely affected. As a result,
subsequent impairment tests may be based upon different assumptions and future cash flow projections, which may result in an
impairment of goodwill, intangible assets and the deferred sales commission asset.

• The outcome of litigation: Litigation is inherently unpredictable, and excessive damage awards do occur. Though we have stated
that we do not expect certain legal proceedings to have a material adverse effect on our results of operations or financial con-
dition, any settlement or judgment with respect to a legal proceeding could be significant, and could have such an effect.

52

AllianceBernstein

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Holding

Market Risk, Risk Management and Derivative Financial Instruments

Holding’s sole investment is AllianceBernstein Units. Holding did not own, nor was it a party, to any derivative financial instru-
ments during the years ended December 31, 2009, 2008 and 2007.

AllianceBernstein

Market Risk, Risk Management and Derivative Financial Instruments

AllianceBernstein’s investments consist of trading and available-for-sale investments, and other investments. Trading and
available-for-sale investments include United States Treasury Bills, equity and fixed income mutual funds investments, exchange-
traded options and various separately-managed portfolios. Trading investments are purchased for short-term investment, principally
to fund liabilities related to deferred compensation plans and to seed new investment services. Although available-for-sale invest-
ments are purchased for long-term investment, the portfolio strategy considers them available-for-sale from time to time due to
changes in market interest rates, equity prices and other relevant factors. Other investments include investments in hedge funds
sponsored by AllianceBernstein and other private investment vehicles.

Trading and Non-Trading Market Risk Sensitive Instruments

Investments with Interest Rate Risk—Fair Value

The table below provides our potential exposure with respect to our fixed income investments, measured in terms of fair value, to
an immediate 100 basis point increase in interest rates at all maturities from the levels prevailing as of December 31, 2009 and 2008.
Such a fluctuation in interest rates is a hypothetical rate scenario used to calibrate potential risk and does not represent our view of
future market changes. While these fair value measurements provide a representation of interest rate sensitivity of our investments in
fixed income mutual funds and fixed income hedge funds, they are based on our exposures at a particular point in time and may not
be representative of future market results. These exposures will change as a result of ongoing changes in investments in response to
our assessment of changing market conditions and available investment opportunities:

Fixed Income Investments:

Trading

Available-for-sale and other investments

As of December 31,

2009

Effect of +100
Basis Point
Change

2008

Effect of +100
Basis Point
Change

Fair Value

Fair Value

(in thousands)

$125,906

178

$(5,766)

(8)

$76,153

160

$(3,099)

(7)

Annual Report 2009

53

Investments with Equity Price Risk—Fair Value
Our investments also include investments in equity mutual funds and equity hedge funds. The following table provides our poten-
tial exposure with respect to our equity investments, measured in terms of fair value, to an immediate 10% drop in equity prices
from those prevailing as of December 31, 2009 and 2008. A 10% decrease in equity prices is a hypothetical scenario used to cali-
brate potential risk and does not represent our view of future market changes. While these fair value measurements provide a repre-
sentation of equity price sensitivity of our investments in equity mutual funds and equity hedge funds, they are based on our
exposures at a particular point in time and may not be representative of future market results. These exposures will change as a
result of ongoing portfolio activities in response to our assessment of changing market conditions and available investment
opportunities:

Equity Investments:

Trading

Available-for-sale and other investments

As of December 31,

2009

Effect of -10%
Equity Price
Change

Fair
Value

(in thousands)

Fair Value

2008

Effect of -10%
Equity Price
Change

$358,676

290,069

$(35,868)

(29,007)

$246,394

255,136

$(24,639)

(25,514)

54

AllianceBernstein

Item 8.

Financial Statements and Supplementary Data

AllianceBernstein Holding L.P.

Statements of Financial Condition

ASSETS

Investment in AllianceBernstein

Other assets

Total assets

LIABILITIES AND PARTNERS’ CAPITAL

Liabilities:

Payable to AllianceBernstein

Other liabilities

Total liabilities

Commitments and contingencies (SeeNote7)

Partners’ capital:

General Partner: 100,000 general partnership units issued and outstanding

Limited partners: 101,251,749 and 90,223,767 limited partnership units issued and outstanding

Accumulated other comprehensive income (loss)

Total partners’ capital

Total liabilities and partners’ capital

December 31,

2009

2008

(in thousands, except unit amounts)

$ 1,912,291

$ 1,600,045

10

1,397

$1,912,301

$1,601,442

$

1,484

699

2,183

$

4,825

462

5,287

1,668

1,916,434

(7,984)

1,910,118

$1,912,301

1,633

1,618,985

(24,463)

1,596,155

$1,601,442

See Accompanying Notes to Financial Statements.

Annual Report 2009

55

AllianceBernstein Holding L.P.

Statements of Income

Equity in net income attributable to AllianceBernstein Unitholders

Income taxes

Net income

Net income per unit:

Basic

Diluted

Years Ended December 31,
2008

2009

2007

(in thousands, except per unit amounts)

$ 192,513

$ 278,636

$ 415,256

25,324

33,910

39,104

$167,189

$244,726

$376,152

$

$

1.80

1.80

$

$

2.79

2.79

$

$

4.35

4.32

See Accompanying Notes to Financial Statements.

56

AllianceBernstein

AllianceBernstein Holding L.P.

Statements of Changes in Partners’ Capital and Comprehensive Income

General Partner’s Capital

Balance, beginning of year

Net income

Cash distributions to unitholders
Balance, end of year

Limited Partners’ Capital

Balance, beginning of year

Net income

Cash distributions to unitholders

Purchases of Holding Units by AllianceBernstein to fund deferred compensation plan awards, net

Issuance of Holding Units to fund deferred compensation plan awards

Allocation of Holding Units from the rabbi trust to fund deferred compensation plan awards

Forfeitures of Holding Units under deferred compensation plans

Impact of initial adoption of ASC 740

Proceeds from exercise of compensatory options to buy Holding Units

Balance, end of year

Accumulated Other Comprehensive Income (Loss)

Balance, beginning of year

Unrealized gain (loss) on investments, net of tax

Foreign currency translation adjustment, net of tax

Changes in retirement plan related items, net of tax

Balance, end of year

Total Partners’ Capital

Year Ended December 31,
2008

2009

2007

(in thousands)

$

1,633

$

1,698

$

1,739

179

(144)
1,668

280

(345)
1,633

434

(475)
1,698

1,618,985

1,548,212

1,546,598

167,010

(132,929)

(6,981)

272,167

11,672

(13,490)

—

—

244,446

(301,031)

(2,358)

70,867

55,276

(9,952)

—

13,525

375,718

(408,248)

(50,853)

—

39,088

(4,287)

145

50,051

1,916,434

1,618,985

1,548,212

(24,463)

1,461

13,043

1,975

(7,984)

17,550

(1,188)

(32,464)

(8,361)

(24,463)

10,851

(2,897)

6,309

3,287

17,550

$1,910,118

$1,596,155

$1,567,460

See Accompanying Notes to Financial Statements.

Annual Report 2009

57

AllianceBernstein Holding L.P.

Statements of Cash Flows

Cash flows from operating activities:

Net income

Adjustments to reconcile net income to net cash used in operating activities:

Equity in net income attributable to AllianceBernstein Unitholders

Changes in assets and liabilities:

Decrease (increase) in other assets

(Decrease) increase in payable to AllianceBernstein

Increase (decrease) in other liabilities

Net cash used in operating activities

Cash flows from investing activities:

Investments in AllianceBernstein with proceeds from exercises of compensatory options to buy Holding Units

Cash distributions received from AllianceBernstein

Net cash provided by investing activities

Cash flows from financing activities:

Cash distributions to unitholders

Proceeds from exercise of compensatory options to buy Holding Units

Net cash used in financing activities

Change in cash and cash equivalents

Cash and cash equivalents as of beginning of the year

Cash and cash equivalents as of end of the year

Cash paid:

Income taxes

Non-cash investing activities:

Changes in accumulated other comprehensive income (loss)

Issuance of Holding Units to fund deferred compensation plan awards

Allocation of Holding Units from the rabbi trust to fund deferred compensation plan awards

Forfeitures of Holding Units under deferred compensation plans

Non-cash financing activities:

Years Ended December 31,
2008

2009

2007

(in thousands)

$ 167,189

$ 244,726

$ 376,152

(192,513)

(278,636)

(415,256)

1,387

(3,341)

237

(675)

(2,635)

148

(27,041)

(37,072)

—

160,114

160,114

(133,073)

—

(133,073)

—

—

—

$

(13,525)

338,448

324,923

(301,376)

13,525

(287,851)

—

—

—

$

(421)

311

(1,383)

(40,597)

(50,051)

449,320

399,269

(408,723)

50,051

(358,672)

—

—

—

$

$

24,749

$

34,410

$

41,422

16,479

272,167

11,672

(13,490)

(42,013)

70,867

55,276

(9,952)

6,699

—

39,088

(4,287)

Purchases of Holding Units by AllianceBernstein to fund deferred compensation plan awards, net

(6,981)

(2,358)

(50,853)

See Accompanying Notes to Financial Statements.

58

AllianceBernstein

AllianceBernstein Holding L.P.
Notes to Financial Statements

The words “we” and “our” refer collectively to AllianceBernstein Holding L.P. (“Holding”) and AllianceBernstein L.P. and its subsidiaries
(“AllianceBernstein”), or to their officers and employees. Similarly, the word “company” refers to both Holding and AllianceBernstein. Where the
context requires distinguishing between Holding and AllianceBernstein, we identify which of them is being discussed. Cross-references are in italics.

1. Business Description and Organization

Holding’s principal source of income and cash flow is attributable to its investment in AllianceBernstein limited partnership interests.

AllianceBernstein provides research, diversified investment management and related services globally to a broad range of clients. Its
principal services include:

•

Institutional Services—servicing its institutional clients, including unaffiliated corporate and public employee pension funds,
endowment funds, domestic and foreign institutions and governments, and affiliates such as AXA and certain of its insurance
company subsidiaries, by means of separately-managed accounts, sub-advisory relationships, structured products, collective
investment trusts, mutual funds, hedge funds and other investment vehicles.

• Retail Services—servicing its individual clients, primarily by means of retail mutual funds sponsored by AllianceBernstein or an
affiliated company, sub-advisory relationships with mutual funds sponsored by third parties, separately-managed account pro-
grams sponsored by financial intermediaries worldwide and other investment vehicles.

• Private Client Services—servicing its private clients, including high-net-worth individuals, trusts and estates, charitable founda-
tions, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds,
mutual funds and other investment vehicles.

• Bernstein Research Services—servicing institutional investors seeking research, portfolio strategy and brokerage-related services,

and issuers of publicly-traded securities seeking equity capital markets services.

AllianceBernstein also provides distribution, shareholder servicing and administrative services to the mutual funds it sponsors.

AllianceBernstein provides a broad range of services with expertise in:

• Value equities, generally targeting stocks that are out of favor and considered undervalued;

• Growth equities, generally targeting stocks with under-appreciated growth potential;

• Fixed income securities, including taxable and tax-exempt securities;

• Blend strategies, combining style-pure investment components with systematic rebalancing;

• Passive management, including index and enhanced index strategies;

• Alternative investments, such as hedge funds, currency management strategies and venture capital; and

• Asset allocation services, by which AllianceBernstein offers blend strategies specifically-tailored for its clients (e.g., customized

target-date fund retirement services for defined contribution plan sponsors).

AllianceBernstein manages these services using various investment disciplines, including market capitalization (e.g., large-, mid- and
small-cap equities), term (e.g., long-, intermediate- and short-duration debt securities), and geographic location (e.g., U.S., interna-
tional, global and emerging markets), as well as local and regional disciplines in major markets around the world.

During 2009, AllianceBernstein was selected by the U.S. Treasury Department as one of only three firms to manage its portfolio of
assets issued by banks and other institutions taking part in the Capital Purchase Program of the Troubled Assets Relief Program. In
addition, AllianceBernstein was selected by the U.S. Treasury Department as one of nine pre-qualified fund managers under the
Public-Private Investment Program and, during the fourth quarter of 2009, we were one of five firms that closed an initial Public-
Private Investment Fund of at least $500 million.

Annual Report 2009

59

AllianceBernstein Holding L.P.
Notes to Financial Statements (continued)

AllianceBernstein’s research is the foundation of its business. AllianceBernstein’s research disciplines include fundamental research,
quantitative research, economic research and currency forecasting. In addition, we have created several specialized research units,
including one that examines global strategic changes that can affect multiple industries and geographies, and another dedicated to
identifying potentially successful innovations within early-stage companies.

As of December 31, 2009, AXA, a sociútú anonyme organized under the laws of France and the holding company for an international
group of insurance and related financial services companies, through certain of its subsidiaries (“AXA and its subsidiaries”) owned
approximately 1.4% of the issued and outstanding units representing assignments of beneficial ownership of limited partnership
interests in Holding (“Holding Units”).

As of December 31, 2009, the ownership structure of AllianceBernstein, expressed as a percentage of general and limited partner-
ship interests, was as follows:

AXA and its subsidiaries

Holding

Unaffiliated Holders

61.6%

36.5

1.9

100.0%

AllianceBernstein Corporation (an indirect wholly-owned subsidiary of AXA, “General Partner”) is the general partner of both
Holding and AllianceBernstein. AllianceBernstein Corporation owns 100,000 general partnership units in Holding and a 1% general
partnership interest in AllianceBernstein. Including both the general partnership and limited partnership interests in Holding and
AllianceBernstein, AXA and its subsidiaries had an approximate 62.1% economic interest in AllianceBernstein as of December 31,
2009.

2. Summary of Significant Accounting Policies

Basis of Presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America. The preparation of the financial statements requires management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Holding’s financial statements and notes should be read in conjunction with the consolidated financial statements and notes of
AllianceBernstein. AllianceBernstein’s consolidated financial statements and notes and management’s discussion and analysis of
financial condition and results of operations are included in Holding’s Form 10-K.

FASB Codification

For annual and interim periods ending after September 15, 2009, the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (the “Codification”) became the single authoritative source of generally accepted accounting principles
(“GAAP”) in the United States.

Subsequent Events

We evaluated subsequent events through February 11, 2010, the date the financial statements were issued.

60

AllianceBernstein

AllianceBernstein Holding L.P.
Notes to Financial Statements (continued)

Investment in AllianceBernstein

Holding records its investment in AllianceBernstein using the equity method of accounting. Holding’s investment is increased to
reflect its proportionate share of income of AllianceBernstein and decreased to reflect its proportionate share of losses of
AllianceBernstein and cash distributions made by AllianceBernstein to its unitholders. In addition, Holding’s investment is adjusted
to reflect certain capital transactions of AllianceBernstein.

Cash Distributions

Holding is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Agreement of Limited
Partnership of Holding (“Holding Partnership Agreement”), to its unitholders pro rata in accordance with their percentage interests
in Holding. Available Cash Flow is defined as the cash distributions Holding receives from AllianceBernstein minus such amounts as
the General Partner determines, in its sole discretion, should be retained by Holding for use in its business.

On February 11, 2010, the General Partner declared a distribution of $62.8 million, or $0.62 per unit, representing Available Cash
Flow for the three months ended December 31, 2009. Each general partnership unit in Holding is entitled to receive distributions
equal to those received by each Holding Unit. The distribution is payable on March 4, 2010 to holders of record at the close of
business on February 22, 2010.

During the third quarter of 2008, AllianceBernstein recorded approximately $35.3 million in insurance recoveries relating to pay-
ments made for a class action claims processing error for which it recorded a charge of $56.0 million in the fourth quarter of 2006.
AllianceBernstein’s and Holding’s fourth quarter 2006 cash distributions were based on net income as calculated prior to Alliance-
Bernstein recording the charge. Accordingly, the insurance recoveries ($0.13 per unit) were not included in AllianceBernstein’s or
Holding’s cash distribution to unitholders for the third quarter of 2008.

Total cash distributions per unit paid to unitholders during 2009, 2008 and 2007 were $1.44, $3.45 and $4.75, respectively.

Compensatory Option Plans

AllianceBernstein maintains certain compensation plans under which options to buy Holding Units have been, or may be, granted
to employees of AllianceBernstein and independent directors of the General Partner. AllianceBernstein recognizes compensation
expense related to grants of compensatory options in its financial statements. Under the fair value method, compensatory expense is
measured at the grant date based on the estimated fair value of the award (determined using the Black-Scholes option valuation
model) and is recognized ratably over the vesting period. Holding exchanges the proceeds from exercises of Holding Unit options
for AllianceBernstein Units and thereby increases its investment in AllianceBernstein. As of December 31, 2009, there were
12,047,522 options for Holding Units outstanding, of which 2,804,042 were exercisable.

Annual Report 2009

61

AllianceBernstein Holding L.P.
Notes to Financial Statements (continued)

3. Net Income Per Unit

Basic net income per unit is derived by dividing net income by the basic weighted average number of units outstanding for each
year. Diluted net income per unit is derived by adjusting net income for the assumed dilutive effect of compensatory options (“Net
income—diluted”) and dividing by the diluted weighted average number of units outstanding for each year.

Years Ended December 31,
2008

2009

2007

Net income—basic

Additional allocation of equity in net income attributable to AllianceBernstein resulting from assumed dilutive effect of

compensatory options

Net income—diluted

Weighted average units outstanding—basic

Dilutive effect of compensatory options

Weighted average units outstanding—diluted

Basic net income per unit

Diluted net income per unit

(in thousands, except per unit amounts)

$167,189

$244,726

$376,152

328
$167,517

92,906

244

93,150

$

$

1.80

1.80

1,133
$245,859

87,571

531

88,102

$

$

2.79

2.79

5,146
$381,298

86,460

1,807

88,267

$

$

4.35

4.32

As of December 31, 2009, 2008 and 2007, we excluded 5,752,877, 5,050,605 and 1,678,985 out-of-the-money options (i.e.,
options with an exercise price greater than the weighted average closing price of a unit for the relevant period), respectively, from
the diluted net income per unit computation due to their anti-dilutive effect.

4. Investment in AllianceBernstein

Holding’s investment in AllianceBernstein for the years ended December 31, 2009 and 2008 were as follows:

Investment in AllianceBernstein as of January 1,

Equity in net income attributable to AllianceBernstein Unitholders

Additional investments with proceeds from exercises of compensatory options to buy Holding Units

Changes in accumulated other comprehensive income (loss)

Cash distributions received from AllianceBernstein

Purchases of Holding Units by AllianceBernstein to fund deferred compensation plan awards, net

Issuance of Holding Units to fund deferred compensation plan awards

Allocation of Holding Units from rabbi trust to fund deferred compensation plan awards

Forfeitures of Holding Units under deferred compensation plans

Investment in AllianceBernstein as of December 31,

2009

2008

(in thousands)

$ 1,600,045

$ 1,574,512

192,513

—

16,479

(160,114)

(6,981)

272,167

11,672

(13,490)

278,636

13,525

(42,013)

(338,448)

(2,358)

70,867

55,276

(9,952)

$1,912,291

$1,600,045

62

AllianceBernstein

AllianceBernstein Holding L.P.
Notes to Financial Statements (continued)

5. Units Outstanding

The following table summarizes the activity in Holding Units:

Outstanding as of December 31, 2007

Options exercised

Units issued

Units forfeited

Outstanding as of December 31, 2008

Options exercised

Units issued

Units forfeited

Outstanding as of December 31, 2009

86,948,149

315,467

3,063,761

(3,610)

90,323,767

—

11,030,983

(3,001)

101,351,749

Units issued pertain to Holding Units newly issued under our Amended and Restated 1997 Long Term Incentive Plan and include:
(i) restricted Holding Unit awards to independent members of the Board of Directors of the General Partner, (ii) restricted Holding
Unit awards to eligible employees, (iii) Holding Unit issuances to fund deferred compensation notional investment elections by plan
participants, (iv) Century Club Plan restricted Holding Unit awards to AllianceBernstein employees whose primary responsibilities
are to assist in the distribution of company-sponsored mutual funds, and (v) restricted Holding Unit issuances in connection with
certain employee separation agreements.

6. Income Taxes

Holding is a publicly-traded partnership for federal tax purposes and, accordingly, is not subject to federal or state corporate income
taxes. However, Holding is subject to the 4.0% New York City unincorporated business tax (“UBT”), net of credits for UBT paid
by AllianceBernstein, and to a 3.5% federal tax on partnership gross income from the active conduct of a trade or business. Hol-
ding’s partnership gross income is derived from its interest in AllianceBernstein.

The principal reasons for the difference between Holding’s effective tax rates and the UBT statutory tax rate of 4.0% are as follows:

2009

Years Ended December 31,
2008

(in thousands)

2007

UBT statutory rate

Federal tax on partnership gross business income

Credit for UBT paid by AllianceBernstein

Income tax expense (all currently payable) and effective tax rate

$ 7,701

4.0%

$ 11,145

4.0%

$ 16,610

4.0%

25,324

(7,701)

$25,324

13.2

(4.0)

13.2

33,910

(11,145)

$33,910

12.2

(4.0)

12.2

39,104

(16,610)

$39,104

9.4

(4.0)

9.4

In order to preserve Holding’s status as a “grandfathered” publicly-traded partnership for federal income tax purposes, management
ensures that Holding does not directly or indirectly (through AllianceBernstein) enter into a substantial new line of business. If
Holding were to lose its status as a “grandfathered” publicly-traded partnership, it would be subject to corporate income tax, which
would reduce materially Holding’s net income and its quarterly distributions to Holding unitholders. For additional information
regarding Holding’s tax status, see “Business—Taxes” in Item 1 and “Risk Factors” in Item 1A.

The effects of a tax position are recognized in the financial statements only if, as of the reporting date, it is “more likely than not” to
be sustained based solely on its technical merits. In making this assessment, a company must assume that the taxing authority will
examine the tax position and have full knowledge of all relevant information. Accordingly, we have no liability for unrecognized
tax benefits as of December 31, 2009, 2008 and 2007. A liability for unrecognized tax benefits, if required, would be recorded in
income tax expense and affect the company’s effective tax rate.

Annual Report 2009

63

AllianceBernstein Holding L.P.
Notes to Financial Statements (continued)

We are no longer subject to federal, state and local income tax examinations by tax authorities for all years prior to 2006. Currently,
there are no examinations in progress and to date we have not been notified of any future examinations by applicable taxing
authorities.

7. Commitments and Contingencies

Legal and regulatory matters described below pertain to AllianceBernstein and are included here due to their potential significance
to Holding’s investment in AllianceBernstein.

On October 2, 2003, a purported class action complaint entitled Hindo, et al. v. AllianceBernstein Growth & Income Fund, et al.
(“Hindo Complaint”) was filed against, among others, AllianceBernstein, Holding and the General Partner. The Hindo Complaint
alleges that certain defendants failed to disclose that they improperly allowed certain hedge funds and other unidentified parties to
engage in “late trading” and “market timing” of certain of our U.S. mutual fund securities, violating various securities laws.

Following October 2, 2003, additional lawsuits making factual allegations generally similar to those in the Hindo Complaint were
filed in various federal and state courts against AllianceBernstein and certain other defendants. On September 29, 2004, plaintiffs
filed consolidated amended complaints with respect to four claim types: mutual fund shareholder claims; mutual fund derivative
claims; derivative claims brought on behalf of Holding; and claims brought under the Employee Retirement Income Security Act of
1974, as amended (“ERISA”) by participants in the Profit Sharing Plan for Employees of AllianceBernstein.

On April 21, 2006, AllianceBernstein and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative
claims and ERISA claims entered into a confidential memorandum of understanding containing their agreement to settle these
claims. The agreement will be documented by a stipulation of settlement and will be submitted for court approval at a later date.
The settlement amount ($30 million), which we previously expensed and disclosed, has been disbursed. The derivative claims
brought on behalf of Holding, in which plaintiffs seek an unspecified amount of damages, remain pending.

We intend to vigorously defend against the lawsuit involving derivative claims brought on behalf of Holding. At the present time,
we are unable to predict the outcome or estimate a possible loss or range of loss in respect of this matter because of the inherent
uncertainty regarding the outcome of complex litigation, and the fact that the plaintiffs did not specify an amount of damages sought
in their complaint.

We are involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of which
allege significant damages. While any inquiry, proceeding or litigation has the element of uncertainty, management believes that the
outcome of any one of the other regulatory inquiries, administrative proceedings, lawsuits or claims that is pending or threatened, or
all of them combined, will not have a material adverse effect on our results of operations or financial condition.

64

AllianceBernstein

AllianceBernstein Holding L.P.
Notes to Financial Statements (continued)

8. Quarterly Financial Data (Unaudited)

Equity in net income attributable to AllianceBernstein Unitholders

Net income

Basic net income per unit(1)

Diluted net income per unit(1)

Cash distributions per unit(2)

Equity in net income attributable to AllianceBernstein Unitholders

Net income

Basic net income per unit(1)

Diluted net income per unit(1)

Cash distributions per unit(2)(3)(4)

December 31

Quarters Ended 2009
September 30

June 30

March 31

(in thousands, except per unit amounts)

$67,086

$59,671

$

$

$

0.63

0.62

0.62

$68,723

$62,530

$

$

$

0.67

0.67

0.67

$44,092

$38,253

$

$

$

0.41

0.41

0.41

$12,612

$ 6,735

$

$

$

0.07

0.07

0.07

December 31

Quarters Ended 2008
September 30

June 30

March 31

(in thousands, except per unit amounts)

$30,661

$24,018

$

$

$

0.27

0.27

0.29

$72,936

$64,361

$

$

$

0.73

0.73

0.60

$93,042

$83,911

$

$

$

0.96

0.96

0.96

$81,997

$72,436

$

$

$

0.83

0.83

0.83

(1) Basic and diluted net income per unit are computed independently for each of the periods presented. Accordingly, the sum of the quarterly net income per unit

amounts may not agree to the total for the year.

(2) Declared and paid during the following quarter.

(3) During the fourth quarter of 2006, AllianceBernstein recorded a $56.0 million pre-tax charge ($54.5 million, net of related income tax benefit) for the estimated
cost of reimbursing certain clients for losses arising out of an error AllianceBernstein made in processing claims for class action settlement proceeds on behalf of
these clients, which include some AllianceBernstein-sponsored mutual funds. During the third quarter of 2008, AllianceBernstein recorded approximately $35.3
million in insurance recoveries relating to this error. AllianceBernstein’s and Holding’s fourth quarter 2006 cash distributions were based on net income as calcu-
lated prior to AllianceBernstein recording the charge. Accordingly, the related insurance recoveries ($0.13 per unit) were not included in AllianceBernstein’s or
Holding’s cash distribution to unitholders for the third quarter of 2008.

(4) During the fourth quarter of 2008, AllianceBernstein recorded an additional $5.1 million ($0.02 per unit) provision for income taxes subsequent to the declara-
tion of the fourth quarter 2008 cash distribution of $0.29 per unit. As a result, the cash distribution per unit in the fourth quarter of 2008 is $0.02 higher than
diluted net income per unit.

Annual Report 2009

65

Report of Independent Registered Public Accounting Firm

To the General Partner and Unitholders
AllianceBernstein Holding L.P.:

In our opinion, the accompanying statements of financial condition and the related statements of income, changes in partners’ capi-
tal and comprehensive income and cash flows present fairly, in all material respects, the financial position of AllianceBernstein Hold-
ing L.P. (“AllianceBernstein Holding”) at December 31, 2009 and 2008, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, AllianceBernstein Holding maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). AllianceBernstein Holding’s management
is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial
Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on AllianceBernstein
Holding’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effec-
tive internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit
of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing
the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projec-
tions of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP
New York, New York
February 11, 2010

66

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries

Consolidated Statements of Financial Condition

ASSETS

Cash and cash equivalents

Cash and securities segregated, at fair value (cost $985,213 and $2,568,339)

Receivables, net:

Brokers and dealers

Brokerage clients
Fees, net

Investments:

Deferred compensation-related

Other

Furniture, equipment and leasehold improvements, net

Goodwill, net

Intangible assets, net

Deferred sales commissions, net

Other assets

Total assets

LIABILITIES AND CAPITAL

Liabilities:

Payables:

Brokers and dealers

Securities sold not yet purchased

Brokerage clients

AllianceBernstein mutual funds

Accounts payable and accrued expenses

Accrued compensation and benefits

Debt
Total liabilities

Commitments and contingencies (SeeNote11)

Capital:

General Partner

Limited partners: 274,745,592 and 263,717,610 units issued and outstanding

Capital contributions receivable from General Partner

Holding Units held for deferred compensation plans

Accumulated other comprehensive income (loss)

Partners’ capital attributable to AllianceBernstein Unitholders

Non-controlling interests in consolidated entities

Total capital
Total liabilities and capital

December 31,

2009

2008

(in thousands,
except unit amounts)

$

614,216

985,331

$

552,577

2,572,569

170,148

582,248
346,482

400,959

373,870

359,674

251,644

398,979
377,167

305,809

272,034

365,804

2,893,029

2,893,029

223,992

90,187

174,804

243,493

113,541

156,813

$7,214,940

$8,503,459

$

120,574

$

110,488

31,806

1,430,835

86,054

278,398

316,331

248,987
2,512,985

48,671

4,850,601

(19,664)

(327,384)

(21,862)

4,530,362

171,593

4,701,955
$7,214,940

167

2,755,104

195,617

310,392

360,086

284,779
4,016,633

45,010

4,485,564

(23,168)

(117,600)

(72,147)

4,317,659

169,167

4,486,826
$8,503,459

See Accompanying Notes to Consolidated Financial Statements.

Annual Report 2009

67

AllianceBernstein L.P. and Subsidiaries

Consolidated Statements of Income

Revenues:

Investment advisory and services fees

Distribution revenues

Bernstein research services

Dividend and interest income

Investment gains (losses)

Other revenues

Total revenues

Less: Interest expense

Net revenues

Expenses:

Employee compensation and benefits

Promotion and servicing:

Distribution plan payments

Amortization of deferred sales commissions

Other

General and administrative

Interest on borrowings

Amortization of intangible assets

Total expenses

Operating income

Non-operating income

Income before income taxes

Income taxes

Net income

Net income of consolidated entities attributable to non-controlling interests

Net income attributable to AllianceBernstein Unitholders

Net income per AllianceBernstein Unit:

Basic

Diluted

Years Ended December 31,
2008

2007

2009

(in thousands, except per unit amounts)

$1,920,332

$2,839,526

$ 3,386,188

277,328

434,605

26,730

144,447

107,848

2,911,290

4,411

2,906,879

378,425

471,716

91,752

(349,172)

118,436

3,550,683

36,524

3,514,159

473,435

423,553

284,014

29,690

122,869

4,719,749

194,432

4,525,317

1,298,053

1,454,691

1,833,796

207,643

54,922

173,250

558,361

2,696

21,126

2,316,051

590,828

33,657

624,485

45,977

578,508

(22,381)

274,359

79,111

207,506

539,198

13,077

20,716

2,588,658

925,501

18,728

944,229

95,803

848,426

(9,186)

335,132

95,481

252,468

574,506

23,970

20,716

3,136,069

1,389,248

15,756

1,405,004

127,845

1,277,159

(16,715)

$ 556,127

$ 839,240

$1,260,444

$

$

2.07

2.07

$

$

3.18

3.18

$

$

4.80

4.77

See Accompanying Notes to Consolidated Financial Statements.

68

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries

Consolidated Statements of Changes in Partners’ Capital and Comprehensive Income

2009

Year Ended December 31,
2008

2007

(in thousands)

General Partner’s Capital

Balance, beginning of year
Net income
Cash distributions to General Partner
Purchases of Holding Units to fund deferred compensation plan awards, net
Issuance of Holding Units to fund deferred compensation plan awards
Allocation of Holding Units from the rabbi trust to fund deferred compensation plan awards
Forfeitures of Holding Units under deferred compensation plans
Compensation plan accrual
Additional investment by Holding with proceeds from exercise of compensatory options to buy Holding Units
ACM New Alliance Liquidation
Impact of initial adoption of ASC 740
Balance, end of year
Limited Partners’ Capital

Balance, beginning of year
Net income
Cash distributions to unitholders
Purchases of Holding Units to fund deferred compensation plan awards, net
Issuance of Holding Units to fund deferred compensation plan awards
Allocation of Holding Units from the rabbi trust to fund deferred compensation plan awards
Forfeitures of Holding Units under deferred compensation plans
Compensatory Holding Unit options expense
Compensation plan accrual
Additional investment by Holding with proceeds from exercise of compensatory options to buy Holding Units
ACM New Alliance Liquidation
Impact of initial adoption of ASC 740
Balance, end of year

Capital Contributions Receivable
Balance, beginning of year
Capital contributions from General Partner
Compensation plan accrual
Balance, end of year

Holding Units Held for Deferred Compensation Plans

Balance, beginning of year
Awards of Holding Units to fund deferred compensation plans
Amortization of deferred compensation awards
Forfeitures of Holding Units under deferred compensation plans
Balance, end of year

Accumulated Other Comprehensive Income (Loss)

Balance, beginning of year
Unrealized gain (loss) on investments, net of tax
Foreign currency translation adjustment, net of tax
Changes in retirement plan related items, net of tax
Balance, end of year

Total Partners’ Capital attributable to AllianceBernstein Unitholders
Non-controlling Interests in Consolidated Entities

Balance, beginning of year
Net income
Unrealized gain (loss) on investments
Foreign currency translation adjustment
Cash distributions to joint venture partners
Contributions from (distributions to) non-controlling interests of our consolidated venture capital fund activities
Balance, end of year

Total Capital

See Accompanying Notes to Consolidated Financial Statements.

