Exhibit
99.1





Part
I





FINANCIAL
INFORMATION


Item 1.Financial
Statements





ALLIANCEBERNSTEIN
L.P.


AND
SUBSIDIARIES


Condensed
Consolidated Statements of Financial Condition


(in
thousands)





March
      31,
                  2009
                
                
                December
      31,
                  2008(unaudited)ASSETSCash
      and cash equivalents
                
                $
                539,158
                
                
                $
                552,577Cash
      and securities segregated, at market (cost: $2,221,338 and
      $2,568,339)
                
                
                2,222,207
                
                
                
                2,572,569Receivables,
      net:Brokers
      and dealers
                
                
                126,910
                
                
                
                251,644Brokerage
      clients
                
                
                411,277
                
                
                
                398,979Fees,
      net
                
                
                314,921
                
                
                
                377,167Investments:Deferred
      compensation related
                
                
                390,161
                
                
                
                305,809Other
                
                
                239,122
                
                
                
                272,034Furniture,
      equipment and leasehold improvements, net
                
                
                376,498
                
                
                
                365,804Goodwill,
      net
                
                
                2,893,029
                
                
                
                2,893,029Intangible
      assets, net
                
                
                238,315
                
                
                
                243,493Deferred
      sales commissions, net
                
                
                101,778
                
                
                
                113,541Other
      assets
                
                
                171,578
                
                
                
                156,813Total
      assets
                
                $
                8,024,954
                
                
                $
                8,503,459LIABILITIES
      AND CAPITALLiabilities:Payables:Brokers
      and dealers
                
                $
                86,717
                
                
                $
                110,655Brokerage
      clients
                
                
                2,411,728
                
                
                
                2,755,104AllianceBernstein
      mutual funds
                
                
                62,577
                
                
                
                195,617Accounts
      payable and accrued expenses
                
                
                305,127
                
                
                
                310,392Accrued
      compensation and benefits
                
                
                360,572
                
                
                
                360,086Debt
                
                
                361,925
                
                
                
                284,779Total
      liabilities
                
                
                3,588,646
                
                
                
                4,016,633Commitments
      and contingencies (See
      Note 7)Capital:General
      Partner
                
                
                44,671
                
                
                
                45,010Limited
      partners: 265,350,019 and 263,717,610 units issued and
      outstanding
                
                
                4,451,497
                
                
                
                4,485,564Capital
      contributions receivable from General Partner
                
                
                (22,621
                )
                
                
                (23,168
                )Deferred
      compensation expense
                
                
                (129,604
                )
                
                
                (117,600
                )Accumulated
      other comprehensive income (loss)
                
                
                (76,859
                )
                
                
                (72,147
                )Partners’
      capital attributable to AllianceBernstein Unitholders
                
                
                4,267,084
                
                
                
                4,317,659Non-controlling
      interests in consolidated entities
                
                
                169,224
                
                
                
                169,167Total
      capital
                
                
                4,436,308
                
                
                
                4,486,826Total
      liabilities and capital
                
                $
                8,024,954
                
                
                $
                8,503,459





See
Accompanying Notes to Condensed Consolidated Financial
Statements.


1


ALLIANCEBERNSTEIN
L.P.


AND
SUBSIDIARIES


Condensed
Consolidated Statements of Income


(in
thousands, except per unit amounts)


(unaudited)





Three
      Months Ended March 31,2009
                                                
                                                
                                                2008Revenues:Investment
      advisory and services fees
                                                
                                                $
                                                444,962
                                                
                                                
                                                $
                                                817,231Distribution
      revenues
                                                
                                                
                                                58,076
                                                
                                                
                                                
                                                109,302Institutional
      research services
                                                
                                                
                                                105,642
                                                
                                                
                                                
                                                118,286Dividend
      and interest income
                                                
                                                
                                                7,801
                                                
                                                
                                                
                                                30,992Investment
      gains (losses)
                                                
                                                
                                                (41,237
                                                )
                                                
                                                
                                                (64,230
                                                )Other
      revenues
                                                
                                                
                                                24,072
                                                
                                                
                                                
                                                30,780Total
      revenues
                                                
                                                
                                                599,316
                                                
                                                
                                                
                                                1,042,361Less:
      Interest expense
                                                
                                                
                                                1,752
                                                
                                                
                                                
                                                13,339Net
      revenues
                                                
                                                
                                                597,564
                                                
                                                
                                                
                                                1,029,022Expenses:Employee
      compensation and benefits
                                                
                                                
                                                313,803
                                                
                                                
                                                
                                                433,672Promotion
      and servicing:Distribution
      plan payments
                                                
                                                
                                                42,441
                                                
                                                
                                                
                                                79,224Amortization
      of deferred sales commissions
                                                
                                                
                                                14,897
                                                
                                                
                                                
                                                22,019Other
                                                
                                                
                                                39,203
                                                
                                                
                                                
                                                57,223General
      and administrative
                                                
                                                
                                                147,287
                                                
                                                
                                                
                                                154,943Interest
      on borrowings
                                                
                                                
                                                964
                                                
                                                
                                                
                                                6,565Amortization
      of intangible assets
                                                
                                                
                                                5,179
                                                
                                                
                                                
                                                5,179Total
      expenses
                                                
                                                
                                                563,774
                                                
                                                
                                                
                                                758,825Operating
      income
                                                
                                                
                                                33,790
                                                
                                                
                                                
                                                270,197Non-operating
      income
                                                
                                                
                                                6,285
                                                
                                                
                                                
                                                4,752Income
      before income taxes
                                                
                                                
                                                40,075
                                                
                                                
                                                
                                                274,949Income
      taxes
                                                
                                                
                                                8,564
                                                
                                                
                                                
                                                30,045Net
      income
                                                
                                                
                                                31,511
                                                
                                                
                                                
                                                244,904Net
      loss in consolidated entities attributable to non-controlling
      interests
                                                
                                                
                                                5,340
                                                
                                                
                                                
                                                2,539Net
      income attributable to AllianceBernstein Unitholders
                                                
                                                $
                                                36,851
                                                
                                                
                                                $
                                                247,443Net
      income per AllianceBernstein Unit:Basic
                                                
                                                $
                                                0.14
                                                
                                                
                                                $
                                                0.94Diluted
                                                
                                                $
                                                0.14
                                                
                                                
                                                $
                                                0.94





See
Accompanying Notes to Condensed Consolidated Financial
Statements.


2


ALLIANCEBERNSTEIN
L.P.


AND
SUBSIDIARIES


Condensed
Consolidated Statements of Cash Flows


(in
thousands)


(unaudited)





Three
      Months Ended March 31,2009
                
                
                2008Cash
      flows from operating activities:Net
      income
                
                $
                31,511
                
                
                $
                244,904Adjustments
      to reconcile net income to net cash provided by operating
      activities:Amortization
      of deferred sales commissions
                
                
                14,897
                
                
                
                22,019Amortization
      of non-cash deferred compensation
                
                
                16,141
                
                
                
                15,825Depreciation
      and other amortization
                
                
                21,089
                
                
                
                27,311Unrealized
      (gains) losses on deferred compensation related
      investments
                
                
                (15,439
                )
                
                
                57,877Other,
      net
                
                
                7,574
                
                
                
                13,174Changes
      in assets and liabilities:Decrease
      in segregated cash and securities
                
                
                350,362
                
                
                
                498,250Decrease
      in receivables
                
                
                167,897
                
                
                
                289,548(Increase)
      in investments
                
                
                (41,724
                )
                
                
                (716,497
                )(Increase)
      in deferred sales commissions
                
                
                (3,134
                )
                
                
                (8,594
                )(Increase)
      decrease in other assets
                
                
                (18,738
                )
                
                
                23,560(Decrease)
      in payables
                
                
                (494,982
                )
                
                
                (291,283
                )Increase
      in accounts payable and accrued expenses
                
                
                10,620
                
                
                
                13,043Increase
      in accrued compensation and benefits
                
                
                1,086
                
                
                
                8,569Net
      cash provided by operating activities
                
                
                47,160
                
                
                
                197,706Cash
      flows from investing activities:Purchases
      of investments
                
                
                (2,135
                )
                
                
                (3,284
                )Proceeds
      from sales of investments
                
                
                2,416
                
                
                
                7,998Additions
      to furniture, equipment and leasehold improvements
                
                
                (28,685
                )
                
                
                (22,406
                )Net
      cash used in investing activities
                
                
                (28,404
                )
                
                
                (17,692
                )Cash
      flows from financing activities:Issuance
      of commercial paper, net
                
                
                10,613
                
                
                
                31,725Proceeds
      from bank loans, net
                
                
                66,000
                
                
                
                98,000(Decrease)
      in overdrafts payable
                
                
                (13,349
                )
                
                
                (20,263
                )Cash
      distributions to General Partner and unitholders
                
                
                (99,154
                )
                
                
                (308,037
                )Cash
      distributions to Joint Venture Partners
                
                
                —
                
                
                
                (257
                )Capital
      contributions from non-controlling interests to fund AB Venture
      activities
                
                
                5,505
                
                
                
                4,772Capital
      contributions from General Partner
                
                
                897
                
                
                
                897Additional
      investment by Holding with proceeds from exercise of compensatory options
      to buy Holding Units
                
                
                —
                
                
                
                4,581Purchases
      of Holding Units to fund deferred compensation plans, net of
      issuances
                
                
                (597
                )
                
                
                (4,855
                )Other
      financing
                
                
                168
                
                
                
                —Net
      cash used in financing activities
                
                
                (29,917
                )
                
                
                (193,437
                )Effect
      of exchange rate changes on cash and cash equivalents
                
                
                (2,258
                )
                
                
                5,358Net
      (decrease) in cash and cash equivalents
                
                
                (13,419
                )
                
                
                (8,065
                )Cash
      and cash equivalents as of beginning of period
                
                
                552,577
                
                
                
                576,416Cash
      and cash equivalents as of end of period
                
                $
                539,158
                
                
                $
                568,351





See
Accompanying Notes to Condensed Consolidated Financial
Statements.


3


ALLIANCEBERNSTEIN
L.P.


AND
SUBSIDIARIES


Notes
to Condensed Consolidated Financial Statements


March
31, 2009


(unaudited)





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.





These
statements should be read in conjunction with AllianceBernstein’s audited
consolidated financial statements included in AllianceBernstein’s Form 10-K for
the year ended December 31, 2008.





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 Investment 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
      programs 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 foundations, partnerships, private and
      family corporations, and other entities, by means of separately managed
      accounts, hedge funds, mutual funds and other investment
      vehicles.





•
            Institutional Research Services –
      servicing our institutional clients seeking independent research,
      portfolio strategy and brokerage-related
  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 that may trade at bargain
      prices;





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





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





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





•
            Passive
      management, including both index and enhanced index
      strategies;





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





•
            Asset
      allocation, by which we offer specifically-tailored investment solutions
      for our clients (e.g., customized target-date fund retirement services for
      institutional defined contribution plan
  clients).





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.





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


4


As of
March 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, AXA
Financial, Inc. (an indirect wholly-owned subsidiary of AXA, “AXA Financial”),
AXA Equitable Life Insurance Company (a wholly-owned subsidiary of AXA
Financial, “AXA Equitable”), and certain subsidiaries of AXA Financial and AXA,
collectively referred to as “AXA and its subsidiaries”, owned approximately 1.6%
of the issued and outstanding units representing assignments of beneficial
ownership of limited partnership interests in Holding (“Holding
Units”).





As of
March 31, 2009, the ownership structure of AllianceBernstein, expressed as a
percentage of general and limited partnership interests, was as
follows:





AXA
      and its subsidiaries
                  
                  
                  63.7
                  %Holding
                  
                  
                  34.3Unaffiliated
      holders
                  
                  
                  2.0100.0
                  %





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 64.3% economic interest in
AllianceBernstein as of March 31, 2009.




On
January 6, 2009, AXA America Holdings, Inc., a wholly-owned subsidiary of AXA,
purchased the remaining 8,160,000 AllianceBernstein Units held by SCB Partners,
Inc. (a wholly-owned subsidiary of SCB Inc., formerly known as Sanford C.
Bernstein Inc.).




2.
            Summary of Significant Accounting
      Policies





Basis
of Presentation





The
interim condensed consolidated financial statements of AllianceBernstein
included herein have been prepared in accordance with the instructions to Form
10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange
Commission (“SEC”). In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, necessary for a fair statement of the
interim results, have been made. The preparation of the condensed 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 condensed
consolidated financial statements and the reported amounts of revenues and
expenses during the interim reporting periods. Actual results could differ from
those estimates. The December 31, 2008 condensed consolidated statement of
financial condition was derived from audited financial statements but does not
include all disclosures required by accounting principles generally accepted in
the United States of America.





Principles
of Consolidation





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





Reclassifications





Effective
January 1, 2009, we adopted Statement of Financial Accounting Standards No. 160
(“SFAS No. 160”), “Noncontrolling Interests in
Consolidated Financial Statements, an Amendment of ARB No. 51”. The objective of SFAS No.
160 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 standards for the
noncontrolling interest in a subsidiary.  The disclosure provisions
for SFAS No. 160 require retrospective application for all periods presented. As
a result, certain prior period amounts have been reclassified to conform to the
current year presentation. These include:(i) net loss
in consolidated entities attributable to non-controlling interests, previously
included within general and administrative expenses, currently shown separately
in the condensed consolidated statements of income, (ii) non-controlling
interests in consolidated entities previously included in liabilities, currently
shown as a component of total capital in the condensed 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
condensed consolidated statements of cash flows.




In
addition, we also reclassified unrealized losses (gains) on deferred
compensation related investments previously included within other, net,
currently shown separately in the condensed consolidated statements of cash
flows.


5


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 Partner. 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 April
22, 2009, the General Partner declared a distribution of $37.5 million, or $0.14
per AllianceBernstein Unit, representing a distribution of Available Cash Flow
for the three months ended March 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 May 14, 2009 to holders of record
on May 4, 2009.





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 qualitative 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.





Investments





Investments
include United States Treasury Bills, unconsolidated mutual funds and limited
partnership hedge funds we sponsor and manage, and investments held by a
consolidated venture capital fund of which we are the general partner and in
which we hold a 10% partnership interest.




Investments
in United States Treasury Bills, mutual funds, and other equity and fixed income
securities are classified as either trading or available-for-sale securities, in
accordance with Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments
in Debt and Equity Securities”. Trading investments are stated at fair
value, based on quoted market prices, with unrealized gains and losses reported
in net income. Available-for-sale investments are stated at fair value, based on
quoted market prices, 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 the realized gain or loss
on investments sold.




We use
the equity method of accounting for investments in limited partnership
hedge funds in accordance with EITF D-46, “Accounting for Limited Partnership
Investments”. The equity in earnings of our limited partnership
hedge fund investments is included in investments gains and losses on the
condensed consolidated statements of income.




The
investments held by our consolidated venture capital fund are primarily
privately held and are initially valued at cost. These investments are adjusted
to fair value when changes in the underlying fair values are readily
ascertainable, reflecting the occurrence of “significant developments” (i.e., business, economic, or
market events that may affect a company in which an investment has been made).
Adjustments to fair value are recorded as unrealized gains and losses in
investment gains and losses on the condensed consolidated statements of income.
There is one private equity investment which represents an approximate 12%
ownership of a company that we own directly, outside of our consolidated venture
capital fund.  This investment is accounted for using the cost
method.




Investments
stated at fair value are measured in accordance with Statement of Financial
Accounting Standards No. 157 (“SFAS No. 157”), “Fair Value Measurements”
(see Note
6).


6


Goodwill,
Net





On
October 2, 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 Bernstein 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 identifiable assets acquired resulted in
the recognition of goodwill of approximately $3.0 billion.




In
accordance with Statement of Financial Accounting Standards No. 142 (“SFAS No.
142”), “Goodwill and Other
Intangible Assets”, we test our single reporting unit 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 our Holding Unit price, occur, suggesting
possible impairment. As of September 30, 2008, the impairment test indicated
that goodwill was not impaired. Due to the significant declines in our assets
under management and operating results in the first quarter of 2009, and the
drop in our market capitalization to below book value at various times during
the quarter, we reviewed goodwill for impairment as of March 31, 2009. 
Some of the data we reviewed included ten-day and ninety-day Holding Unit price
trading ranges (with and without control premiums), comparable company multiples
analysis (with control premiums), precedent transaction analysis and discounted
cash flow analysis.  We determined that (i) no triggering events
occurred during the first quarter of 2009 that would indicate it is more likely
than not that goodwill is impaired, and (ii) goodwill is not impaired as of
March 31, 2009.




To the
extent that securities valuations remain depressed for prolonged periods of time
and market conditions stagnate or worsen, our assets under management, revenues,
profitability 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.




Intangible
Assets, Net





Intangible
assets consist primarily of costs assigned to acquired investment management
contracts of SCB Inc., less accumulated amortization. Intangible assets are
recognized at fair value and are amortized on a straight-line basis over their
estimated useful life of approximately 20 years. The gross carrying amount and
accumulated amortization of intangible assets subject to amortization totaled
$414.3 million and $176.0 million, respectively, as of March 31, 2009 and $414.3
million and $155.3 million, respectively, as of March 31, 2008. Amortization
expense was $5.2 million for each of the three months ended March 31, 2009 and
2008, and estimated annual amortization expense for each of the next five years
is approximately $20.7 million.




Management
tests intangible assets for impairment quarterly. A present value technique is
applied to expected cash flows to estimate the fair value of intangible assets.
Estimated fair value is then compared to the recorded book value to determine
whether impairment is indicated. The key assumptions used in the estimates
include attrition factors of customer accounts, asset growth rates, direct
expenses and fee rates included in management’s current business plan and our
weighted average cost of capital of 13.4% for the discount rate. In determining
these estimates, we choose assumptions based on actual historical trends that
may or may not occur in the future. Management has determined that intangible
assets were not impaired as of March 31, 2009.




If securities
valuations remain depressed for prolonged periods of time and market conditions
stagnate or worsen, our assets under management and revenues from these
investment management contracts would likely be adversely affected. As a
result, certain triggering events, including impairment of our goodwill, may
occur requiring more frequent testing for impairment of intangibles. Such tests
may be based upon different assumptions, which could result in an impairment of
this asset. Any impairment could reduce materially the recorded amount of
intangible assets with a corresponding charge to our earnings.




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 by our
U.S. funds. Management tests the deferred sales commission asset for
recoverability quarterly and determined that the balance as of March 31, 2009
was not impaired.


7


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 as required
by Statement of Financial Accounting Standards No. 5, “Accounting for
Contingencies”, and Financial Accounting Standards Board (“FASB”)
Interpretation No. 14, “Reasonable Estimation of the Amount
of a Loss – an interpretation of FASB Statement No. 5”. 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 may be
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 assets under
management (“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
component 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 standard
pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid
prices from standard 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 vs. liabilities or any other methodology that is validated
and approved by our Valuation Committee (“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
Committee, which is composed of senior officers and employees and is chaired by
our Chief Risk Officer, is responsible for overseeing the pricing and valuation
of all investments held in client portfolios. The Committee has adopted a
Statement of Pricing Policies describing principles and policies that apply to
pricing and valuing investments held in client portfolios. We have also
established a Pricing Group, which reports to the Committee. The Committee
has delegated to the Pricing Group responsibility for monitoring the pricing
process for all investments held in client portfolios.




Institutional
research services revenue consists of brokerage transaction charges received by
Sanford C. Bernstein & Co., LLC (“SCB LLC”) and Sanford C. Bernstein Limited
(“SCBL”), each a wholly-owned subsidiary of AllianceBernstein, for independent
research and brokerage-related services provided to institutional investors.
Brokerage transaction charges earned and related expenses are recorded on a
trade-date basis. Distribution revenues, shareholder servicing fees, and
dividend and interest income are accrued as earned.





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.
Participants 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, or (ii) in options to acquire Holding Units. We typically purchase
the investments that are notionally elected by the participants and hold such
investments in a consolidated rabbi trust or custodial account. Awards generally
vest over four years but can vest as soon as immediately depending on the terms
of the individual award, the age of the participant, or as was the case of our
former Chairman and CEO, the terms of his employment 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 for which a long-term deferral election has not been made are paid
currently to participants. 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.





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


8


Compensatory
Unit Awards and Option Plans





In
accordance with Statement of Financial Accounting Standards No. 123
(revised 2004) (“SFAS No. 123-R”), “Share Based Payment”, we
recognize compensation expense related to grants of unit awards and options 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 to buy
Holding Units.





Variable
Interest Entities





In
accordance with FASB Interpretation No. 46 (revised December 2003) (“FIN 46-R”),
“Consolidation of 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 to determine the
entities that the company is required to consolidate under FIN 46-R. 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 entities,
but we derive no other benefit from these assets and cannot use them in our
operations.





As of
March 31, 2009, we have significant variable interests in certain structured
products and hedge funds with approximately $47.9 million in client assets under
management. 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 in these entities is limited to our
investments of $0.1 million in these entities.





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





As of
March 31, 2009, $2.2 billion 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 Securities Exchange Act of 1934,
as amended (“Exchange Act”).





AllianceBernstein
Investments, Inc. (“AllianceBernstein Investments”), a wholly-owned subsidiary
of AllianceBernstein and the distributor of company-sponsored mutual funds,
maintains several special bank accounts for the exclusive benefit of
customers.  As of March 31, 2009, $27.8 million of cash was 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 period. 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:





Three
      Months Ended
                  March
      31,2009
                
                
                2008(in
      thousands, except per unit amounts)Net
      income attributable to AllianceBernstein Unitholders
                
                $
                36,851
                
                
                $
                247,443Weighted
      average units outstanding - basic
                
                
                264,932
                
                
                
                260,627Dilutive
      effect of compensatory options to buy Holding Units
                
                
                —
                
                
                
                316Weighted
      average units outstanding - diluted
                
                
                264,932
                
                
                
                260,943Basic
      net income per AllianceBernstein Unit
                
                $
                0.14
                
                
                $
                0.94Diluted
      net income per AllianceBernstein Unit
                
                $
                0.14
                
                
                $
                0.94





As of
March 31, 2009 and 2008, we excluded, respectively, 12,822,155 and 3,667,552
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) from the
diluted net income per unit computation due to their anti-dilutive
effect.