$

45,010
5,561
(4,647)
5
2,722
8
(2)
14
—
—
—
48,671

4,485,564
550,566
(460,086)
(6,986)
269,445
12,533
(13,711)
11,889
1,387
—
—
—
4,850,601

(23,168)
4,905
(1,401)
(19,664)

(117,600)
(284,708)
61,211
13,713
(327,384)

(72,147)
4,232
39,098
6,955
(21,862)
4,530,362

169,167
22,381
159
4,074
—
(24,188)
171,593
$4,701,955

$

45,932
8,392
(10,197)
—
709
30
(7)
17
135
(1)
—
45,010

4,526,126
830,848
(1,009,482)
(2,358)
70,158
58,252
(10,702)
7,737
1,642
13,390
(47)
—
4,485,564

(26,436)
4,927
(1,659)
(23,168)

(57,501)
(129,149)
58,341
10,709
(117,600)

53,105
(3,511)
(96,978)
(24,763)
(72,147)
4,317,659

147,652
9,186
(451)
(3,290)
(10,387)
26,457
169,167
$4,486,826

$

46,416
12,605
(13,646)
—
—
36
(1)
17
501
—
4
45,932

4,584,200
1,247,839
(1,350,965)
(50,853)
—
42,667
(4,380)
5,947
1,683
49,550
—
438
4,526,126

(29,590)
4,854
(1,700)
(26,436)

(63,196)
(42,703)
44,017
4,381
(57,501)

33,167
(8,859)
18,757
10,040
53,105
4,541,226

53,515
16,715
59
1,114
(5,904)
82,153
147,652
$4,688,878

Annual Report 2009

69

AllianceBernstein L.P. and Subsidiaries

Consolidated Statements of Cash Flows

Cash flows from operating activities:

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of deferred sales commissions

Amortization of non-cash deferred compensation

Depreciation and other amortization

Unrealized (gains) losses on deferred compensation related investments
Other, net

Changes in assets and liabilities:

Decrease (increase) in segregated cash and securities

Decrease in receivables

Decrease (increase) in investments

(Increase) in deferred sales commissions

(Increase) decrease in other assets

(Decrease) increase in payables

(Decrease) increase in accounts payable and accrued expenses

(Decrease) increase in accrued compensation and benefits

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of investments

Proceeds from sales of investments

Additions to furniture, equipment and leasehold improvements

Net cash used in investing activities

Cash flows from financing activities:

(Repayment) issuance of commercial paper, net

(Decrease) increase in overdrafts payable

Distributions to General Partner and unitholders

Distributions to Joint Venture Partners

(Distributions to) contributions from non-controlling interests in consolidated entities

Capital contributions from General Partner

Additional investment by Holding with proceeds from exercise of compensatory options to buy Holding Units

Purchases of Holding Units to fund deferred compensation plan awards, net

Other

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents as of beginning of the period

Cash and cash equivalents as of end of the period

Cash paid:

Interest

Income taxes

See Accompanying Notes to Consolidated Financial Statements.

Years Ended December 31,
2008

2007

2009

(in thousands)

$ 578,508

$

848,426

$ 1,277,159

54,922

73,101

83,851

(184,384)
(19,867)

1,587,238

66,314

19,787

(31,568)

(18,626)

(1,520,959)

(21,493)

(41,361)

625,463

(10,378)

6,924

(53,763)

(57,217)

(36,751)

(16,860)

(464,733)

—

(24,188)

4,905

—

(6,981)

132

79,111

66,078

97,746

254,686
13,082

(132,792)

331,916

(34,189)

(9,081)

6,223

4,658

(50,740)

(110,346)

95,481

49,815

102,394

21,701
(6,932)

(360,181)

1,871,138

(211,909)

(84,101)

(14,648)

(1,625,583)

25,370

75,477

1,364,778

1,215,181

(22,221)

43,229

(75,208)

(54,200)

(260,146)

(11,524)

(25,932)

52,393

(137,547)

(111,086)

175,750

23,321

(1,019,679)

(1,364,611)

(10,387)

26,457

4,927

13,525

(2,358)

—

(5,904)

82,153

4,854

50,051

(50,853)

—

(544,476)

(1,259,185)

(1,085,239)

37,869

61,639

552,577

(75,232)

(23,839)

576,416

10,783

29,639

546,777

$ 614,216

$

552,577

$

576,416

$

5,433

64,085

$

47,933

$

218,398

132,491

87,329

70

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements

The words “we” and “our” refer collectively to AllianceBernstein Holding L.P. (“Holding”) and AllianceBernstein L.P. and its subsidiaries
(“AllianceBernstein”), or to their officers and employees. Similarly, the word “company” refers to both Holding and AllianceBernstein. Where the
context requires distinguishing between Holding and AllianceBernstein, we identify which of them is being discussed. Cross-references are in italics.

1. Business Description and Organization

AllianceBernstein provides research, diversified investment management and related services globally to a broad range of clients.
Our principal services include:

•

Institutional Services—servicing our institutional clients, including unaffiliated corporate and public employee pension funds,
endowment funds, domestic and foreign institutions and governments, and affiliates such as AXA and certain of its insurance
company subsidiaries, by means of separately-managed accounts, sub-advisory relationships, structured products, collective
investment trusts, mutual funds, hedge funds and other investment vehicles.

• Retail Services—servicing our individual clients, primarily by means of retail mutual funds sponsored by AllianceBernstein or an
affiliated company, sub-advisory relationships with mutual funds sponsored by third parties, separately-managed account pro-
grams sponsored by financial intermediaries worldwide and other investment vehicles.

• Private Client Services—servicing our private clients, including high-net-worth individuals, trusts and estates, charitable founda-
tions, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds,
mutual funds and other investment vehicles.

• Bernstein Research Services—servicing institutional investors seeking research, portfolio strategy and brokerage-related services,

and issuers of publicly-traded securities seeking equity capital markets services.

We also provide distribution, shareholder servicing and administrative services to the mutual funds we sponsor.

We provide a broad range of services with expertise in:

• Value equities, generally targeting stocks that are out of favor and considered undervalued;

• Growth equities, generally targeting stocks with under-appreciated growth potential;

• Fixed income securities, including taxable and tax-exempt securities;

• Blend strategies, combining style-pure investment components with systematic rebalancing;

• Passive management, including index and enhanced index strategies;

• Alternative investments, such as hedge funds, currency management strategies and venture capital; and

• Asset allocation, by which we offer blend strategies specifically-tailored for our clients (e.g., customized target-date fund retire-

ment services for defined contribution plan sponsors).

We manage these services using various investment disciplines, including market capitalization (e.g., large-, mid- and small-cap
equities), term (e.g., long-, intermediate- and short-duration debt securities), and geographic location (e.g., U.S., international,
global and emerging markets), as well as local and regional disciplines in major markets around the world.

Recently, we were selected by the U.S. Treasury Department as one of only three firms to manage its portfolio of assets issued by
banks and other institutions taking part in the Capital Purchase Program of the Troubled Assets Relief Program. In addition, we
were selected by the U.S. Treasury Department as one of nine pre-qualified fund managers under the Public-Private Investment
Program and, during the fourth quarter of 2009, we were one of five firms that closed an initial Public-Private Investment Fund of
at least $500 million.

Our research is the foundation of our business. Our research disciplines include fundamental research, quantitative research,
economic research and currency forecasting. In addition, we have created several specialized research units, including one that
examines global strategic changes that can affect multiple industries and geographies, and another dedicated to identifying potentially
successful innovations within early-stage companies.

Annual Report 2009

71

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

As of December 31, 2009, AXA, a société anonyme organized under the laws of France and the holding company for an international
group of insurance and related financial services companies, through certain of its subsidiaries (“AXA and its subsidiaries”) owned
approximately 1.4% of the issued and outstanding units representing assignments of beneficial ownership of limited partnership
interests in Holding (“Holding Units”).

As of December 31, 2009, the ownership structure of AllianceBernstein, expressed as a percentage of general and limited partner-
ship interests, was as follows:

AXA and its subsidiaries

Holding

Unaffiliated holders

61.6%

36.5

1.9

100.0%

AllianceBernstein Corporation (an indirect wholly-owned subsidiary of AXA, “General Partner”) is the general partner of both
Holding and AllianceBernstein. AllianceBernstein Corporation owns 100,000 general partnership units in Holding and a 1% general
partnership interest in AllianceBernstein. Including both the general partnership and limited partnership interests in Holding and
AllianceBernstein, AXA and its subsidiaries had an approximate 62.1% economic interest in AllianceBernstein as of December 31,
2009.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America. The preparation of the consolidated financial statements requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of
the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results
could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include AllianceBernstein and its majority-owned and/or controlled subsidiaries. All sig-
nificant inter-company transactions and balances among the consolidated entities have been eliminated.

Subsequent Events

We evaluated subsequent events through February 11, 2010, the date the financial statements were issued.

FASB Codification

For annual and interim periods ending after September 15, 2009, the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (the “Codification”) became the single authoritative source of generally accepted accounting principles
(“GAAP”) in the United States.

Reclassifications and Revisions

Effective January 1, 2009, we adopted amended accounting principles related to non-controlling interests in consolidated financial
statements. The objective of this amendment is to improve the relevance, comparability and transparency of the financial
information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting

72

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

standards for the non-controlling interest in a subsidiary. The disclosure provisions of the amendment require retrospective applica-
tion for all periods presented. As a result, certain prior period amounts have been reclassified to conform to the current year pre-
sentation. These include: (i) net income of consolidated entities attributable to non-controlling interests, previously included within
general and administrative expenses, currently shown separately in the consolidated statements of income, (ii) non-controlling inter-
ests in consolidated entities previously included in liabilities, currently shown as a component of total capital in the consolidated
statements of financial condition, and (iii) change in non-controlling interests in consolidated entities previously included within
cash provided by operating activities, currently included in net cash used in financing activities in the consolidated statements of
cash flows.

In addition, securities sold not yet purchased, previously included in payable to brokers and dealers in the consolidated statements of
financial condition, is currently shown separately.

Variable Interest Entities

Management reviews quarterly its management agreements and its investments in, and other financial arrangements with, certain
entities that hold client assets under management (“AUM”) to determine the variable interest entities that the company is required
to consolidate. These entities include certain mutual fund products, hedge funds, structured products, group trusts, collective
investment trusts and limited partnerships. We earn investment management fees on client assets under management of these enti-
ties, but we derive no other benefit from these assets and cannot use them in our operations.

As of December 31, 2009, we have significant variable interests in certain structured products and hedge funds with approximately
$60.3 million in AUM. However, these variable interest entities do not require consolidation because management has determined
that we are not the primary beneficiary of the expected losses or expected residual returns of these entities. Our maximum exposure
to loss is limited to our investment of $0.1 million in these entities.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits, money market accounts, overnight commercial paper and highly
liquid investments with original maturities of three months or less. Due to the short-term nature of these instruments, the recorded
value has been determined to approximate fair value.

Fees Receivable, Net

Fees receivable are shown net of allowances. An allowance for doubtful accounts related to investment advisory and services fees is
determined through an analysis of the aging of receivables, assessments of collectibility based on historical trends and other qual-
itative and quantitative factors, including the following: our relationship with the client, the financial health (or ability to pay) of the
client, current economic conditions and whether the account is closed or active.

Collateralized Securities Transactions

Customers’ securities transactions are recorded on a settlement date basis, with related commission income and expenses reported on
a trade date basis. Receivables from and payables to customers include amounts due on cash and margin transactions. Securities
owned by customers are held as collateral for receivables; collateral is not reflected in the consolidated financial statements. Principal
securities transactions and related expenses are recorded on a trade date basis.

Securities borrowed and securities loaned by Sanford C. Bernstein & Co., LLC (“SCB LLC”) and Sanford C. Bernstein Limited
(“SCBL”), both wholly-owned subsidiaries, are recorded at the amount of cash collateral advanced or received in connection with the
transaction and are included in receivables from and payables to brokers and dealers in the consolidated statements of financial condition.
Securities borrowed transactions require SCB LLC and SCBL to deposit cash collateral with the lender. With respect to securities
loaned, SCB LLC and SCBL receive cash collateral from the borrower. The initial collateral advanced or received approximates or is

Annual Report 2009

73

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

greater than the fair value of securities borrowed or loaned. SCB LLC and SCBL monitor the fair value of the securities borrowed and
loaned on a daily basis and request additional collateral or return excess collateral, as appropriate. Income or expense is recognized over
the life of the transactions.

Investments

Investments include United States Treasury Bills, unconsolidated mutual funds and limited partnership hedge funds we sponsor and
manage, various separately-managed portfolios, exchange-traded options and investments owned by a consolidated venture capital
fund in which we own a controlling interest as the general partner and in which we hold a 10% limited partnership interest.

Investments in United States Treasury Bills, mutual funds, and other equity and fixed income securities are classified as either trad-
ing or available-for-sale securities. Trading investments are stated at fair value with unrealized gains and losses reported in net
income. Available-for-sale investments are stated at fair value with unrealized gains and losses reported as a separate component of
accumulated other comprehensive income in partners’ capital. Realized gains and losses on the sale of investments are included in
income in the current period. Average cost is used to determine realized gain or loss on investments sold.

We use the equity method of accounting for investments in limited partnership hedge funds. The equity in earnings of our limited
partnership hedge fund investments is included in investment gains and losses on the consolidated statements of income.

The investments owned by our consolidated venture capital fund are generally illiquid and are initially valued at cost. These invest-
ments are adjusted to fair value to reflect the occurrence of “significant developments” (i.e., capital transactions or business,
economic or market events). Adjustments to fair value are recorded as unrealized gains and losses in investment gains and losses on
the consolidated statements of income. There is one private equity investment which represents an approximate 11% ownership in a
company that we own directly, outside of our consolidated venture capital fund. This investment is accounted for using the cost
method.

See Note 7 for a description of how we measure the fair value of our investments.

Furniture, Equipment and Leasehold Improvements, Net

Furniture, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation is
recognized on a straight-line basis over the estimated useful lives of eight years for furniture and three to six years for equipment and
software. Leasehold improvements are amortized on a straight-line basis over the lesser of their estimated useful lives or the terms of
the related leases.

Goodwill, Net

In 2000, AllianceBernstein acquired the business and assets of SCB Inc., an investment research and management company formerly
known as Sanford C. Bernstein Inc. (“Bernstein”), and assumed the liabilities of Bernstein (“Bernstein Transaction”). The purchase
price consisted of a cash payment of approximately $1.5 billion and 40.8 million newly-issued AllianceBernstein Units. The Bern-
stein Transaction was accounted for under the purchase method and the cost of the acquisition was allocated on the basis of the
estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price over the fair value of identifi-
able assets acquired resulted in the recognition of goodwill of approximately $3.0 billion.

We test our goodwill annually, as of September 30, for impairment. The carrying value of goodwill is also reviewed if facts and
circumstances, such as significant declines in assets under management, revenues, earnings or the Holding Unit price, occur,
suggesting possible impairment. As of September 30, 2009, the impairment test indicated that goodwill was not impaired.

To the extent that securities valuations are depressed for prolonged periods of time, our assets under management, revenues, profit-
ability and unit price would likely be adversely affected. As a result, subsequent impairment tests may be based upon different
assumptions and future cash flow projections, which may result in an impairment of this asset. Any impairment could reduce
materially the recorded amount of goodwill with a corresponding charge to our earnings.

74

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Intangible Assets, Net

Intangible assets consist primarily of costs assigned to acquired investment management contracts of SCB Inc. based on their esti-
mated fair value at the time of acquisition less accumulated amortization. Intangible assets are recognized at fair value and are amor-
tized on a straight-line basis over their estimated useful life of approximately 20 years. The gross carrying amount of intangible assets
totaled $415.9 million as of December 31, 2009 and $414.3 million as of December 31, 2008, and accumulated amortization was
$191.9 million as of December 31, 2009 and $170.8 million as of December 31, 2008, resulting in the net carrying amount of
intangible assets subject to amortization of $224.0 million as of December 31, 2009 and $243.5 million as of December 31, 2008.
Amortization expense was $21.1 million for 2009 and $20.7 million for each of the years 2008 and 2007, and estimated amor-
tization expense for each of the next five years is approximately $22 million.

We periodically review intangible assets for impairment as events or changes in circumstances indicate that the carrying value may
not be recoverable. If the carrying value exceeds fair value, additional impairment tests are performed to measure the amount of the
impairment loss, if any.

Deferred Sales Commissions, Net

We pay commissions to financial intermediaries in connection with the sale of shares of open-end company-sponsored mutual funds
sold without a front-end sales charge (“back-end load shares”). These commissions are capitalized as deferred sales commissions and
amortized over periods not exceeding five and one-half years for U.S. fund shares and four years for non-U.S. fund shares, the
periods of time during which deferred sales commissions are generally recovered. We recover these commissions from distribution
services fees received from those funds and from contingent deferred sales commissions (“CDSC”) received from shareholders of
those funds upon the redemption of their shares. CDSC cash recoveries are recorded as reductions of unamortized deferred sales
commissions when received. Effective January 31, 2009, back-end load shares are no longer offered to new investors by our U.S.
mutual funds. Management tests the deferred sales commission asset for recoverability quarterly and determined that the balance as
of December 31, 2009 was not impaired.

Loss Contingencies

With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of
a negative outcome is probable, and the amount of the loss can be reasonably estimated, we record an estimated loss for the
expected outcome of the litigation. If the likelihood of a negative outcome is reasonably possible and we are able to determine an
estimate of the possible loss or range of loss, we disclose that fact together with the estimate of the possible loss or range of loss.
However, it is difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent
uncertainties, particularly when plaintiffs allege substantial or indeterminate damages, or when the litigation is highly complex or
broad in scope. In such cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss.

Revenue Recognition

Investment advisory and services fees, generally calculated as a percentage of AUM, are recorded as revenue as the related services
are performed. Certain investment advisory contracts, including those associated with hedge funds, provide for a performance-based
fee, in addition to or in lieu of a base fee, which is calculated as either a percentage of absolute investment results or a percentage of
investment results in excess of a stated benchmark over a specified period of time. Performance-based fees are recorded as a compo-
nent of revenue at the end of each contract’s measurement period.

We calculate AUM using established fair valuation methodologies, including market-based valuation methods and fair valuation
methods. Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options
and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid
prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing vendors and
brokers for other derivative products. Fair valuation methods include discounted cash flow models, evaluation of assets versus

Annual Report 2009

75

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

liabilities or any other methodology that is validated and approved by our Valuation Committee. Fair valuation methods are used
only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.
Fair valued investments typically make up less than 1% of our total AUM. Recent market volatility has not had a significant effect
on our ability to acquire market data and, accordingly, our ability to use market-based valuation methods.

The Valuation Committee, which is composed of senior officers and employees, is responsible for overseeing the pricing and valu-
ation of all investments held in client and AllianceBernstein portfolios. The Valuation Committee has adopted a Statement of Pric-
ing Policies describing principles and policies that apply to pricing and valuing investments held in client and AllianceBernstein
portfolios. We have also established a Pricing Group, which reports to the Valuation Committee. The Valuation Committee has
delegated to the Pricing Group responsibility for monitoring the pricing process for all investments.

Bernstein Research Services revenue consists primarily of brokerage transaction charges received by SCB LLC and SCBL for
research and brokerage-related services provided to institutional investors. Brokerage transaction charges earned and related
expenses are recorded on a trade-date basis. SCB LLC also receives revenues from its equity capital markets activities in the form of
underwriting fees, management fees and/or selling concessions, which are recognized when earned.

Distribution revenues, shareholder servicing fees, and dividend and interest income are accrued as earned.

Mutual Fund Underwriting Activities

Purchases and sales of shares of company-sponsored mutual funds in connection with the underwriting activities of our subsidiaries,
including related commission income, are recorded on trade date. Receivables from brokers and dealers for sale of shares of
company-sponsored mutual funds are generally realized within three business days from trade date, in conjunction with the settle-
ment of the related payables to company-sponsored mutual funds for share purchases. Distribution plan and other promotion and
servicing payments are recognized as expense when incurred.

Deferred Compensation Plans

We maintain several unfunded, non-qualified deferred compensation plans under which annual awards to employees are generally
made in the fourth quarter. For awards made before 2009, participants were permitted to allocate their awards: (i) among notional
investments in Holding Units, certain of the investment services we provide to our clients, and a money market fund, (ii) restricted
Holding Units or (iii) under certain circumstances, in options to buy Holding Units. Awards in 2009 consisted solely of restricted
Holding Units. We typically make investments in our services that are notionally elected by the participants and maintain them in a
consolidated rabbi trust or separate custodial account. Awards generally vest over four years but can vest as soon as immediately
upon grant depending on the terms of the individual award, the age of the participant, or the terms of an employment, separation or
retirement agreement. Upon vesting, awards are distributed to participants unless they have made a voluntary long-term election to
defer receipt. Quarterly cash distributions on unvested Holding Units or restricted Holding Units for which a long-term deferral
election has not been made are paid currently to participants. For awards made prior to December 2009, quarterly cash distributions
on notional investments in Holding Units and income credited on notional investments in our investment services or the money
market fund for which a long-term deferral election has been made are reinvested and distributed as elected by participants. For
awards made in December 2009, quarterly cash distributions on vested and unvested restricted Holding Units for which a long-term
deferral election has been made are paid currently to participants.

Compensation expense for awards under the plans, including changes in participant account balances resulting from gains and losses
on related investments (other than in Holding Units and options to buy Holding Units), is recognized on a straight-line basis over
the applicable vesting periods. Mark-to-market gains or losses on investments made to fund deferred compensation obligations
(other than in Holding Units and options to buy Holding Units) are recognized currently as investment gains (losses) in the con-
solidated statements of income. In addition, our equity in the earnings of investments in limited partnership hedge funds made to
fund deferred compensation obligations is recognized currently as investment gains (losses) in the consolidated statements of income.

76

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Compensatory Unit Awards and Option Plans

We recognize compensation expense related to grants of restricted Holding Units and options to buy Holding Units in the financial
statements. Under the fair value method, compensatory expense is measured at the grant date based on the estimated fair value of
the award and is recognized over the vesting period. Fair value of unit awards is the grant date unit price; fair value of options is
determined using the Black-Scholes option valuation model. New Holding Units are issued upon exercise of options.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries are translated into United States dollars (“US$”) at exchange rates in effect at the balance
sheet dates, and related revenues and expenses are translated into US$ at average exchange rates in effect during each period. Net
foreign currency gains and losses resulting from the translation of assets and liabilities of foreign operations into US$ are reported as
a separate component of accumulated other comprehensive income in the consolidated statements of changes in partners’ capital and
comprehensive income. Net realized foreign currency transaction (losses) gains were $(0.4) million, $20.1 million and $7.1 million
for 2009, 2008 and 2007, respectively.

Cash Distributions

AllianceBernstein is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Agreement of
Limited Partnership of AllianceBernstein (“AllianceBernstein Partnership Agreement”), to its unitholders and to the General Part-
ner. Available Cash Flow can be summarized as the cash flow received by AllianceBernstein from operations minus such amounts as
the General Partner determines, in its sole discretion, should be retained by AllianceBernstein for use in its business.

The General Partner computes cash flow received from operations by determining the sum of:

• net cash provided by operating activities of AllianceBernstein,

• proceeds from borrowings and from sales or other dispositions of assets in the ordinary course of business, and

•

income from investments in marketable securities, liquid investments and other financial instruments that are acquired for
investment purposes and that have a value that may be readily established,

and then subtracting from this amount the sum of:

• payments in respect of the principal of borrowings, and

• amounts expended for the purchase of assets in the ordinary course of business.

On February 11, 2010, the General Partner declared a distribution of $194.2 million, or $0.70 per AllianceBernstein Unit, represent-
ing a distribution of Available Cash Flow for the three months ended December 31, 2009. The General Partner, as a result of its 1%
general partnership interest, is entitled to receive 1% of each distribution. The distribution is payable on March 4, 2010 to holders of
record on February 22, 2010.

During the third quarter of 2008, we recorded approximately $35.3 million in insurance recoveries relating to payments made for a
class action claims processing error for which we recorded a charge of $56.0 million in the fourth quarter of 2006. Our fourth quar-
ter 2006 cash distribution was based on net income as calculated prior to recording the charge. Accordingly, the insurance recov-
eries ($0.13 per unit) were not included in our cash distribution to unitholders for the third quarter of 2008.

Total cash distributions per unit paid to the General Partner and unitholders during 2009, 2008 and 2007 were $1.73, $3.87 and
$5.20, respectively.

Comprehensive Income

We report all changes in comprehensive income in the consolidated statements of changes in partners’ capital and comprehensive
income. Comprehensive income includes net income, as well as unrealized gains and losses on investments classified as
available-for-sale, foreign currency translation adjustments, and unrecognized actuarial net losses, prior service cost and transition
assets, all net of tax.

Annual Report 2009

77

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

3. Cash and Securities Segregated Under Federal Regulations and Other Requirements

As of December 31, 2009 and 2008, $0.9 billion and $2.5 billion, respectively, of United States Treasury Bills were segregated in a
special reserve bank custody account for the exclusive benefit of brokerage customers of SCB LLC under Rule 15c3-3 of the Secu-
rities Exchange Act of 1934, as amended (“Exchange Act”).

AllianceBernstein Investments, Inc. (“AllianceBernstein Investments”), a wholly-owned subsidiary of AllianceBernstein and the dis-
tributor of company-sponsored mutual funds, maintains several special bank accounts for the exclusive benefit of customers. As of
December 31, 2009 and 2008, $37.4 million and $47.9 million of cash, respectively, were segregated in these bank accounts.

4. Net Income Per Unit

Basic net income per unit is derived by reducing net income for the 1% general partnership interest and dividing the remaining 99%
by the basic weighted average number of units outstanding for each year. Diluted net income per unit is derived by reducing net
income for the 1% general partnership interest and dividing the remaining 99% by the total of the basic weighted average number
of units outstanding and the dilutive unit equivalents resulting from outstanding compensatory options to buy Holding Units as
follows:

Net income attributable to AllianceBernstein Unitholders

Weighted average units outstanding—basic

Dilutive effect of compensatory options to buy Holding Units

Weighted average units outstanding—diluted

Basic net income per AllianceBernstein Unit

Diluted net income per AllianceBernstein Unit

Years Ended December 31,
2008

2007

2009

(in thousands, except per unit amounts)

$556,127

266,300

244

266,544

$

$

2.07

2.07

$839,240

260,965

531

261,496

$

$

3.18

3.18

$1,260,444

259,854

1,807

261,661

$

$

4.80

4.77

For the years ended December 31, 2009, 2008 and 2007, we excluded 5,752,877, 5,050,605 and 1,678,985 out-of-the-money
options (i.e., options with an exercise price greater than the weighted average closing price of a unit for the relevant period),
respectively, from the diluted net income per unit computation due to their anti-dilutive effect.

5. Fees Receivables, Net

Fees receivable, net consists of:

AllianceBernstein mutual funds

Unaffiliated clients (net of allowance of $1,393 in 2009 and $1,488 in 2008)

Affiliated clients

Total fees receivables, net

December 31,

2009

2008

(in thousands)

$ 112,535

$ 89,530

222,660

11,287

280,288

7,349

$346,482

$377,167

78

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

6. Investments

Investments consist of:

Available-for-sale

Trading:

Deferred compensation-related

United States Treasury Bills

Other

Investments in limited partnership hedge funds:

Deferred compensation-related

Other

Private equity investments

Other investments

Total investments

December 31,

2009

2008

(in thousands)

$ 18,246

$

7,566

326,364

28,000

130,218

74,595

16,579

172,747

8,080

238,136

52,694

31,717

67,673

2,191

176,823

1,043

$774,829

$577,843

Total investments related to deferred compensation obligations of $401.0 million and $305.8 million as of December 31, 2009 and
2008, respectively, consist of company-sponsored mutual funds and limited partnership hedge funds. We typically make investments
in our services that are notionally elected by deferred compensation plan participants and maintain them in a consolidated rabbi trust
or separate custodial account. The rabbi trust and custodial account enable us to hold such investments separate from our other
assets for the purpose of settling our obligations to participants. The investments held in the rabbi trust and custodial account remain
available to the general creditors of AllianceBernstein.

The underlying investments of the hedge funds in which we invest include long and short positions in equity securities, fixed
income securities (including various agency and non-agency asset-based securities), currencies, commodities and derivatives
(including various swaps and forward contracts). Such investments are valued at quoted market prices or, where quoted market
prices are not available, are fair valued based on the pricing policies and procedures of the underlying funds.

United States Treasury Bills are held by SCB LLC in their investment account and are pledged as collateral with clearing
organizations.

Annual Report 2009

79

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The following is a summary of the cost and fair value of available-for-sale and trading investments held as of December 31, 2009
and 2008:

December 31, 2009:

Available-for-sale:

Equity investments

Fixed income investments

Trading:

Equity investments

Fixed income investments

December 31, 2008:

Available-for-sale:

Equity investments

Fixed income investments

Trading:

Equity investments

Fixed income investments

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair
Value

(in thousands)

$ 12,827

153

$ 12,980

$217,076

114,606
$331,682

$ 11,822

235

$ 12,057

$434,909

79,594

$514,503

$

$

5,241

27

5,268

$141,950

12,278
$154,228

$

$

$

$

264

4

268

67

65

132

$

$

$

$

$

$

—

(2)

(2)

(350)

(978)
(1,328)

(4,680)

(79)

(4,759)

$(188,582)

(3,506)

$(192,088)

$ 18,068

178

$ 18,246

$358,676

125,906
$484,582

$

$

7,406

160

7,566

$246,394

76,153

$322,547

Proceeds from sales of available-for-sale investments were approximately $6.9 million, $42.0 million and $52.4 million in 2009,
2008 and 2007, respectively. Realized gains from our sales of available-for-sale investments were zero in 2009, zero in 2008 and
$8.5 million in 2007. Realized losses from our sales of available-for-sale investments were $2.5 million in 2009, $6.4 million in 2008
and zero in 2007. We assess valuation declines to determine the extent to which such declines are fundamental to the underlying
investment or attributable to temporary market-related factors. Based on our assessment, we do not believe the declines are other
than temporary as of December 31, 2009.

7. Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an
orderly transaction between market participants at the measurement date. The three broad levels of fair value hierarchy are as fol-
lows:

• Level 1—Quoted prices in active markets are available for identical assets or liabilities as of the reported date.

• Level 2—Quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as

of the reported date.

• Level 3—Prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the

reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of
fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

80

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Assets Measured at Fair Value on a Recurring Basis

The following table summarizes the valuation of our financial instruments by pricing observability levels as of December 31, 2009:

Cash equivalents

Securities segregated

Receivables from brokers and dealers

Investments – available-for-sale

Investments – trading

Mutual fund investments

Equity and fixed income securities

U.S. Treasury bills

Investments – private equity

Total assets measured at fair value

Securities sold not yet purchased

Total liabilities measured at fair value

Level 1

Level 2

Level 3

Total

(in thousands)

$ 178,875

$

177,772

$ —

$

356,647

—

(15)

18,246

332,340

90,611

—

2,913

$622,970

$ 31,806

$ 31,806

947,888

612

—

—

32,900

28,000

62,006

$1,249,178

$

$

—

—

—

—

—

—

731

—

97,828

$98,559

$ —

$ —

947,888

597

18,246

332,340

124,242

28,000

162,747

$1,970,707

$

$

31,806

31,806

The following table summarizes the valuation of our financial instruments pricing observability levels as of December 31, 2008:

Level 1

Level 2

Level 3

Total

Cash equivalents

Securities segregated

Receivables from brokers and dealers

Investments – available-for-sale

Investments – trading

Mutual fund investments

Equity and fixed income securities

U.S. Treasury Bills

Investments – private equity

Total assets measured at fair value

Securities sold not yet purchased

Total liabilities measured at fair value

(in thousands)

$ 184,404

$

—

$

—

(46)

7,566

237,529

25,027

—

4,694

2,524,698

680

—

—

6,874

52,694

—

$459,174

$2,584,946

$

$

167

167

$

$

—

—

—

—

—

—

—

423

—

162,129

$162,552

$

$

—

—

$

184,404

2,524,698

634

7,566

237,529

32,324

52,694

166,823

$3,206,672

$

$

167

167

Following is a description of the fair value methodologies used for instruments measured at fair value, as well as the general classi-
fication of such instruments pursuant to the valuation hierarchy:

• Cash equivalents: We invest excess cash in various money market funds that are valued based on quoted prices in active markets;
these are included in Level 1 of the valuation hierarchy. We also hold United Kingdom Treasury Bills, which are valued based
on quoted yields in secondary markets and are included in Level 2 of the valuation hierarchy.