9


5.
            Investments





Investments
      consist of:March
      31, 2009
                
                
                December
      31, 2008(in
      thousands)Available-for-sale
                
                $
                7,407
                
                
                $
                7,566Trading:Deferred
      compensation related
                
                
                326,524
                
                
                
                238,136United
      States Treasury Bills
                
                
                22,692
                
                
                
                52,694Other
                
                
                34,460
                
                
                
                31,717Investments
      in limited partnership hedge funds:Deferred
      compensation related
                
                
                63,637
                
                
                
                67,673Other
                
                
                1,799
                
                
                
                2,191Private
      equity investments
                
                
                171,396
                
                
                
                176,823Other
      investments
                
                
                1,368
                
                
                
                1,043Total
      investments
                
                $
                629,283
                
                
                $
                577,843




Total
investments related to deferred compensation obligations of $390.2 million and
$305.8 million as of March 31, 2009 and December 31, 2008, respectively, consist
of company-sponsored mutual funds and limited partnership hedge funds. We
typically purchase the investments that are notionally elected by deferred
compensation plan participants and maintain them in a consolidated rabbi trust
or custodial account. The rabbi trust and separate custodial account enable us
to transfer investments and hold such investments separate from other general
corporate assets for the purpose of paying future participant obligations. The
investments held in the rabbi trust and custodial account remain available to
the general creditors of AllianceBernstein. For awards made in December 2008 and
thereafter, we will continue to deposit into the rabbi trust Holding Units in
which participants notionally invested a portion of their awards. The portion of
their awards notionally invested in mutual fund shares or the money market fund,
which was previously deposited into the rabbi trust, will be deposited into the
custodial account.




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.




We
      purchase United States Treasury Bills for transfer into a special reserve
      bank custody account for the exclusive benefit of brokerage customers of
      SCB LLC when required by Rule 15c3-3 of the Exchange Act (see Note
      3).




6.
            Fair
      Value




In
accordance with SFAS No. 157, 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 established by SFAS No. 157
are as follows:





•
            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.


10


Assets
Measured at Fair Value on a Recurring Basis





The
following table summarizes the valuation of our financial instruments by SFAS
No. 157 pricing observability levels as of March 31, 2009:





Level
      1
                
                
                Level
      2
                
                
                Level
      3
                
                
                Total(in
      thousands)Cash
      equivalents
                
                $
                185,950
                
                
                $
                —
                
                
                $
                —
                
                
                $
                185,950Securities
      segregated
                
                
                —
                
                
                
                2,194,399
                
                
                
                —
                
                
                
                2,194,399Receivables
      from brokers and dealers
                
                
                (485
                )
                
                
                91
                
                
                
                —
                
                
                
                (394
                )Investments
      – available-for-sale
                
                
                7,407
                
                
                
                —
                
                
                
                —
                
                
                
                7,407Investments
      – tradingMutual
      fund investments
                
                
                325,254
                
                
                
                —
                
                
                
                —
                
                
                
                325,254Equity
      and fixed income securities
                
                
                28,504
                
                
                
                6,726
                
                
                
                500
                
                
                
                35,730U.S.
      Treasury bills
                
                
                —
                
                
                
                22,692
                
                
                
                —
                
                
                
                22,692Investments
      – private equity
                
                
                4,042
                
                
                
                —
                
                
                
                157,355
                
                
                
                161,397Total
      assets measured at fair value
                
                $
                550,672
                
                
                $
                2,223,908
                
                
                $
                157,855
                
                
                $
                2,932,435Payables
      to brokers and dealers
                
                $
                383
                
                
                $
                —
                
                
                $
                —
                
                
                $
                383Total
      liabilities measured at fair value
                
                $
                383
                
                
                $
                —
                
                
                $
                —
                
                
                $
                383




The
following table summarizes the valuation of our financial instruments by SFAS
No. 157 pricing observability levels as of December 31, 2008:





Level
      1
                
                
                Level
      2
                
                
                Level
      3
                
                
                Total(in
      thousands)Cash
      equivalents
                
                $
                184,404
                
                
                $
                —
                
                
                $
                —
                
                
                $
                184,404Securities
      segregated
                
                
                —
                
                
                
                2,524,698
                
                
                
                —
                
                
                
                2,524,698Receivables
      from brokers and dealers
                
                
                (46
                )
                
                
                680
                
                
                
                —
                
                
                
                634Investments
      – available-for-sale
                
                
                7,566
                
                
                
                —
                
                
                
                —
                
                
                
                7,566Investments
      – tradingMutual
      fund investments
                
                
                237,529
                
                
                
                —
                
                
                
                —
                
                
                
                237,529Equity
      and fixed income securities
                
                
                25,027
                
                
                
                6,874
                
                
                
                423
                
                
                
                32,324U.S.
      Treasury bills
                
                
                —
                
                
                
                52,694
                
                
                
                —
                
                
                
                52,694Investments
      – private equity
                
                
                4,694
                
                
                
                —
                
                
                
                162,129
                
                
                
                166,823Total
      assets measured at fair value
                
                $
                459,174
                
                
                $
                2,584,946
                
                
                $
                162,552
                
                
                $
                3,206,672Payables
      to brokers and dealers
                
                $
                167
                
                
                $
                —
                
                
                $
                —
                
                
                $
                167Total
      liabilities measured at fair value
                
                $
                167
                
                
                $
                —
                
                
                $
                —
                
                
                $
                167





Following
is a description of the fair value methodologies used for instruments measured
at fair value, as well as the general classification 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; as such these
      are included in Level 1 of the valuation
  hierarchy.





•
            Securities
      segregated: United States Treasury Bills segregated in a special
      reserve bank custody account as required by Rule 15c3-3 of the Exchange
      Act. As these securities are valued based on quoted yields in secondary
      markets, we have included them in Level 2 of the valuation
      hierarchy.





•
            Receivables from
      brokers and dealers: We hold several exchange traded futures and
      currency forward contracts with counterparties that are included in Level
      1 and Level 2, respectively, of the valuation
  hierarchy.




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


11


•
            Investments – private
      equity: The valuation of non-public private equity investments held
      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 the transaction
      price 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 environment 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.





•
            Payables to brokers
      and dealers: Securities sold, but not yet purchased, are included
      in Level 1 of the valuation
hierarchy.





The
following table summarizes the change in carrying value associated with Level 3
financial instruments carried at fair value during the first quarter of 2009 and
2008:





Three
      Months Ended March 31,2009
                    
                    
                    2008(in
      thousands)Balance
      as of beginning of period
                    
                    $
                    162,552
                    
                    
                    $
                    125,020Transfer
      (out) in, net
                    
                    
                    (20
                    )
                    
                    
                    —Purchases
      (sales), net
                    
                    
                    604
                    
                    
                    
                    7,027Realized
      (losses) gains, net
                    
                    
                    (22
                    )
                    
                    
                    —Unrealized
      (losses) gains, net
                    
                    
                    (5,259
                    )
                    
                    
                    205Balance
      as of end of period
                    
                    $
                    157,855
                    
                    
                    $
                    132,252




Realized
and unrealized gains and losses on Level 3 financial instruments are recorded in
investment gains and losses on the condensed consolidated statements of
income.




Assets
Measured at Fair Value on a Nonrecurring Basis




In
accordance with FASB Staff Position No. 157-2 (“FSP No. 157-2”), we adopted SFAS
No. 157 for nonfinancial assets and nonfinancial liabilities on January 1, 2009.
There were no impairments recognized for goodwill, intangible assets or other
long-lived assets for the three months ended March 31, 2009.




7.
            Commitments and
      Contingencies





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. fund shares and four years for
non-U.S. 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 $101.8 million
as of March 31, 2009. 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 $3.4 million and $6.5
million, totaled approximately $3.1 million and $8.6 million during the three
months ended March 31, 2009 and 2008, respectively.  Effective January
31, 2009, back-end load shares are no longer offered to new investors in U.S.
funds.


12


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 March 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
23% to 25% for U.S. fund shares and 21% to 42% 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 current periods ended March 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 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 March 31, 2009,
management determined that the deferred sales commission asset was not impaired.
However, if higher redemption rates continue in 2009, this asset may become
impaired. If management determines in the future that the deferred sales
commission asset is not recoverable, an impairment 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
the three months ended March 31, 2009, U.S. equity markets declined by
approximately 11.0% as measured by the change in the Standard & Poor’s 500
Stock Index and U.S. fixed income markets increased by approximately 0.1% as
measured by the change in the Barclays Aggregate Bond Index. The redemption rate
for domestic back-end load shares was 24.8% during the three months ended March
31, 2009. Changes in non-U.S. capital markets for the three months ended March
31, 2009 have ranged from a 0.9% increase to a 13.9% decrease as measured by the
MSCI World, Emerging Market and EAFE Indices. The redemption rate for non-U.S.
back-end load shares was 21.5% during the three months ended March 31, 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.


13


8.
            Qualified Employee Benefit
      Plans





We
maintain a qualified profit sharing plan (the “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.





We
maintain several defined contribution plans for foreign employees in the United
Kingdom, Australia, New Zealand, Japan and other foreign entities. Employer
contributions are generally consistent with regulatory requirements and tax
limits. Defined contribution expense for foreign entities was $2.0 million and
$3.1 million during the three months ended March 31, 2009 and 2008,
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. As of December 31, 2008, the Retirement Plan
was changed to provide that the 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). 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.




In April
2009, we contributed $12.0 million to the Retirement Plan and currently intend
to contribute an additional $1.5 million to the Retirement Plan later this year.
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.




Net
expense under the Retirement Plan consisted of:





Three
      Months Ended March 31,2009
                
                
                2008(in
      thousands)Service
      cost
                
                $
                —
                
                
                $
                792Interest
      cost on projected benefit obligations
                
                
                1,098
                
                
                
                1,241Expected
      return on plan assets
                
                
                (769
                )
                
                
                (1,148
                )Amortization
      of prior service credit
                
                
                —
                
                
                
                (109
                )Recognized
      actuarial loss
                
                
                109
                
                
                
                —Amortization
      of transition asset
                
                
                (36
                )
                
                
                (36
                )Net
      pension charge
                
                $
                402
                
                
                $
                740





9.
            Units
      Outstanding





The
following table summarizes the activity in units during the first three months
of 2009:


Outstanding
      as of December 31, 2008
                
                
                263,717,610Options
      to buy Holding Units exercised
                
                
                —Holding
      Units issued
                
                
                1,587,114Holding
      Units awarded
                
                
                46,163Holding
      Units forfeited
                
                
                (868
                )Outstanding
      as of March 31, 2009
                
                
                265,350,019





Holding
Units issued pertain to Holding Units we issued to fund deferred compensation
plan elections by participants. Holding Units awarded and Holding Units
forfeited pertain to restricted Holding Unit awards to independent members of
the Board of Directors and Century Club Plan Holding Unit awards to
AllianceBernstein employees whose primary responsibilities are to assist in the
distribution of company-sponsored mutual funds and who meet certain sales
targets.





10.
            Income
    Taxes





AllianceBernstein
is a private partnership for federal income tax purposes and, accordingly, is
not subject to federal and state corporate income taxes. However,
AllianceBernstein is subject to a 4.0% New York City unincorporated business tax
(“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 in the foreign jurisdictions where they are located.


14


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 considered 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.





Our
income tax provision for the first quarter of 2009 includes a $3.4 million
entry relating to an under-accrual of foreign taxes in the fourth quarter
of 2008.  This adjusting entry was not material to the income tax
provision or income tax liability in our condensed consolidated financial
statements or to the results of operations and financial condition in any prior
reporting period.


15


11.
            Debt





Total
credit available, debt outstanding and weighted average interest rates as of
March 31, 2009 and December 31, 2008 were as follows:





March
      31, 2009
                                                  
                                                  
                                                  December
      31, 2008Credit
                                                    Available
                                                  
                                                  
                                                  Debt
                                                    Outstanding
                                                  
                                                  
                                                  Interest
                                                    Rate
                                                  
                                                  
                                                  Credit
                                                    Available
                                                  
                                                  
                                                  Debt
                                                    Outstanding
                                                  
                                                  
                                                  Interest
                                                    Rate(in
      millions)Revolving
      credit facility(1)
                                                  
                                                  $
                                                  704.1
                                                  
                                                  
                                                  $
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  %
                                                  
                                                  $
                                                  715.2
                                                  
                                                  
                                                  $
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  %Commercial
      paper(1)(2)
                                                  
                                                  
                                                  295.9
                                                  
                                                  
                                                  
                                                  295.9
                                                  
                                                  
                                                  
                                                  0.7
                                                  
                                                  
                                                  
                                                  284.8
                                                  
                                                  
                                                  
                                                  284.8
                                                  
                                                  
                                                  
                                                  1.8Total
      revolving credit facility(1)
                                                  
                                                  
                                                  1,000.0
                                                  
                                                  
                                                  
                                                  295.9
                                                  
                                                  
                                                  
                                                  0.7
                                                  
                                                  
                                                  
                                                  1,000.0
                                                  
                                                  
                                                  
                                                  284.8
                                                  
                                                  
                                                  
                                                  1.8Revolving
      credit facility –SCB LLC
                                                  
                                                  
                                                  950.0
                                                  
                                                  
                                                  
                                                  50.0
                                                  
                                                  
                                                  
                                                  0.3
                                                  
                                                  
                                                  
                                                  950.0
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —Uncommitted
      bank loan(3)
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  16.0
                                                  
                                                  
                                                  
                                                  1.0
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —Total
                                                  
                                                  $
                                                  1,950.0
                                                  
                                                  
                                                  $
                                                  361.9
                                                  
                                                  
                                                  
                                                  0.6
                                                  
                                                  
                                                  $
                                                  1,950.0
                                                  
                                                  
                                                  $
                                                  284.8
                                                  
                                                  
                                                  
                                                  1.8


________________


(1)
              Our
      $1.0 billion revolving credit facility supports our commercial paper
      program; amounts borrowed under the commercial paper program reduce
      amounts available for direct borrowing under the revolving credit facility
      on a dollar-for-dollar basis.


(2)
              Commercial
      paper outstanding is short-term in nature, and as such, book value
      approximates fair value.


(3)
              As of March 31, 2009,SCB LLC maintained four separate
      uncommitted credit facilities with various banks totaling $525 million, a
      decrease from five facilities totaling $775 million as of December 31,
      2008 as a result of general credit
  tightening.





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. 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 were in
compliance with the covenants as of March 31, 2009.




SCB LLC
has a $950 million three-year revolving credit facility with a group of
commercial banks to fund its obligations resulting from engaging in certain
securities trading and custody activities for private clients. 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.




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.




12.
            Comprehensive
      Income





Comprehensive
income consisted of:





Three
      Months Ended March 31,2009
                
                
                2008(in
      thousands)Net
      income attributable to AllianceBernstein Unitholders
                
                $
                36,851
                
                
                $
                247,443Other
      comprehensive income (loss), net of tax:Unrealized
      gains (losses) on investments
                
                
                538
                
                
                
                (3,006
                )Foreign
      currency translation adjustment
                
                
                (5,323
                )
                
                
                10,626Changes
      in retirement plan related items
                
                
                73
                
                
                
                (166
                )Comprehensive
      income
                
                
                32,139
                
                
                
                254,897Comprehensive
      (loss) in consolidated entities attributable to non-controlling
      interests
                
                
                (5,448
                )
                
                
                (2,642
                )Comprehensive
      income attributable to AllianceBernstein Unitholders
                
                $
                26,691
                
                
                $
                252,255


16


13.
            Changes
      in Capital




Changes
      in capital consisted of:




Partners’
      Capital Attributable to AllianceBernstein Unitholders
                                                    
                                                    
                                                    Non-Controlling
      Interests In Consolidated Entities
                                                    
                                                    
                                                    Total
      Capital(in
      thousands)Balance
      as of  December 31, 2008
                                                    
                                                    $
                                                    4,317,659
                                                    
                                                    
                                                    $
                                                    169,167
                                                    
                                                    
                                                    $
                                                    4,486,826Comprehensive
      income (loss):Net
      income (loss)
                                                    
                                                    
                                                    36,851
                                                    
                                                    
                                                    
                                                    (5,340
                                                    )
                                                    
                                                    
                                                    31,511Other
      comprehensive income (loss), net of tax:Unrealized
      gains (losses) on investments
                                                    
                                                    
                                                    538
                                                    
                                                    
                                                    
                                                    (156
                                                    )
                                                    
                                                    
                                                    382Foreign
      currency translation adjustment
                                                    
                                                    
                                                    (5,323
                                                    )
                                                    
                                                    
                                                    48
                                                    
                                                    
                                                    
                                                    (5,275
                                                    )Changes
      in retirement plan related items
                                                    
                                                    
                                                    73
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    73Comprehensive
      income (loss)
                                                    
                                                    
                                                    32,139
                                                    
                                                    
                                                    
                                                    (5,448
                                                    )
                                                    
                                                    
                                                    26,691Cash
      distributions
                                                    
                                                    
                                                    (99,154
                                                    )
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (99,154
                                                    )Capital
      contributions
                                                    
                                                    
                                                    897
                                                    
                                                    
                                                    
                                                    5,505
                                                    
                                                    
                                                    
                                                    6,402Compensation-related
      transactions
                                                    
                                                    
                                                    15,543
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    15,543Balance
      as of March 31, 2009
                                                    
                                                    $
                                                    4,267,084
                                                    
                                                    
                                                    $
                                                    169,224
                                                    
                                                    
                                                    $
                                                    4,436,308




14.
            Accounting
      Pronouncements




In
December 2008, the FASB issued Staff Position No. 132(R)-1 (“FSP No. 132(R)-1”),
which requires companies to disclose information about fair value measurements
of retirement plan assets that would be similar to the disclosures about fair
value measurements required by SFAS No. 157. The provisions of FSP No. 132(R)-1
are effective for fiscal years ending after December 15, 2009. FSP No. 132(R)-1
is not expected to have a material impact on our consolidated financial
statements.




In April
2009, the FASB issued Staff Position No. 157-4 (“FSP No. 157-4”), which relates
to determining fair values when there is no active market or where the price
inputs being used represent distressed sales. FSP No. 157-4 reaffirms the need
to use judgment to ascertain if a formerly active market has become inactive and
in determining fair values when markets have become inactive. The provisions of
FSP No. 157-4 are effective for interim and annual periods ending after June 15,
2009. FSP No. 157-4 is not expected to have a material impact on our
consolidated financial statements.




In April
2009, the FASB issued Staff Position No. 107-1 (“FSP No. 107-1”) and APB Opinion
No. 28-1 (“APB No. 28-1”), which relate to fair value disclosures for any
financial instruments that are not currently reflected on the balance sheet of
companies at fair value.Prior to FSP No. 107-1, fair values for these assets and liabilities were
only disclosed once a year. FSP No. 107-1 and APB No. 28-1 require these
disclosures on a quarterly basis, providing qualitative and quantitative
information about fair value estimates for all those financial instruments not
measured on the balance sheet at fair value. The provisions of FSP No. 107-1 and
APB No. 28-1 are effective for interim and annual periods ending after June 15,
2009. FSP No. 107-1 and APB No. 28-1 are not expected to have a material impact
on our consolidated financial statements.




In April
2009, the FASB issued Staff Positions No. 115-2 (“FSP No. 115-2”) and No. 124-2
(“FSP No. 124-2”), which relate to other-than-temporary impairments and is
intended to bring greater consistency to the timing of impairment recognition,
and provide greater clarity to investors about the credit and noncredit
components of impaired debt securities that are not expected to be sold. The
provisions of FSP No. 115-2 and FSP No. 124-2 are effective for interim and
annual periods ending after June 15, 2009. FSP No. 115-2 and FSP No. 124-2 are
not expected to have a material impact on our consolidated financial
statements.


17


Report of Independent
Registered Public Accounting Firm








To the
General Partner and Unitholders


AllianceBernstein
L.P.





We have
reviewed the accompanying condensed consolidated statement of financial
condition of AllianceBernstein L.P. ("AllianceBernstein") as of March 31, 2009,
the related condensed consolidated statements of income for the three-month
periods ended March 31, 2009 and 2008, and the condensed consolidated statements
of cash flows for the three-month periods ended March 31, 2009 and
2008.  These interim financial statements are the responsibility of
the management of AllianceBernstein Corporation, the General
Partner.





We
conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting
matters.  It is substantially less in scope than an audit conducted in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.  Accordingly, we
do not express such an opinion.





Based on
our review, we are not aware of any material modifications that should be made
to the accompanying condensed consolidated interim financial statements for them
to be in conformity with accounting principles generally accepted in the United
States of America.





We
previously audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated statement of
financial condition as of December 31, 2008, and the related consolidated
statements of income, of changes in partners' capital and comprehensive income,
and of cash flows for the year then ended (not presented herein), and in our
report dated February 20, 2009, we expressed an unqualified opinion on those
consolidated financial statements.  As discussed in Note 2 to the
accompanying condensed consolidated financial statements, AllianceBernstein
changed its method of accounting for non-controlling interests in consolidated
entities.  The accompanying condensed consolidated statement of
financial condition as of December 31, 2008 reflects this change.








/s/
      PricewaterhouseCoopers LLPNew
      York, New YorkMay
      8, 2009




18


Item
2.   Management’s Discussion and
Analysis of Financial Condition and Results of Operations





Executive
Overview




Returns
during the first quarter of 2009 were negative across most global equity
markets, while fixed income returns were generally neutral. Although still
negative on an absolute basis, the majority of our investment services,
especially growth equity and fixed income, provided solid relative performance
for our clients when compared to benchmarks, as investors began to increase
their appetite for risk, albeit modestly. While economic and market conditions
remain extremely challenging, we were encouraged that our fundamental bottoms-up
stock selection resulted in positive relative performance for most of our
clients during the first quarter. Furthermore, we believe our research is
identifying resilient companies even in a weak economy.




In the
first quarter of 2009, our total client assets under management (“AUM”) fell
$51.3 billion, or 11.1%, driven by market depreciation of $31.1 billion and net
outflows of $20.2 billion. Net outflows for the quarter slowed somewhat from
$23.2 billion during the fourth quarter of 2008, as lower Retail net outflows
were partially offset by slightly higher Institutional Investments net outflows.
Furthermore, our AUM mix continues to shift more towards fixed income AUM, which
currently comprises 42.1% of our total AUM versus 27.6% just one year ago. On
the other hand, equity AUM as a percentage of our total AUM has declined from
69.6% to 52.0% over the past year. This shift affects our overall fee
realization rate as Fixed Income Services generally have lower fees than Equity
Services.




Institutional
Investment Services AUM declined $33.6 billion, or 11.5%, to $257.8 billion
during the quarter with market depreciation of $20.4 billion and net outflows of
$13.4 billion. Sales of new mandates remained tepid, although we did see a
slight increase in March.  Clients continue to terminate mandates,
primarily due to poor absolute and relative performance. Our pipeline of won but
unfunded mandates fell to $4 billion from $8 billion at the end of
2008.




Retail
Services AUM declined $10.7 billion, or 10.6%, driven mostly by market
depreciation of $7.2 billion.  Net outflows slowed to $3.5 billion
versus $9.0 billion in the fourth quarter of 2008. We attribute this improvement
to both higher sales, primarily in Asia with higher value-added fixed income
funds, and lower redemptions.