• Securities segregated: We hold United States Treasury Bills, which are segregated in a special reserve bank custody account as

required by Rule 15c3-3 of the Exchange Act. These securities are valued based on quoted yields in secondary markets, and are
included in Level 2 of the valuation hierarchy.

• Receivables from brokers and dealers: We hold several exchange-traded futures and currency forward contracts with counter-

parties that are included in Level 1 and Level 2, respectively, of the valuation hierarchy.

Annual Report 2009

81

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

•

•

Investments—available-for-sale and trading: Our available-for-sale investments consist principally of company-sponsored mutual
funds with exchange listed net asset values. Our trading investments mainly comprise company-sponsored mutual funds with
exchange listed net asset values, United States Treasury Bills, exchange-traded options and various separately-managed portfolios
consisting primarily of equity securities with quoted prices in active markets. These investments are included in Level 1 or Level
2 of the valuation hierarchy. Trading investments also include separately-managed portfolios of fixed income securities that are
included in Level 2 or Level 3 of the valuation hierarchy.

Investments—private equity: The valuation of non-public private equity investments owned by a consolidated venture capital
fund requires significant management judgment due to the absence of quoted market prices, inherent lack of liquidity and the
long-term nature of such investments. Private equity investments are valued initially at cost. The carrying values of private
equity investments are adjusted either up or down from cost to reflect expected exit values as evidenced by financing and sale
transactions with third parties, or when determination of a valuation adjustment is confirmed through ongoing review in
accordance with our valuation policies and procedures. A variety of factors are reviewed and monitored to assess positive and
negative changes in valuation including, but not limited to, current operating performance and future expectations of investee
companies, industry valuations of comparable public companies, changes in market outlook and the third party financing envi-
ronment over time. In determining valuation adjustments resulting from the investment review process, particular emphasis is
placed on current company performance and market conditions. Non-public equity investments are included in Level 3 of the
valuation hierarchy because they trade infrequently and, therefore, the fair value is unobservable. Publicly-traded equity
investments are included in Level 1 of the valuation hierarchy. If they contain trading restrictions, publicly-traded equity
investments are included in Level 2 of the valuation hierarchy.

• Securities sold not yet purchased: Securities sold not yet purchased, primarily reflecting short positions in equities and exchange-

traded options, are included in Level 1 of the valuation hierarchy.

The following table summarizes the changes in carrying value associated with Level 3 financial instruments carried at fair value:

Balance as of beginning of period

Transfers out, net

Purchases, net

Realized (losses) gains, net

Unrealized gains, net

Balance as of end of period

Years Ended December 31,

2009

2008

(in thousands)

$162,552

$ 125,020

(85,606)

8,170

(1,739)

15,182

—

31,070

9

6,453

$ 98,559

$162,552

Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the con-
solidated statements of income. Substantially all of the Level 3 investments are private equity investments owned by our con-
solidated venture capital fund, of which we own 10% and non-controlling interests own 90%.

Assets Measured at Fair Value on a Nonrecurring Basis

We adopted Accounting Standards Codification (“ASC”) 820-10-65-1 for nonfinancial assets and nonfinancial liabilities on
January 1, 2009. There were no impairments recognized for goodwill, intangible assets or other long-lived assets as of
December 31, 2009.

82

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

8. Furniture, Equipment and Leasehold Improvements, Net

Furniture, equipment and leasehold improvements, net consist of:

Furniture and equipment

Leasehold improvements

Less: Accumulated depreciation and amortization

Furniture, equipment and leasehold improvements, net

December 31,

2009

2008

(in thousands)

$ 544,493

$ 522,913

348,222

892,715

(533,041)

$359,674

322,803

845,716

(479,912)

$365,804

Depreciation and amortization expense on furniture, equipment and leasehold improvements were $61.4 million, $65.6 million and
$58.4 million for the years ended December 31, 2009, 2008 and 2007, respectively.

9. Deferred Sales Commissions, Net

The components of deferred sales commissions, net for the years ended December 31, 2009 and 2008 were as follows:

Carrying amount of deferred sales commissions

Less: Accumulated amortization

Cumulative CDSC received

Deferred sales commissions, net

(1) Excludes amounts related to fully amortized deferred sales commissions.

December 31,(1)

2009

2008

(in thousands)

$ 571,599

$ 521,334

(349,697)

(131,715)

(294,775)

(113,018)

$ 90,187

$113,541

Amortization expense was $54.9 million, $79.1 million and $95.5 million for the years ended December 31, 2009, 2008 and 2007,
respectively. Estimated future amortization expense related to the December 31, 2009 net asset balance, assuming no additional
CDSC is received in future periods, is as follows (in thousands):

2010

2011

2012

2013

2014

2015

$ 41,208

24,717

15,168

7,913

1,050

131

$90,187

Annual Report 2009

83

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

10. Debt

Total credit available, debt outstanding and weighted average interest rates were as follows:

Revolving credit facility(1)

Commercial paper(1)

Total revolving credit facility – AllianceBernstein(1)

Revolving credit facility – SCB LLC(1)

Uncommitted lines of credit – SCB LLC(1)

Uncommitted bank facilities – SCB LLC

Total

Credit
Available

$

751.0

249.0

1,000.0

950.0

—

—

2009
Debt
Outstanding

$ —

249.0

249.0

—

—

—

$1,950.0

$249.0

As of December 31,

Interest
Rate

Credit
Available

(in millions)

—%

$

715.2

2008
Debt
Outstanding

Interest
Rate

0.2

0.2

—

—

—

0.2

284.8

1,000.0

950.0

—

—

$ —

284.8

284.8

—

—

—

$1,950.0

$284.8

—%

1.8

1.8

—

—

—

1.8

(1) Commercial paper and amounts outstanding under the revolving credit facility are short-term in nature and, as such, recorded value is estimated to approximate

fair value.

AllianceBernstein has a $1.0 billion five-year revolving credit facility with a group of commercial banks and other lenders which
expires in 2011. The revolving credit facility is intended to provide back-up liquidity for our $1.0 billion commercial paper pro-
gram, although we borrow directly under the facility from time to time. Amounts borrowed under the commercial paper program
reduce amounts available for direct borrowing under the revolving credit facility on a dollar-for-dollar basis. Our interest rate, at
our option, is a floating rate generally based upon a defined prime rate, a rate related to the London Interbank Offered Rate
(“LIBOR”) or the Federal Funds rate. The revolving credit facility contains covenants which, among other things, require us to
meet certain financial ratios. We are in compliance with these covenants.

SCB LLC has a $950 million three-year revolving credit facility with a group of commercial banks to fund its activities resulting
from engaging in certain securities trading (including derivatives) and custody activities on behalf of private clients and participating
in equity capital offerings on behalf of issuers of publicly-traded securities. The facility expires in 2011. Under the revolving credit
facility, the interest rate, at the option of SCB LLC, is a floating rate generally based upon a defined prime rate, a rate related to
LIBOR or the Federal Funds rate. This revolving credit facility contains covenants which, among other things, require
AllianceBernstein, as guarantor, to meet the same financial ratios contained in its $1.0 billion revolving credit facility. We are in
compliance with these covenants.

AllianceBernstein and AXA executed guarantees in regard to the $950 million SCB LLC facility. In the event SCB LLC is unable
to meet its obligations, AllianceBernstein or AXA will pay the obligations when due or on demand. AllianceBernstein will
reimburse AXA to the extent AXA must pay on its guarantee. This agreement is continuous and remains in effect until the later of
payment in full of any such obligation under the credit facility has been made or the maturity date.

SCB LLC has four separate uncommitted credit facilities with various banks totaling $525 million, a decrease from five facilities total-
ing $775 million as of December 31, 2008. In addition, SCB LLC has two lines of credit with a commercial bank as of
December 31, 2009 and 2008, one for $75 million secured by pledges of U.S. Treasury Bills and a second for $50 million secured
by pledges of equity securities.

84

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Commitments and Contingencies

Operating Leases

We lease office space, furniture and office equipment under various operating leases. The future minimum payments under
non-cancelable leases, sublease commitments and related payments we are obligated to make, net of sublease commitments of third
party lessees to make payments to us, as of December 31, 2009 are as follows:

2010
2011

2012

2013

2014

2015 and thereafter

Total future minimum payments

Payments

$

126.2
133.7

142.8

143.2

142.8

1,702.3

$2,391.0

Sublease
Receipts

(in millions)

$ 6.2
3.4

3.6

3.7

3.6

9.4

$29.9

Net
Payments

$

120.0
130.3

139.2

139.5

139.2

1,692.9

$2,361.1

Office leases contain escalation clauses that provide for the pass through of increases in operating expenses and real estate taxes. Rent
expense, which is amortized on a straight-line basis over the life of the lease, was $133.6 million, $125.7 million and $106.8 million
for the years ended December 31, 2009, 2008 and 2007, respectively, net of sublease income of $3.4 million, $3.3 million and $3.4
million for the years ended December 31, 2009, 2008 and 2007, respectively.

Deferred Sales Commission Asset

Payments of sales commissions made by AllianceBernstein Investments to financial intermediaries in connection with the sale of
back-end load shares under our mutual fund distribution system (the “System”) are capitalized as deferred sales commissions
(“deferred sales commission asset”) and amortized over periods not exceeding five and one-half years for U.S. mutual fund shares
and four years for non-U.S. mutual fund shares, the periods of time during which the deferred sales commission asset is expected to
be recovered. CDSC cash recoveries are recorded as reductions of unamortized deferred sales commissions when received. The
amount recorded for the net deferred sales commission asset was $90.2 million and $113.5 million as of December 31, 2009 and
2008, respectively. Payments of sales commissions made by AllianceBernstein Investments to financial intermediaries in connection
with the sale of back-end load shares under the System, net of CDSC received of $18.7 million, $33.7 million and $31.1 million,
totaled approximately $31.6 million, $9.1 million and $84.1 million during 2009, 2008 and 2007, respectively. Effective January 31,
2009, back-end load shares are no longer offered to new investors in U.S. mutual funds.

Management tests the deferred sales commission asset for impairment quarterly by comparing undiscounted future cash flows to the
recorded value, net of accumulated amortization. Significant assumptions utilized to estimate the company’s future average assets
under management and undiscounted future cash flows from back-end load shares are updated quarterly and include expected
future market levels and redemption rates. Market assumptions are selected using a long-term view of expected average market
returns based on historical returns of broad market indices. As of December 31, 2009, management used average market return
assumptions of 5% for fixed income securities and 8% for equities to estimate annual market returns. Higher actual average market
returns would increase undiscounted future cash flows, while lower actual average market returns would decrease undiscounted
future cash flows. Future redemption rate assumptions range from 21% to 24% for U.S. fund shares and 27% to 40% for non-U.S.
fund shares. These assumptions are determined by reference to actual redemption experience over the five-year, three-year,
one-year and three-month periods ended December 31, 2009, calculated as a percentage of our average assets under management
represented by back-end load shares. An increase in the actual rate of redemptions would decrease undiscounted future cash flows,
while a decrease in the actual rate of redemptions would increase undiscounted future cash flows. These assumptions are reviewed
and updated quarterly. Estimates of undiscounted future cash flows and the remaining life of the deferred sales commission asset are

Annual Report 2009

85

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

made from these assumptions and the aggregate undiscounted future cash flows are compared to the recorded value of the deferred
sales commission asset. As of December 31, 2009, management determined that the deferred sales commission asset was not
impaired. However, if management determines in the future that the deferred sales commission asset is not recoverable, an impair-
ment condition would exist and a loss would be measured as the amount by which the recorded amount of the asset exceeds its
estimated fair value. Estimated fair value is determined using management’s best estimate of future cash flows discounted to a present
value amount.

During 2009, U.S. equity markets increased by approximately 26.5% as measured by the change in the Standard & Poor’s 500 Stock
Index and U.S. fixed income markets increased by approximately 5.9% as measured by the change in the Barclays Aggregate Bond
Index. The redemption rate for domestic back-end load shares was 21.1% in 2009. Increases in non-U.S. capital markets ranged
from 30.0% to 78.5% as measured by the MSCI World, Emerging Market and EAFE Indices. The redemption rate for non-U.S.
back-end load shares was 27.3% in 2009. Declines in financial markets or higher redemption levels, or both, as compared to the
assumptions used to estimate undiscounted future cash flows, as described above, could result in the impairment of the deferred sales
commission asset. Due to the volatility of the capital markets and changes in redemption rates, management is unable to predict
whether or when a future impairment of the deferred sales commission asset might occur. Any impairment would reduce materially
the recorded amount of the deferred sales commission asset with a corresponding charge to earnings.

Legal Proceedings

On October 2, 2003, a purported class action complaint entitled Hindo, et al. v. AllianceBernstein Growth & Income Fund, et al.
(“Hindo Complaint”) was filed against, among others, AllianceBernstein, Holding and the General Partner. The Hindo Complaint
alleges that certain defendants failed to disclose that they improperly allowed certain hedge funds and other unidentified parties to
engage in “late trading” and “market timing” of certain of our U.S. mutual fund securities, violating various securities laws.

Following October 2, 2003, additional lawsuits making factual allegations generally similar to those in the Hindo Complaint were
filed in various federal and state courts against AllianceBernstein and certain other defendants. On September 29, 2004, plaintiffs
filed consolidated amended complaints with respect to four claim types: mutual fund shareholder claims; mutual fund derivative
claims; derivative claims brought on behalf of Holding; and claims brought under the Employee Retirement Income Security Act of
1974, as amended (“ERISA”) by participants in the Profit Sharing Plan for Employees of AllianceBernstein.

On April 21, 2006, AllianceBernstein and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative
claims and ERISA claims entered into a confidential memorandum of understanding containing their agreement to settle these
claims. The agreement will be documented by a stipulation of settlement and will be submitted for court approval at a later date.
The settlement amount ($30 million), which we previously expensed and disclosed, has been disbursed. The derivative claims
brought on behalf of Holding, in which plaintiffs seek an unspecified amount of damages, remain pending.

We intend to vigorously defend against the lawsuit involving derivative claims brought on behalf of Holding. At the present time,
we are unable to predict the outcome or estimate a possible loss or range of loss in respect of this matter because of the inherent
uncertainty regarding the outcome of complex litigation, and the fact that the plaintiffs did not specify an amount of damages sought
in their complaint.

We are involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of which
allege significant damages. While any inquiry, proceeding or litigation has the element of uncertainty, management believes that the
outcome of any one of the other regulatory inquiries, administrative proceedings, lawsuits or claims that is pending or threatened, or
all of them combined, will not have a material adverse effect on our results of operations or financial condition.

Other

During July 2009, we entered into a subscription agreement under which we committed to invest up to $40 million in a venture
capital fund over a six-year period. As of December 31, 2009, we have not funded any of this commitment. In February 2010, we
received an initial $1.6 million capital call.

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Notes to Consolidated Financial Statements (continued)

Also during July 2009, we were selected by the U.S. Treasury Department as one of nine pre-qualified investment managers under
the Public-Private Investment Program. As part of the program, each investment manager is required to invest a minimum of $20
million in the Public-Private Investment Fund they manage. As of December 31, 2009, we funded $4.1 million of this
commitment.

12. Net Capital

SCB LLC, a broker-dealer and a member organization of the New York Stock Exchange (“NYSE”), is subject to the Uniform Net
Capital Rule 15c3-1 of the Exchange Act. SCB LLC computes its net capital under the alternative method permitted by the rule,
which requires that minimum net capital, as defined, equal the greater of $1 million, or two percent of aggregate debit items arising
from customer transactions, as defined. As of December 31, 2009, SCB LLC had net capital of $163.5 million, which was $152.0
million in excess of the minimum net capital requirement of $11.5 million. Advances, dividend payments and other equity with-
drawals by SCB LLC are restricted by the regulations of the U.S. Securities and Exchange Commission (“SEC”), the Financial
Industry Regulatory Authority, Inc., and other securities agencies.

SCBL is a member of the London Stock Exchange. As of December 31, 2009, SCBL was subject to financial resources require-
ments of $14.8 million imposed by the Financial Services Authority of the United Kingdom and had aggregate regulatory financial
resources of $41.8 million, an excess of $27.0 million.

AllianceBernstein Investments serves as distributor and/or underwriter for certain company-sponsored mutual funds.
AllianceBernstein Investments is registered as a broker-dealer under the Exchange Act and is subject to the minimum net capital
requirements imposed by the SEC. AllianceBernstein Investments’ net capital as of December 31, 2009 was $55.2 million, which
was $49.2 million in excess of its required net capital of $6.0 million.

Many of our subsidiaries around the world are subject to minimum net capital requirements by the local laws and regulations to
which they are subject. As of December 31, 2009, each of our subsidiaries subject to a minimum net capital requirement satisfied
the applicable requirement.

13. Counterparty Risk

Customer Activities

In the normal course of business, brokerage activities involve the execution, settlement and financing of various customer securities
trades, which may expose SCB LLC and SCBL to off-balance sheet risk by requiring SCB LLC and SCBL to purchase or sell secu-
rities at prevailing market prices in the event the customer is unable to fulfill its contracted obligations.

SCB LLC’s customer securities activities are transacted on either a cash or margin basis. In margin transactions, SCB LLC extends
credit to the customer, subject to various regulatory and internal margin requirements. These transactions are collateralized by cash
or securities in the customer’s account. In connection with these activities, SCB LLC may execute and clear customer transactions
involving the sale of securities not yet purchased. SCB LLC seeks to control the risks associated with margin transactions by requir-
ing customers to maintain collateral in compliance with the aforementioned regulatory and internal guidelines. SCB LLC monitors
required margin levels daily and, pursuant to such guidelines, requires customers to deposit additional collateral, or reduce positions,
when necessary. A majority of SCB LLC’s customer margin accounts are managed on a discretionary basis whereby
AllianceBernstein maintains control over the investment activity in the accounts. For these discretionary accounts, SCB LLC’s mar-
gin deficiency exposure is minimized through maintaining a diversified portfolio of securities in the accounts and by virtue of
AllianceBernstein’s discretionary authority and SCB LLC’s role as custodian.

SCB LLC may enter into forward foreign currency contracts on behalf of accounts for which SCB LLC acts as custodian. SCB LLC
minimizes credit risk associated with these contracts by monitoring these positions on a daily basis, as well as by virtue of
AllianceBernstein’s discretionary authority and SCB LLC’s role as custodian.

Annual Report 2009

87

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

In accordance with industry practice, SCB LLC and SCBL record customer transactions on a settlement date basis, which is gen-
erally three business days after trade date. SCB LLC and SCBL are exposed to risk of loss on these transactions in the event of the
customer’s or broker’s inability to meet the terms of their contracts, in which case SCB LLC and SCBL may have to purchase or
sell financial instruments at prevailing market prices. The risks assumed by SCB LLC and SCBL in connection with these trans-
actions are not expected to have a material effect on AllianceBernstein’s, SCB LLC’s or SCBL’s financial condition or results of
operations.

Other Counterparties

SCB LLC and SCBL are engaged in various brokerage activities on behalf of clients in which counterparties primarily include
broker-dealers, banks and other financial institutions. In the event counterparties do not fulfill their obligations, SCB LLC and
SCBL may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument.
It is SCB LLC’s and SCBL’s policy to review, as necessary, the credit standing of each counterparty.

In connection with SCB LLC’s security borrowing and lending arrangements, SCB LLC enters into collateralized agreements
which may result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations.
Security borrowing arrangements require SCB LLC to deposit cash collateral with the lender. With respect to security lending
arrangements, SCB LLC receives collateral in the form of cash in amounts generally in excess of the market value of the securities
loaned. SCB LLC minimizes credit risk associated with these activities by establishing credit limits for each broker and monitoring
these limits on a daily basis. Additionally, security borrowing and lending collateral is marked to market on a daily basis, and addi-
tional collateral is deposited by or returned to SCB LLC as necessary. During the fourth quarter of 2007, SCB LLC outsourced its
hedge fund related prime brokerage operations, resulting in the elimination of a substantial portion of its security borrowing and
security lending activity.

14. Qualified Employee Benefit Plans

We maintain a qualified profit sharing plan covering U.S. employees and certain foreign employees. Employer contributions are
discretionary and generally limited to the maximum amount deductible for federal income tax purposes. Aggregate contributions for
2009, 2008 and 2007 were $15.2 million, $24.5 million and $29.4 million, respectively.

We maintain several defined contribution plans for foreign employees in the United Kingdom, Australia, New Zealand, Japan and
our other foreign entities. Employer contributions are generally consistent with regulatory requirements and tax limits. Defined
contribution expense for foreign entities was $7.7 million, $10.6 million and $8.3 million in 2009, 2008 and 2007, respectively.

We maintain a qualified, noncontributory, defined benefit retirement plan (“Retirement Plan”) covering current and former
employees who were employed by AllianceBernstein in the United States prior to October 2, 2000. Benefits are based on years of
credited service, average final base salary (as defined), and primary Social Security benefits. Service and compensation after
December 31, 2008 are not taken into account in determining participants’ retirement benefits. This change, considered a plan cur-
tailment, resulted in a decrease in our projected obligation of $13.1 million. This decrease in our projected obligation was offset
against existing deferred losses in accumulated other comprehensive income (loss). In addition, as a result of all future service being
eliminated, we accelerated recognition of the existing prior service credit of $3.5 million in the fourth quarter of 2008.

Our policy is to satisfy our funding obligation for each year in an amount not less than the minimum required by ERISA and not
greater than the maximum amount we can deduct for federal income tax purposes. We contributed $12.8 million to the Retire-
ment Plan during 2009. We currently estimate we will contribute $6.0 million to the Retirement Plan during 2010. Contribution
estimates, which are subject to change, are based on regulatory requirements, future market conditions and assumptions used for
actuarial computations of the Retirement Plan’s obligations and assets. Management, at the present time, is unable to determine the
amount, if any, of additional future contributions that may be required.

88

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AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The Retirement Plan’s projected benefit obligation, fair value of plan assets, and funded status (amounts recognized in the con-
solidated statements of financial condition) were as follows:

Changeinprojectedbenefitobligation:

Projected benefit obligation at beginning of year

Service cost

Interest cost

Actuarial loss

Plan curtailment
Benefits paid

Projected benefit obligation at end of year

Changeinplanassets:

Plan assets at fair value at beginning of year

Actual return on plan assets

Employer contribution

Benefits paid

Plan assets at fair value at end of year

Funded status

Years Ended December 31,

2009

2008

(in thousands)

$ 72,230

$ 76,731

—

4,420

3,427

—
(2,913)

77,164

33,383

13,368

12,754

(2,913)

56,592

2,995

4,996

3,891

(13,133)
(3,250)

72,230

56,786

(25,770)

5,617

(3,250)

33,383

$(20,572)

$(38,847)

The amounts recognized in other comprehensive income (loss), net of taxes, for 2009 and 2008 were as follows:

Unrecognized net gain (loss) from experience different from that assumed and effects of changes and assumptions

Unrecognized prior service credit

Unrecognized net plan assets as of January 1, 1987 being recognized over 26.3 years

Other comprehensive income (loss)

2009

2008

(in thousands)

$ 7,098

$ (20,811)

—

(143)

(3,844)

(108)

$6,955

$(24,763)

The amounts included in accumulated other comprehensive income (loss), net of taxes, as of December 31, 2009 and 2008 were as
follows:

Unrecognized net loss from experience different from that assumed and effects of changes and assumptions

Unrecognized net plan assets as of January 1, 1987 being recognized over 26.3 years

Accumulated other comprehensive loss

2009

2008

(in thousands)

$ (15,151)

$ (22,249)

459

602

$(14,692)

$(21,647)

The estimated initial plan assets and amortization of loss for the Retirement Plan that will be amortized from accumulated other
comprehensive income over the next year is $143,000 and $223,000, respectively. The accumulated benefit obligation for the plan
was $77.2 million and $72.2 million as of December 31, 2009 and 2008, respectively.

Actuarial computations used to determine benefit obligations as of December 31, 2009 and 2008 (measurement dates) were made
utilizing the following weighted-average assumptions:

Discount rate on benefit obligations

Annual salary increases

Annual Report 2009

2009

2008

6.05%

0.00

6.20%

3.11

89

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The following benefit payments, which reflect expected future service, are expected to be paid as follows (in thousands):

2010

2011

2012

2013

2014

2015-2019

Net expense under the Retirement Plan consisted of:

Service cost

Interest cost on projected benefit obligations

Expected return on plan assets

Amortization of prior service credit

Amortization of transition asset

Curtailment gain recognized

Recognized actuarial loss

Net pension charge (benefit)

$ 3,438

2,696

4,158

3,257

2,876

24,153

Years Ended December 31,
2008

2009

2007

(in thousands)

$ —

$ 2,995

$ 3,447

4,419

(3,110)

—

(143)

—

431

4,996

(4,590)

(431)

(143)

(3,510)

—

4,769

(4,310)

(59)

(143)

—

—

$1,597

$ (683)

$3,704

Actuarial computations used to determine net periodic costs were made utilizing the following weighted-average assumptions:

Years Ended December 31,
2008

2009

2007

Discount rate on benefit obligations

Expected long-term rate of return on plan assets

Annual salary increases

The Retirement Plan’s asset allocation percentages consisted of:

Equity securities

Debt securities

Real estate

6.20%

6.55%

5.90%

8.00

0.00

8.00

3.14

8.00

3.14

December 31,

2009

2008

61%

31

8

56%

30

14

100%

100%

In developing the expected long-term rate of return on plan assets of 8.0%, management considered the historical returns and future
expectations for returns for each asset category, as well as the target asset allocation of the portfolio. The expected long-term rate of
return on assets is based on weighted average expected returns for each asset class.

The guidelines regarding allocation of assets formalized in the Investment Policy Statement were adopted by the Investment
Committee for the Retirement Plan to reflect the Plan’s liquidity requirements, funded status, growth expectations and risk toler-
ance. The guidelines specify an allocation weighting of 50% to 70% for global equity securities (target of 60%), 20% to 40% for
fixed income securities (target of 30%) and 0% to 10% for real estate investment trusts (target of 10%). Alternative investments are
permitted under the guidelines, with such investments to be allocated to one or more of the above security classes and subject to the
indicated tactical ranges.

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AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Exposure of the total portfolio to cash equivalents on average should not exceed 5% of the portfolio’s value on a market value basis.
The plan seeks to provide a rate of return that exceeds applicable benchmarks over rolling five-year periods. The benchmark for the
plan’s large cap domestic equity investment strategy is the S&P 500 Index; the small cap domestic equity investment strategy is
measured against the Russell 2000 Index; the international equity investment strategy is measured against the MSCI EAFE Index;
and the fixed income investment strategy is measured against the Barclays Aggregate Bond Index.

The following table summarizes the valuation of our Retirement Plan assets by pricing observability levels as of December 31, 2009:

Cash

Short-term investments
Mutual fund

Offshore hedge funds

Private investment trusts

Total assets measured at fair value

Level 1

Level 2

Level 3

Total

(in thousands)

$

12

$ —

—
4,233

—

—

$4,245

1,435
—

6,539

44,373

$52,347

$—

—
—

—

—

$—

$

12

1,435
4,233

6,539

44,373

$56,592

See Note 7 for a description of how we measure the fair value of our plan assets.

The Retirement Plan invests in a mutual fund which is an open-end fund that seeks total return from long-term growth of capital
and income. Typically the mutual fund invests at least 80% of its net assets in real estate investment trusts (“REITs”) and other real
estate industry companies. The mutual fund is subject to certain risks associated with the direct ownership of real estate and with the
real estate industry in general. To the extent that assets underlying the mutual fund’s investments are concentrated geographically,
by property type or in certain other respects, the mutual fund may be subject to additional risks.

Additionally, the Retirement Plan invests in two offshore hedge funds and two private investment trusts. One of the hedge funds
seeks to deliver long-term returns in excess of balanced allocations of equities and fixed income instruments with comparable vola-
tility over time, while the other hedge fund attempts to significantly outperform the returns of global markets over full market
cycles. One of the private investment trusts invests primarily in investment grade, U.S. dollar-denominated fixed income securities.
The other private investment trust primarily invests in equity securities of companies located around the world.

The short-term investments held by the Retirement Plan consist mainly of United States Treasury Bills.

We provide postretirement medical benefits which allow retirees between the ages of 55 and 65 meeting certain service require-
ments, at their election, to continue to participate in our group medical program by paying 100% of the applicable group premium.
Retirees older than 65 may also continue to participate in our group medical program, but are required to pay the full expected cost
of benefits. To the extent that retirees’ medical costs exceed premiums paid, we incur the cost of providing a postretirement medical
benefit. During 2009, our net periodic benefit cost was $0.5 million, and our aggregate benefit obligation as of December 31, 2009
is $4.0 million.

15. Long-term Incentive Compensation Plans

We maintain an unfunded, non-qualified incentive compensation program known as the Amended and Restated AllianceBernstein
Incentive Compensation Award Program (formerly known as the Amended and Restated AllianceBernstein Partners Compensation
Plan, the “Incentive Compensation Program”) under which annual awards may be granted to eligible employees.

Effective December 7, 2009, awards under the Incentive Compensation Program are governed by the Post-December 1, 2009
Award Provisions under the Incentive Compensation Program (“2009 ICP Provisions”). As a result, all 2009 awards under the
Incentive Compensation Program were in the form of restricted Holding Units, which vest ratably over four years. The 2009 ICP
Provisions include a “rule of 65” retirement provision (employees must have attained age 55 and completed at least 10 years of

Annual Report 2009

91

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

service) that will allow qualified employees to retire from the company and continue to vest in their award provided they comply
with covenants and agreements in the award agreement (e.g., non-competition and non-solicitation). Upon vesting, awards are dis-
tributed to participants unless a voluntary election to defer receipt has been made. Quarterly cash distributions on vested and
unvested restricted Holding Units are paid currently to participants. As an eligible employee’s total compensation increases, the
percentage of his or her annual incentive compensation paid in equity awards increases relative to other employees.

Prior to 2009, participants in the Incentive Compensation Program allocated their awards among notional investments in Holding
Units and certain of our investment services and, in certain instances, in options to buy Holding Units. The Compensation
Committee of the Board of Directors of the General Partner had the discretion to determine each calendar year a minimum and a
maximum percentage of each award that could have been treated as notionally invested in Holding Units or certain of our invest-
ment services, or, under certain circumstances, allocated to options to buy Holding Units.

For 2001 through 2008 awards, vesting periods range from four years to immediate depending on the age of the participant. Upon
vesting, awards are distributed to participants unless a voluntary election to defer receipt has been made. Quarterly cash distributions
on unvested Holding Units for which a deferral election has not been made are paid currently to participants. Quarterly cash dis-
tributions on vested and unvested Holding Units for which a deferral election had been made and income earned on notional
investments in company-sponsored mutual funds are treated as fully vested and are reinvested and distributed as elected by
participants.

• For 2008 awards, executives and those senior officers previously participating in the Special Option Program were permitted to

allocate up to half of their awards to investments in options to buy Holding Units (see Note 16).

• For 2006 and 2007 awards, selected senior officers were permitted to elect to allocate up to a specified portion of their awards

to investments in options to buy Holding Units (“Special Option Program”); the firm matched this allocation on a two-for-one
basis (for additional information about the Special Option Program, see Note 16).

• Beginning with 2003 awards, participants were permitted to allocate their awards to a combination of notional investments in

Holding Units (up to 50%) and notional investments in certain of our investment services.

• For 2002 awards, participants were permitted to allocate their awards to a combination of notional investments in Holding

Units and notional investments in certain of our investment services.