Private
Client Services AUM declined $7.0 billion, or 10.0%, to $62.0 billion. Net
outflows slowed somewhat and included approximately $900 million in hedge fund
redemptions, while sales of new accounts were flat versus the fourth quarter of
2008. Market depreciation during the first quarter of $3.5 billion represented
5% of the quarter’s beginning AUM – a reflection of the effectiveness of our
asset allocation services. Although we continue to meet with new client
prospects regularly, we may see little movement of assets into actively managed
accounts during these uncertain times. Financial advisor headcount fell 5%
sequentially to 285 as a result of our reduction in force as well as attrition,
but we are hiring a new class of advisors scheduled to commence training in June
of this year.




Institutional
Research Services revenues were down 10.7% to $105.6 million versus the first
quarter of 2008, primarily the result of lower trading activity by hedge fund
clients. However, we believe we continue to gain share and saw strength among
our long-only clients as well as in our low-touch, electronic trading platform,
which grew compared to the prior year quarter. We believe that we are well
positioned to capture market share in the current environment and will therefore
continue to invest in strategic upgrades and extensions of our products and
capabilities. For example, during the first quarter, we had six new sector
analysts initiate coverage.




We
continue to pursue opportunities to serve as an advisor to the various U.S.
government-sponsored financial assistance programs. In fact, the U.S. Department
of Treasury recently announced its selection of AllianceBernstein as one of its
advisors under the Emergency Economic Stabilization Act.  We look
forward to the opportunity to serve the Treasury and assist it in ensuring that
U.S. taxpayers’ assets are managed in a prudent and transparent
manner.




With AUM
down over 44% since the first quarter of 2008, revenues are down $431.4 million,
or 41.9%, quarter-over-quarter, to $597.6 million driven primarily by advisory
fees that fell 45.6%, or $372.2 million, and asset-based distribution revenue
that fell 46.9%, or $51.2 million.  During the first quarter of 2009,
we recorded losses of $28 million on investments related to employee deferred
compensation, a decrease of $30 million versus the first quarter of 2008 due to
lower 2009 investment balances.  Operating expenses declined $195.0
million, or 25.7%, compared to the first quarter of 2008.  The decline
resulted from lower employee compensation and benefits expense that fell by
$119.9 million, or 27.6%, due primarily to lower incentive compensation and
commissions, and lower promotion and servicing expenses that fell by $61.9
million, or 39.1%, due primarily to lower asset-based distribution plan payments
as well as lower travel, printing and mailing costs.




March provided some indication that
capital markets may have begun to stabilize, but it is far from clear they have
reached an inflection point. Market volatility will likely remain high for
sometime. When a sustained market recovery occurs, the potential for outsized
investment returns that has been building should begin to be realized. We remain
focused on delivering comparative investment performance for our clients while
recognizing our responsibilities to our unitholders and employees alike. We
believe our lower expense base can support substantial future growth of our
clients’ AUM, thus providing strong positive operating and financial
leverage.


19


Expense
Reduction




Over the
past fifteen months, our AUM decreased by $389.7 billion, or 48.7%, from $800.4
billion at December 31, 2007. This decrease, and the resulting decrease of fee
revenues, hasled
us to undertake significant operating expense and capital expenditure reduction
initiatives.




We
reduced our headcount by 236 during the first quarter of 2009 to 4,761 and have
identified 75 additional staff members we expect will depart during the second
quarter. This, as well as the reduction in force that occurred during the fourth
quarter of 2008, represents a reduction of nearly 1,000 staff members, or a 17%
decline, compared to our peak during the third quarter of 2008. The severance
costs for this headcount reduction were $42.7 million in the fourth quarter
of 2008 and $22.4 million in the first quarter of 2009. By taking these
severance measures, we reduced our fixed compensation costs (salaries and fringe
benefits) by nearly $100 million on an annualized basis. These reductions have
also decreased the demand for cash and deferred incentive compensation and, to a
lesser extent, reduced other variable costs, such as market data services and
communications. In taking the measures to reduce our headcount, we have worked
hard to retain our intellectual capital, in particular our analysts, portfolio
managers, chief investment officers, directors of research and traders. We have
also taken into consideration the importance of retaining staff required to
ensure adequate sales and marketing, client service, compliance and other key
infrastructure activities.




We have
eliminated or deferred nearly $150 million of planned capital expenditures since
the beginning of 2008. Spending on variable operating expenses, including print,
mail, travel and entertainment, recruitment, seminars, communications, temporary
help, and technology consulting, has been reduced. We have also taken important
measures to reduce our space footprint in Asia and Europe. However, other costs,
especially occupancy and technology, are more difficult to reduce since they are
required to support our global platform.






20





Assets
Under Management





Assets
under management by distribution channel were as follows:





As
      of March 31,2009
                
                
                2008
                
                
                $
      Change
                
                
                %
      Change(in
      billions)Institutional
      Investments
                
                $
                257.8
                
                
                $
                471.3
                
                
                $
                (213.5
                )
                
                
                (45.3
                )%Retail
                
                
                90.9
                
                
                
                162.7
                
                
                
                (71.8
                )
                
                
                (44.2
                )Private
      Client
                
                
                62.0
                
                
                
                101.3
                
                
                
                (39.3
                )
                
                
                (38.7
                )Total
                
                $
                410.7
                
                
                $
                735.3
                
                
                $
                (324.6
                )
                
                
                (44.1
                )





Assets
under management by investment service were as follows:





As
      of March 31,2009
                              
                              
                              2008
                              
                              
                              $
      Change
                              
                              
                              %
      Change(in
      billions)EquityValue:U.S.
                              
                              $
                              37.4
                              
                              
                              $
                              94.0
                              
                              
                              $
                              (56.6
                              )
                              
                              
                              (60.2
                              )%Global
      & international
                              
                              
                              100.1
                              
                              
                              
                              247.8
                              
                              
                              
                              (147.7
                              )
                              
                              
                              (59.6
                              )137.5
                              
                              
                              
                              341.8
                              
                              
                              
                              (204.3
                              )
                              
                              
                              (59.8
                              )Growth:U.S.
                              
                              
                              29.8
                              
                              
                              
                              61.0
                              
                              
                              
                              (31.2
                              )
                              
                              
                              (51.2
                              )Global
      & international
                              
                              
                              46.2
                              
                              
                              
                              109.0
                              
                              
                              
                              (62.8
                              )
                              
                              
                              (57.6
                              )76.0
                              
                              
                              
                              170.0
                              
                              
                              
                              (94.0
                              )
                              
                              
                              (55.3
                              )Total
      Equity
                              
                              
                              213.5
                              
                              
                              
                              511.8
                              
                              
                              
                              (298.3
                              )
                              
                              
                              (58.3
                              )Fixed
      Income:U.S.
                              
                              
                              105.2
                              
                              
                              
                              113.6
                              
                              
                              
                              (8.4
                              )
                              
                              
                              (7.4
                              )Global
      & international
                              
                              
                              67.6
                              
                              
                              
                              89.0
                              
                              
                              
                              (21.4
                              )
                              
                              
                              (24.1
                              )172.8
                              
                              
                              
                              202.6
                              
                              
                              
                              (29.8
                              )
                              
                              
                              (14.7
                              )Other(1):U.S.
                              
                              
                              17.7
                              
                              
                              
                              14.9
                              
                              
                              
                              2.8
                              
                              
                              
                              19.3Global
      & international
                              
                              
                              6.7
                              
                              
                              
                              6.0
                              
                              
                              
                              0.7
                              
                              
                              
                              10.724.4
                              
                              
                              
                              20.9
                              
                              
                              
                              3.5
                              
                              
                              
                              16.8Total:U.S.
                              
                              
                              190.1
                              
                              
                              
                              283.5
                              
                              
                              
                              (93.4
                              )
                              
                              
                              (32.9
                              )Global
      & international
                              
                              
                              220.6
                              
                              
                              
                              451.8
                              
                              
                              
                              (231.2
                              )
                              
                              
                              (51.2
                              )Total
                              
                              $
                              410.7
                              
                              
                              $
                              735.3
                              
                              
                              $
                              (324.6
                              )
                              
                              
                              (44.1
                              )







(1)Includes
index, structured and asset allocation services.


21


Changes
in assets under management for the three-month period ended March 31, 2009 were
as follows:





Distribution
      Channel
                                              
                                              
                                              Investment
      ServiceInstitutional
                                                Investments
                                              
                                              
                                              Retail
                                              
                                              
                                              Private
                                                Client
                                              
                                              
                                              Total
                                              
                                              
                                              Value
                                                Equity
                                              
                                              
                                              Growth
                                                Equity
                                              
                                              
                                              Fixed
                                                Income
                                              
                                              
                                              Other(1)
                                              
                                              
                                              Total(in
      billions)Balance
      as of December 31, 2008
                                              
                                              $
                                              291.4
                                              
                                              
                                              $
                                              101.6
                                              
                                              
                                              $
                                              69.0
                                              
                                              
                                              $
                                              462.0
                                              
                                              
                                              $
                                              172.4
                                              
                                              
                                              $
                                              88.3
                                              
                                              
                                              $
                                              177.1
                                              
                                              
                                              $
                                              24.2
                                              
                                              
                                              $
                                              462.0Long-term
      flows:Sales/new
      accounts
                                              
                                              
                                              5.3
                                              
                                              
                                              
                                              4.8
                                              
                                              
                                              
                                              1.7
                                              
                                              
                                              
                                              11.8
                                              
                                              
                                              
                                              1.8
                                              
                                              
                                              
                                              2.2
                                              
                                              
                                              
                                              5.4
                                              
                                              
                                              
                                              2.4
                                              
                                              
                                              
                                              11.8Redemptions/terminations
                                              
                                              
                                              (15.4
                                              )
                                              
                                              
                                              (8.1
                                              )
                                              
                                              
                                              (3.0
                                              )
                                              
                                              
                                              (26.5
                                              )
                                              
                                              
                                              (13.3
                                              )
                                              
                                              
                                              (6.7
                                              )
                                              
                                              
                                              (6.2
                                              )
                                              
                                              
                                              (0.3
                                              )
                                              
                                              
                                              (26.5
                                              )Cash
      flow/unreinvested dividends
                                              
                                              
                                              (3.3
                                              )
                                              
                                              
                                              (0.2
                                              )
                                              
                                              
                                              (2.0
                                              )
                                              
                                              
                                              (5.5
                                              )
                                              
                                              
                                              (2.2
                                              )
                                              
                                              
                                              (2.1
                                              )
                                              
                                              
                                              (1.8
                                              )
                                              
                                              
                                              0.6
                                              
                                              
                                              
                                              (5.5
                                              )Net
      long-term inflows (outflows)
                                              
                                              
                                              (13.4
                                              )
                                              
                                              
                                              (3.5
                                              )
                                              
                                              
                                              (3.3
                                              )
                                              
                                              
                                              (20.2
                                              )
                                              
                                              
                                              (13.7
                                              )
                                              
                                              
                                              (6.6
                                              )
                                              
                                              
                                              (2.6
                                              )
                                              
                                              
                                              2.7
                                              
                                              
                                              
                                              (20.2
                                              )Transfers
                                              
                                              
                                              0.2
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (0.2
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —Market
      depreciation
                                              
                                              
                                              (20.4
                                              )
                                              
                                              
                                              (7.2
                                              )
                                              
                                              
                                              (3.5
                                              )
                                              
                                              
                                              (31.1
                                              )
                                              
                                              
                                              (21.2
                                              )
                                              
                                              
                                              (5.7
                                              )
                                              
                                              
                                              (1.7
                                              )
                                              
                                              
                                              (2.5
                                              )
                                              
                                              
                                              (31.1
                                              )Net
      change
                                              
                                              
                                              (33.6
                                              )
                                              
                                              
                                              (10.7
                                              )
                                              
                                              
                                              (7.0
                                              )
                                              
                                              
                                              (51.3
                                              )
                                              
                                              
                                              (34.9
                                              )
                                              
                                              
                                              (12.3
                                              )
                                              
                                              
                                              (4.3
                                              )
                                              
                                              
                                              0.2
                                              
                                              
                                              
                                              (51.3
                                              )Balance
      as of March 31, 2009
                                              
                                              $
                                              257.8
                                              
                                              
                                              $
                                              90.9
                                              
                                              
                                              $
                                              62.0
                                              
                                              
                                              $
                                              410.7
                                              
                                              
                                              $
                                              137.5
                                              
                                              
                                              $
                                              76.0
                                              
                                              
                                              $
                                              172.8
                                              
                                              
                                              $
                                              24.4
                                              
                                              
                                              $
                                              410.7





(1)
            Includes
      index, structured and asset allocation
services.





Changes
in assets under management for the twelve-month period ended March 31, 2009 were
as follows:





Distribution
      Channel
                    
                    
                    Investment
      ServiceInstitutional
                      Investments
                    
                    
                    Retail
                    
                    
                    Private
                      Client
                    
                    
                    Total
                    
                    
                    Value
                      Equity
                    
                    
                    Growth
                      Equity
                    
                    
                    Fixed
                      Income
                    
                    
                    Other(1)
                    
                    
                    Total(in
      billions)Balance
      as of  March 31, 2008
                    
                    $
                    471.3
                    
                    
                    $
                    162.7
                    
                    
                    $
                    101.3
                    
                    
                    $
                    735.3
                    
                    
                    $
                    341.8
                    
                    
                    $
                    170.0
                    
                    
                    $
                    202.6
                    
                    
                    $
                    20.9
                    
                    
                    $
                    735.3Long-term
      flows:Sales/new
      accounts
                    
                    
                    31.7
                    
                    
                    
                    20.3
                    
                    
                    
                    9.4
                    
                    
                    
                    61.4
                    
                    
                    
                    22.4
                    
                    
                    
                    13.1
                    
                    
                    
                    20.1
                    
                    
                    
                    5.8
                    
                    
                    
                    61.4Redemptions/terminations
                    
                    
                    (46.7
                    )
                    
                    
                    (37.5
                    )
                    
                    
                    (9.5
                    )
                    
                    
                    (93.7
                    )
                    
                    
                    (46.7
                    )
                    
                    
                    (24.7
                    )
                    
                    
                    (21.8
                    )
                    
                    
                    (0.5
                    )
                    
                    
                    (93.7
                    )Cash
      flow/unreinvested dividends
                    
                    
                    (15.4
                    )
                    
                    
                    (6.9
                    )
                    
                    
                    (8.3
                    )
                    
                    
                    (30.6
                    )
                    
                    
                    (16.7
                    )
                    
                    
                    (12.0
                    )
                    
                    
                    (10.3
                    )
                    
                    
                    8.4
                    
                    
                    
                    (30.6
                    )Net
      long-term inflows (outflows)
                    
                    
                    (30.4
                    )
                    
                    
                    (24.1
                    )
                    
                    
                    (8.4
                    )
                    
                    
                    (62.9
                    )
                    
                    
                    (41.0
                    )
                    
                    
                    (23.6
                    )
                    
                    
                    (12.0
                    )
                    
                    
                    13.7
                    
                    
                    
                    (62.9
                    )Transfers
                    
                    
                    (10.4
                    )
                    
                    
                    10.6
                    
                    
                    
                    (0.2
                    )
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —Market
      depreciation
                    
                    
                    (172.7
                    )
                    
                    
                    (58.3
                    )
                    
                    
                    (30.7
                    )
                    
                    
                    (261.7
                    )
                    
                    
                    (163.3
                    )
                    
                    
                    (70.4
                    )
                    
                    
                    (17.8
                    )
                    
                    
                    (10.2
                    )
                    
                    
                    (261.7
                    )Net
      change
                    
                    
                    (213.5
                    )
                    
                    
                    (71.8
                    )
                    
                    
                    (39.3
                    )
                    
                    
                    (324.6
                    )
                    
                    
                    (204.3
                    )
                    
                    
                    (94.0
                    )
                    
                    
                    (29.8
                    )
                    
                    
                    3.5
                    
                    
                    
                    (324.6
                    )Balance
      as of March 31, 2009
                    
                    $
                    257.8
                    
                    
                    $
                    90.9
                    
                    
                    $
                    62.0
                    
                    
                    $
                    410.7
                    
                    
                    $
                    137.5
                    
                    
                    $
                    76.0
                    
                    
                    $
                    172.8
                    
                    
                    $
                    24.4
                    
                    
                    $
                    410.7





(1)
            Includes
      index, structured and asset allocation
services.




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





Three
      Months Ended
                  March
      31,2009
                
                
                2008
                
                
                $
      Change
                
                
                %
      Change(in
      billions)Distribution
      Channel:Institutional
      Investments
                
                $
                266.9
                
                
                $
                484.2
                
                
                $
                (217.3
                )
                
                
                (44.9
                )%Retail
                
                
                92.8
                
                
                
                170.4
                
                
                
                (77.6
                )
                
                
                (45.6
                )Private
      Client
                
                
                64.2
                
                
                
                103.8
                
                
                
                (39.6
                )
                
                
                (38.1
                )Total
                
                $
                423.9
                
                
                $
                758.4
                
                
                $
                (334.5
                )
                
                
                (44.1
                )Investment
      Service:Value
      Equity
                
                $
                148.2
                
                
                $
                356.3
                
                
                $
                (208.1
                )
                
                
                (58.4
                )Growth
      Equity
                
                
                79.4
                
                
                
                179.7
                
                
                
                (100.3
                )
                
                
                (55.8
                )Fixed
      Income
                
                
                173.8
                
                
                
                200.8
                
                
                
                (27.0
                )
                
                
                (13.5
                )Other(1)
                
                
                22.5
                
                
                
                21.6
                
                
                
                0.9
                
                
                
                4.4Total
                
                $
                423.9
                
                
                $
                758.4
                
                
                $
                (334.5
                )
                
                
                (44.1
                )





(1)
            Includes
      index, structured and asset allocation
services.


22


Consolidated
Results of Operations





Three
      Months Ended
                  March
      31,2009
                
                
                2008
                
                
                $
      Change
                
                
                %
      Change(in
      millions, except per unit amounts)Net
      revenues
                
                $
                597.6
                
                
                $
                1,029.0
                
                
                $
                (431.4
                )
                
                
                (41.9
                )%Expenses
                
                
                563.8
                
                
                
                758.8
                
                
                
                (195.0
                )
                
                
                (25.7
                )Operating
      income
                
                
                33.8
                
                
                
                270.2
                
                
                
                (236.4
                )
                
                
                (87.5
                )Non-operating
      income
                
                
                6.3
                
                
                
                4.8
                
                
                
                1.5
                
                
                
                32.3Income
      before income taxes
                
                
                40.1
                
                
                
                275.0
                
                
                
                (234.9
                )
                
                
                (85.4
                )Income
      taxes
                
                
                8.6
                
                
                
                30.1
                
                
                
                (21.5
                )
                
                
                (71.5
                )Net
      income
                
                
                31.5
                
                
                
                244.9
                
                
                
                (213.4
                )
                
                
                (87.1
                )Net
      loss in consolidated entities attributable to non-controlling
      interests
                
                
                5.4
                
                
                
                2.5
                
                
                
                2.9
                
                
                
                110.3Net
      income attributable to AllianceBernstein Unitholders
                
                $
                36.9
                
                
                $
                247.4
                
                
                $
                (210.5
                )
                
                
                (85.1
                )Diluted
      net income per AllianceBernstein Unit
                
                $
                0.14
                
                
                $
                0.94
                
                
                $
                (0.80
                )
                
                
                (85.1
                )Distributions
      per AllianceBernstein Unit
                
                $
                0.14
                
                
                $
                0.94
                
                
                $
                (0.80
                )
                
                
                (85.1
                )Operating
      margin(1)
                
                
                6.5
                %
                
                
                26.5
                %








(1)
            Operating
      income plus net loss attributable to non-controlling interests as a
      percentage of net revenues.





Net
income attributable to AllianceBernstein Unitholders for the three months ended
March 31, 2009 decreased $210.5 million, or 85.1%, from the three months ended
March 31, 2008. This decrease was primarily due to lower investment advisory and
services fees resulting from lower assets under management, partially offset by
lower employee compensation and benefits expenses and lower promotion and
servicing expenses.


23


Net
Revenues





The
following table summarizes the components of net revenues:





Three
      Months Ended
                        March
      31,2009
                      
                      
                      2008
                      
                      
                      $
      Change
                      
                      
                      %
      Change(in
      millions)Investment
      advisory and services fees:Institutional
      Investments:Base
      fees
                      
                      $
                      184.5
                      
                      
                      $
                      353.1
                      
                      
                      $
                      (168.6
                      )
                      
                      
                      (47.7
                      )%Performance-based
      fees
                      
                      
                      11.5
                      
                      
                      
                      6.6
                      
                      
                      
                      4.9
                      
                      
                      
                      74.5196.0
                      
                      
                      
                      359.7
                      
                      
                      
                      (163.7
                      )
                      
                      
                      (45.5
                      )Retail:Base
      fees
                      
                      
                      110.9
                      
                      
                      
                      220.3
                      
                      
                      
                      (109.4
                      )
                      
                      
                      (49.7
                      )Performance-based
      fees
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —110.9
                      
                      
                      
                      220.3
                      
                      
                      
                      (109.4
                      )
                      
                      
                      (49.7
                      )Private
      Client:Base
      fees
                      
                      
                      137.3
                      
                      
                      
                      236.1
                      
                      
                      
                      (98.8
                      )
                      
                      
                      (41.9
                      )Performance-based
      fees
                      
                      
                      0.8
                      
                      
                      
                      1.1
                      
                      
                      
                      (0.3
                      )
                      
                      
                      (31.5
                      )138.1
                      
                      
                      
                      237.2
                      
                      
                      
                      (99.1
                      )
                      
                      
                      (41.8
                      )Total:Base
      fees
                      
                      
                      432.7
                      
                      
                      
                      809.5
                      
                      
                      
                      (376.8
                      )
                      
                      
                      (46.6
                      )Performance-based
      fees
                      
                      
                      12.3
                      
                      
                      
                      7.7
                      
                      
                      
                      4.6
                      
                      
                      
                      58.9445.0
                      
                      
                      
                      817.2
                      
                      
                      
                      (372.2
                      )
                      
                      
                      (45.6
                      )Distribution
      revenues
                      
                      
                      58.1
                      
                      
                      
                      109.3
                      
                      
                      
                      (51.2
                      )
                      
                      
                      (46.9
                      )Institutional
      research services
                      
                      
                      105.6
                      
                      
                      
                      118.3
                      
                      
                      
                      (12.7
                      )
                      
                      
                      (10.7
                      )Dividend
      and interest income
                      
                      
                      7.8
                      
                      
                      
                      31.0
                      
                      
                      
                      (23.2
                      )
                      
                      
                      (74.8
                      )Investment
      gains (losses)
                      
                      
                      (41.2
                      )
                      
                      
                      (64.2
                      )
                      
                      
                      23.0
                      
                      
                      
                      (35.8
                      )Other
      revenues
                      
                      
                      24.1
                      
                      
                      
                      30.8
                      
                      
                      
                      (6.7
                      )
                      
                      
                      (21.8
                      )Total
      revenues
                      
                      
                      599.4
                      
                      
                      
                      1,042.4
                      
                      
                      
                      (443.0
                      )
                      
                      
                      (42.5
                      )Less:
      interest expense
                      
                      
                      1.8
                      
                      
                      
                      13.4
                      
                      
                      
                      (11.6
                      )
                      
                      
                      (86.9
                      )Net
      revenues
                      
                      $
                      597.6
                      
                      
                      $
                      1,029.0
                      
                      
                      $
                      (431.4
                      )
                      
                      
                      (41.9
                      )




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 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.