• For 2001 awards, participants were required to allocate at least 50% of their awards to notional investments in Holding Units

and could allocate the remainder to notional investments in certain of our investment services.

• Awards made for 1999 and 2000 are notionally invested in Holding Units and vested over periods ranging from eight years to

immediate depending on the age of the participant.

• Awards made from 1995 through 1998 generally vested ratably over eight years.

• Effective January 1, 2006, participant accounts were converted to notional investments in Holding Units or a money
market fund, or a combination of both, at the election of the participant, in lieu of being subject to an earnings-based
calculation. Each participant elected a distribution date, which could be no earlier than January 2007. Holding issued
834,864 Holding Units in January 2006 in connection with this conversion, with a market value on that date of
approximately $47.2 million.

The Incentive Compensation Program (including the 2009 ICP Provisions) may be terminated at any time without cause, in which
case our liability would be limited to vested benefits. We made awards in 2009, 2008 and 2007 aggregating $223.1 million, $236.0
million and $314.6 million, respectively. In January 2009, $22.9 million of the 2008 award was allocated to options to buy Holding
Units (see Note 16). The 2007 award is net of $9.9 million allocated to the December 2007 Special Option Program’s awards. The
amounts charged to employee compensation and benefits expense for the years ended December 31, 2009, 2008 and 2007 were
$199.7 million, $59.9 million and $227.2 million, respectively.

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AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

During December 2008, Mr. Sanders, our former Chairman and CEO, retired from the company. Based on his employment and
retirement agreements, unvested deferred compensation awards fully vested in 2008. The amounts charged to employee compensa-
tion and benefits expense under his agreements for the years ended December 31, 2008 and 2007 were $40.9 million and $19.7
million, respectively.

Effective August 1, 2005, we established the AllianceBernstein Financial Advisor Wealth Accumulation Plan (“Wealth Accumu-
lation Plan”), a voluntary unfunded, non-qualified incentive plan. The Wealth Accumulation Plan was established to attract and
retain eligible employees expected to make significant contributions to the future growth and success of Bernstein Global Wealth
Management, the unit of AllianceBernstein that services private clients. Participants designate the percentage of their awards to be
notionally invested in Holding Units or certain of our investment services. No more than 50% of the award may be notionally
invested in Holding Units. All awards vest annually on a pro rata basis over the term of the award. We made awards totaling $16.5
million in 2009, $15.2 million in 2008, and $23.5 million in 2007. The amounts charged to employee compensation and benefits
expense for the years ended December 31, 2009, 2008 and 2007 were $9.5 million, $8.7 million and $8.0 million, respectively.

During 2003, we established the AllianceBernstein Commission Substitution Plan (“Commission Substitution Plan”), an unfunded,
non-qualified incentive plan. Employees whose principal duties are to sell or market the products or services of AllianceBernstein
and whose compensation is entirely or mostly commission-based were eligible for an award under this plan. Participants designated
the percentage of their awards to be allocated to notional investments in Holding Units or in certain of our investment services.
Awards vested ratably over a three-year period and were amortized as employee compensation expense. The Commission Sub-
stitution Plan was terminated in 2007 and no awards have been made since 2006. The amounts charged to employee compensation
and benefits expense for the years ended December 31, 2009, 2008 and 2007 were $10.5 million, $21.7 million and $31.9 million,
respectively.

We maintain an unfunded, non-qualified deferred compensation plan known as the Capital Accumulation Plan and also have
assumed obligations under contractual unfunded deferred compensation arrangements covering certain executives (“Contractual
Arrangements”). The Capital Accumulation Plan was frozen on December 31, 1987 and no additional awards have been made. The
Board of Directors of the General Partner (“Board”) may terminate the Capital Accumulation Plan at any time without cause, in
which case our liability would be limited to benefits that have vested. Payment of vested benefits under both the Capital Accumu-
lation Plan and the Contractual Arrangements will generally be made over a ten-year period commencing at retirement age. The
General Partner is obligated to make capital contributions to AllianceBernstein in amounts equal to benefits paid under the Capital
Accumulation Plan and the Contractual Arrangements. Amounts included in employee compensation and benefits expense for the
Capital Accumulation Plan and the Contractual Arrangements for the years ended December 31, 2009, 2008 and 2007 were $1.4
million, $1.7 million and $1.7 million, respectively.

16. Compensatory Unit Awards and Option Plans

In 1997, we established the 1997 Long Term Incentive Plan (“1997 Plan”), under which options to buy Holding Units, restricted
Holding Units and phantom restricted Holding Units, performance awards, and other Holding Unit-based awards may be granted
to key employees and independent directors of the General Partner for terms established at the time of grant (generally 10 years).
Options granted to employees are generally exercisable at a rate of 20% of the Holding Units subject to such options on each of the
first five anniversary dates of the date of grant (except for certain options awarded under the Special Option Program, which are
described below); options granted to independent directors are generally exercisable at a rate of 33.3% of the Holding Units subject to
such options on each of the first three anniversary dates of the date of grant. Restricted Holding Units awarded to independent
directors of the General Partner vest on the third anniversary of the grant date or immediately upon a director’s resignation.
Restricted Holding Units awarded to our CEO (as described below under “Restricted Holding Unit Awards”) vest 20% on each of the
first five anniversary dates of the grant date. Restricted Holding Units awarded under the Incentive Compensation Program vest
25% on December 1st of the subsequent four years. The aggregate number of Holding Units that can be the subject of options
granted or that can be issued under the 1997 Plan may not exceed 41,000,000 Holding Units. As of December 31, 2009, options to
buy 19,574,923 Holding Units, net of forfeitures, had been granted and 15,168,431 Holding Units, net of forfeitures, were issued

Annual Report 2009

93

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

for other unit awards made under the 1997 Plan (as described below). Holding Unit-based awards (including options) in respect of
6,256,646 Holding Units were available for grant of options or issuance of Holding Units as of December 31, 2009. The 1997 Plan
will expire on July 26, 2010. We intend to convene a special meeting of Holding Unitholders during 2010 to seek approval for a
new long-term equity compensation plan.

In 1993, we established the 1993 Unit Option Plan (“1993 Plan”), under which options to buy Holding Units were granted to key
employees and independent directors of the General Partner for terms of up to 10 years. Each option has an exercise price of not
less than the fair market value of Holding Units on the date of grant. Options are exercisable at a rate of 20% of the Holding Units
subject to such options on each of the first five anniversary dates of the date of grant. No options or other awards have been granted
under the 1993 Plan since it expired in 2003.

Option Awards

On January 26, 2007, the Compensation Committee of the Board approved the Special Option Program, under which selected
senior officers voluntarily allocate a specified portion of their annual long-term incentive compensation award to options to buy
Holding Units and the company matches this allocation on a two-for-one basis. Also on January 26, 2007, and pursuant to the
Special Option Program, the Compensation Committee granted two separate awards of options to buy Holding Units to 67
participants. The exercise price for both awards is $90.65, the closing price of Holding Units on the grant date. The first grant, with
a fair value of $17.69 per option, awarded options to buy 555,985 Holding Units, vesting in equal increments on each of the first
five anniversaries of the grant date and expiring in 10 years. The second grant, with a fair value of $17.67 per option, awarded
options to buy 1,113,220 Holding Units, vesting in equal annual increments on each of the sixth through tenth anniversaries of the
grant date and expiring in 11 years.

On December 7, 2007, the Compensation Committee granted two separate awards of options to buy Holding Units to 68 partic-
ipants under the Special Option Program. The exercise price for both awards is $80.46, the closing price of Holding Units on the
grant date. The first grant, with a fair value of $13.30 per option, awarded options to buy 740,633 Holding Units, vesting in equal
increments on each of the first five anniversaries of the grant date and expiring in 10 years. The second grant, with a fair value of
$15.28 per option, awarded options to buy 1,289,321 Holding Units, vesting in equal annual increments on each of the sixth
through tenth anniversaries of the grant date and expiring in 11 years.

On January 23, 2009, the Compensation Committee granted an award of options to buy 6,534,182 Holding Units to 67 selected
senior officers. The exercise price is $17.05, the closing price of Holding Units on the grant date, and the fair value is $3.51 per
option.

Options to buy Holding Units (including grants to independent directors) were granted as follows: 6,565,302 options were granted
during 2009, 13,825 options were granted during 2008 and 3,708,939 options were granted during 2007. The weighted average fair
value of options to buy Holding Units granted during 2009, 2008 and 2007 was $3.52, $10.85 and $15.96, respectively, on the date
of grant, determined using the Black-Scholes option valuation model with the following assumptions:

Risk-free interest rate

Expected cash distribution yield

Historical volatility factor

Expected term

2009

2008

2007

1.6 – 2.1%

5.2 – 6.1%

40.0 – 44.6%

3.2%

5.4%

29.3%

3.5 – 4.9%

5.6 – 5.7%

27.7–30.8%

6.0 – 6.5 years

6.0 years

6.0 – 9.5 years

Due to a lack of sufficient historical data, we have chosen to use the simplified method to calculate the expected term of options.

94

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The following table summarizes the activity in options under our various option plans:

Outstanding as of December 31, 2008

Granted

Exercised

Forfeited

Expired

Outstanding as of December 31, 2009

Exercisable as of December 31, 2009

Vested or expected to vest as of December 31, 2009

Weighted
Average
Exercise Price
Per Holding
Unit

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic Value

(in thousands)

$66.11

17.06

—

45.09

30.21
41.79

51.91

41.26

6.3

7.3

2.9

7.3

$—

—

—

Holding
Units

6,685,808

6,565,302

—

(948,888)

(254,700)
12,047,522

2,804,042

11,530,174

The aggregate intrinsic value as of December 31, 2009 on options outstanding, exercisable and expected to vest is negative, and is
therefore presented as zero in the table above. The total intrinsic value of options exercised during 2009, 2008 and 2007 was zero,
$6.3 million and $58.8 million, respectively.

Under the fair value method, compensation expense is measured at the grant date based on the estimated fair value of the options
awarded (determined using the Black-Scholes option valuation model) and is recognized over the vesting period. We recorded
compensation expense relating to option grants of $11.9 million, $7.7 million and $5.9 million, respectively, for the years ended
December 31, 2009, 2008 and 2007. As of December 31, 2009, there was $47.9 million of compensation cost related to unvested
option grants not yet recognized in the consolidated statements of income. The cost is expected to be recognized over a weighted
average period of 4.7 years.

Restricted Holding Unit Awards

In 2009, 2008 and 2007, restricted Holding Units were awarded to the independent directors of the General Partner. These Units
give the directors, in most instances, all the rights of other Holding Unitholders subject to such restrictions on transfer as the Board
may impose. We awarded 8,210, 2,335 and 1,705 restricted Holding Units in 2009, 2008 and 2007, respectively, with grant date
fair values of $18.27, $64.24 and $87.98 per restricted Holding Unit, respectively. All of the restricted Holding Units vest on the
third anniversary of grant date or immediately upon a director’s resignation. We fully expensed these awards on each grant date.

In accordance with the terms of the employment agreement between Mr. Kraus, Chairman and CEO, the General Partner, Hold-
ing and AllianceBernstein dated December 19, 2008, Mr. Kraus was granted 2,722,052 restricted Holding Units with a grant date
fair value of $19.20. Subject to accelerated vesting provisions in Mr. Kraus’s employment agreement, his restricted Holding Units
vest ratably on each of the first five anniversaries of December 19, 2008, commencing December 19, 2009, provided, with respect
to each installment, Mr. Kraus continues to be employed by AllianceBernstein on the vesting date. The agreement provides for
immediate vesting upon AXA ceasing to control the management of AllianceBernstein’s business or Holding ceasing to be publicly
traded and certain qualifying terminations of employment, including termination of Mr. Kraus’s employment (i) by AllianceBern-
stein without cause, (ii) by Mr. Kraus for good reason (“good reason” generally means actions taken by AllianceBernstein resulting
in a material negative change in Mr. Kraus’s employment relationship, including assignment to Mr. Kraus of duties materially
inconsistent with his position or a requirement that Mr. Kraus report to an officer or employee of AllianceBernstein instead of
reporting directly to the Board), and (iii) due to death or disability.

In 1993, we established the Century Club Plan, under which employees of AllianceBernstein whose primary responsibilities are to
assist in the distribution of company-sponsored mutual funds and who meet certain sales targets, are eligible to receive an award of
restricted Holding Units. Awards vest ratably over three years and are amortized over the vesting period as employee compensation

Annual Report 2009

95

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

expense. We awarded 46,163, 46,030 and 45,072 restricted Holding Units in 2009, 2008 and 2007, respectively, with grant date
fair values of $12.17, $62.05 and $82.37 per Holding Unit, respectively.

Beginning in 2009, we awarded restricted Holding Units under the Incentive Compensation Program (see Note 15). Restricted
Holding Unit awards vest ratably over four years and are amortized over the vesting period as employee compensation expense. We
awarded 8,345,805 restricted Holding Units in 2009 with a grant date fair value of $26.73 per restricted Holding Unit.

We also awarded restricted Holding Units in connection with certain employment and separation agreements with vesting schedules
ranging between two to five years. The fair value of the restricted Holding Units is amortized over the required service period as
employee compensation expense. We awarded 1,443,227 Holding Units in 2009 with grant date fair values ranging between $16.79
and $28.38 per restricted Holding Unit.

The following table summarizes the activity of unvested restricted Holding Units during 2009:

Unvested as of December 31, 2008

Granted

Vested

Forfeited

Unvested as of December 31, 2009

Holding
Units

2,806,846

9,843,405

(591,566)

(3,001)

12,055,684

Weighted Average
Grant Date Fair
Value

$20.71

26.13

22.82

43.78

25.03

The total grant date fair value of restricted Holding Units that vested during 2009, 2008 and 2007 was $14.7 million, $2.3 million
and $2.5 million, respectively.

We recorded compensation expense relating to restricted Holding Unit awards of $30.5 million, $2.9 million and $2.5 million,
respectively, for the years ended December 31, 2009, 2008 and 2007. As of December 31, 2009, there was $236.2 million of com-
pensation cost related to unvested restricted Holding Unit awards granted and not yet recognized in the consolidated statement of
income. The cost is expected to be recognized over a weighted average period of 4.0 years.

17. Units Outstanding

The following table summarizes the activity in units:

Outstanding as of December 31, 2007

Options to buy Holding Units exercised

Holding Units issued

Holding Units forfeited

Outstanding as of December 31, 2008

Options to buy Holding Units exercised

Holding Units issued

Holding Units forfeited

Outstanding as of December 31, 2009

260,341,992

315,467

3,063,761

(3,610)
263,717,610

—

11,030,983

(3,001)

274,745,592

Holding Units issued pertain to Holding Units newly issued under our Amended and Restated 1997 Long Term Incentive Plan and
include: (i) restricted Holding Unit awards to independent members of the Board of Directors of the General Partner, (ii) restricted
Holding Unit awards to eligible employees, (iii) Holding Unit issuances to fund deferred compensation notional investment elec-
tions by plan participants, (iv) Century Club Plan restricted Holding Unit awards and (v) restricted Holding Unit issuances in con-
nection with certain employee separation agreements.

96

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

18. Income Taxes

AllianceBernstein is a private partnership for federal income tax purposes and, accordingly, is not subject to federal and state corpo-
rate income taxes. However, AllianceBernstein is subject to a 4.0% New York City unincorporated business tax (“UBT”). Domes-
tic corporate subsidiaries of AllianceBernstein, which are subject to federal, state and local income taxes, are generally included in
the filing of a consolidated federal income tax return with separate state and local income tax returns being filed. Foreign corporate
subsidiaries are generally subject to taxes in the foreign jurisdictions where they are located.

In order to preserve AllianceBernstein’s status as a private partnership for federal income tax purposes, AllianceBernstein Units must
not be considered publicly traded. The AllianceBernstein Partnership Agreement provides that all transfers of AllianceBernstein
Units must be approved by AXA Equitable and the General Partner; AXA Equitable and the General Partner approve only those
transfers permitted pursuant to one or more of the safe harbors contained in relevant treasury regulations. If such units were consid-
ered readily tradable, AllianceBernstein’s net income would be subject to federal and state corporate income tax. Furthermore,
should AllianceBernstein enter into a substantial new line of business, Holding, by virtue of its ownership of AllianceBernstein,
would lose its status as a “grandfathered” publicly-traded partnership and would become subject to corporate income tax which
would reduce materially Holding’s net income and its quarterly distributions to Holding unitholders.

Earnings before income taxes and income tax expense consist of:

Earnings before income taxes:

United States

Foreign

Total

Income tax expense:

Partnership UBT

Corporate subsidiaries:

Federal

State and local

Foreign

Current tax expense

Deferred tax expense (benefit)
Income tax expense

Years Ended December 31,
2008

2007

2009

(in thousands)

$ 539,002

85,483

$624,485

$ 669,205

275,024

$944,229

$ 1,113,185

291,819

$1,405,004

$

2,420

$

9,945

$

30,219

5,550

632

32,001

40,603

5,374
$ 45,977

13,713

1,762

78,367

103,787

(7,984)
$ 95,803

6,852

2,733

87,494

127,298

547
$ 127,845

The principal reasons for the difference between the effective tax rates and the UBT statutory tax rate of 4.0% are as follows:

2009

Years Ended December 31,
2008

(in thousands)

2007

UBT statutory rate

Corporate subsidiaries’ federal, state, local and foreign income taxes

Effect of ASC 740 adjustments, miscellaneous taxes, and other

Income not taxable resulting from use of UBT business apportionment factors

Income tax expense and effective tax rate

$ 24,979

4.0%

$ 37,769

4.0%

$ 55,532

4.0%

32,585

(1,988)

(9,599)

$45,977

5.2

(0.3)

(1.5)

7.4

77,732

(11,929)

(7,769)

$95,803

8.2

(1.3)

(0.8)

10.1

83,195

2,684

(13,566)

$127,845

5.9

0.2

(1.0)

9.1

We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not” to
be sustained based solely on its technical merits. In making this assessment, we assume that the taxing authority will examine the tax
position and have full knowledge of all relevant information.

Annual Report 2009

97

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Years Ended December 31,
2008

2007

2009

Balance as of beginning of period

Additions for prior year tax positions

Reductions for prior year tax positions

Additions for current year tax positions

Reductions for current year tax positions

Reductions related to settlements with tax authorities/closed years

Balance as of end of period

(in thousands)

$8,805

$19,016

$17,862

174

—

1,182

(52)

(2,744)

$7,365

324

(603)

1,649

(715)

(10,866)

$ 8,805

2,000

(1,452)

3,317

(303)

(2,408)

$19,016

The amount of unrecognized tax benefits as of December 31, 2009, 2008 and 2007 when recognized, is recorded as a reduction to
income tax expense and reduces the company’s effective tax rate.

Interest and penalties, if any, relating to tax positions are recorded in income tax expense on the consolidated statements of income.
The total amount of interest expense (credit) recorded in income tax expense during 2009, 2008 and 2007 was $(0.1) million, $(1.4)
million and $0.5 million, respectively. The total amount of accrued interest recorded on the consolidated statements of financial
condition as of December 31, 2009, 2008 and 2007 are $0.8 million, $0.9 million and $2.2 million, respectively. There were no
accrued penalties as of December 31, 2009, 2008 or 2007.

The company is generally no longer subject to U.S. federal, or state and local income tax examinations by tax authorities for any
year prior to 2006 except as noted below. The Internal Revenue Service (“IRS”) completed an examination of our domestic
corporate subsidiaries’ federal tax returns for 2005 in the second quarter of 2009. This examination was settled resulting in a tax
payment to the U.S. Treasury in the amount of $0.2 million. The IRS has not indicated whether they will examine our domestic
corporate subsidiaries’ federal tax returns for the years subsequent to 2005. The State of New York has begun an examination of the
Partnership’s tax returns for the years 2005 and 2006. This examination is in the preliminary stage and we do not believe an increase
in the reserve is necessary. In addition, an assessment has been received resulting from a state and local examination of
AllianceBernstein’s corporate subsidiary tax returns for years 2001 through 2004. This matter is in the appeal stage, however, we do
not believe an increase in the reserve is necessary.

During December 2008, the examinations of AllianceBernstein’s New York City Partnership tax returns for the years 2003 through
2005 were formerly settled. As a result, we recognized approximately $12.1 million of net unrecognized tax benefits, including
accrued interest, during the fourth quarter of 2008.

The Canadian Revenue Agency has commenced an examination of AllianceBernstein’s Canadian subsidiary tax returns for the years
2005-2007. The examination remains in the preliminary stage and we do not believe an increase to the reserve is necessary. Cur-
rently, there are no other income tax examinations at our significant non-U.S. subsidiaries. Years that remain open and may be
subject to examination vary under local law, and range from one to seven years.

Adjustment to the reserve could occur in light of changing facts and circumstances with respect to aforementioned on-going
examinations.

Subject to the results of the examinations for the tax years 2001-2007, under our existing policy for determining whether a tax posi-
tion is effectively settled for purposes of recognizing previously unrecognized tax benefits, there is the possibility that recognition of
unrecognized tax benefits of approximately $2.9 million including accrued interest could occur over the next twelve months.

98

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. The tax effect of significant items comprising the net
deferred tax asset (liability) is as follows:

Deferred tax asset:

Differences between book and tax basis:

Deferred compensation plans

Charge for mutual fund matters, legal proceedings and claims processing contingency

Other, primarily accrued expenses deductible when paid

Deferred tax asset
Deferred tax liability:

Differences between book and tax basis:

Intangible assets

Translation adjustment

Other, primarily undistributed earnings of certain foreign subsidiaries

Net deferred tax asset (liability)

December 31,

2009

2008

(in thousands)

$ 9,593

$14,704

71

11,489

21,153

14,056

5,902

4,576

24,534

$(3,381)

4,179

5,235

24,118

17,075

2,700

3,050

22,825

$ 1,293

The deferred tax asset is included in other assets. Management has determined that realization of the deferred tax asset is more likely
than not based on anticipated future taxable income.

The company provides income taxes on the undistributed earnings of non-U.S. corporate subsidiaries except to the extent that such
earnings are permanently invested outside the United States. As of December 31, 2009, $534.4 million of accumulated undis-
tributed earnings of non-U.S. corporate subsidiaries were permanently invested. At existing applicable income tax rates, additional
taxes of approximately $26.5 million would need to be provided if such earnings were remitted.

19. Business Segment Information

Management has assessed the requirements of ASC 280, Segment Reporting, and determined that, because we utilize a consolidated
approach to assess performance and allocate resources, we have only one operating segment. Enterprise-wide disclosures as of and
for the years ended December 31, 2009, 2008 and 2007 were as follows:

Services

Net revenues derived from our investment management, research and related services were as follows:

Years Ended December 31,
2008

2009

2007

Institutions

Retail

Private client

Bernstein research services

Other
Total revenues

Less: Interest expense

Net revenues

Annual Report 2009

(in millions)

$ 1,241

1,227

850

472

(239)
3,551

37

$ 811

888

590

435

187
2,911

4

$ 1,482

1,521

961

424

332
4,720

195

$2,907

$3,514

$4,525

99

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Geographic Information

Net revenues and long-lived assets, related to our U.S. and international operations, as of and for the years ended December 31,
were:

Net revenues:

United States

International

Total

Long-lived assets:

United States

International

Total

Major Customers

2009

2008

2007

(in millions)

$ 2,038

869

$2,907

$ 2,258

1,256

$3,514

$ 3,013

1,512

$4,525

$ 3,488

$ 3,576

$ 3,656

79

40

52

$3,567

$3,616

$3,708

Company-sponsored mutual funds are distributed to individual investors through broker-dealers, insurance sales representatives,
banks, registered investment advisers, financial planners and other financial intermediaries. AXA Advisors, LLC (“AXA Advisors”), a
wholly-owned subsidiary of AXA Financial that uses members of the AXA Equitable insurance agency sales force as its registered
representatives, has entered into a selected dealer agreement with AllianceBernstein Investments and has been responsible for 2%,
4% and 2% of our open-end mutual fund sales in 2009, 2008 and 2007, respectively. Subsidiaries of Merrill Lynch & Co., Inc.
(“Merrill Lynch”), which was acquired by Bank of America Corporation in 2008, was responsible for approximately 5%, 8% and
7% of our open-end mutual fund sales in 2009, 2008 and 2007, respectively. Morgan Stanley Smith Barney LLC (formed by the
combination of the Global Wealth Management Group of Morgan Stanley & Co. Incorporated and the Smith Barney division of
Citigroup Global Markets Inc.) was responsible for approximately 5% of open-end mutual fund sales in 2009. Citigroup, Inc. and its
subsidiaries (“Citigroup”), was responsible for approximately 7% of our open-end mutual fund sales in 2008 and 2007. AXA Advi-
sors, Merrill Lynch, Morgan Stanley Smith Barney and Citigroup are under no obligation to sell a specific amount of shares of
company-sponsored mutual funds, and each also sells shares of mutual funds that it sponsors and that are sponsored by unaffiliated
organizations (in the case of Merrill Lynch, Morgan Stanley Smith Barney and Citigroup).

AXA and the general and separate accounts of AXA Equitable (including investments by the separate accounts of AXA Equitable in
the funding vehicle EQ Advisors Trust) accounted for approximately 4%, 5% and 5% of total revenues for each of the years ended
December 31, 2009, 2008 and 2007, respectively. No single institutional client other than AXA and its subsidiaries accounted for
more than 1% of total revenues for the years ended December 31, 2009, 2008 and 2007.

100

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

20. Related Party Transactions

Mutual Funds

Investment management, distribution, shareholder and administrative, and brokerage services are provided to individual investors by
means of retail mutual funds sponsored by our company, our subsidiaries and our affiliated joint venture companies. Substantially all
of these services are provided under contracts that set forth the services to be provided and the fees to be charged. The contracts are
subject to annual review and approval by each of the mutual funds’ boards of directors or trustees and, in certain circumstances, by
the mutual funds’ shareholders. Revenues for services provided or related to the mutual funds are as follows:

Investment advisory and services fees

Distribution revenues

Shareholder servicing fees

Other revenues

Bernstein research services

AXA and its Subsidiaries

Years Ended December 31,
2008

2007

2009

(in thousands)

$658,476

$870,524

$1,027,636

277,328

90,141

6,962

1,138

378,425

99,028

6,868

1,233

473,435

103,604

6,502

1,583

We provide investment management and certain administration services to AXA and its subsidiaries. In addition, AXA and its sub-
sidiaries distribute company-sponsored mutual funds, for which they receive commissions and distribution payments. Sales of
company-sponsored mutual funds through AXA and its subsidiaries, excluding cash management products, aggregated approx-
imately $0.3 billion, $0.7 billion and $0.5 billion for the years ended December 31, 2009, 2008 and 2007, respectively. Also, we are
covered by various insurance policies maintained by AXA subsidiaries and we pay fees for technology and other services provided
by AXA and its subsidiaries that are included in General and Administrative expenses. Aggregate amounts included in the con-
solidated financial statements for transactions with AXA and its subsidiaries are as follows:

Revenues:

Investment advisory and services fees

Bernstein research services

Other revenues

Expenses:

Commissions and distribution payments to financial intermediaries

Other promotion and servicing

General and administrative

Balance Sheet:

Institutional investment advisory and services fees receivable

Other due (to) from AXA and its subsidiaries

Years Ended December 31,
2008

2007

2009

(in thousands)

$ 129,012

$ 180,689

$ 208,786

71

568

225

697

606

824

$129,651

$181,611

$210,216

$

6,918

1,935

17,285

$

9,408

$

703

13,843

7,178

1,409

10,219

$ 26,138

$ 23,954

$ 18,806

$ 11,287

$

7,349

$ 10,103

(3,888)

(2,679)

(2,405)

$ 7,399

$ 4,670

$ 7,698

AllianceBernstein and AXA Asia Pacific Holdings Limited (“AXA Asia Pacific”) own two investment management companies and
we include their financial results in our consolidated results of operations. Investment advisory and services fees earned by these
companies were approximately $40.9 million, $68.3 million and $77.6 million, for the years ended December 31, 2009, 2008 and

Annual Report 2009

101

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

2007, respectively, of which approximately $14.0 million, $19.6 million and $22.9 million, respectively, were from AXA affiliates
and are included in the table above. Minority interest recorded for these companies was $3.7 million, $9.7 million and $11.1 million
for the years ended December 31, 2009, 2008 and 2007, respectively.

AllianceBernstein Venture Fund I, L.P. was launched during the fourth quarter of 2006. It seeks to achieve its investment objective,
which is long-term capital appreciation through equity and equity-related investments, by acquiring early-stage growth companies
in private transactions. One of our subsidiaries is the general partner of the fund and, as a result, the fund is included in our con-
solidated financial statements, with approximately $163 million, $167 million and $136 million of investments on the consolidated
statement of financial condition as of December 31, 2009, 2008 and 2007, respectively. AXA Equitable holds a 10% limited
partnership interest in this fund.

The General Partner is obligated to make capital contributions to AllianceBernstein in amounts equal to benefits paid under the
Capital Accumulation Plan and the Contractual Arrangements (see Note 15). Amounts paid by the General Partner to
AllianceBernstein for the Capital Accumulation Plan and the Contractual Arrangements for the years ended December 31, 2009,
2008 and 2007 was $4.9 million.

Other Related Parties

The consolidated statements of financial condition include a net receivable from Holding and a net receivable or payable to our
unconsolidated joint ventures as a result of cash transactions for fees and expense reimbursements. The net balances included in the
consolidated statements of financial condition as of December 31, 2009, 2008 and 2007 are as follows:

Due from Holding, net

Due from unconsolidated joint ventures, net

21. Comprehensive Income

Comprehensive income consisted of:

Net income

Other comprehensive income (loss), net of tax:

Unrealized gains (losses) on investments

Foreign currency translation adjustment

Changes in retirement plan related items

Comprehensive income

Comprehensive (income) loss of consolidated entities attributable to non-controlling interests

December 31,
2008

(in thousands)

$4,825

$ —

2009

$1,484

$ —

2007

$7,460

$ 255

Years Ended December 31,

2009

2008

2007

(in thousands)

$ 578,508

$ 848,426

$ 1,277,159

4,391

43,172

6,955

633,026

(26,614)

(3,962)

(100,268)

(24,763)

719,433

(5,445)

(8,800)

19,871

10,040

1,298,270

(17,888)

Comprehensive income attributable to AllianceBernstein Unitholders

$606,412

$713,988

$1,280,382

22. Accounting Pronouncements

In June 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-17, Consolidations (Topic 810)—Improvements to Finan-
cial Reporting by Enterprises Involved with Variable Interest Entities. This standard changes how a company determines when an entity
that is insufficiently capitalized or is not controlled through voting should be consolidated. The determination of whether a com-
pany is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to

102

AllianceBernstein

AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

direct the activities of the entity that most significantly impact the entity’s economic performance. This standard will require addi-
tional disclosures about involvement with variable interest entities and any significant changes in risk exposure due to that involve-
ment, including how involvement with a variable interest entity affects the financial statements. The provisions of this standard are
effective January 1, 2010. In January 2010, the FASB deferred portions of ASU 2009-17 as they relate to asset managers. Manage-
ment is currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements. The
adoption of this standard may require that a significant amount of assets, liabilities, revenues and expenses of certain variable interest
entities in which we have a minimal financial ownership interest be included in our consolidated financial statements, with corre-
sponding offsets to non-controlling interests.

23. Quarterly Financial Data (Unaudited)

Net revenues

Net income attributable to AllianceBernstein Unitholders

Basic net income per AllianceBernstein Unit(1)

Diluted net income per AllianceBernstein Unit(1)

Cash distributions per AllianceBernstein Unit(2)

Net revenues

Net income attributable to AllianceBernstein Unitholders

Basic net income per AllianceBernstein Unit(1)

Diluted net income per AllianceBernstein Unit(1)

Cash distributions per AllianceBernstein Unit(2)(3)(4)

Quarters Ended 2009

December 31

September 30

June 30

March 31

(in thousands, except per unit amounts)

$781,861

$191,640

$

$

$

0.71

0.70

0.70

$806,014

$199,341

$

$

$

0.74

0.74

0.74

$ 721,440

$ 128,295

$

$

$

0.48

0.48

0.48

$ 597,564

$

$

$

$

36,851

0.14

0.14

0.14

Quarters Ended 2008

December 31

September 30

June 30

March 31

(in thousands, except per unit amounts)

$580,522

$ 91,979

$

$

$

0.35

0.35

0.37

$840,991

$219,529

$

$

$

0.83

0.83

0.70

$1,063,624

$ 280,289

$1,029,022

$ 247,443

$

$

$

1.06

1.06

1.06

$

$

$

0.94

0.94

0.94

(1) Basic and diluted net income per unit are computed independently for each of the periods presented. Accordingly, the sum of the quarterly net income per unit

amounts may not agree to the total for the year.

(2) Declared and paid during the following quarter.

(3) During the fourth quarter of 2006, we recorded a $56.0 million pre-tax charge ($54.5 million, net of related income tax benefit) for the estimated cost of

reimbursing certain clients for losses arising out of an error we made in processing claims for class action settlement proceeds on behalf of these clients, which
include some AllianceBernstein-sponsored mutual funds. During the third quarter of 2008, we recorded approximately $35.3 million in insurance recoveries relat-
ing to this error. AllianceBernstein’s and Holding’s fourth quarter 2006 cash distributions were based on net income as calculated prior to AllianceBernstein
recording the charge. Accordingly, the related insurance recoveries ($0.13 per unit) were not included in AllianceBernstein’s or Holding’s cash distribution to
unitholders for the third quarter of 2008.

(4) During the fourth quarter of 2008, we recorded an additional $5.1 million ($0.02 per unit) provision for income taxes subsequent to the declaration of the

fourth quarter 2008 cash distribution of $0.37 per unit. As a result, the cash distribution per unit in the fourth quarter of 2008 is $0.02 higher than diluted net
income per unit.

Annual Report 2009

103

Report of Independent Registered Public Accounting Firm

To the General Partner and Unitholders
AllianceBernstein L.P.:

In our opinion, the accompanying consolidated statements of financial condition and the related consolidated statements of income,
changes in partners’ capital and comprehensive income and cash flows present fairly, in all material respects, the financial position of
AllianceBernstein L.P. and its subsidiaries (“AllianceBernstein”) at December 31, 2009 and 2008, and the results of their operations
and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, AllianceBernstein maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). AllianceBernstein’s man-
agement is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over
Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on
AllianceBernstein’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and
whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial state-
ments included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial statement pre-
sentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over finan-
cial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in
the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projec-
tions of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP
New York, New York
February 11, 2010

104

AllianceBernstein

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

Neither AllianceBernstein nor Holding had any changes in or disagreements with accountants in respect of accounting or financial
disclosure.

Annual Report 2009

105

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Each of Holding and AllianceBernstein maintains a system of disclosure controls and procedures that is designed to ensure that
information required to be disclosed in our reports under the Exchange Act is (i) recorded, processed, summarized and reported in a
timely manner, and (ii) accumulated and communicated to management, including the Chief Executive Officer and the Chief
Financial Officer, to permit timely decisions regarding our disclosure.

As of the end of the period covered by this report, management carried out an evaluation, under the supervision and with the partic-
ipation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of disclosure
controls and procedures. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the
disclosure controls and procedures are effective.

Management’s Report on Internal Control Over Financial Reporting

Management acknowledges its responsibility for establishing and maintaining adequate internal control over financial reporting for
each of Holding and AllianceBernstein.

Internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive offi-
cer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“GAAP”) and
includes those policies and procedures that:

• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of

the assets of the company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accord-
ance with GAAP and receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the

company’s assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those internal control systems
determined to be effective can provide only reasonable assurance with respect to the reliability of financial statement preparation and
presentation. Because of these inherent limitations, internal control over financial reporting may not prevent or detect misstate-
ments. Projections of any evaluation of effectiveness of internal control to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

Management assessed the effectiveness of each of Holding’s and AllianceBernstein’s internal control over financial reporting as of
December 31, 2009. In making its assessment, management used the criteria set forth by the Committee of Sponsoring Orga-
nizations of the Treadway Commission in Internal Control-Integrated Framework (“COSO criteria”).

Based on its assessment, management concluded that, as of December 31, 2009, each of Holding and AllianceBernstein maintained
effective internal control over financial reporting based on the COSO criteria.

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the 2009 financial statements included
in this Form 10-K, has issued an attestation report on the effectiveness of each of Holding’s and AllianceBernstein’s internal control
over financial reporting as of December 31, 2009. These reports can be found in Item 8.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting occurred during the fourth quarter of 2009 that materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.

106

AllianceBernstein

Item 9B. Other Information

Both AllianceBernstein and Holding reported all information required to be disclosed on Form 8-K during the fourth quarter of
2009.

Annual Report 2009

107

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

General Partner

The Partnerships’ activities are managed and controlled by the General Partner. The Board of Directors of the General Partner
(“Board”) acts as the Board of each of the Partnerships. The General Partner has agreed that it will conduct no active business other
than managing the Partnerships, although it may make certain investments for its own account. Neither AllianceBernstein
Unitholders nor Holding Unitholders have any rights to manage or control the Partnerships, or to elect directors of the General
Partner. The General Partner is an indirect, wholly-owned subsidiary of AXA.

The General Partner does not receive any compensation from AllianceBernstein or Holding for services rendered to them as their
general partner. The General Partner holds a 1% general partnership interest in AllianceBernstein and 100,000 units of general part-
nership interest in Holding. Each general partnership unit in Holding is entitled to receive distributions equal to those received by
each limited partnership unit.

The General Partner is entitled to reimbursement by AllianceBernstein for any expenses it incurs in carrying out its activities as
general partner of the Partnerships, including compensation paid by the General Partner to its directors and officers (to the extent
such persons are not compensated directly by AllianceBernstein).

Directors and Executive Officers

As of February 11, 2010, the directors and executive officers of the General Partner were as follows (officers of the General Partner
serve as equivalent officers of AllianceBernstein and Holding):

Name

Age

Position

Peter S. Kraus

Dominique Carrel-Billiard

Christopher M. Condron

Henri de Castries

Denis Duverne

Richard S. Dziadzio

Deborah S. Hechinger

Weston M. Hicks

Nick Lane

Lorie A. Slutsky

A.W. (Pete) Smith, Jr.

Peter J. Tobin

Laurence E. Cranch

James A. Gingrich

Robert H. Joseph, Jr.

Lori A. Massad

David A. Steyn

Biographies

57

43

62

55

56

46

59

53

36

57

66

65

63

51

62

45

50

Chairman of the Board and Chief Executive Officer

Director

Director

Director

Director

Director

Director

Director

Director

Director

Director

Director

General Counsel

Chairman and Chief Executive Officer of SCB LLC

Chief Financial Officer

Chief Talent Officer—Talent Development and Human Capital

Chief Operating Officer

Mr. Kraus was elected Chairman of the Board of the General Partner and Chief Executive Officer of the General Partner,
AllianceBernstein and Holding in December 2008. Mr. Kraus has in-depth experience in the financial markets, including invest-
ment banking, asset management and private wealth management. Most recently, he served as an executive vice president, the head
of global strategy and a member of the Management Committee of Merrill Lynch from September 2008 through December 2008.
Prior to joining Merrill Lynch, Mr. Kraus spent 22 years with Goldman Sachs Group Inc. (“Goldman”), where he most recently
served as co-head of the Investment Management Division and a member of the Management Committee, as well as head of firm-
wide strategy and chairman of the Strategy Committee. Mr. Kraus also served as co-head of the Financial Institutions Group. He

108

AllianceBernstein

was named a partner at Goldman in 1994 and managing director in 1996. Mr. Kraus is a member of the Management Board of
AXA (“AXA Management Board”) and was named a Director of AXA Financial, AXA Equitable, MONY Life Insurance Com-
pany (a wholly-owned subsidiary of AXA Financial, “MONY”) and MONY Life Insurance Company of America (a wholly-
owned subsidiary of MONY, “MLOA”) on February 12, 2009. He is also Chairman of the Investment Committee of Trinity
College, Chairman of the Board of Overseers of CalArts, Co-Chair of the Friends of the Carnegie International, a member of the
board of Keewaydin Camp and a member of the board of Young Audiences, Inc., a non-profit organization that works with educa-
tional systems, the arts community and private and public sectors to provide arts education to children.

Mr. Carrel-Billiard was elected a Director of the General Partner in July 2004. He has been Chief Executive Officer of AXA Invest-
ment Managers S.A. (“AXA IM”), a subsidiary of AXA, since June 2006 and was named to the AXA Group Executive Committee
in January 2009. He is also a member of the boards of directors of various other privately-held subsidiaries and affiliates of the AXA
Group. Mr. Carrel-Billiard joined AXA in June 2004 as the Senior Vice President-Business Support and Development in charge of
AXA Financial, asset management and reinsurance. Prior to joining AXA, Mr. Carrel-Billiard was a Partner of McKinsey & Com-
pany (“McKinsey”), a strategic consulting firm, where he specialized in the financial services industry. During the 12 years he spent
at McKinsey, Mr. Carrel-Billiard worked on a broad array of topics (including insurance, asset gathering and management, and
corporate and investment banking) for the top management of international banks, insurance companies, including AXA, and other
financial services groups.

Mr. Condron was elected a Director of the General Partner in May 2001. He has been Director, President and Chief Executive
Officer of AXA Financial since May 2001. He is Chairman of the Board, Chief Executive Officer and President of AXA Equitable
and a member of the AXA Management Board. In addition, Mr. Condron is Chairman of the Board, President and Chief Execu-
tive Officer of MONY and MLOA, which AXA Financial acquired in July 2004. In January 2010, he assumed the additional
responsibility of overseeing AXA’s global Life & Savings and Health businesses. Prior to joining AXA Financial, Mr. Condron
served as both President and Chief Operating Officer of Mellon Financial Corporation (“Mellon”), from 1999, and as Chairman
and Chief Executive Officer of The Dreyfus Corporation, a subsidiary of Mellon, from 1995. Mr. Condron has been a member of
the Board of Directors of Keefe Bruyette & Woods, Inc. (NYSE: KBW), a full-service investment bank and broker-dealer, since
January 2007. He also serves as Chairman of KBW’s compensation committee and as a member of its audit committee and its
corporate governance and nominating committee. Mr. Condron is also a member of the boards of directors of The American
Council of Life Insurers and the Financial Services Round Table.

Mr. de Castries was elected a Director of the General Partner in October 1993. Since May 2000, he has been Chairman of the
AXA Management Board. Prior thereto, he served AXA in various capacities, including Vice Chairman of the AXA Management
Board; Senior Executive Vice President-Financial Services and Life Insurance Activities in the United States, Germany, the United
Kingdom and Benelux from 1996 to 2000; Executive Vice President-Financial Services and Life Insurance Activities from 1993 to
1996; General Secretary from 1991 to 1993; and Central Director of Finances from 1989 to 1991. He is also a director or officer of
AXA Financial, AXA Equitable and various other subsidiaries and affiliates of the AXA Group. Mr. de Castries was elected Vice
Chairman of AXA Financial in February 1996 and was elected Chairman of AXA Financial in April 1998.

Mr. Duverne was elected a Director of the General Partner in February 1996. In January 2010, he was selected to oversee AXA
Group strategy, finance and operations with AXA’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer report-
ing to him. Mr. Duverne has been a member of the AXA Management Board since February 2003. He was Chief Financial Officer
of AXA from May 2003 through December 2009. From January 2000 to May 2003, Mr. Duverne served as Group Executive Vice
President-Finance, Control and Strategy. Mr. Duverne joined AXA as Senior Vice President in 1995. He is a Director of AXA
Financial, AXA Equitable and various other subsidiaries and affiliates of the AXA Group.

Mr. Dziadzio was re-elected a Director of the General Partner in May 2007. (He had previously served on the Board from February
2001 to May 2004.) The Chief Financial Officer of AXA Financial and AXA Equitable since January 2007, Mr. Dziadzio was
elected Senior Executive Vice President of AXA Equitable in January 2010. He joined AXA Financial and AXA Equitable in July
2004 and was elected Executive Vice President in September 2004. He became Deputy Chief Financial Officer of AXA Financial
and AXA Equitable in September 2005. Prior to joining AXA Financial, Mr. Dziadzio held various positions with subsidiaries and
affiliates of the AXA Group, which he originally joined in 1994 as a senior analyst in the corporate finance department, working

Annual Report 2009

109

primarily on mergers and acquisitions. In 1997, he was promoted to corporate finance officer, handling corporate finance activities
for the group in insurance and asset management in the U.S. and U.K. In 1998, Mr. Dziadzio became head of finance and admin-
istration for AXA Real Estate Investment Managers, a subsidiary of AXA. From February 2001 to June 2004, he was responsible for
business support and development for AXA Financial, AllianceBernstein and AXA IM.

Ms. Hechinger was elected a Director of the General Partner in May 2007. Currently an independent consultant on non-profit
governance, she was President and Chief Executive Officer of BoardSource, a leading governance resource for non-profit orga-
nizations, from 2003 to 2007. From 2004 to 2007, Ms. Hechinger also served as co-convener of the Governance and Fiduciary
Responsibilities work group, one of the five groups established by the Panel on the Nonprofit Sector to make recommendations to
Congress on ways to improve the governance and accountability of non-profit organizations. She also served on the Advisory Board
for the Center for Effective Philanthropy and was a Member of the Ethics and Accountability Committee at Independent Sector.
Prior to joining BoardSource, Ms. Hechinger was the Executive Vice President of the World Wildlife Fund, a large, global con-
servation organization, where she oversaw all fundraising, communication and operations activities. She has also served as a Deputy
Comptroller and as Director of the Securities and Corporate Practices Division at the Office of the Comptroller of the Currency
and has held senior executive positions in the Division of Enforcement at the SEC.

Mr. Hicks was elected a Director of the General Partner in July 2005. A professional investor and CFA charter holder, he has been
a Director and the President and chief executive officer of Alleghany Corporation (NYSE: Y, “Alleghany”), an insurance and
diversified financial services holding company, since December 2004 and was Executive Vice President of Alleghany from October
2002 until December 2004. From March 2001 through October 2002, Mr. Hicks was Executive Vice President and Chief Financial
Officer of The Chubb Corporation.

Mr. Lane was elected a Director of the General Partner in July 2008. He is currently the head of AXA Group strategy and he is the
Business Support Development representative for AXA Equitable, AXA IM, AllianceBernstein and AXA’s global Life & Savings
business. Previously, Mr. Lane served as Vice Chairman of AXA Advisors LLC and AXA Network LLC where he was charged
with overseeing the Retail Broker Dealer and Network Business as well as its enterprise operations and supervision systems. Prior to
joining AXA Equitable, Mr. Lane worked for McKinsey where he was a leader in their sales and marketing practice. His previous
experiences also include serving as an infantry officer in the United States Marine Corps and working on the floor of the NYSE.
AXA IM, AXA Advisors and AXA Network are subsidiaries of AXA.

Ms. Slutsky was elected a Director of the General Partner in July 2002. Since January 1990, she has been President and Chief Execu-
tive Officer of The New York Community Trust, a community foundation that manages a $2 billion endowment and annually
grants more than $150 million. Ms. Slutsky served on the Board of Directors of BoardSource from 1999 to 2008 and served as its
Chair from 2005 to 2007. She has been a Director of AXA Financial (as well as a member of its Audit Committee and Organization
and Compensation Committee), AXA Equitable, MONY and MLOA since September 2006.

Mr. Smith was elected a Director of the General Partner in July 2005. The former CEO of Watson Wyatt Worldwide, he was also
President of the Private Sector Council, a non-profit public service organization dedicated to improving the efficiency of the federal
government, from September 2000 until May 2005. Mr. Smith has been President of Smith Consulting, a privately-held company
specializing in executive compensation consulting, since June 2005.

Mr. Tobin was elected a Director of the General Partner in May 2000. From September 2003 to June 2005, he was Special Assis-
tant to the President of St. John’s University. Prior thereto, Mr. Tobin served as Dean of the Tobin College of Business of St.
John’s University from August 1998 to September 2003. As Dean, Mr. Tobin was the chief executive and academic leader of the
College of Business. Mr. Tobin was Chief Financial Officer at The Chase Manhattan Corporation from 1996 to 1997. Prior there-
to, he was Chief Financial Officer of Chemical Bank (which merged with Chase in 1996) from 1991 to 1996 and Chief Financial
Officer of Manufacturers Hanover Trust (which merged with Chemical in 1991) from 1985 to 1991. Mr. Tobin has served on the
board of directors of CIT Group Inc. (NYSE: CIT) since 1985 (except for one year during which CIT Group was owned by
Tyco). He has been a Director of AXA Financial and AXA Equitable since March 1999 and also serves on AXA Financial’s Audit
Committee, Investment Committee, Investment and Finance Committee, Organization and Compensation Committee, and
Executive Committee.

110

AllianceBernstein

Mr. Cranch has been our General Counsel since he joined our firm in 2004. Prior to joining AllianceBernstein, Mr. Cranch was a
partner of Clifford Chance, an international law firm. Mr. Cranch joined Clifford Chance in 2000 when Rogers & Wells, a New
York law firm of which he was Managing Partner, merged with Clifford Chance.

Mr. Gingrich joined our firm in 1999 as a senior research analyst on the sell-side and has been Chairman and Chief Executive Offi-
cer of SCB LLC since February 2007. Prior to becoming Chairman and CEO of SCB LLC, Mr. Gingrich had served as Global
Director of Research from December 2002 to January 2007.

Mr. Joseph joined our firm in 1984 and held various financial positions until his election as Chief Financial Officer in 1994. Before
joining AllianceBernstein, Mr. Joseph was a Senior Audit Manager with Price Waterhouse for 13 years.

Ms. Massad joined our firm in 2006 as Chief Talent Officer. In February 2009, her role was expanded to include oversight of
Human Capital in addition to Talent Development. Prior to joining our firm, Ms. Massad served as Chief Talent Officer and Chief
Operating Officer at Marakon Associates, a strategy consulting firm from 2004 to 2006. Before Marakon, Ms. Massad was a found-
ing member of two start-ups: Spencer Stuart Talent Network (in 2001) and EmployeeMatters, a human resources outsourcing firm
(in 2000). Before that, she spent eight years at The Boston Consulting Group, where she became a senior manager on the consult-
ing staff and leader of the firm’s recruiting, training and development programs. While with The Boston Consulting Group,
Ms. Massad was also an adjunct professor at New York University’s Leonard Stern School of Business.

Mr. Steyn joined our firm in 1999, having been the founding co-Chief Executive Officer of Bernstein’s London office, and has
been Chief Operating Officer of AllianceBernstein since July 2009. As COO, the heads of Distribution Services (Institutions, Retail
and Private Clients) and the heads of Corporate and Fiduciary Services (IT, Operations, Finance, and Legal & Compliance) report
to him. Mr. Steyn was the Global Head of Distribution Services from April 2007 through July 2009, prior to which he had been
Head of Institutions since November 2003.

Corporate Governance

Board of Directors

The Board holds regular quarterly meetings, generally in February, May, July or August, and November of each year, and holds
special meetings or takes action by unanimous written consent as circumstances warrant. The Board has standing Executive, Audit,
Corporate Governance, Compensation and Special Committees, each of which is described in further detail below. Of the direc-
tors, only Mr. de Castries attended fewer than 75% of the aggregate of all Board and committee meetings which he was entitled to
attend in 2009.

Committees of the Board

The Executive Committee of the Board (“Executive Committee”) is composed of Ms. Slutsky and Messrs. Condron, Duverne,
Kraus (Chair) and Tobin. The Executive Committee exercises all of the powers and authority of the Board (with limited
exceptions) when the Board is not in session, or when it is impractical to assemble the full Board. The Executive Committee held
four meetings in 2009.

The Corporate Governance Committee of the Board (“Governance Committee”) is composed of Mr. Condron, Ms. Hechinger
(Chair), Mr. Kraus, and Ms. Slutsky. The Governance Committee assists the Board in (i) identifying and evaluating qualified
individuals to become Board members; (ii) determining the composition of the Board and its committees; (iii) developing and
monitoring a process to assess Board effectiveness; (iv) developing and implementing our corporate governance guidelines; and
(v) reviewing our policies and programs that relate to matters of corporate responsibility of the General Partner and the Partnerships.
The Governance Committee held two meetings in 2009.

The Audit Committee of the Board (“Audit Committee”) is composed of Messrs. Hicks, Smith and Tobin (Chair). The primary
purposes of the Audit Committee are to: (i) assist the Board in its oversight of (1) the integrity of the financial statements of the
Partnerships, (2) the Partnerships’ status and system of compliance with legal and regulatory requirements and business conduct,
(3) the independent registered public accounting firm’s qualification and independence, and (4) the performance of the Partnerships’

Annual Report 2009

111

internal audit function; and (ii) oversee the appointment, retention, compensation, evaluation and termination of the Partnerships’
independent registered public accounting firm. Consistent with this function, the Audit Committee encourages continuous
improvement of, and fosters adherence to, the Partnerships’ policies, procedures and practices at all levels. With respect to these
matters, the Audit Committee provides an open avenue of communication among the independent registered public accounting
firm, senior management, the Internal Audit Department and the Board. The Audit Committee held ten meetings in 2009.

The functions of each of the committees discussed above are more fully described in each committee’s charter. The charters are
available on our Internet site (http://www.alliancebernstein.com).

The Compensation Committee of the Board (“Compensation Committee”) is composed of Mr. Condron (Chair), Mr. Kraus,
Ms. Slutsky and Mr. Smith. For additional information about the Compensation Committee, see “Compensation Discussion & Analy-
sis—Compensation Committee” in Item 11.

The Special Committee of the Board (“Special Committee”) is composed of Ms. Hechinger, Mr. Hicks, Ms. Slutsky, Mr. Smith
and Mr. Tobin (Chair). The Special Committee has the authority to direct and oversee any matters referred to it by the Board and/
or management including, but not limited to, matters relating to conflicts of interest and the relationship among AllianceBernstein,
Holding and AXA. The members of the Special Committee do not receive any additional compensation for their service on the
Special Committee, apart from the ordinary meeting fees described in “Executive Compensation—Director Compensation” in Item 11.
The Special Committee held five meetings during 2009.

Audit Committee Financial Experts

In January 2009, the Governance Committee, after reviewing materials prepared by management, recommended that the Board
determine that each of Weston M. Hicks and Peter J. Tobin is an “audit committee financial expert” within the meaning of
Item 407(d) of Regulation S-K. The Board so determined at its regular meeting in February 2009. The Board also determined at
this meeting that each member of the Audit Committee (Messrs. Hicks, Smith and Tobin) is financially literate and possesses
accounting or related financial management expertise, as contemplated by Section 303A.07(a) of the NYSE Listed Company
Manual.

In February 2010, the Governance Committee, after reviewing materials prepared by management, recommended that the Board
determine that Peter J. Tobin is an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K. The
Board so determined at its regular meeting in February 2010. The Board also determined at this meeting that each member of the
Audit Committee (Messrs. Hicks, Smith and Tobin) is financially literate and possesses accounting or related financial management
expertise, as contemplated by Section 303A.07(a) of the NYSE Listed Company Manual.

Independence of Certain Directors

In January 2009 and February 2010, the Governance Committee, after reviewing materials prepared by management, recom-
mended that the Board determine that each of Ms. Hechinger, Mr. Hicks, Ms. Slutsky, Mr. Smith and Mr. Tobin is “independent”
within the meaning of Section 303A.02 of the NYSE Listed Company Manual. The Board considered immaterial relationships of
Ms. Hechinger (relating to her service as an executive officer of BoardSource concurrently with Ms. Slutsky serving as that compa-
ny’s Chairperson), Mr. Hicks (relating to Alleghany Corporation being a client of SCB LLC and Mr. Hicks having been employed
by Bernstein from 1991 to 1999) and Ms. Slutsky (relating to contributions formerly made by AllianceBernstein to The New York
Community Trust, of which she is President and Chief Executive Officer) and then determined, at both its February 2009 and
February 2010 regular meetings, that each of Ms. Hechinger, Mr. Hicks, Ms. Slutsky, Mr. Smith and Mr. Tobin is independent
within the meaning of the relevant rules.

Code of Ethics and Related Policies

All of our directors, officers and employees are subject to our Code of Business Conduct and Ethics. The code is intended to com-
ply with Section 303A.10 of the NYSE Listed Company Manual, Rule 204A-1 under the Investment Advisers Act and Rule 17j-1

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under the Investment Company Act, as well as with recommendations issued by the Investment Company Institute regarding,
among other things, practices and standards with respect to securities transactions of investment professionals. The Code of Business
Conduct and Ethics establishes certain guiding principles for all of our employees, including sensitivity to our fiduciary obligations
and ensuring that we meet those obligations. Our Code of Business Conduct and Ethics may be found in the “Corporate Gover-
nance” portion of our Internet site (http://www.alliancebernstein.com).

We have adopted a Code of Ethics for the Chief Executive Officer and Senior Financial Officers, which is intended to comply with
Section 406 of the Sarbanes-Oxley Act of 2002 (“Item 406 Code”). The Item 406 Code was adopted on October 28, 2004 by the
Executive Committee. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding certain amend-
ments to, or waivers from, provisions of the Item 406 Code that apply to the Chief Executive Officer, Chief Financial Officer and
Controller by posting such information on our Internet site (http://www.alliancebernstein.com). To date, there have been no such
amendments or waivers.

NYSE Governance Matters

Section 303A.00 of the NYSE Listed Company Manual exempts limited partnerships from compliance with the following sections
of the Manual: Section 303A.01 (board must have a majority of independent directors), 303A.04 (corporate governance committee
must have only independent directors as its members), and 303A.05 (compensation committee must have only independent direc-
tors as its members). Holding is a limited partnership (as is AllianceBernstein). In addition, because the General Partner is a wholly-
owned subsidiary of AXA, and the General Partner controls Holding (and AllianceBernstein), we believe we would also qualify for
the “controlled company” exemption. Notwithstanding the foregoing, the Board has adopted a Corporate Governance Committee
Charter that complies with Section 303A.04 and a Compensation Committee Charter that complies with Section 303A.05. How-
ever, not all members of these committees are independent.

Our Corporate Governance Guidelines (“Guidelines”) promote the effective functioning of the Board and its committees, promote
the interests of the Partnerships’ respective unitholders, with appropriate regard to the Board’s duties to the sole stockholder of the
General Partner, and set forth a common set of expectations as to how the Board, its various committees, individual directors and
management should perform their functions. The Guidelines may be found in the “Corporate Governance” portion of our Internet
site (http://www.alliancebernstein.com).

The Corporate Governance Committee is responsible for considering any request for a waiver under the Code of Business Conduct
and Ethics, the Item 406 Code, the AXA Group Compliance and Ethics Guide, and the AXA Financial Policy Statement on Ethics
from any director or executive officer of the General Partner. Any such waiver that has been granted would be set forth in the
“Corporate Governance” portion of our Internet site (http://www.alliancebernstein.com).

Peter J. Tobin has been chosen to preside at all executive sessions of non-management and independent directors. Interested parties
wishing to communicate directly with Mr. Tobin may send an e-mail, with “confidential” in the subject line, to
corporate_secretary@alliancebernstein.com. Upon receipt, our Corporate Secretary will promptly forward all such e-mails to Mr. Tobin.
Interested parties may also address mail to Mr. Tobin in care of Corporate Secretary, AllianceBernstein Corporation, 1345 Avenue
of the Americas, New York, NY 10105, and the Corporate Secretary will promptly forward such mail to Mr. Tobin. We have
posted this information in the “Corporate Governance” portion of our Internet site (http://www.alliancebernstein.com).

Our Internet site (http://www.alliancebernstein.com), under the heading “Contact our Directors”, provides an e-mail address for any
interested party, including unitholders, to communicate with the Board of Directors. Our Corporate Secretary reviews e-mails sent
to that address and has some discretion in determining how or whether to respond, and in determining to whom such e-mails
should be forwarded. In our experience, substantially all of the e-mails received are ordinary client requests for administrative assis-
tance that are best addressed by management or solicitations of various kinds.

The 2009 Certification by our Chief Executive Officer under NYSE Listed Company Manual Section 303A.12(a) was submitted to
the NYSE on March 13, 2009.

Certifications by our Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 have been furnished as exhibits to this Form 10-K.

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113

Holding Unitholders and AllianceBernstein Unitholders may request a copy of any committee charter, the Guidelines, the Code of
Business Conduct and Ethics, and the Item 406 Code by contacting our Corporate Secretary
(corporate_secretary@alliancebernstein.com). The charters and memberships of the Executive, Audit, Corporate Governance and Com-
pensation Committees may be found in the “Corporate Governance” portion of our Internet site (http://www.alliancebernstein.com).

Fiduciary Culture

We maintain a robust fiduciary culture and, as a fiduciary, we place the interests of our clients first and foremost. We are committed
to the fair and equitable treatment of all our clients, and to compliance with all applicable rules and regulations and internal policies
to which our business is subject. We pursue these goals through education of our employees to promote awareness of our fiduciary
obligations, incentives that align employees’ interests with those of our clients, and a range of measures, including active monitor-
ing, to ensure regulatory compliance. Specific steps we have taken to help us achieve these goals include:

• establishing two committees, the Code of Ethics Oversight Committee (“Ethics Committee”) and the Internal Compliance

Controls Committee (“Compliance Committee”), composed of our executive officers and other senior executives to oversee
and resolve code of ethics and compliance-related issues;

• creating an ombudsman office, where employees and others can voice concerns on a confidential basis;

•

initiating firm-wide compliance and ethics training programs; and

• appointing a Conflicts Officer and establishing a Conflicts Committee to identify and manage conflicts of interest.

The Ethics Committee oversees all matters relating to issues arising under the AllianceBernstein Code of Business Conduct and
Ethics. The Ethics Committee meets on a quarterly basis and at such other times as circumstances warrant. The Ethics Committee
and its subcommittee, the Personal Trading Subcommittee, have oversight of personal trading by our employees.

The Compliance Committee reviews compliance issues throughout our company, endeavors to develop solutions to those issues as
they may arise from time to time, and oversees implementation of those solutions. The Compliance Committee meets on a quar-
terly basis and at such other times as circumstances warrant.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires directors of the General Partner and executive officers of the Partnerships, and persons
who own more than 10% of the Holding Units or AllianceBernstein Units, to file with the SEC initial reports of ownership and
reports of changes in ownership of Holding Units or AllianceBernstein Units. To the best of management’s knowledge, during
2009: (i) all Section 16(a) filing requirements relating to Holding were complied with, except that a Form 4 was not timely filed for
Mr. Cranch relating to his 2009 restricted Holding Unit award; and (ii) all Section 16(a) filing requirements relating to
AllianceBernstein were complied with. Our Section 16 filings can be found under “Investor & Media Relations” / “Reports &
SEC Filings” on our Internet site (http://www.alliancebernstein.com).

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Item 11.

Executive Compensation

Compensation Discussion and Analysis (“CD&A”)

Overview of Compensation Philosophy and Program

The intellectual capital of our employees is collectively the most important asset of our firm. We invest in people—we hire qualified
people, train them, encourage them to give their best thinking to the firm and our clients, and compensate them in a manner
designed to motivate and retain them. As a result, the costs of employee compensation and benefits are significant, comprising
approximately 56% of our operating expenses and representing approximately 48.5% of our adjusted revenues (as defined below) for
2009. Although these percentages are not unusual for companies in the financial services industry, the magnitude of this expense
requires that it be monitored by management, and overseen by the Board, with the particular attention of the Compensation
Committee.

We believe that the quality, skill, and dedication of our executives are critical to enhancing the long-term value of our company.
Our key compensation goals are to attract and retain highly-qualified executive talent, provide rewards for the past year’s perform-
ance, provide incentives for future performance and align our executives’ long-term interests with those of our clients and
Unitholders. We believe that success in achieving good results for the firm, and for our Unitholders, flows from achieving invest-
ment success for our clients.

We utilize a variety of compensation elements to achieve the goals described above, including base salary, annual short-term
incentive compensation awards (cash bonuses), a long-term incentive compensation award program under which awards of
restricted Holding Units are made and a defined contribution plan, all of which are discussed in more detail below.

Although estimates are developed for budgeting and strategic planning purposes, executive compensation is not correlated with
meeting any specific targets. (Some of our salespeople have compensation incentives based on sales levels.)

In addition to the compensation goals discussed above, in 2009, we also focused on adjusting our compensation practices to make
them more competitive with industry peers and increasing the potential for wealth creation for our executives and employees in
order to attract, motivate and retain top talent. As a result (and as we noted in Note 2 to the consolidated financial statements in our Forms
10-Q for the quarters ended June 30, 2009 and September 30, 2009), we changed our approach regarding long-term incentive compen-
sation. Specifically, in 2009, all long-term incentive compensation awards were in the form of restricted Holding Units and, accord-
ingly, unlike in previous years, executives (and employees) were not able to notionally allocate any of their 2009 awards to our
investment services.