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
standard pricing vendors for fixed income, asset-backed or mortgage-backed
issues; mid prices from standard 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 (“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.


24


The
Committee, which is composed of senior officers and employees and is chaired by
our Chief Risk Officer, is responsible for overseeing the pricing and valuation
of all investments held in client portfolios. The Committee has adopted a
Statement of Pricing Policies describing principles and policies that apply to
pricing and valuing investments held in client portfolios. We have also
established a Pricing Group, which reports to the Committee.  The
Committee has delegated to the Pricing Group responsibility for monitoring the
pricing process for all investments held in client portfolios.




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. 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. 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 meet 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. As of March 31, 2009, we are eligible to earn performance-based
fees on approximately 10%, or $39.1 billion, of our
AUM.  Approximately $6.2 billion of this AUM is subject to
high-watermark provisions with $3.8 billion held in hedge funds and $2.4 billion
in long-only institutional separately managed accounts. The potential impact on
our investment advisory fee revenues from hedge fund performance-based fees is
significantly greater than that of separately managed accounts because hedge
fund performance-based fees are generally based on absolute investment returns
(i.e., we are eligible to earn performance-based fees if the fund’s return is
positive for the applicable performance measurement period), while separately
managed account performance-based fees are generally based on investment returns
above a specified benchmark (i.e., we are eligible to earn performance-based
fees if the account’s return exceeds the return of a pre-determined benchmark,
such as the S&P 500 Index, for the applicable performance measurement
period). As of March 31, 2009, approximately 50% of our AUM subject to
high-watermarks are below the high-watermarks by 10% or more. This will make it
very difficult for us to earn performance-based fees in 2009.





For the
three months ended March 31, 2009, our investment advisory and services fees
decreased 45.6% from the first quarter of 2008, primarily due to a decrease of
44.1% in average assets under management and the impact of a change in product
mix toward Fixed Income Services, which generally have lower fees than Equity
Services. Performance-based fees aggregated $12.3 million for the three months
ended March 31, 2009 from the All Asset Deep Value Fund as compared to $7.7
million for the three months ended March 31, 2008 earned from long-only
accounts.





Our
institutional investment advisory and services fees for the three months ended
March 31, 2009 decreased $163.7 million, or 45.5%, from the three months ended
March 31, 2008, primarily as a result of a decrease in average assets under
management of 44.9% and the impact of the change in product mix.





Retail
investment advisory and services fees for the three months ended March 31,
2009 decreased by $109.4 million, or 49.7%, from the three months ended
March 31, 2008, due to a 45.6% decline in average assets under management
and lower fee realization rates resulting from product mix changes.





Private
client investment advisory and services fees for the three months ended March
31, 2009 decreased by $99.1 million, or 41.8%, from the three months ended March
31, 2008, primarily as a result of lower base fees reflecting a 35.9% decrease
in billable assets under management and the impact of the product mix
change.





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 for the three months ended March 31, 2009 decreased $51.2 million, or
46.9%, compared to the three months ended March 31, 2008, principally due to
lower average mutual fund assets under management. The decline in revenues and
assets under management was split approximately evenly between U.S. and non-U.S.
services.





Institutional Research
Services





Institutional Research Services revenue
consists principally of brokerage transaction charges received for providing
equity research and brokerage-related services to institutional
investors.





Revenues
from Institutional Research Services for the three months ended March 31, 2009
were $105.6 million, representing a decrease of $12.7 million, or 10.7%
from the three months ended March 31, 2008. This decrease primarily resulted
from lower trading activity by hedge fund clients.


25


Dividend and Interest Income
and Interest Expense





Dividend
and interest income consists primarily of investment income and interest earned
on U.S. Treasury Bills. Interest expense principally
reflects interest accrued on cash balances in customers’ brokerage
accounts.




Dividend and interest, net of
interest expense, for the three months ended March 31, 2009 decreased $11.6
million from the three months ended March 31, 2008. The decrease was due
primarily to lower interest earned on Treasury Bill balances and lower interest
earned on investments reflecting sharply lower interests
rates.





Investment Gains
(Losses)





Investment
gains (losses), consists primarily of realized and unrealized investment gains
or losses on trading investments related to deferred compensation plan
obligations and investments made in our consolidated venture capital fund,
realized gains or losses on the sale of our available-for-sale investments, and
equity in earnings of investments in limited partnership hedge funds that we
sponsor and manage.




Investment
(losses) decreased $23.0 million for the three months ended March 31, 2009
compared to the first quarter of 2008. The decrease was due primarily to lower
realized and unrealized losses on investments related to deferred compensation
plan obligations, partially offset by realized and unrealized losses on Treasury
Bill investments in the current year quarter.





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 for the three months ended March 31, 2009 decreased $6.7 million from
the three months ended March 31, 2008 due to lower shareholder servicing fees as
a result of lower Retail Services assets under management.





Expenses





The
following table summarizes the components of expenses:





Three
      Months Ended
                  March
      31,2009
                
                
                2008
                
                
                $
      Change
                
                
                %
      Change(in
      millions)Employee
      compensation and benefits
                
                $
                313.8
                
                
                $
                433.7
                
                
                $
                (119.9
                )
                
                
                (27.6
                )Promotion
      and servicing
                
                
                96.5
                
                
                
                158.4
                
                
                
                (61.9
                )
                
                
                (39.1
                )General
      and administrative
                
                
                147.3
                
                
                
                154.9
                
                
                
                (7.6
                )
                
                
                (4.9
                )Interest
                
                
                1.0
                
                
                
                6.6
                
                
                
                (5.6
                )
                
                
                (85.3
                )Amortization
      of intangible assets
                
                
                5.2
                
                
                
                5.2
                
                
                
                —
                
                
                
                —Total
                
                $
                563.8
                
                
                $
                758.8
                
                
                $
                (195.0
                )
                
                
                (25.7
                )





Employee Compensation and
Benefits





We had
4,761 full-time employees at March 31, 2009 compared to 5,585 at March 31, 2008.
Employee compensation and benefits, which represented approximately 56% and 57%
of total expenses in the first quarter of 2009 and 2008, respectively, includes
salaries (including severance), cash and deferred incentive compensation,
commissions, fringe benefits and other employment costs (including recruitment,
training, temporary help and meals).





Base
compensation, fringe benefits and other employment costs for the three months
ended March 31, 2009 decreased $19.3 million, or 10.7%, from the three months
ended March 31, 2008, primarily as a result of lower salaries, lower fringe
benefits reflecting lower compensation levels, and lower recruitment costs,
partially offset by higher severance costs due to our workforce reduction.
Incentive compensation decreased $60.3 million, or 41.3%, due to lower
headcount, lower estimated year-end cash bonus payments and lower deferred
compensation expense. Commission expense was lower by $40.3 million, or 37.3%,
reflecting lower sales volume across all distribution channels.




Promotion and
Servicing





Promotion
and servicing expenses, which represented approximately 17% of total expenses in
the first quarter of 2009 and 21% of total expenses during the corresponding
period in 2008, includes distribution plan payments to financial intermediaries
for distribution of company-sponsored mutual funds and amortization of deferred
sales commissions paid to financial intermediaries for the sale of back-end load
shares of our company-sponsored mutual funds. See “Capital Resources and
Liquidity” in this Item 2 and Note 7 to AllianceBernstein’s condensed
consolidated financial statements contained in Item 1 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 seminars for financial intermediaries
that distribute our mutual fund products.


26


Promotion
and servicing expenses for the three months ended March 31, 2009 decreased $61.9
million, or 39.1%, from the three months ended March 31, 2008, primarily due to
lower distribution plan payments (resulting from lower average Retail Services
assets under management), amortization of deferred sales commissions, travel and
entertainment expense, and other distribution expenses.





General and
Administrative





General
and administrative expenses, which represented approximately 26% and 20% of
total expenses in the first quarter of 2009 and 2008, respectively, are costs
related to operations, including technology, professional fees, occupancy,
communications and similar expenses. General and administrative expenses for the
three months ended March 31, 2009 decreased $7.6 million, or 4.9%, from the
three months ended March 31, 2008. The decrease was primarily due to lower legal
expenses (due to costs incurred in the prior year quarter related to certain
employee-related arbitrations), partially offset by foreign exchange losses in
the current quarter.





Interest on
Borrowings





Interest
on our borrowings for the three months ended March 31, 2009 decreased $5.6
million, or 85.3%, from the three months ended March 31, 2008, as a result of
significantly lower interest rates and lower short-term borrowing
levels.




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 for
the three months ended March 31, 2009 increased $1.5 million, or
32.3%.




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 filed. Foreign corporate subsidiaries are generally subject to taxes
in the foreign jurisdictions where they are located.





Income
tax expense for the three months ended March 31, 2009 decreased $21.5 million,
or 71.5%, from the three months ended March 31, 2008, primarily as a result of
lower earnings, partially offset by a first quarter 2009 entry for an
under-accrual of foreign taxes in the fourth quarter of 2008. See Note 10 to AllianceBernstein's condensed
consolidated financial statements contained in Item 1.





Net
Loss in Consolidated Entities Attributable to Non-Controlling
Interests




Our
non-controlling interests in consolidated entities consist of 90% limited
partner interests in our consolidated venture capital fund (of which 10% is
owned by AXA and its subsidiaries and 80% is owned by an unaffiliated client)
and 50% interests in consolidated joint ventures in Australia and New Zealand
(of which 50% is owned by AXA and its subsidiaries).




Net loss
attributable to non-controlling interests in earnings of consolidated entities
for the three months ended March 31, 2009 increased $2.9 million, primarily as a
result of lower joint venture earnings and unrealized losses on investments in
our consolidated venture capital fund.




Impairment
Analysis
  As of
March 31, 2009, management determined that goodwill, intangible assets and the
deferred sales commission assets were not impaired. See
“Critical Accounting Estimates” in this Item 2for a discussion of our
impairment testing methodology.
  To the
extent that securities valuations remain depressed for prolonged periods of time
and market conditions stagnate or worsen, our assets under management, 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. In the current environment, we anticipate
reviewing these assets for impairment more frequently.