Overview of 2009 Incentive Compensation Program

Our 2009 incentive compensation, generally consisting of annual cash bonuses and restricted Holding Unit awards, is intended to
reward our executives (and any other employee with 2009 total compensation in excess of $200,000) for their performance and
encourage them to remain with the firm. Annual cash bonuses generally reflect individual performance and the financial perform-
ance of the firm and provide a shorter-term incentive to remain through year-end because such bonuses are typically paid during
the last week of the year. Restricted Holding Unit awards provide future earnings potential and encourage longer-term retention
because such awards vest over time and are subject to forfeiture; recipients are therefore encouraged to remain with the firm.

The aggregate amount of incentive compensation (i.e., the amount available to pay annual cash bonuses and make restricted Hold-
ing Unit awards to executives and other employees) is determined on a discretionary basis and is primarily a function of our firm’s
financial performance. Amounts are awarded to help us achieve our goal of attracting, motivating and retaining top talent while also
helping ensure that our unitholders receive an appropriate return on their investment. In 2009, senior management, with the
approval of the Compensation Committee, determined that the appropriate metric to consider in determining the amount of
incentive compensation for 2009 and future years is the ratio of adjusted employee compensation and benefits expense to adjusted
revenues. (We define adjusted employee compensation and benefits expense as employee compensation and benefits expense minus
other employment costs such as recruitment, meals, temporary help, and training and seminars. We define adjusted revenues as net
revenues minus distribution revenues.) Senior management, with the approval of the Compensation Committee, also determined
that adjusted employee compensation and benefits expense should range between 45% and 50% of our adjusted revenues except in
unexpected or unusual circumstances.

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115

As shown in the table below, in 2009, adjusted employee compensation and benefits expense amounted to 48.5% of adjusted rev-
enue (in thousands):

Net Revenues

Distribution Revenues

Adjusted Revenues

Employee Compensation & Benefits Expense

Other Employment Costs

Adjusted Employee Compensation & Benefits Expense

Adjusted Compensation Ratio

$ 2,906,879

(277,328)

$2,629,551

$ 1,298,053

(23,806)

$1,274,247

48.5 %

Our 2009 adjusted compensation ratio is towards the high end of the range discussed above, reflecting the need to keep compensa-
tion levels competitive with industry peers. In determining the appropriate level of compensation for the firm’s executives, senior
management considered compensation benchmarking data from McLagan Partners (“McLagan”), which included comparisons of
estimated 2009 executive compensation to executive compensation in 2008 as well as 2007.

Employees with total compensation in excess of $200,000 received a portion of their incentive compensation in the form of a cash
bonus and a portion in the form of restricted Holding Units. The split between cash bonus and restricted Holding Units varied
depending on the employee’s total compensation, with lower-paid employees receiving a greater percentage of their incentive
compensation as cash bonuses than more highly-paid employees. Quarterly cash distributions on vested and unvested restricted
Holding Units are paid currently to award recipients.

Overview of our Chief Executive Officer’s Compensation

On December 19, 2008, Peter S. Kraus, the General Partner, AllianceBernstein and Holding entered into an agreement (“Kraus
Employment Agreement”) pursuant to which Mr. Kraus is to serve as Chairman of the Board of the General Partner and CEO of
the General Partner, AllianceBernstein and Holding until January 2, 2014 (“Employment Term”) unless the Kraus Employment
Agreement is terminated in accordance with its terms.

In connection with the commencement of Mr. Kraus’s employment, on December 19, 2008, he was granted 2,722,052 restricted
Holding Units (“Restricted Holding Unit Grant”). Subject to accelerated vesting clauses in the Kraus Employment Agreement,
Mr. Kraus’s restricted Holding Units vest ratably on each of the first five anniversaries of December 19, 2008, commencing
December 19, 2009, provided, with respect to each installment, Mr. Kraus continues to be employed by AllianceBernstein on the
vesting date. The agreement provides for immediate vesting upon AXA ceasing to control the management of AllianceBernstein’s
business or Holding ceasing to be publicly traded and certain qualifying terminations of employment, including termination of
Mr. Kraus’s employment (i) by AllianceBernstein without cause, (ii) by Mr. Kraus for good reason (“good reason” generally means
actions taken by AllianceBernstein resulting in a material negative change in Mr. Kraus’s employment relationship, including
assignment to Mr. Kraus of duties materially inconsistent with his position or a requirement that Mr. Kraus report to an officer or
employee of AllianceBernstein instead of reporting directly to the Board), and (iii) due to death or disability. Mr. Kraus will be paid
the cash distributions payable with respect to his unvested restricted Holding Units and a dollar amount equal to the cash dis-
tributions payable with respect to the number of any Holding Units that are withheld by AllianceBernstein to cover Mr. Kraus’s
withholding tax obligations as the Holding Units vest. These cash distributions will be paid at the time distributions are made to
Holding Unitholders generally, provided that no such payments to Mr. Kraus will be required with respect to any cash distribution
with a record date following the earlier of (i) the termination of Mr. Kraus’s employment for any reason, and (ii) December 19,
2013.

Mr. Kraus is paid an annual base salary of $275,000 and received a 2009 cash bonus of $6 million.

During the Employment Term, AllianceBernstein has no commitment to pay any cash bonuses to Mr. Kraus beyond the $6 million
he was paid in 2009 (with any additional bonuses being entirely in the discretion of the Board) or to make any additional equity-
based awards to him. Consequently, for years after 2009 during the Employment Term, the totality of Mr. Kraus’s compensation

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(other than his salary) will be dependent on the level of cash distributions on the restricted Holding Units granted to him and the
evolution of the trading price of Holding Units, thereby directly aligning Mr. Kraus’s interests with those of other holders of Hold-
ing Units.

Mr. Kraus is also entitled to receive perquisites and benefits, including full tax gross-ups by AllianceBernstein with respect to
personal air travel on company aircraft, personal use of a company car and driver, any continued medical coverage due to termi-
nation by death or disability, and any payments for COBRA coverage due to termination of employment by AllianceBernstein
without cause or by Mr. Kraus for good reason.

The terms of the Kraus Employment Agreement were the result of arm’s-length negotiations between Mr. Kraus and a member of
the Compensation Committee. These terms, including the compensation elements, were discussed and approved by the Compensa-
tion Committee and the full Board on December 19, 2008 and reflect their decision to structure the allocation of Mr. Kraus’s
compensation more heavily toward a restricted Holding Unit award. As a result, Mr. Kraus’s compensation consists almost entirely
of the Restricted Holding Unit Grant. The $6 million cash bonus applied only with respect to 2009.

The amount of compensation ultimately realized by Mr. Kraus from the Restricted Holding Unit Grant will depend on the future
market price of Holding Units and the amount of cash distributions paid on Holding Units, both of which are partially dependent
on the financial and operating results of AllianceBernstein. Given the five-year vesting, Mr. Kraus has a strong incentive to remain
with our firm for the full five-year term of the Kraus Employment Agreement and to cause our firm to have strong financial per-
formance during each of those five years. Thus, his long-term interests are directly aligned with the interests of our Unitholders and
also indirectly aligned with the interests of our clients, as strong performance for our clients generally contributes directly to
increases in assets under management and thus improved financial performance for the firm. The size of the Restricted Holding
Unit Grant, which had a value of approximately $52 million based on the market price of a Holding Unit on December 19, 2008,
reflected the determination by Mr. Kraus and the Board that this was a reasonable and appropriate amount of long-term incentive
compensation in view of Mr. Kraus’s expertise and experience, his past compensation, the compensation of his predecessor and the
compensation of other chief executive officers of comparable asset management companies.

The $6 million cash bonus for 2009 represents the amount which Mr. Kraus and the Board agreed represented an appropriate short-
term financial inducement for Mr. Kraus to join AllianceBernstein based on these same factors and reflected the significant
uncertainty surrounding the level of 2009 quarterly cash distributions on Holding Units when he was hired; it most directly reflects
the goal of attracting highly qualified executive talent. The $275,000 base salary is in line with our firm’s policy to keep base salaries
low in relation to total compensation. The terms of the perquisites and benefits received by Mr. Kraus reflect the results of the
arm’s-length negotiation process.

Factors Considered when Determining Executive Compensation

Decisions about executive compensation are based primarily on our assessment of each executive’s leadership, operational perform-
ance, and potential to enhance investment returns and service for our clients, all of which contribute to long-term Unitholder value.
We do not utilize quantitative formulas when determining the compensation of our Chief Executive Officer, our Chief Financial
Officer and our other three most highly-compensated executives (“named executive officers”), but rather rely on our judgment
about each executive’s performance and whether each particular payment or award provides an appropriate reward for the current
year’s performance. We begin this process by determining the total incentive compensation amounts available for a particular year
(as more fully explained above in “Overview of 2009 Incentive Compensation Program”). We then consider a number of key factors for
each of the named executive officers (other than Mr. Kraus, our CEO, whose compensation is described above in “Overview of our
Chief Executive Officer’s Compensation”). These factors include: total compensation paid to the named executive officer in the pre-
vious year; the increase or decrease in the current year’s total incentive compensation amounts available; the named executive offic-
er’s performance compared to individual business and operational goals established at the beginning of the year; the nature, scope
and level of responsibilities of the named executive officer; the contribution to our overall financial results; and the contribution of
the executive’s business unit to the company’s fiduciary culture in which clients’ interests are paramount. We also consider data
provided by McLagan to benchmark the total compensation paid to each of our named executive officers.

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117

This process, which is conducted by the Chief Executive Officer working with other members of senior management, results in
specific incentive compensation recommendations to the Compensation Committee supported by the factors considered. The
Compensation Committee then makes the final incentive compensation decisions. The Compensation Committee did not analyze
quantifiable goals relating to the firm’s business units in determining the cash bonus of each of the named executive officers.

Business and operational goals established in 2009 for our named executive officers other than Mr. Kraus are as follows:

• For Mr. Steyn, the main elements of his business and operational goals included: restoring financial leverage to the firm through
the right-sizing, rationalization and re-engineering of the Distribution Services’ units (Private Clients, Institutions and Retail)
and the Corporate and Fiduciary Services’ units (Finance, Legal and Compliance, IT and Operations); leading the continued
collaboration and co-operation of the three distribution channels; focusing the distribution channels on key strategic initiatives
and new product launches; integrating the local management of the overseas offices (in particular London, Hong Kong, Tokyo
and Sydney) into the global management of the distribution channels; and working with Human Capital and Finance on the
overhaul of the firm’s incentive and deferred compensation programs.

• For Mr. Gingrich, the main elements of his business and operational goals included: optimizing the revenue and profit con-

tribution of our Bernstein Research Services unit; further enhancing this unit’s research capabilities, trading services and product
array; extending this unit’s geographic platform; and attracting, motivating and retaining top talent.

• For Mr. Cranch, the main elements of his business goals included: maintaining the firm’s good compliance record; sustaining

and improving the Legal and Compliance Department’s level of client service; minimizing litigation against the firm; and creat-
ing a high performance culture among staff in the Legal and Compliance department.

• For Mr. Joseph, the main elements of his business and operational goals included: assuming global responsibility for admin-

istrative functions and restructuring our firm’s finance organization to achieve greater operational efficiency and an improved
control environment; leading a firm-wide initiative to reduce controllable operating expenses by at least 15%; accelerating our
firm’s monthly closing process; enhancing management reporting and decision support; implementing procedures to better
allocate capital, de-risk our firm’s balance sheet and secure an appropriate level of liquidity; and identifying and developing our
firm’s next generation of finance leaders.

Consistent with the management approach taken by AllianceBernstein for its executives generally, the 2009 goals of our named
executive officers (other than Mr. Kraus, whose compensation is described above in “Overview of our Chief Executive Officer’s
Compensation”) did not include specific revenue or profit targets. By their nature, the business and operational goals for each of these
other named executive officers are difficult to measure quantitatively and thus management uses discretion to determine whether
those goals and objectives have been met. In the case of each of these four named executive officers, management determined that
the main elements of the established business and operational goals had been met in 2009.

In addition to considering the extent to which our named executive officers met their business and operational goals, we consider
each executive’s current salary, and prior-year short-term and long-term incentive compensation awards, and the compensation paid
to the executive’s peers within the company. In general, we believe that key employees should be well-compensated, but that sig-
nificant portions of compensation should be deferred and earned for service in future periods, which provides an incentive for key
employees to remain with the firm.

Furthermore, during the fourth quarter of each year, McLagan provides us with comparative compensation benchmarking data,
which summarizes compensation levels for the prior year at selected asset management companies comparable to ours. This data
provides ranges of compensation levels for executive positions at these companies similar to those held by our named executive offi-
cers, including salary, total cash compensation and total compensation. The comparable companies are selected in order to provide
appropriate comparables for the size and business mix of AllianceBernstein and the roles played by the named executive officers. In
2009, the McLagan data we used to benchmark the compensation of our named executive officers was based on compensation
comparisons from a number of selected asset management companies and banks, including the following: Bank of America, Barclays
Global Investors, BlackRock Financial Management, Citigroup, Deutsche Bank, Franklin Templeton Investments, Goldman Sachs
Asset Management, Morgan Stanley Investment Management, PIMCO Advisors, T. Rowe Price Associates and The Vanguard
Group. For a complete listing of the comparable companies provided by McLagan, see Exhibit 99.01 to this Form 10-K.

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Total compensation paid to our named executive officers fell within the ranges of total compensation paid to executives in similar
positions by the companies included in the McLagan data. Additionally, the Board, when it reviewed and approved the Kraus
Employment Agreement on December 19, 2008, considered McLagan data indicating that Mr. Kraus’s compensation arrangement
was fully competitive and appropriate given our size, scope and complexity, and Mr. Kraus’s experience, credentials and proven
track record.

Our Chief Executive Officer, and the Compensation Committee, retain discretion as to how to utilize the McLagan benchmarking
data. The data is not used in a formulaic or mechanical way to determine named executive officer compensation levels. The Com-
pensation Committee considered McLagan data in concluding that the compensation levels paid in 2009 to our named executive
officers were appropriate and reasonable.

Compensation Elements for Executive Officers

Below we describe the major elements of our executive compensation.

1. Base Salary. Base salaries comprise a small portion of executives’ total compensation and are maintained at low levels relative to
salaries of executives at peer firms. Within the relatively narrow range of base salaries paid to executives, we consider individual
experience, responsibilities and tenure with the firm. The salaries we paid during 2009 to our named executive officers are shown in
column (c) of the Summary Compensation Table.

2. Short-term Incentive Compensation (Cash Bonus). We pay annual cash bonuses in late December to reward individual perform-
ance for the year. These bonuses are based on management’s evaluation (subject to the Compensation Committee’s review and
approval) of each executive’s performance during the year, and the performance of the executive’s business unit or function, com-
pared to business and operational goals established at the beginning of the year, and in the context of the firm’s overall financial
performance. The cash bonuses we awarded in 2009 to our named executive officers are shown in column (d) of the Summary
Compensation Table.

3. Long-term Incentive Compensation. We grant annual long-term incentive compensation awards in December to supplement cash
bonuses and to encourage retention of our executives. These awards are made under an unfunded, non-qualified incentive compen-
sation plan under which awards may be granted to eligible employees.

As discussed above in “Overview of 2009 Incentive Compensation Program”, in 2009 we changed our approach regarding long-term
incentive compensation by requiring that all awards be in the form of restricted Holding Units. We implemented this change to
directly align our executives’ long-term interests with the interests of our Unitholders while also indirectly aligning our executives’
long-term interests with the interests of our clients as strong performance for our clients generally contributes directly to increases in
assets under management and thus improved financial performance for the firm. As a result of this change, award recipients are not
able to allocate their 2009 awards to notional investments in certain of our investment services offered to clients. The 2009 restricted
Holding Unit awards granted to our named executive officers are shown in column (i) of the Grants of Plan-based Awards Table.

Restricted Holding Units were awarded as part of total incentive compensation based on a customized set of goals for each execu-
tive. The relative level of cash bonus compared to restricted Holding Units is generally fixed using a sliding scale based on the total
compensation level of the executive, with lower-paid executives receiving a greater percentage of their incentive compensation as
cash bonuses than more highly-paid executives.

In 2009, the value used for restricted Holding Units was the closing price as reported for NYSE composite transactions on the day
the Compensation Committee approved incentive compensation awards (December 7, 2009).

Awards of restricted Holding Units generally vest ratably over four years. However, if the recipient of such an award is at least 55
years old and has at least ten years of service, the award recipient qualifies for “Retirement”. Any award recipient who qualifies for
“Retirement” continues to vest post-Retirement, provided the award recipient complies with agreements and covenants contained
in the award agreement (including covenants not to compete with AllianceBernstein, not to solicit AllianceBernstein’s clients or
employees, to maintain confidentiality of AllianceBernstein’s trade secrets and proprietary information, and not to disparage
AllianceBernstein) until the Holding Units have fully vested.

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119

Withdrawals prior to vesting are not permitted. Upon vesting, awards are distributed to participants unless the participant has, in
advance, voluntarily elected to defer receipt to future periods. Quarterly cash distributions on vested and unvested restricted Hold-
ing Units are paid currently to participants and are included in column (i) of the Summary Compensation Table. For awards made
prior to 2009, quarterly cash distributions on vested and unvested Holding Units for which a voluntary deferral election has been
made, and earnings credited on investment services, are reinvested and distributed as elected by participants. These are shown as
“earnings” in column (d) of the Non-Qualified Deferred Compensation Table.

4. Defined Contribution Plan. Employees of AllianceBernstein L.P. are eligible to participate in the Profit Sharing Plan for Employ-
ees of AllianceBernstein L.P. (as amended and restated as of January 1, 2008, “Profit Sharing Plan”), a tax-qualified retirement plan.
The Compensation Committee determines the amount of company contributions (both the level of annual matching by the firm of
an employee’s pre-tax salary deferral contributions and the annual company profit sharing contribution). For 2009, the Compensa-
tion Committee determined that employee deferral contributions would be matched on a one-to-one basis up to five percent of
eligible compensation and there would be no profit sharing contribution. Company contributions to the Profit Sharing Plan on
behalf of the named executive officers are shown in column (i) of the Summary Compensation Table.

5. CEO Arrangements. See “Overview of our Chief Executive Officer’s Compensation” in this Item 11.

6. Former President and Chief Operating Officer Arrangements. Gerald M. Lieberman, formerly a member of the Board and our Presi-
dent and Chief Operating Officer, retired effective July 31, 2009 (“Retirement Date”).

Pursuant to our agreement with Mr. Lieberman (“Lieberman Retirement Agreement”) and in recognition of his years of service to
our firm and his assistance with transitioning his responsibilities, Mr. Lieberman received his base salary of $200,000, less applicable
tax withholdings and other payroll deductions, through January 31, 2010. In addition, Mr. Lieberman received a lump sum separa-
tion payment of $2,600,000, less applicable tax withholdings and other payroll deductions, and was awarded 157,898 restricted
Holding Units. The number of restricted Holding Units was determined by dividing $3,400,000 by the average closing price on the
NYSE of a Holding Unit for the period covering the four trading days immediately preceding the Retirement Date, the Retire-
ment Date and the five trading days immediately following the Retirement Date, and rounded up to the nearest whole num-
ber. Mr. Lieberman’s 157,898 restricted Holding Units vest ratably on July 31 in each of 2010, 2011 and 2012, provided
Mr. Lieberman complies with the terms of the Lieberman Retirement Agreement (including non-competition, non-solicitation,
confidentiality, non-disparagement and cooperation). Mr. Lieberman also receives, until July 31, 2012, a number of continuing
benefits from AllianceBernstein as described in the Lieberman Retirement Agreement, which has been filed as Exhibit 10.04 to this
Form 10-K. These benefits include access to comparable medical and dental coverage, office space, administrative assistance and a
company car and driver.

Compensation Committee

The Compensation Committee consists of Mr. Condron, Mr. Kraus, Ms. Slutsky and Mr. Smith. As discussed above (see “Directors,
Executive Officers and Corporate Governance—NYSE Governance Matters” in Item 10), because it is a limited partnership, Holding is
exempt from NYSE rules that require public companies to have a compensation committee made up solely of independent direc-
tors. AXA owns, indirectly, an approximate 62.1% economic interest in AllianceBernstein (as of December 31, 2009), and compen-
sation expense is a significant component of our financial results. For these reasons, Mr. Condron, President and Chief Executive
Officer of AXA Financial, serves as chairman of the Compensation Committee, and any action taken by the Compensation Com-
mittee requires the affirmative vote or consent of an executive officer of one or more of our parent companies. (Presently,
Mr. Condron is the only member of the Compensation Committee who is also an executive officer of one or more of our parent
companies.)

The Compensation Committee has general oversight of compensation and compensation-related matters, including: (i) determining
cash bonuses; (ii) determining contributions and awards under incentive plans or other compensation arrangements (whether quali-
fied or non-qualified) for employees of AllianceBernstein and its subsidiaries, and amending or terminating such plans or arrange-
ments or any welfare benefit plan or arrangement or making recommendations to the Board with respect to adopting any new
incentive compensation plan, including equity-based plans; (iii) reviewing and approving corporate goals and objectives relevant to

120

AllianceBernstein

the compensation of our Chief Executive Officer, evaluating his performance in light of those goals and objectives, and determining
and approving his compensation level based on this evaluation (our Chief Executive Officer will recuse himself from voting on his
own compensation); and (iv) reviewing the CD&A, and recommending to the Board its inclusion in the Partnerships’ Forms 10-K.
In December 2007, the Compensation Committee delegated responsibility for managing AllianceBernstein’s non-qualified plans to
the Omnibus Committee for Non-Qualified Plans (“Omnibus Committee”), consisting of six members who are senior officers of
AllianceBernstein. The Compensation Committee held seven meetings in 2009. The Omnibus Committee held two meetings in
2009 and acted by unanimous written consent twice.

The Compensation Committee’s year-end process has generally focused on the cash bonuses and long-term incentive compensation
awards granted to senior management. Mr. Kraus plays an active role in the work of the Compensation Committee. Mr. Kraus,
working with other members of senior management, provides recommendations for individual employee awards to the Compensa-
tion Committee for their consideration.

The Compensation Committee held its regularly-scheduled meeting regarding year-end compensation on December 7, 2009, at
which it discussed and approved senior management’s compensation recommendations. The Compensation Committee has not
retained its own consultants.

The Compensation Committee’s functions are more fully described in the committee’s charter, which is available online at our
Internet site (http://www.alliancebernstein.com).

Other Compensation-Related Matters

AllianceBernstein and Holding are, respectively, private and public limited partnerships, and are subject to taxes other than federal
and state corporate income tax. (See “Business—Taxes” in Item 1.) Accordingly, Section 162(m) of the Code, which limits tax
deductions relating to executive compensation otherwise available to entities taxed as corporations, is not applicable to either
AllianceBernstein or Holding.

We have amended our qualified and non-qualified plans to the extent necessary to comply with applicable law.

For long-term incentive compensation awards made during or before 2007, we typically purchased the investments that were
notionally elected by plan participants and held these investments in a consolidated rabbi trust. Effective January 1, 2009, invest-
ments we previously made in our investment services offered to clients are held in a custodial account, while we continue to hold
investments in Holding Units in the rabbi trust. These investments are subject to the general creditors of AllianceBernstein.

All compensation awards that involve the issuance of Holding Units are made under the 1997 Long Term Incentive Plan, as
amended and restated November 28, 2007 (“1997 Plan”), which Holding Unitholders initially approved in 1997. Holding Unit-
holders approved amendments to the 1997 Plan (increasing the number of Holding Units that may be issued thereunder, and
extending its life) in 2000. No more than 41 million Holding Units may be awarded under the 1997 Plan. As of December 31,
2009, 6,256,646 Holding Units were available for new awards under the 1997 Plan through July 26, 2010, the 1997 Plan’s expira-
tion date. We intend to convene a special meeting of Holding Unitholders during 2010 to seek approval for a new long-term
equity compensation plan.

Compensation Committee Interlocks and Insider Participation

Mr. Condron is the Chairman of the Board, President and Chief Executive Officer of AXA Equitable, the sole stockholder of the
General Partner. As of December 31, 2009, AXA Equitable and its affiliates owned an aggregate 62.1% economic interest in
AllianceBernstein. Mr. Kraus is Chairman of the Board and Chief Executive Officer of the General Partner and, accordingly, also
serves in that capacity for AllianceBernstein and Holding. Mr. Kraus is also a director of AXA Financial, AXA Equitable, MONY
and MLOA. No other executive officer of AllianceBernstein served as a member of a compensation committee or a director of
another entity an executive officer of which served as a member of AllianceBernstein’s Compensation Committee or Board.

Annual Report 2009

121

Compensation Committee Report

The members of the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analy-
sis set forth above and, based on such review and discussion, recommended its inclusion in this Form 10-K.

Christopher M. Condron (Chair)

Lorie A. Slutsky

Peter S. Kraus

A.W. (Pete) Smith, Jr.

Summary Compensation Table

The following table summarizes the total compensation of our named executive officers as of the end of 2009, 2008 and 2007
(including Mr. Lieberman, who is no longer an executive officer as a result of his retirement on July 31, 2009):

Name and Principal Position Year
(b)

(a)

Salary
($)
(c)

Bonus
($)
(d)

Stock
Awards(1)
($)
(e)

Option
Awards(1)
($)
(f)

Non-Equity
Incentive Plan
Compensation
($)
(g)

Peter S. Kraus(2)

Chairman and Chief
Executive Officer

David A. Steyn

Chief Operating Officer

2009
2008

275,000
—

6,000,000
—

10,452,680
—

2009

176,048

1,672,503

—
—

—

167,225

—

—

James A. Gingrich

2009

200,000

1,270,000

Chairman and CEO of
SCB LLC

Laurence E. Cranch
General Counsel

Robert H. Joseph, Jr.

Chief Financial Officer

Gerald M. Lieberman

Former President and Chief
Operating Officer

2009

200,000

770,000

—

173,684

2009
2008
2007

2009
2008
2007

195,000
195,000
185,000

200,000
200,000
200,000

395,000
400,000
1,050,000

—
1,000,000
4,050,000

410,011
—
—

—
—
16,091

3,382,175
—
—

1,040,000
—
42,908

—
—

—

—

—

—
—
—

—
—
—

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
(h)

—
—

—

—

—

47,830
63,612
18,664

—
—
—

All Other
Compensation
($)
(i)

Total(1)
($)
(j)

4,175,132
—

20,902,812
—

16,569

1,865,120

10,414

1,647,639

11,188

1,154,872

38,977
692,285
1,088,406

3,140,351
1,827,920
7,568,795

1,086,818
1,350,897
2,358,161

7,762,526
3,027,920
11,861,703

(1) The figures in columns (e) and (f) of the above table provide the amount of amortization expense incurred by our firm in connection with awards made to the

named executive officers, as required by Item 402(c) of Regulation S-K. The total compensation figures in column (j) of the above table do not include the grant
date fair value of awards made in 2009. For information about these awards, see “Grants of Plan-based Awards in 2009” later in this Item 11.

(2) Mr. Kraus joined AllianceBernstein in December 2008. Accordingly, Mr. Kraus did not receive any compensation in 2008 or 2007. His compensation structure is

set forth in the Kraus Employment Agreement, the terms of which are described above in “Compensation Discussion and Analysis—Overview of our Chief Execu-
tive Officer’s Compensation” and described below in “Potential Payments upon Termination or Change in Control”.

For information about how salary and bonus relate to total compensation, see “Compensation Elements for Executive Officers” in this Item 11. Mr. Steyn’s sal-
ary is paid in U.K. pounds sterling and then converted into U.S. dollars.

Mr. Steyn’s compensation reflects his role as Chief Operating Officer of AllianceBernstein and the contribution he makes in restoring financial leverage to the
firm, leading continued collaboration and co-operation among our three buy-side distribution channels, focusing those channels on key strategic initiatives and
new product launches, and working with Human Capital and Finance on the overhaul of the firm’s incentive compensation program.

122

AllianceBernstein

Mr. Gingrich’s compensation reflects his role as Chief Executive Officer of Sanford C. Bernstein & Co., LLC, our sell-side business, and his leadership role in
optimizing the revenue and profit contribution of our sell-side business and further enhancing that business’s research capabilities, trading services and product
array.

Mr. Cranch’s compensation reflects his role as General Counsel of AllianceBernstein and the contribution he makes in maintaining a good compliance record,
minimizing litigation against the firm and creating a culture of high performance among the firm’s Legal and Compliance personnel.

Mr. Joseph’s compensation reflects his role as the Chief Financial Officer of AllianceBernstein and the contribution he makes in ensuring that our business and
operations are adequately funded and accurately reflected in our financial records and reports and that adequate internal controls over financial reporting are in
place and operating effectively.

For 2009, Column (e) includes:

for Mr. Kraus, AllianceBernstein’s amortization expense in respect of the vesting of his Restricted Holding Unit Grant, based on the value of the grant on
the grant date (see “Compensation Discussion and Analysis—Overview of our Chief Executive Officer’s Compensation” in this Item 11).

for Mr. Joseph, AllianceBernstein’s amortization expense in respect of the vesting of his 2009 restricted Holding Unit award due to his qualifying for Retire-
ment (see “Compensation Elements for Executive Officers—Long-term Incentive Compensation” in this Item 11), based on the value of the grant on the
grant date.

for Mr. Lieberman, AllianceBernstein’s amortization expense in respect of the restricted Holding Unit award granted pursuant to the Lieberman Retirement
Agreement (see “Compensation Elements for Executive Officers—Former President and Chief Operating Officer Arrangements” in this Item 11).

Column (f) reflects AllianceBernstein’s amortization expense in respect of the vesting of option grants based on the value of those grants on the grant date. For
additional information, see Note 16 to AllianceBernstein’s consolidated financial statements in Item 8.

Column (h) reflects the change in pension value for Mr. Joseph, the only named executive officer who participates in the Amended and Restated Retirement
Plan for Employees of AllianceBernstein L.P. (“Retirement Plan”). Benefits under the Retirement Plan ceased accruing as of December 31, 2008. For additional
information about the Retirement Plan, see Note 14 to AllianceBernstein’s consolidated financial statements in Item 8 and “Pension Benefits in 2009” in this
Item 11.

Column (i) reflects 2008 and 2007 awards under the Incentive Compensation Award Program (formerly known as the Partners Compensation Plan, “Incentive
Compensation Program”) and other items. We report Incentive Compensation Program awards granted prior to 2009 under column (i) because, while they
were designed to provide incentives to recipients, they could not be categorized as having been granted under an “incentive plan” under relevant SEC rules
because there were no specific performance measures that were required to be met before a participant could receive his or her award. Also, as described in
Note 15 to AllianceBernstein’s consolidated financial statements in Item 8 and “Compensation Discussion and Analysis—Overview of Compensation Philosophy
and Program” in this Item 11, any allocation of awards by recipients to equity of the firm was voluntary; until 2009, we did not unilaterally make awards of
Holding Units to the named executive officers. In addition, awards granted under the Incentive Compensation Program before 2009 were not accounted for
under ASC 718, Compensation—Stock Compensation.

During 2009, we owned fractional interests in two aircraft with an aggregate operating cost of $2,747,698 (including $988,877 in maintenance fees,
$1,243,262 in usage fees and $515,559 of amortization based on the original cost of our fractional interests, less estimated residual value). The unamortized
value of the fractional interests as of December 31, 2009 was $6,437,249. We also leased an aircraft during 2009 with an aggregate operating cost of
$2,681,769 (including $650,552 in leasing costs, $649,569 in maintenance fees and $1,381,648 in usage fees).

Our interests in aircraft facilitate business travel of senior management. In 2009, we permitted our Chief Executive Officer and former President to use the air-
craft for personal travel. Overall, personal travel constituted approximately 5.7% of our actual use of the aircraft in 2009.

Our methodology for determining the reported value of personal use of aircraft includes fees paid to the managers of the aircraft (fees take into account the
aircraft type and weight, number of miles flown, flight time, number of passengers, and a variable fee), but excludes our fixed costs (amortization of original
cost less estimated residual value and monthly maintenance fees). We included such amounts in column (i).

We use the Standard Industry Fare Level (“SIFL”) methodology to calculate the amount to include in the taxable income of executives for the personal use of
company-owned aircraft. Using the SIFL methodology, which was approved by our Compensation Committee, limits our ability to deduct the full cost of
personal use of company-owned aircraft by our executive officers. Taxable income for the 12 months ended October 31, 2009 for personal use imputed to
Mr. Kraus is $19,139 and to Mr. Lieberman is $15,072. Messrs. Steyn, Gingrich, Cranch and Joseph did not make personal use of company-owned aircraft
during those 12 months, so no income was imputed to them.

Column (i) also includes the aggregate incremental cost to our company of certain other expenses and perquisites, including leased cars, drivers, contributions
to the Profit Sharing Plan, life insurance premiums, medical and dental coverage, office space, administrative assistance, business club dues and parking, as
applicable.

For 2008, a portion ($1,040,000) of Mr. Lieberman’s total in column (i) has been re-allocated to column (f) in 2009, representing a subsequent election to allo-
cate part of his 2008 Incentive Compensation Program award to options. In addition, the $1,040,000 is now disclosed in column (l) of the Grants of Plan-based
Awards table.

Annual Report 2009

123

For 2009, column (i) includes:

for Mr. Kraus, $3,919,755 for quarterly distributions related to his Restricted Holding Unit Grant, $62,015 for personal use of aircraft, $167,926 for
personal use of a car and driver (including lease costs ($25,732), driver compensation ($120,334) and other car-related costs ($21,860), such as parking,
gas, tolls, and repairs and maintenance) and $25,436 for gross-ups related to imputed income for personal use of aircraft and car.

for Mr. Steyn, a $14,084 contribution to the Alliance Trust Full Self Invested Personal Pension (a profit sharing plan for our U.K. employees) and $2,485 for
car-related parking costs.

for Mr. Gingrich, a $10,000 contribution to the Profit Sharing Plan and $414 of life insurance premiums.

for Mr. Cranch, a $10,000 contribution to the Profit Sharing Plan and $1,188 of life insurance premiums.

for Mr. Joseph, a $9,750 contribution to the Profit Sharing Plan, $14,839 for personal use of a car (including lease costs ($6,000) and other car-related
costs ($8,839), such as parking, gas, tolls, and repairs and maintenance), $7,326 of life insurance premiums and $7,062 in business club dues.

for Mr. Lieberman, $2,600,000 in severance, $170,530 for quarterly distributions on restricted Holding Units, $47,389 for personal use of aircraft,
$157,013 for personal use of a car and driver (including lease costs ($28,738), driver compensation ($102,980) and other car-related costs ($25,295), such
as parking, gas, tolls, and repairs and maintenance), $5,538 for medical and dental coverage, $63,750 for office space, $73,131 for administrative assis-
tance and $23,000 in other benefit-related costs.

Grants of Plan-based Awards in 2009

The following table describes each grant of an award made to a named executive officer during 2009 under the 1997 Plan, an
equity compensation plan (including Mr. Lieberman, who is no longer an executive officer as a result of his retirement on July 31,
2009):

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards

Estimated Future Payouts Under
Equity Incentive Plan Awards

Name
(a)

Grant
Date
(b)

Threshold
($)
(c)

Target
($)
(d)

Maximum
($)
(e)

Threshold
(#)
(f)

Target
(#)
(g)

Maximum
(#)
(h)

Peter S. Kraus

David A. Steyn

James A. Gingrich

Laurence E. Cranch

—

12/7/09

12/7/09
1/23/09

12/7/09
1/23/09

Robert H. Joseph, Jr.

12/7/09

Gerald M. Lieberman

1/23/09
8/7/09

—

—

—
—

—
—

—

—
—

—

—

—
—

—
—

—

—
—

—

—

—
—

—
—

—

—
—

—

—

—
—

—
—

—

—
—

—

—

—
—

—
—

—

—
—

—

—

—
—

—
—

—

—
—

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
(i)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(j)

—

146,083

94,650
—

38,534
—

15,339

—
157,898

—

—

—
263,533

—
78,348

—

296,297
—

Exercise
or Base
Price of
Option
Awards
($/Sh)
(k)

Grant
Date Fair
Value of
Stock and
Option
Awards
(l)

— $

—

—

—
17.05

—
17.05

—

17.05
—

3,904,799

2,529,995
925,000

1,030,014
275,000

410,011

1,040,000
3,382,175

124

AllianceBernstein

Outstanding Equity Awards at 2009 Fiscal Year-End
The following table describes any outstanding equity awards as of December 31, 2009 of our named executive officers (including
Mr. Lieberman, who is no longer an executive officer as a result of his retirement on July 31, 2009):

Option Awards

Holding Unit Awards

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)

Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)
(g)

Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested
($)
(h)

Option
Exercise
Price
($)
(e)

Option
Expiration
Date
(f)

Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
(i)

Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
(j)

—

—

—

—

—
—
—
—

—

—

—

17.05

17.05

33.18
50.25
53.75
48.50

17.05

— 2,177,642

61,191,740

—

146,083

1/23/19

1/23/19

12/06/12
12/07/11
12/11/10
06/20/10

94,650

38,534

15,339
—
—
—

4,104,932

2,659,665

1,082,805

431,026
—
—
—

1/23/19

157,898

4,436,934

—

—

—

—

—
—
—
—

—

—

—

—

—

—
—
—
—

—

Name
(a)

Peter S. Kraus(1)

David A. Steyn(2)

James A. Gingrich(2)(3)

Laurence E. Cranch(2)(3)

Robert H. Joseph, Jr.(2)(4)

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
(b)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
(c)

—

—

—

—

15,000
15,000
15,000
50,000

—

—

263,533

78,348

—
—
—
—

Gerald M. Lieberman(3)(5)

—

296,297

(1) Mr. Kraus’s Restricted Holding Unit Award vests ratably on December 19, 2010, 2011, 2012 and 2013.

(2) These restricted Holding Unit awards vest ratably on December 1, 2010, 2011, 2012 and 2013.

(3) These option awards vest ratably on January 23, 2010, 2011, 2012, 2013 and 2014.

(4) Mr. Joseph’s option awards are fully vested.

(5) Mr. Lieberman’s restricted Holding Unit award vests ratably on July 31, 2010, 2011 and 2012.

Option Exercises and Holding Units Vested in 2009
The following table describes any Holding Units vested for our named executive officers during 2009 (including Mr. Lieberman,
who is no longer an executive officer as a result of his retirement on July 31, 2009). None of our named executive officers exercised
options during 2009:

Name
(a)

Option Awards

Holding Unit Awards

Number of Units
Acquired on Exercise
(#)
(b)

Value Realized
on Exercise
($)
(c)

Number of Holding Units
Acquired on Vesting
(#)
(d)

Value Realized
on Vesting
($)
(e)

Peter S. Kraus

David A. Steyn

James A. Gingrich

Laurence E. Cranch

Robert H. Joseph, Jr.

Gerald M. Lieberman

Annual Report 2009

—

—

—

—

—

—

—

—

—

—

—

—

544,410

14,116,562

—

—

—

—

—

—

—

—

—

—

125

Pension Benefits for 2009

The following table describes the accumulated benefit under our company pension plan belonging to each of our named executive
officers as of December 31, 2009, if any (including Mr. Lieberman, who is no longer an executive officer as a result of his retire-
ment on July 31, 2009):

Name
(a)

Peter S. Kraus

David A. Steyn

James A. Gingrich

Laurence E. Cranch

Robert H. Joseph, Jr.

Gerald M. Lieberman

Plan Name
(b)

n/a

n/a

n/a

n/a

Retirement Plan

n/a

Number of Years
Credited Service
(#)
(c)

Present Value of
Accumulated Benefit
($)
(d)

Payments During
Last Fiscal Year
($)
(e)

—

—

—

—

24

—

—

—

—

—

537,972(1)

—

—

—

—

—

—

—

(1) The Executive Committee has determined that no new benefits shall be accrued under the Retirement Plan, effective as of the close of business on December 31,

2008.

The Retirement Plan is a qualified, noncontributory, defined benefit retirement plan covering current and former employees who
were employed in the United States prior to October 2, 2000. Each participant’s benefits are determined under a formula which
takes into account years of credited service through December 31, 2008, the participant’s average compensation over prescribed
periods and Social Security covered compensation. The maximum annual benefit payable under the Retirement Plan may not exceed
the lesser of $100,000 or 100% of a participant’s average aggregate compensation for the three consecutive years in which he or she
received the highest aggregate compensation from us or such lower limit as may be imposed by the Code on certain participants by
reason of their coverage under another qualified retirement plan we maintain. A participant is fully vested after the completion of five
years of service. The Retirement Plan generally provides for payments to, or on behalf of, each vested employee upon such employ-
ee’s retirement at the normal retirement age provided under the plan or later, although provision is made for payment of early
retirement benefits on an actuarially reduced basis. Normal retirement age under the plan is 65. Death benefits are payable to the
surviving spouse of an employee who dies with a vested benefit under the Retirement Plan. For additional information regarding
interest rates and actuarial assumptions, see Note 14 to AllianceBernstein’s consolidated financial statements in Item 8.

Non-Qualified Deferred Compensation for 2009

The following table describes our named executive officers’ non-qualified deferred compensation contributions, earnings and dis-
tributions during 2009 and their non-qualified deferred compensation plan balances as of December 31, 2009 (including
Mr. Lieberman’s, although he is no longer an executive officer as a result of his retirement on July 31, 2009):

Name
(a)

Peter S. Kraus

David A. Steyn

James A. Gingrich

Laurence E. Cranch

Robert H. Joseph, Jr.

Gerald M. Lieberman

126

Executive
Contributions
in Last FY
($)
(b)

Registrant
Contributions
in Last FY
($)
(c)

Aggregate
Earnings
in Last FY
($)
(d)

Aggregate
Withdrawals/
Distributions
($)
(e)

Aggregate
Balance at
Last FYE
($)
(f)

—

—

—

—

—

—

—

—

—

—

—

—

—

2,194,329

1,055,504

629,506

1,331,215

—

(1,652,275)

(1,419,365)

—

(954,879)

—

6,722,898

4,326,464

2,445,279

4,605,132

507,375

(2,637,478)

1,679,427

AllianceBernstein

For Messrs. Steyn, Gingrich, Cranch, Joseph and Lieberman, amounts shown reflect their respective interests from pre-2009 awards
under the Incentive Compensation Program. For additional information about the Incentive Compensation Program, see Note 15 to
AllianceBernstein’s consolidated financial statements in Item 8. For individuals with notional investments in Holding Units (Messrs. Ging-
rich, Cranch and Joseph), amounts of quarterly distributions on such Holding Units are reflected as earnings in column (d) and, to
the extent distributed to the named executive officer, reflected as distributions in column (e). Column (f) includes the value of all
notional investments as of the close of business on December 31, 2009. As of that date, Messrs. Gingrich, Cranch and Joseph
notionally held 24,576 Holding Units, 7,703 Holding Units and 64,679 Holding Units, respectively, as a result of pre-2009 awards
under the Incentive Compensation Program. Mr. Steyn and Mr. Lieberman did not notionally hold any Holding Units.

Potential Payments upon Termination or Change in Control

In connection with the commencement of Mr. Kraus’s employment, on December 19, 2008, he was granted 2,722,052 restricted
Holding Units. During Mr. Kraus’s Employment Term, AllianceBernstein has no commitment to pay any cash bonuses to
Mr. Kraus beyond the $6 million in 2009 (with any additional bonuses being entirely at the discretion of the Board) or to make any
additional equity-based awards to him. Consequently, for years after 2009 during the Employment Term, the totality of Mr. Kraus’s
compensation (other than his salary and absent any additional awards the Board may choose to grant) will be dependent on the level
of cash distributions on the restricted Holding Units granted to him and the evolution of the trading price of Holding Units,
thereby directly aligning Mr. Kraus’s interests with those of other holders of Holding Units. For additional information about
Mr. Kraus’s compensation, see “Overview of our Chief Executive Officer’s Compensation” in this Item 11.

The Kraus Employment Agreement contains a number of accelerated vesting clauses, including immediate vesting upon a “change
in control” of our firm (i.e., AXA, our parent company, ceasing to control the management of AllianceBernstein’s business or
Holding ceasing to be publicly traded); and immediate vesting upon certain qualifying terminations of employment, including
termination of Mr. Kraus’s employment (i) by AllianceBernstein “without cause”, (ii) by Mr. Kraus for “good reason” and (iii) due
to death or disability.

The change-in-control provisions in the Kraus Employment Agreement were required by Mr. Kraus as part of his negotiation in
order to assure him that AllianceBernstein would continue to be operated as a separately-managed entity, and with a certain degree
of independence, and that Holding would continue as a publicly-traded entity. Both AXA and Mr. Kraus believe that this arrange-
ment adds significant value to AllianceBernstein. The Board understood that AXA had no intention of changing this arrangement
during the term of Mr. Kraus’s Employment Term and thus concluded that the change-in-control provisions were acceptable and
necessary in order to recruit Mr. Kraus.

The provisions requiring accelerated vesting upon termination without cause or for good reason were required by Mr. Kraus in
order to preserve the value of his long-term incentive compensation arrangement. The Board agreed to these provisions because
they were typical of executive compensation agreements for executives at Mr. Kraus’s level and because the Board concluded that
they were necessary to recruit Mr. Kraus.

The Board concluded that the change-in-control and termination provisions in the Kraus Employment Agreement fit into
AllianceBernstein’s overall compensation objectives because they permitted AllianceBernstein to attract and retain a highly-qualified
chief executive officer, were consistent with AXA’s and the Board’s expectations with respect to the manner in which
AllianceBernstein and Holding would be operated from 2009 to 2013, were consistent with the Board’s expectations that Mr. Kraus
would not be terminated without cause and that no steps would be taken that would provide him with the ability to terminate the
agreement with good reason (and thus that there was no inconsistency between these provisions and AllianceBernstein’s goal of
providing Mr. Kraus with effective incentives for future performance), and to align his long-term interests with those of Alliance-
Bernstein’s Unitholders and clients.

It is the current intention and expectation of AllianceBernstein’s management and the Board that provisions similar to those
included in the Kraus Employment Agreement, such as change-in-control, termination by AllianceBernstein without cause and
termination by an executive for good reason, will not be included in employment agreements with other executives of
AllianceBernstein, and thus that the decisions made with respect to the Kraus Employment Agreement should not affect the deci-
sions made in the future regarding compensation elements for other executives.

Annual Report 2009

127

There are no other amounts payable to the named executive officers upon a change in control of the company.

The following table sets forth estimated payments and benefits to which our named executive officers (other than Mr. Lieberman)
would be entitled upon a change in control of AllianceBernstein or the specified terminations of employment as of December 31,
2009, along with the actual payments and benefits that Mr. Lieberman received in connection with his retirement on July 31, 2009:

Name
(a)

Peter S. Kraus

Change in control
Termination by AllianceBernstein without cause
Termination by Mr. Kraus for good reason
Death or disability(4)(5)

David A. Steyn

Death or disability(6)

James A. Gingrich

Death or disability(6)

Laurence E. Cranch

Death or disability(6)

Robert H. Joseph, Jr.

Death or disability(6)

Gerald M. Lieberman
Retirement(6)(7)

Acceleration
or Grant of
Restricted
Holding
Unit
Awards(2) ($)
(c)

61,191,740
61,191,740
61,191,740
61,191,740

4,104,932

Option
Awards(3)
($)
(d)

Other
Benefits
($)
(e)

—
—
—
—

—

—
—
—
—

—

—

—

—

2,659,665

2,912,040

1,082,805

865,745

431,026

—

Cash
Payments(1)
($)
(b)

—
—
—
—

—

—

—

—

2,600,000

4,436,934

3,274,082

1,246,263

(1) Messrs. Steyn, Gingrich, Cranch and Joseph are not entitled to any payments or benefits upon termination of their employment by AllianceBernstein without

cause. Nevertheless, it is our expectation that each would receive a cash severance payment. As the amounts of any such payments would be determined at the
time of such termination, we are unable to estimate the amount of any such payments.

(2) Restricted Holding Unit awards made in December 2009 to Messrs. Steyn, Gingrich, Cranch and Joseph are subject to a “Rule of 65” retirement provision. An

award recipient qualifies for “retirement” if the recipient is at least 55 years old and has completed at least 10 years of service. Any award recipient who qualifies
for “retirement” retains the right to receive distribution of the underlying Holding Units post-retirement provided the recipient complies with agreements and
covenants in the award agreement until the Holding Units have fully vested.

(3) Options awarded to Messrs. Gingrich, Cranch and Lieberman, which are set forth in the “Outstanding Equity Awards at 2009 Fiscal Year-End” table above, are
subject to a “Rule of 70” retirement provision. An award recipient qualifies for retirement if the recipient: (i) is at least 65 years old; or (ii) is at least 55 years old
and the recipient’s age and years of service added together equal or exceed 70. An award recipient who qualifies for retirement continues to vest post-
retirement provided the recipient complies with any agreements and covenants enforced by AllianceBernstein.

(4) The Kraus Employment Agreement defines “Disability” as a good faith determination by AllianceBernstein that Mr. Kraus is physically or mentally incapacitated
and has been unable for a period of one hundred and twenty (120) days in the aggregate during any twelve-month period to perform substantially all of the
duties for which he is responsible immediately before the commencement of the incapacity.

(5) Upon termination of Mr. Kraus’s employment due to death or disability, AllianceBernstein will provide at its expense continued health and welfare benefits for

Mr. Kraus, his spouse and his dependants through the end of the calendar year in which termination occurs. Thereafter, until the date Mr. Kraus (or, in the case
of his spouse, his spouse) reaches age 65, AllianceBernstein shall provide Mr. Kraus and his spouse with access to participation in AllianceBernstein’s medical
plans at Mr. Kraus’s (or his spouse’s) sole expense based on a reasonably determined fair market value premium rate.

(6) “Disability” is defined in the Incentive Compensation Program award agreements of Messrs. Steyn, Gingrich, Cranch and Joseph, and in the Special Option Pro-
gram award agreements of Messrs. Gingrich, Cranch and Lieberman, as the inability to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to last for a continuous period of not less than 12 months, as determined by the carrier of the
long-term disability insurance program maintained by AllianceBernstein or its affiliate that covers the executive officer.

(7) For additional information relating to Mr. Lieberman’s $2,600,000 severance payment, restricted Holding Unit award and other benefits that he received in

connection with his retirement, see “Compensation Elements for Executive Officers—Former President and Chief Operating Officer Arrangements”.

128

AllianceBernstein

Director Compensation in 2009

The following table describes how we compensated our independent directors during 2009:

Fees
Earned or
Paid in
Cash
($)
(b)

56,500
67,000

77,500

76,000

94,000

Stock
Awards(1)
($)
(c)

Option
Awards(2)
($)
(d)

30,000
30,000

30,000

30,000

30,000

30,000
30,000

30,000

30,000

30,000

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(f)

Non-Equity
Incentive
Plan
Compensation
($)
(e)

—
—

—

—

—

—
—

—

—

—

All Other
Compensation
($)
(g)

—
—

—

—

—

Total
($)
(h)

116,500
127,000

137,500

136,000

154,000

Name
(a)

Deborah S. Hechinger
Weston M. Hicks

Lorie A. Slutsky

A.W. (Pete) Smith, Jr.

Peter J. Tobin

(1) As of December 31, 2009, our independent directors had outstanding restricted Holding Unit awards in the following amounts: Ms. Hechinger owned 2,450
Holding Units, Mr. Hicks owned 2,912 Holding Units, Ms. Slutsky owned 3,573 Holding Units, Mr. Smith owned 2,912 Holding Units and Mr. Tobin owned
3,573 Holding Units.

(2) As of December 31, 2009, our independent directors had outstanding option awards in the following amounts: Ms. Hechinger owned options to buy 10,945

Holding Units, Mr. Hicks owned options to buy 13,373 Holding Units, Ms. Slutsky owned options to buy 42,524 Holding Units, Mr. Smith owned options to buy
13,373 Holding Units and Mr. Tobin owned options to buy 57,774 Holding Units.

The General Partner only pays fees, and makes equity awards, to directors who are not employed by our company or by any of our
affiliates. Such fees and awards consist of:

• an annual retainer of $40,000 (paid quarterly after any quarter during which a director serves on the Board);

• a fee of $1,500 for participating in a meeting of the Board, or any duly constituted committee of the Board, whether he or she

participates in person or by telephone;

• an annual retainer of $15,000 for acting as Chair of the Audit Committee;

• an annual retainer of $7,500 for acting as Chair of the Corporate Governance Committee; and

• an annual equity-based grant under the 1997 Plan consisting of:

•

restricted Holding Units having a value of $30,000 based on the closing price of Holding Units on the NYSE as of the
grant date; and

• options to buy Holding Units with a value of $30,000 calculated using the Black-Scholes method.

On May 21, 2009, at a regularly-scheduled meeting of the Board, 1,642 restricted Holding Units and options to buy 6,224 Holding
Units at $18.27 per Unit were granted to each of Ms. Hechinger, Mr. Hicks, Ms. Slutsky, Mr. Smith and Mr. Tobin. Such grants
have generally been made at the May meeting of the Board. The date of the meeting was set at a Board meeting in 2008. The
exercise price of the options was the closing price on the NYSE on the grant date. For information about how the Black-Scholes
value was calculated, see Note 16 to AllianceBernstein’s consolidated financial statements in Item 8. Options granted to independent direc-
tors vest ratably over three years. Restricted Holding Units granted to independent directors “cliff” vest after three years (i.e., 100%
of the award vests and gets distributed on the third anniversary of the grant date). In order to avoid any perception that our
directors’ independence might be impaired, these options and restricted Holding Units are not forfeitable. Vesting of options con-
tinues following a director’s resignation from the Board. Restricted Holding Units vest and are distributed as soon as admin-
istratively feasible following an independent director’s resignation from the Board.

Annual Report 2009

129

The General Partner may reimburse any director for reasonable expenses incurred in participating in Board meetings. Holding and
AllianceBernstein, in turn, reimburse the General Partner for expenses incurred by the General Partner on their behalf, including
amounts in respect of directors’ fees and expenses. These reimbursements are subject to any relevant provisions of the Holding
Partnership Agreement and AllianceBernstein Partnership Agreement.

130

AllianceBernstein

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters

Securities Authorized for Issuance under Equity Compensation Plans

The following table summarizes the Holding Units to be issued pursuant to our equity compensation plans as of December 31,
2009:

Equity Compensation Plan Information

Plan Category

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Total

Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
(a)

12,047,522

—

12,047,522

Weighted average
exercise price of
outstanding
options, warrants
and rights
(b)

Number of
securities
remaining
available for future
issuance
(c)

$ 41.79

—

$41.79

6,256,646

—

6,256,646

There are no AllianceBernstein Units to be issued pursuant to an equity compensation plan.

For information about our equity compensation plans (1993 Unit Option Plan, 1997 Plan, Century Club Plan), see Note 16 to
AllianceBernstein’s consolidated financial statements in Item 8.

Principal Security Holders

As of December 31, 2009, we had no information that any person beneficially owned more than 5% of the outstanding Holding
Units.

As of December 31, 2009, we had no information that any person beneficially owned more than 5% of the outstanding
AllianceBernstein Units except AXA and certain of its wholly-owned subsidiaries as reported on Schedule 13D/A, Forms 3 and
Forms 4 filed with the SEC on April 1, 2009 pursuant to the Exchange Act.

The table below and the notes following it have been prepared in reliance upon such filings for the nature of ownership and an
explanation of overlapping ownership.

Name and Address of Beneficial Owner

Amount and Nature of Beneficial
Ownership Reported on Schedule

Percent of Class

AXA(1)(2)(3)(4)

25 avenue Matignon 75008
Paris, France

170,121,745(5)

61.9%

(1) Based on information provided by AXA Financial, on December 31, 2009, AXA and certain of its subsidiaries beneficially owned all of AXA Financial’s out-

standing common stock. For insurance regulatory purposes the shares of common stock of AXA Financial beneficially owned by AXA and its subsidiaries have
been deposited into a voting trust (“Voting Trust”), the term of which has been extended until May 12, 2012. The trustees of the Voting Trust (the “Voting
Trustees”) are Henri de Castries, Denis Duverne and Christopher M. Condron, each of whom serves on the AXA Management Board. The Voting Trustees have
agreed to exercise their voting rights to protect the legitimate economic interests of AXA, but with a view to ensuring that certain minority shareholders of AXA
do not exercise control over AXA Financial or certain of its insurance subsidiaries.

(2) Based on information provided by AXA, as of December 31, 2009, 14.12% of the issued ordinary shares (representing 22.20% of the voting power) of AXA
were owned directly and indirectly by two French mutual insurance companies engaged in the Property & Casualty insurance business and the Life & Savings
insurance business in France (the “Mutuelles AXA”).

(3) The Voting Trustees and the Mutuelles AXA, as a group, may be deemed to be beneficial owners of all AllianceBernstein Units beneficially owned by AXA and its
subsidiaries. By virtue of the provisions of the Voting Trust Agreement, AXA may be deemed to have shared voting power with respect to the AllianceBernstein
Units. AXA and its subsidiaries have the power to dispose or direct the disposition of all shares of the capital stock of AXA Financial deposited in the Voting

Annual Report 2009

131

Trust. The Mutuelles AXA, as a group, may be deemed to share the power to vote or to direct the vote and to dispose or to direct the disposition of all the
AllianceBernstein Units beneficially owned by AXA and its subsidiaries. The address of each of AXA and the Voting Trustees is 25 avenue Matignon, 75008 Paris,
France. The address of the Mutuelles AXA is 26, rue Drouot, 75009 Paris, France.

(4) By reason of their relationships, AXA, the Voting Trustees, the Mutuelles AXA, AXA America Holdings, Inc. (a wholly-owned subsidiary of AXA), AXA IM Rose

Inc. (a 95.29%-owned subsidiary of AXA), AXA Financial, AXA Equitable, AXA Financial (Bermuda) Ltd. (a wholly-owned subsidiary of AXA Financial), Coliseum
Reinsurance Company (a wholly-owned subsidiary of AXA Financial), ACMC Inc. (a wholly-owned subsidiary of AXA Financial), MONY Life Insurance Company (a
wholly-owned subsidiary of AXA Financial) and MONY Life Insurance Company of America (a wholly-owned subsidiary of MONY Life Insurance Company) may
be deemed to share the power to vote or to direct the vote and to dispose or direct the disposition of all or a portion of the 168,146,626 AllianceBernstein Units.

(5) As indicated above in note 4, AXA IM Rose Inc. is a 95.29%-owned subsidiary of AXA, meaning that 4.71% of the AllianceBernstein Units beneficially owned by
AXA IM Rose Inc. as of December 31, 2009 were not beneficially owned by AXA. As a result, as of December 31, 2009, AXA beneficially owned 168,146,626
AllianceBernstein Units, or 61.2% of the issued and outstanding AllianceBernstein Units.

As of December 31, 2009, Holding was the record owner of 101,351,749, or 36.9%, of the issued and outstanding
AllianceBernstein Units.

Management

The following table sets forth, as of December 31, 2009, the beneficial ownership of Holding Units by each director and named
executive officer of the General Partner and by all directors and executive officers as a group:

Name of Beneficial Owner

Number of Holding
Units and Nature of
Beneficial Ownership

Percent of Class

2,441,789

2.4%

Peter S. Kraus(1)(2)

Dominique Carrel-Billiard(1)

Christopher M. Condron(1)

Henri de Castries(1)

Denis Duverne(1)

Richard S. Dziadzio(1)

Deborah S. Hechinger(3)

Weston M. Hicks(4)

Nick Lane(1)

Lorie A. Slutsky(1)(5)

A.W. (Pete) Smith, Jr.(6)

Peter J. Tobin(1)(7)
David A. Steyn(1)(8)

James A. Gingrich(1)(9)

Laurence E. Cranch(1)(10)

Robert H. Joseph, Jr.(1)(11)

Gerald M. Lieberman(12)

—

35,000

2,000

2,000

—

4,675

12,565

—

38,415

9,084
52,627

155,662

201,142

61,905

214,114

217,157

3,488,867

*

*

*

*

*

*

*

*

*

*
*

*

*

*

*

*

3.4%

All directors and executive officers of the General Partner as a group (18 persons)(13)(14)

* Number of Holding Units listed represents less than 1% of the Units outstanding.

(1) Excludes Holding Units beneficially owned by AXA and its subsidiaries. Ms. Slutsky and Messrs. Kraus, Carrel-Billiard, de Castries, Condron, Duverne, Dziadzio,
Lane, and Tobin are directors and/or officers of AXA, AXA IM, AXA Financial, and/or AXA Equitable. Messrs. Kraus, Steyn, Gingrich, Cranch and Joseph are
directors and/or officers of the General Partner.

(2)

In connection with the commencement of Mr. Kraus’s employment, on December 19, 2008, he was granted 2,722,052 restricted Holding Units. Subject to
accelerated vesting clauses in the Kraus Employment Agreement (e.g., immediate vesting upon AXA ceasing to control the management of AllianceBernstein’s
business or Holding ceasing to be publicly traded and certain qualifying terminations of employment), Mr. Kraus’s restricted Holding Units will vest ratably on
each of the first five anniversaries of December 19, 2008, commencing December 19, 2009, provided, with respect to each installment, Mr. Kraus continues to

132

AllianceBernstein

be employed by AllianceBernstein on the vesting date. Mr. Kraus sold 280,263 Holding Units to cover withholding tax obligations when his first tranche of Hold-
ing Units vested.

(3)

Includes 2,225 Holding Units Ms. Hechinger can acquire within 60 days under an AllianceBernstein option plan.

(4)

Includes 4,653 Holding Units Mr. Hicks can acquire within 60 days under an AllianceBernstein option plan.

(5)

Includes 33,804 Holding Units Ms. Slutsky can acquire within 60 days under an AllianceBernstein option plan.

(6)

Includes 4,653 Holding Units Mr. Smith can acquire within 60 days under an AllianceBernstein option plan.

(7)

Includes 49,054 Holding Units Mr. Tobin can acquire within 60 days under an AllianceBernstein option plan.

(8)

Includes 146,083 restricted Holding Units Mr. Steyn was awarded in December 2009.

(9)

Includes 52,706 Holding Units Mr. Gingrich can acquire within 60 days under an AllianceBernstein option plan, 94,650 restricted Holding Units awarded in
December 2009 and 24,576 restricted Holding Units to which he previously allocated portions of incentive compensation awards.

(10) Includes 15,669 Holding Units Mr. Cranch can acquire within 60 days under an AllianceBernstein option plan, 38,533 restricted Holding Units awarded in

December 2009 and 7,703 restricted Holding Units to which he previously allocated portions of incentive compensation awards.

(11) Includes 95,000 Holding Units Mr. Joseph can acquire within 60 days under AllianceBernstein option plans, 15,339 restricted Holding Units awarded in

December 2009 and 64,679 restricted Holding Units to which he previously allocated portions of incentive compensation awards.

(12) Includes 59,259 Holding Units Mr. Lieberman can acquire within 60 days under an AllianceBernstein option plan and 157,898 restricted Holding Units awarded

under the Lieberman Retirement Agreement. For additional information regarding he Lieberman Retirement Agreement, see “Compensation Elements for Execu-
tive Officers—Former President and Chief Operating Officer Arrangements” in Item 11.

(13) Includes 317,023 Holding Units the directors and executive officers as a group can acquire within 60 days under AllianceBernstein option plans.

(14) Includes 333,139 restricted Holding Units awarded in December 2009 to the executive officers as a group and 98,608 restricted Holding Units to which the

executive officers as a group previously allocated portions of incentive compensation awards.

As of December 31, 2009, our directors and executive officers did not beneficially own any AllianceBernstein Units.

Annual Report 2009

133

The following table sets forth, as of December 31, 2009, the beneficial ownership of the common stock of AXA by each director
and named executive officer of the General Partner and by all directors and executive officers as a group:

AXA Common Stock(1)

Name of Beneficial Owner

Number of Shares
and Nature of
Beneficial Ownership

Percent of Class

Peter S. Kraus

Dominique Carrel-Billiard(2)

Christopher M. Condron(3)

Henri de Castries(4)

Denis Duverne(5)

Richard S. Dziadzio(6)

Deborah S. Hechinger

Weston M. Hicks

Nick Lane(7)

Lorie A. Slutsky(8)

A.W. (Pete) Smith, Jr.

Peter J. Tobin(9)

David A. Steyn

James A. Gingrich

Laurence E. Cranch

Robert H. Joseph, Jr.

Gerald M. Lieberman

—

140,053

3,408,754

6,493,930

2,537,149

202,036

—

—

9,232

5,804

—

23,969

—

—

—

—

—

All directors and executive officers of the General Partner as a group (18 persons)(10)

12,820,927

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

* Number of shares listed represents less than 1% of the outstanding AXA common stock.

(1) Holdings of AXA American Depositary Shares (“ADS”) are expressed as their equivalent in AXA common stock. Each AXA ADS represents the right to

receive one AXA ordinary share.

(2) Includes 87,653 shares Mr. Carrel-Billiard can acquire within 60 days under option plans. Also includes 268 unvested AXA performance shares, which

are paid out when vested based on the price of AXA at that time.

(3) Includes 1,051,533 shares and 1,544,743 ADSs Mr. Condron can acquire within 60 days under option plans. Also includes 193,096 unvested perform-

ance units, which are paid out when vested based on the price of ADSs at that time; payout will be 70% in cash and 30% in ADSs.

(4) Includes 4,831,150 shares Mr. de Castries can acquire within 60 days under option plans. Also includes 175,099 unvested AXA performance shares,

which are paid out when vested based on the price of AXA at that time.

(5) Includes 1,708,368 shares Mr. Duverne can acquire within 60 days under option plans. Also includes 143,766 unvested AXA performance shares,

which are paid out when vested based on the price of AXA at that time.

(6) Includes 169,880 shares Mr. Dziadzio can acquire within 60 days under option plans. Also includes 21,080 unvested performance units, which are paid

out when vested based on the price of ADSs at that time; payout will be 70% in cash and 30% in ADSs.

(7) Includes 6,212 ADSs Mr. Lane can acquire within 60 days under options plans.

(8) Includes 944 ADSs Ms. Slutsky can acquire within 60 days under option plans.

(9) Includes 5,579 ADSs Mr. Tobin can acquire within 60 days under option plans.

(10) Includes 7,848,584 shares and 1,557,478 ADSs the directors and executive officers as a group can acquire within 60 days under option plans.

134

AllianceBernstein

Partnership Matters

The General Partner makes all decisions relating to the management of AllianceBernstein and Holding. The General Partner has
agreed that it will conduct no business other than managing AllianceBernstein and Holding, although it may make certain invest-
ments for its own account. Conflicts of interest, however, could arise between AllianceBernstein and Holding, the General Partner
and the Unitholders of both Partnerships.

Section 17-403(b) of the Delaware Revised Uniform Limited Partnership Act (“Delaware Act”) states in substance that, except as
provided in the Delaware Act or the applicable partnership agreement, a general partner of a limited partnership has the liabilities of
a general partner in a general partnership governed by the Delaware Uniform Partnership Law (as in effect on July 11, 1999) to the
partnership and to the other partners. Accordingly, while under Delaware law a general partner of a limited partnership is liable as a
fiduciary to the other partners, those fiduciary obligations may be altered by the terms of the applicable partnership agreement. The
AllianceBernstein Partnership Agreement and Holding Partnership Agreement both set forth limitations on the duties and liabilities
of the General Partner. Each partnership agreement provides that the General Partner is not liable for monetary damages for errors
in judgment or for breach of fiduciary duty (including breach of any duty of care or loyalty) unless it is established (the person
asserting such liability having the burden of proof) that the General Partner’s action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury, with reckless disregard for the best interests of the Partnerships or with actual bad
faith on the part of the General Partner, or constituted actual fraud. Whenever the AllianceBernstein Partnership Agreement and
the Holding Partnership Agreement provide that the General Partner is permitted or required to make a decision (i) in its
“discretion” or under a grant of similar authority or latitude, the General Partner is entitled to consider only such interests and fac-
tors as it desires and has no duty or obligation to consider any interest of or other factors affecting the Partnerships or any
Unitholder of AllianceBernstein or Holding or (ii) in its “good faith” or under another express standard, the General Partner will
act under that express standard and will not be subject to any other or different standard imposed by the AllianceBernstein Partner-
ship Agreement and the Holding Partnership Agreement or applicable law or in equity or otherwise. The partnership agreements
further provide that to the extent that, at law or in equity, the General Partner has duties (including fiduciary duties) and liabilities
relating thereto to either Partnership or any partner, the General Partner acting under the AllianceBernstein Partnership Agreement
or the Holding Partnership Agreement, as applicable, will not be liable to the Partnerships or any partner for its good faith reliance
on the provisions of the partnership agreement.

In addition, the AllianceBernstein Partnership Agreement and the Holding Partnership Agreement grant broad rights of
indemnification to the General Partner and its directors and affiliates and authorize AllianceBernstein and Holding to enter into
indemnification agreements with the directors, officers, partners, employees and agents of AllianceBernstein and its affiliates and Hold-
ing and its affiliates. The Partnerships have granted broad rights of indemnification to officers and employees of AllianceBernstein and
Holding. The foregoing indemnification provisions are not exclusive, and the Partnerships are authorized to enter into additional
indemnification arrangements. AllianceBernstein and Holding have obtained directors and officers/errors and omissions liability
insurance.

The AllianceBernstein Partnership Agreement and the Holding Partnership Agreement also allow transactions between
AllianceBernstein and Holding and the General Partner or its affiliates if the transactions are on terms determined by the General
Partner to be comparable to (or more favorable to AllianceBernstein or Holding than) those that would prevail with an unaffiliated
party. The partnership agreements provide that those transactions are deemed to meet that standard if such transactions are approved
by a majority of those directors of the General Partner who are not directors, officers or employees of any affiliate of the General
Partner (other than AllianceBernstein and its subsidiaries or Holding) or, if in the reasonable and good faith judgment of the General
Partner, the transactions are on terms substantially comparable to (or more favorable to AllianceBernstein or Holding than) those
that would prevail in a transaction with an unaffiliated party.

The AllianceBernstein Partnership Agreement and the Holding Partnership Agreement expressly permit all affiliates of the General
Partner (including AXA Equitable and its other subsidiaries) to compete, directly or indirectly, with AllianceBernstein and Holding, to
engage in any business or other activity and to exploit any opportunity, including those that may be available to AllianceBernstein and
Holding. AXA, AXA Financial, AXA Equitable and certain of their subsidiaries currently compete with AllianceBernstein. (See
“Business—Competition” in Item 1.) The partnership agreements further provide that, except to the extent that a decision or action by

Annual Report 2009

135

the General Partner is taken with the specific intent of providing an improper benefit to an affiliate of the General Partner to the detri-
ment of AllianceBernstein or Holding, there is no liability or obligation with respect to, and no challenge of, decisions or actions of the
General Partner that would otherwise be subject to claims or other challenges as improperly benefiting affiliates of the General Partner
to the detriment of the Partnerships or otherwise involving any conflict of interest or breach of a duty of loyalty or similar fiduciary
obligation.

Section 17-1101(c) of the Delaware Act provides that it is the policy of the Delaware Act to give maximum effect to the principle
of freedom of contract and to the enforceability of partnership agreements. Further, Section 17-1101(d) of the Delaware Act pro-
vides in part that to the extent that, at law or in equity, a partner has duties (including fiduciary duties) to a limited partnership or to
another partner, those duties may be expanded, restricted, or eliminated by provisions in a partnership agreement (provided that a
partnership agreement may not eliminate the implied contractual covenant of good faith and fair dealing). In addition, Sec-
tion 17-1101(f) of the Delaware Act provides that a partnership agreement may limit or eliminate any or all liability of a partner to a
limited partnership or another partner for breach of contract or breach of duties (including fiduciary duties); provided, however,
that a partnership agreement may not limit or eliminate liability for any act or omission that constitutes a bad faith violation of the
implied contractual covenant of good faith and fair dealing. Decisions of the Delaware courts have recognized the right of parties,
under the above provisions of the Delaware Act, to alter by the terms of a partnership agreement otherwise applicable fiduciary
duties and liability for breach of duties. However, the Delaware Courts have required that a partnership agreement make clear the
intent of the parties to displace otherwise applicable fiduciary duties (the otherwise applicable fiduciary duties often being referred to
as “default” fiduciary duties). Judicial inquiry into whether a partnership agreement is sufficiently clear to displace default fiduciary
duties is necessarily fact driven and is made on a case by case basis. Accordingly, the effectiveness of displacing default fiduciary
obligations and liabilities of general partners continues to be a developing area of the law and it is not certain to what extent the
foregoing provisions of the AllianceBernstein Partnership Agreement and the Holding Partnership Agreement are enforceable under
Delaware law.

136

AllianceBernstein

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Policies and Procedures Regarding Transactions with Related Persons

Each of the Holding Partnership Agreement and the AllianceBernstein Partnership Agreement expressly permits AXA and its affili-
ates, which includes AXA Equitable and its affiliates (collectively, “AXA Affiliates”), to provide services to AllianceBernstein and
Holding if the terms of the transaction are approved by the General Partner in good faith as being comparable to (or more favorable
to each such partnership than) those that would prevail in a transaction with an unaffiliated party. This requirement is conclusively
presumed to be satisfied as to any transaction or arrangement that (i) in the reasonable and good faith judgment of the General Part-
ner, meets that unaffiliated party standard, or (ii) has been approved by a majority of those directors of the General Partner who are
not also directors, officers or employees of an Affiliate of the General Partner.

In practice, our management pricing committees review investment advisory agreements with AXA Affiliates, which is the manner
in which the General Partner reaches a judgment regarding the appropriateness of the fees. Other transactions with AXA Affiliates
are submitted to the Audit Committee for their review and approval; the unanimous consent of the Audit Committee constitutes
the consent of three of five independent directors on the Board. We are not aware of any transaction during 2009 between our
company and any related person with respect to which these procedures were not followed.

We do not have written policies regarding the employment of immediate family members of any of our related persons. Compensa-
tion and benefits for all of our employees, including employees who are immediate family members of any of our related persons, is
established in accordance with our employment and compensation practices applicable to employees with equivalent qualifications
and responsibilities who hold similar positions.

Financial Arrangements with AXA Affiliates

The General Partner has, in its reasonable and good faith judgment (based on its knowledge of, and inquiry with respect to, com-
parable arrangements with or between unaffiliated parties), approved the following arrangements with AXA Equitable and its affili-
ates as being comparable to, or more favorable to AllianceBernstein than, those that would prevail in a transaction with an
unaffiliated party.

The following tables summarize transactions between AllianceBernstein and related persons during 2009. The first table summarizes
services we provide to related persons, and the second table summarizes services our related persons provide to us:

Parties(1)

General Description of Relationship(2)

Amounts Received
or Accrued for in 2009

AXA Asia Pacific(2)(3)

AXA Equitable(3)

We provide investment management services and ancillary accounting, valuation,
reporting, treasury and other services to the general and separate accounts of AXA
Equitable and its insurance company subsidiaries.

EQAT, AXA Enterprise Trust and AXA Premier VIP Trust

We serve as sub-adviser to these open-end mutual funds, each of which is
sponsored by a subsidiary of AXA Financial.

AXA Life Japan Limited(2)(3)

MONY Life Insurance Company and its subsidiaries(3)(4)

We provide investment management services and ancillary accounting services.

AXA Sun Life(2)(3)

$31,441,000

$29,751,000
(of which
$418,000
relates to the
ancillary
services)

$27,619,000

$11,400,000

$ 8,576,000
(of which
$150,000
relates to the
ancillary
services)

$ 4,271,000

Annual Report 2009

137

Parties(1)

General Description of Relationship(2)

Amounts Received
or Accrued for in 2009

AXA Bermuda(2)(3)

AXA France(2)(3)

AXA Winterthur(2)(3)

AXA Rosenberg Investment Management Asia Pacific(2)(3)

AXA (Canada)(2)(3)

AXA U.K. Group Pension Scheme(2)

AXA Corporate Solutions(2)(3)

AXA Germany(2)(3)

AXA Belgium(2)(3)
AXA Mediterranean(2)(3)

AXA Reinsurance Company(2)(3)
AXA Foundation, Inc., a subsidiary of AXA Financial(2)

Other AXA subsidiaries(2)

$3,531,000

$2,179,000

$2,010,000

$1,939,000

$1,710,000

$1,634,000

$1,313,000

$ 966,000

$ 618,000
$ 176,000
$ 171,000

$ 159,000

$ 187,000

(1) AllianceBernstein or one of its subsidiaries is a party to each transaction.

(2) We provide investment management services unless otherwise indicated.

(3) This entity is a subsidiary of AXA. AXA is an indirect parent of AllianceBernstein.

(4) Subsidiaries include MONY Life Insurance Company of America and U.S. Financial Life Insurance Company.

Parties(1)(2)

General Description of Relationship

Amounts Paid
or Accrued for in 2009

AXA Business Services Pvt. Ltd.

AXA Advisors

AXA Equitable

AXA Equitable

AXA Advisors

AXA Group Solutions Pvt. Ltd.

AXA Technology Services India Pvt. Ltd.

GIE Informatique AXA (“GIE”)

AXA Business Services provides data processing services and support for certain
investment operations functions.

AXA Advisors distributes certain of our Retail Products and provides Private Client
referrals.

We are covered by various insurance policies maintained by AXA Equitable.

AXA Equitable provides certain data processing services and related functions.

AXA Advisors sells shares of our mutual funds under Distribution Services and
Educational Support agreements.

AXA Group Solution Pvt. Ltd provides maintenance and development support for
applications.

AXA Technology Services India Pvt. Ltd. provides certain data processing services
and functions.

GIE provides cooperative technology development and procurement services to us
and to various other subsidiaries of AXA.

$6,921,000

$6,918,000

$3,872,000

$2,591,000

$1,935,000

$1,586,000

$1,317,000

$ 998,000

(1) AllianceBernstein is a party to each transaction.

(2) Each entity is a subsidiary of AXA. AXA is an indirect parent of AllianceBernstein.

Additional Transactions with Related Persons

In January 2008, AllianceBernstein and AXA executed guarantees in connection with a three-year $950 million Revolving Credit
Agreement (“SCB LLC Credit Agreement”). If SCB LLC is unable to meet its obligations, AllianceBernstein or AXA will pay the
obligations when due or on demand. AllianceBernstein will reimburse AXA to the extent AXA must pay on its guarantee. This
arrangement remains in effect until the later of payment in full of any borrowings under the SCB LLC Credit Agreement has been
made or the credit agreement expires.

138

AllianceBernstein

On February 1, 2001, AllianceBernstein and AXA Asia Pacific entered into a Subscription and Shareholders Agreement under
which they established two investment management companies in Australia and New Zealand named AllianceBernstein Australia
Limited and AllianceBernstein New Zealand Limited, respectively. AXA Asia Pacific and AllianceBernstein each own fifty percent
(50%) of the equity of each company and have equal representation on the boards. These companies currently manage approx-
imately $28.3 billion in client assets, and earned approximately $40.9 million in management fees in 2009 (of which $14.0 million is
included in the table above). AllianceBernstein and AXA Asia Pacific have agreed to combine their New Zealand operations with
and into their Australia operations. As a result, New Zealand client service, portfolio management and operations will be performed
in Australia. The transition is expected to be completed during the first quarter of 2010.

AXA Advisors was our 18th largest distributor of U.S. Funds in 2009, for which we paid AXA Advisors sales concessions on sales of
approximately $303 million. Various subsidiaries of AXA distribute certain of our Non-U.S. Funds, for which such entities received
aggregate distribution payments of approximately $229,000 in 2009.

AXA Equitable and its affiliates are not obligated to provide funds to us, except for ACMC Inc.’s and the General Partner’s obligation
to fund certain of our incentive compensation and employee benefit plan obligations. ACMC Inc. and the General Partner are obli-
gated, subject to certain limitations, to make capital contributions to AllianceBernstein in an amount equal to the payments
AllianceBernstein is required to make as incentive compensation under the employment agreements entered into in connection with
AXA Equitable’s 1985 acquisition of Donaldson, Lufkin and Jenrette Securities Corporation (since November 2000, a part of Credit
Suisse Group) as well as obligations of AllianceBernstein to various employees and their beneficiaries under AllianceBernstein’s Capital
Accumulation Plan. In 2009, ACMC Inc. made capital contributions to AllianceBernstein in the amount of approximately $4.9 million
in respect of these obligations. ACMC Inc.’s obligations to make these contributions are guaranteed by Equitable Holdings, LLC (a
wholly-owned subsidiary of AXA Equitable), subject to certain limitations. All tax deductions with respect to these obligations, to the
extent funded by ACMC Inc., the General Partner or Equitable Holdings, LLC, will be allocated to ACMC Inc. or the General
Partner.

Arrangements with Immediate Family Members of Related Persons

Two individuals who served as executive officers during a portion of 2009, one of whom was also a director, have immediate family
members whom we employ. We established the compensation and benefits of each such family member in accordance with our
employment and compensation practices applicable to employees with equivalent qualifications and responsibilities who hold similar
positions. These employees are three of our 4,369 employees.

Gerald M. Lieberman’s daughter, Andrea L. Feldman, is employed in Financial Planning & Analysis and received 2009 compensa-
tion of $119,000 (salary, cash bonus and contribution to the Profit Sharing Plan). Mr. Lieberman’s son-in-law, Jonathan H. Feld-
man, Ms. Feldman’s spouse, is employed in Retail Services and received 2009 compensation of $237,086 (salary, cash bonus, long-
term incentive compensation, contribution to the Profit Sharing Plan and life insurance premiums). Gerald M. Lieberman was
Director of the General Partner and the President and Chief Operating Officer of the General Partner, AllianceBernstein and Hold-
ing until his retirement on July 31, 2009.

James G. Reilly’s brother, Michael J. Reilly, is a U.S. Large Cap Growth portfolio manager and received 2009 compensation of
$1,380,971 (salary, cash bonus, long-term incentive compensation, options amortization, contribution to the Profit Sharing Plan and
life insurance premiums). James G. Reilly is a Senior Vice President of the General Partner, AllianceBernstein and Holding, and he
is our U.S. Large Cap Growth team leader.

Director Independence

See “Corporate Governance—Independence of Certain Directors” in Item 10.

Annual Report 2009

139

Item 14.

Principal Accounting Fees and Services

The following table presents fees for professional audit services rendered by PricewaterhouseCoopers LLP (“PwC”) for the audit of
AllianceBernstein’s and Holding’s annual financial statements for 2009 and 2008, respectively, and fees for other services rendered
by PwC:

Audit fees(1)

Audit related fees(2)

Tax fees(3)

All other fees(4)

Total

2009

2008

(in thousands)

$ 6,173

$ 7,490

2,439

2,167

5

2,408

2,376

5

$10,784

$12,279

(1)

Includes $87,675 and $105,000 paid for audit services to Holding in 2009 and 2008, respectively.

(2) Audit related fees consist principally of fees for audits of financial statements of certain employee benefit plans, internal control reviews and accounting con-

sultation.

(3) Tax fees consist of fees for tax consultation and tax compliance services.

(4) All other fees in 2009 and 2008 consisted of miscellaneous non-audit services.

On November 9, 2005, the Audit Committee adopted a policy to pre-approve audit and non-audit service engagements with the
independent registered public accounting firm. This policy was revised on August 3, 2006. The independent registered public
accounting firm is to provide annually a comprehensive and detailed schedule of each proposed audit and non-audit service to be
performed. The Audit Committee then affirmatively indicates its approval of the listed engagements. Engagements that are not list-
ed, but that are of similar scope and size to those listed and approved, may be deemed to be approved, if the fee for such service is
less than $100,000. In addition, the Audit Committee has delegated to its chairman the ability to approve any permissible non-audit
engagement where the fees are expected to be less than $100,000.

140

AllianceBernstein

PART IV

Item 15.

Exhibits, Financial Statement Schedules

(a)

There is no document filed as part of this Form 10-K.

Financial Statement Schedule.

Attached to this Form 10-K is a schedule describing Valuation and Qualifying Account-Allowance for Doubtful Accounts
for the three years ended December 31, 2009, 2008 and 2007. PwC’s report regarding the schedule is also attached.

(b)

Exhibits.

The following exhibits required to be filed by Item 601 of Regulation S-K are filed herewith or incorporated by reference
herein, as indicated:

Exhibit

Description

2.01

3.01

3.02

3.03

3.04

3.05

3.06

3.07

3.08

10.01

10.02

10.03

10.04

10.05

10.06

10.07

10.08

10.09

Agreement between Federated Investors, Inc. and Alliance Capital Management L.P. dated as of October 28, 2004 (incorporated by reference to Exhibit 2.1 to
Form 10-Q for the quarterly period ended September 30, 2004, as filed November 8, 2004).

Amended and Restated Certificate of Limited Partnership dated February 24, 2006 of Holding (incorporated by reference to Exhibit 99.06 to Form 8-K, as filed
February 24, 2006).

Amendment No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited Partnership of Holding (incorporated by reference to Exhibit 3.1 to
Form 10-Q for the quarterly period ended September 30, 2006, as filed November 8, 2006).

Amended and Restated Agreement of Limited Partnership dated October 29, 1999 of Alliance Capital Management Holding L.P. (incorporated by reference to
Exhibit 3.2 to Form 10-K for the fiscal year ended December 31, 2003, as filed March 10, 2004).

Amended and Restated Certificate of Limited Partnership dated February 24, 2006 of AllianceBernstein (incorporated by reference to Exhibit 99.07 to Form 8-K,
as filed February 24, 2006).

Amendment No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited Partnership of AllianceBernstein (incorporated by reference to
Exhibit 3.2 to Form 10-Q for the quarterly period ended September 30, 2006, as filed November 8, 2006).

Amended and Restated Agreement of Limited Partnership dated October 29, 1999 of Alliance Capital Management L.P. (incorporated by reference to Exhibit 3.3
to Form 10-K for the fiscal year ended December 31, 2003, as filed March 10, 2004).

Certificate of Amendment to the Certificate of Incorporation of AllianceBernstein Corporation (incorporated by reference to Exhibit 99.08 to Form 8-K, as filed
February 24, 2006).

AllianceBernstein Corporation By-Laws with amendments through February 24, 2006 (incorporated by reference to Exhibit 99.09 to Form 8-K, as filed
February 24, 2006).

Amended and Restated AllianceBernstein Incentive Compensation Award Program (as amended and restated as of December 7, 2009).

Post-December 1, 2009 Award Provisions under the Amended and Restated AllianceBernstein Incentive Compensation Award Program.

Form of 2009 Award Agreement under Incentive Compensation Award Program and 1997 Long Term Incentive Plan.

Retirement Agreement between Gerald M. Lieberman, AllianceBernstein Corporation and AllianceBernstein L.P. dated as of June 9, 2009.

Summary of AllianceBernstein L.P.’s Lease at 1345 Avenue of the Americas, New York, New York 10105.

Guidelines for Transfer of AllianceBernstein L.P. Units.

Form of Award Agreement under the Special Option Program (incorporated by reference to Exhibit 10.05 to Form 10-K for the fiscal year ended December 31,
2008, as filed February 23, 2009).

Amended and Restated Commercial Paper Dealer Agreement, dated as of February 10, 2009, among Banc of America Securities LLC, Merrill Lynch Money
Markets Inc., Deutsche Bank Securities Inc. and AllianceBernstein L.P. (incorporated by reference to Exhibit 10.11 to Form 10-K for the fiscal year ended
December 31, 2008, as filed February 23, 2009).

Employment Agreement among Peter S. Kraus, AllianceBernstein Corporation, AllianceBernstein Holding L.P. and AllianceBernstein L.P., dated as of
December 19, 2008 (incorporated by reference to Exhibit 99.02 to Form 8-K, as filed December 24, 2008).

Annual Report 2009

141

Exhibit

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

12.01

21.01

23.01

31.01

31.02

32.01

32.02

Description

Revolving Credit Agreement dated as of January 25, 2008 among Sanford C. Bernstein & Co., LLC, as Borrower, AllianceBernstein L.P., as U.S. Guarantor,
Citibank, N.A., as Administrative Agent, Citigroup Global Markets Inc., as Arranger, JPMorgan Chase Bank, N.A. and Bank of America, N.A., as Co-Syndication
Agents, HSBC Bank USA, National Association, as Documentation Agent, and the financial institutions whose names appear on the signature pages as “Banks”
(incorporated by reference to Exhibit 10.08 to Form 10-K for the fiscal year ended December 31, 2007, as filed February 25, 2008).

Amended and Restated 1997 Long Term Incentive Plan, as amended through November 28, 2007 (incorporated by reference to Exhibit 10.02 to Form 10-K for
the fiscal year ended December 31, 2007, as filed February 25, 2008).

Supplement dated November 2, 2007 to the Revolving Credit Facility (incorporated by reference to Exhibit 10.10 to Form 10-K for the fiscal year ended
December 31, 2007, as filed February 25, 2008). (See Exhibit 10.14.)

Amended and Restated Issuing and Paying Agency Agreement, dated as of May 3, 2006 (incorporated by reference to Exhibit 10.2 to Form 10-Q for the
quarterly period ended March 31, 2006, as filed May 8, 2006).

Revolving Credit Facility dated as of February 17, 2006 among AllianceBernstein L.P., as Borrower, Bank of America, N.A., as Administrative Agent, Banc of
America Securities LLC, as Arranger, Citibank N.A. and The Bank of New York, as Co-Syndication Agents, Deutsche Bank Securities Inc. and JPMorgan Chase
Bank, N.A., as Co-Documentation Agents, and The Various Financial Institutions Whose Names Appear on the Signature Pages as “Banks” (incorporated by
reference to Exhibit 10.1 to Form 10-K for the fiscal year ended December 31, 2005, as filed February 24, 2006).

Investment Advisory and Management Agreement for MONY Life Insurance Company (incorporated by reference to Exhibit 10.4 to Form 10-K for the fiscal year
ended December 31, 2004, as filed March 15, 2005).

Investment Advisory and Management Agreement for the General Account of AXA Equitable Life Insurance Company (incorporated by reference to Exhibit 10.5
to Form 10-K for the fiscal year ended December 31, 2004, as filed March 15, 2005).

Alliance Capital Management L.P. Partners Plan of Repurchase adopted as of February 20, 2003 (incorporated by reference to Exhibit 10.2 to Form 10-K for the
fiscal year ended December 31, 2002, as filed March 27, 2003).

Services Agreement dated as of April 22, 2001 between Alliance Capital Management L.P. and AXA Equitable Life Insurance Company (incorporated by
reference to Exhibit 10.19 to Form 10-K for the fiscal year ended December 31, 2001, as filed March 28, 2002).

Alliance Capital Management L.P. Annual Elective Deferral Plan (incorporated by reference to Exhibit 99 to Form S-8, as filed November 6, 2000).

Extendible Commercial Notes Dealer Agreement, dated as of December 14, 1999 (incorporated by reference to Exhibit 10.10 to the Form 10-K for the fiscal year
ended December 31, 1999, as filed March 28, 2000).

Amended and Restated Investment Advisory and Management Agreement dated January 1, 1999 among Alliance Capital Management Holding L.P., Alliance
Corporate Finance Group Incorporated, and AXA Equitable Life Insurance Company (incorporated by reference to Exhibit (a)(6) to Form 10-Q/A for the quarterly
period ended September 30, 1999, as filed on September 28, 2000).

Amended and Restated Accounting, Valuation, Reporting and Treasury Services Agreement dated January 1, 1999 between Alliance Capital Management
Holding L.P., Alliance Corporate Finance Group Incorporated, and AXA Equitable Life Insurance Company (incorporated by reference to Exhibit (a)(7) to the Form
10-Q/A for the quarterly period ended September 30, 1999, as filed September 28, 2000).

Alliance Capital Accumulation Plan (incorporated by reference to Exhibit 10.11 to Form 10-K for the fiscal year ended December 31, 1988, as filed March 31,
1989).

AllianceBernstein Consolidated Ratio of Earnings to Fixed Charges in respect of the years ended December 31, 2009, 2008 and 2007.

Subsidiaries of AllianceBernstein.

Consents of PricewaterhouseCoopers LLP.

Certification of Mr. Kraus furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Mr. Joseph furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Mr. Kraus furnished for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Mr. Joseph furnished for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.01

List of comparable companies utilized by McLagan Partners to generate 2009 compensation benchmarking data.

142

AllianceBernstein

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date: February 11, 2010

By: /s/ Peter S. Kraus

AllianceBernstein Holding L.P.

Peter S. Kraus
Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Exchange Act, this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

Date: February 11, 2010

Date: February 11, 2010

/s/ Robert H. Joseph, Jr.

Robert H. Joseph, Jr.
Chief Financial Officer

/s/ Edward J. Farrell

Edward J. Farrell
Chief Accounting Officer

Annual Report 2009

143

Directors

/s/ Peter S. Kraus

Peter S. Kraus
Chairman of the Board

/s/ Dominique Carrel-Billiard

Dominique Carrel-Billiard
Director

/s/ Christopher M. Condron

Christopher M. Condron
Director

/s/ Henri de Castries

Henri de Castries
Director

/s/ Denis Duverne

Denis Duverne
Director

/s/ Richard S. Dziadzio

Richard S. Dziadzio
Director

/s/ Deborah S. Hechinger

Deborah S. Hechinger
Director

/s/ Weston M. Hicks

Weston M. Hicks
Director

/s/ Nick Lane

Nick Lane
Director

/s/ Lorie A. Slutsky

Lorie A. Slutsky
Director

/s/ A.W. (Pete) Smith, Jr.

A.W. (Pete) Smith, Jr.
Director

/s/ Peter J. Tobin

Peter J. Tobin
Director

144

AllianceBernstein

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2009 Company Information

AllianceBernstein Holding L.P.
New York Stock Exchange
Symbol: AB

Headquarters
1345 Avenue of the Americas
New York, New York 10105
212.969.1000
www.alliancebernstein.com

Unitholder Investor Relations
Phone   800.962.2134
212.969.2136
Fax  
E-mail 
ir@alliancebernstein.com 
www.alliancebernstein.com/investorrelations

All forms we ﬁ le with the US Securities and 
Exchange Commission, as well as this annual 
report, can be found in the Investor & Media 
Relations section of our website. 

Unitholder Account Assistance
Unitholders who own units in certiﬁ cate form 
should contact the transfer agent and registrar 
listed below with any questions:

Media Relations
John Meyers
212.969.2301

(regular mail)
Shareholder Relations Department
P.O. Box 358015
Pittsburgh, PA 15252-8015

(overnight mail)
BNY Mellon Shareowner Services
480 Washington Boulevard, 27th Floor
Jersey City, NJ 07310-1900
US 866.737.9896
Outside the US 201.680.6578
E-mail  shrrelations@bnymellon.com
www.bnymellon.com/shareowner/isd

Unitholder Tax Assistance
Unitholders with Schedule K-1 or any tax-related 
questions can contact: 

Phone   800.526.3132
Fax  
212.969.6870
E-mail   K1help@alliancebernstein.com
www.taxpackagesupport.com/ab

Independent Public Accountants
PricewaterhouseCoopers LLP
New York

Mutual Fund Shareholder Information
For US Investors:
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, Texas 78278-6003
Monday to Friday, 8:30 am–7:00 pm ET
800.221.5672
US Direct Number 210.384.6000
24-Hour Automated Assistance 
(aka “Alliance Answer”) 
800.251.0539
www.alliancebernstein.com

For non-US Investors:
AllianceBernstein Investor Services,
a unit of AllianceBernstein (Luxembourg) S.A. 
Société Anonyme
R.C.S. Luxembourg B 34 405
18, rue Eugène Ruppert
L-2453 Luxembourg
Phone: International Access Code + 800.22.63.8637
Be advised that only the international access 
code is required to dial this number and not the 
country code.
Alt. Phone: + 352.46.39.36.151

AllianceBernstein Institutional Investments 
Ellen Gutierrez
212.969.2438
www.alliancebernstein.com/institutional

Bernstein Global Wealth Management
212.486.5800
www.bernstein.com

Sanford C. Bernstein & Co., LLC 
Institutional Research Services
Lori Lewin
212.756.4226
www.bernsteinresearch.com

Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this report 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 signiﬁ cant of these factors include, but are not limited to, the following: the performance of ﬁ nancial markets, the investment performance 
of sponsored investment products and separately managed accounts, general economic conditions, industry trends, future acquisitions, competitive conditions and government 
regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly traded partnerships are taxed. We caution readers to carefully consider 
such factors. Further, such 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 reﬂ ect 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” in Item 1A and “Cautions Regarding Forward-Looking Statements” in Item 7 of the enclosed Form 10-K. Any or all of the forward-looking 
statements that we make in this report, the enclosed Form 10-K, other documents we ﬁ le with or furnish to the SEC, and any other public statements we issue, 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” could also adversely affect our 
ﬁ nancial condition, results of operations and business prospects.

AllianceBernstein® and the AB AllianceBernstein logo are trademarks and service marks owned by AllianceBernstein L.P.
© 2010 AllianceBernstein Holding L.P. and AllianceBernstein L.P.
Printed in the USA

AB–4737–0210

AllianceBernstein Holding L.P.
1345 Avenue of the Americas
New York, NY 10105

www.alliancebernstein.com