27


CAPITAL
RESOURCES AND LIQUIDITY





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





Three
      Months Ended
                  March
      31,2009
                
                
                2008
                
                
                %
      Change(in millions)Total
      capital, as of March 31
                
                $
                4,436.3
                
                
                $
                4,654.1
                
                
                
                (4.7
                )%Cash
      flow from operations
                
                
                47.2
                
                
                
                197.7
                
                
                
                (76.1
                )Proceeds
      from sales (purchases) of investments, net
                
                
                0.3
                
                
                
                4.7
                
                
                
                (94.0
                )Capital
      expenditures
                
                
                (28.7
                )
                
                
                (22.4
                )
                
                
                28.0Distributions
      paid to General Partner and unitholders
                
                
                (99.2
                )
                
                
                (308.0
                )
                
                
                (67.8
                )Purchases
      of Holding Units to fund deferred compensation plans, net
                
                
                (0.6
                )
                
                
                (4.9
                )
                
                
                (87.7
                )Additional
      investments by Holding with proceeds from exercise of compensatory options
      to buy Holding Units
                
                
                —
                
                
                
                4.6
                
                
                
                (100.0
                )Issuance
      of commercial paper, net
                
                
                10.6
                
                
                
                31.7
                
                
                
                (66.5
                )Proceeds
      from bank loans, net
                
                
                66.0
                
                
                
                98.0
                
                
                
                (32.7
                )Available
      Cash Flow
                
                
                37.5
                
                
                
                247.6
                
                
                
                (84.8
                )




Cash and
cash equivalents of $539.2 million as of March 31, 2009 decreased $13.4 million
from $552.6 million at December 31, 2008. Cash inflows are primarily provided by
operations, issuance of commercial paper, proceeds from sales of investments,
capital contributions from non-controlling interests to fund AB Venture
activities, and additional investments by Holding relating to equity-based
transactions. Significant cash outflows include cash distributions paid to the
General Partner and unitholders, capital expenditures, purchases of investments
and purchases of Holding Units to fund deferred compensation plans.





Contingent
Deferred Sales Charge





See Note 7 to AllianceBernstein’s
condensed consolidated financial statements contained in Item
1.





Debt
and Credit Facilities





Total
credit available, debt outstanding and weighted average interest rates as of
March 31, 2009 and December 31, 2008 were as follows:





March
      31, 2009
                                                  
                                                  
                                                  December
      31, 2008Credit
                                                    Available
                                                  
                                                  
                                                  Debt
                                                    Outstanding
                                                  
                                                  
                                                  Interest
                                                    Rate
                                                  
                                                  
                                                  Credit
                                                    Available
                                                  
                                                  
                                                  Debt
                                                    Outstanding
                                                  
                                                  
                                                  Interest
                                                    Rate(in
      millions)Revolving
      credit facility(1)
                                                  
                                                  $
                                                  704.1
                                                  
                                                  
                                                  $
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  %
                                                  
                                                  $
                                                  715.2
                                                  
                                                  
                                                  $
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  %Commercial
      paper(1)
      (2)
                                                  
                                                  
                                                  295.9
                                                  
                                                  
                                                  
                                                  295.9
                                                  
                                                  
                                                  
                                                  0.7
                                                  
                                                  
                                                  
                                                  284.8
                                                  
                                                  
                                                  
                                                  284.8
                                                  
                                                  
                                                  
                                                  1.8Total
      revolving credit facility(1)
                                                  
                                                  
                                                  1,000.0
                                                  
                                                  
                                                  
                                                  295.9
                                                  
                                                  
                                                  
                                                  0.7
                                                  
                                                  
                                                  
                                                  1,000.0
                                                  
                                                  
                                                  
                                                  284.8
                                                  
                                                  
                                                  
                                                  1.8Revolving
      credit facility –SCB LLC
                                                  
                                                  
                                                  950.0
                                                  
                                                  
                                                  
                                                  50.0
                                                  
                                                  
                                                  
                                                  0.3
                                                  
                                                  
                                                  
                                                  950.0
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —Uncommitted
      bank loan(3)
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  16.0
                                                  
                                                  
                                                  
                                                  1.0
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —Total
                                                  
                                                  $
                                                  1,950.0
                                                  
                                                  
                                                  $
                                                  361.9
                                                  
                                                  
                                                  
                                                  0.6
                                                  
                                                  
                                                  $
                                                  1,950.0
                                                  
                                                  
                                                  $
                                                  284.8
                                                  
                                                  
                                                  
                                                  1.8





(1)
              Our
      $1.0 billion revolving credit facility supports our commercial paper
      program; amounts borrowed under the commercial paper program reduce
      amounts available for direct borrowing under the revolving credit facility
      on a
dollar-for-dollar basis.


(2)
              Commercial
      paper outstanding is short-term in nature, and as such, book value
      approximates fair value.


(3)
              As
      of March 31, 2009,SCB LLC
      maintained four separate uncommitted credit facilities with various banks
      totaling $525 million, a decrease from five facilities
      totaling $775 million as of December 31, 2008 as a result of general
      credit tightening.





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. 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 were in
compliance with the covenants as of March 31, 2009.


28


SCB LLC
has a $950 million three-year revolving credit facility with a group of
commercial banks to fund its obligations resulting from engaging in certain
securities trading and custody activities for private clients. 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.




Our solid
financial foundation and access to public and private debt, at competitive
terms, 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 Cautions Regarding Forward-Looking
Statements.





COMMITMENTS
AND CONTINGENCIES





AllianceBernstein’s
capital commitments, which consist primarily of operating leases for office
space, are generally funded from future operating cash flows.




See Note 7 to AllianceBernstein’s
condensed consolidated financial statements contained in Item 1 for a
discussion of our mutual fund distribution system and related deferred sales
commission asset and of certain legal proceedings to which we are a
party.





CRITICAL
ACCOUNTING ESTIMATES





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





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 March 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 current periods ended March 31, 2009, and calculated as
a percentage of the company’s average assets under management represented by
back-end load shares, ranged from 23% to 25% for U.S. fund shares and 21% to 42%
for non-U.S. fund shares. Effective January 31, 2009, back-end load shares are
no longer offered by our U.S. funds. 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 March 31, 2009, management determined
that the deferred sales commission asset was not impaired. However, if higher
redemption rates continue in 2009, this asset may become impaired. If management
determines in the future that the deferred sales commission asset is not
recoverable, an impairment 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 corresponding charge to our earnings.





Goodwill





In
accordance with SFAS No. 142, we test our single reporting unit 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 our Holding Unit price, occur, suggesting
possible impairment. As of September 30, 2008 the impairment test indicated that
goodwill was not impaired.  Due to the significant declines in our
assets under management and operating results in the first quarter of 2009, and
the drop in our market capitalization to below book value at various times
during the quarter, we reviewed goodwill for impairment as of March 31,
2009.  Some of the data we reviewed included ten-day and ninety-day Holding
Unit price trading ranges (with and without control premiums), comparable
company multiples analysis (with control premiums), precedent transaction
analysis and discounted cash flow analysis.  We determined that (i) no
triggering events occurred during the first quarter of 2009 that would indicate
it is more likely than not that goodwill is impaired, and (ii) goodwill is not
impaired as of March 31, 2009.


29


The
impairment analysis is a two-step process.  The first step involves
determining whether the estimated fair value of AllianceBernstein, 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
calculate the amount of impairment, if any.




In the
first step of the process, there are several methods of estimating
AllianceBernstein’s fair value, which include valuation techniques such as
discounted expected cash flows and market valuation (private partnership units
outstanding multiplied by Holding Unit price). Developing 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 factored in current
market conditions and all material events that have impacted, or that we
believed at the time could potentially impact, future discounted expected cash
flows for the first four years and a compounded annual growth rate
thereafter.




To the
extent that securities valuations remain depressed for prolonged periods of time
and market conditions stagnate or worsen, our assets under management, revenues,
profitability 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.





Intangible
Assets





Management
tests intangible assets for impairment quarterly. A present value technique is
applied to expected cash flows to estimate the fair value of intangible assets.
Estimated fair value is then compared to the recorded book value to determine
whether an impairment is indicated. The key assumptions used in the estimates
include attrition factors of customer accounts, asset growth rates, direct
expenses and fee rates included in management’s current business plan and our
weighted average cost of capital of 13.4% for the discount rate. In determining
these estimates, we choose assumptions based on actual historical trends that
may or may not occur in the future. Management has determined that intangible
assets were not impaired as of March 31, 2009.




If
securities valuations remain depressed for prolonged periods of time and market
conditions stagnate or worsen, our assets under management and revenues from
these investment management contracts would likely be adversely affected. As a
result, certain triggering events, including impairment of our goodwill, may
occur requiring more frequent testing for impairment of intangibles. Such tests
may be based upon different assumptions, which could result in an impairment of
this asset. Any impairment could reduce materially the recorded amount of
intangible assets with a corresponding charge to our earnings.




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 mortality rates. The assumptions
are reviewed annually and may be updated to reflect the current environment. A
summary of the key economic assumptions are described in Note 14 to
AllianceBernstein’s consolidated financial statements in our Form 10-K for the
year ended December 31, 2008. In accordance with U.S. generally accepted
accounting 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, the Retirement Plan was changed to provide that the
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).





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 in accordance with Statement of Financial Accounting
Standards No. 5, “Accounting
for Contingencies”, which requires a loss contingency to be recorded if
it is probable and reasonably estimable as of the date of the financial
statements. See Note 7 to
AllianceBernstein’s condensed consolidated financial statements contained in
Item 1.


30


ACCOUNTING
PRONOUNCEMENTS




See Note 14to AllianceBernstein’s condensed
consolidated financial statements contained in Item 1of this Form
10-Q.





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
significant of these factors include, but are not limited to, the following: the
performance of financial markets, the investment performance of sponsored
investment products and separately managed accounts, general economic
conditions, industry trends, future acquisitions, competitive conditions and
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 Part I, Item
1A of our Form 10-K for the year ended December 31, 2008 and Part II, Item
1Ain this
Form 10-Q. Any or all of the forward-looking statements that we make in this
Form 10-Q, 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 revenues, financial condition,
results of operations and business prospects.




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




•
            Our backlog of new
      institutional mandates not yet funded:Before they are
      funded, institutional mandates do not represent legally binding
      commitments to fund and, accordingly, the possibility exists that not all
      mandates will be funded in the amounts and at the times we currently
      anticipate.




•
            The possibility that
      prolonged weakness in asset values may result in impairment of goodwill,
      intangible assets and the deferred sales commission asset: To the
      extent that securities valuations remain depressed for prolonged periods
      of time and market conditions stagnate or worsen, our assets under
      management, 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 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 solid financial
      foundation and access to public and private debt providing adequate
      liquidity for our general business needs: Our solid financial
      foundation is dependent on our cash flow from operations, which is subject
      to the performance of the capital markets, our ability to maintain and
      grow our 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, may be limited by adverse market
      conditions, our profitability and changes in government regulations,
      including tax rates and interest
rates.




•
            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 condition, any settlement or
      judgment with respect to a legal proceeding could be significant, and
      could have a material adverse effect on our results of operations or
      financial condition.




•
            Our expectation that,
      when a sustained market recovery occurs, the potential for outsized
      investment returns that hasbeen building should
      begin to be realized: Historical performance is not necessarily
      indicative of future results or market movements. The actual performance
      of the capital markets and other factors beyond our control will affect
      our investment success for clients and asset
  flows.




•
            Ourexpectation
      that our lower expense base can support substantial future growth of our
      clients’ AUM, thus providing strong positive operating and financial
      leverage: Unanticipated events and factors may cause us to expand
      our expense base, thus limiting the extent to which we benefit
      from any positive
leverage.




31


OTHER
INFORMATION





With
respect to the unaudited condensed consolidated interim financial information of
AllianceBernstein for the three months ended March 31, 2009, included in this
quarterly report on Form 10-Q, PricewaterhouseCoopers LLP reported that they
have applied limited procedures in accordance with professional standards for a
review of such information.  However, their separate report dated May
8, 2009 appearing herein states that they did not audit and they do not express
an opinion on the unaudited condensed consolidated interim financial
information. Accordingly, the degree of reliance on their report on such
information should be restricted in light of the limited nature of the review
procedures applied. PricewaterhouseCoopers LLP is not subject to the liability
provisions of Section 11 of the Securities Act of 1933, as amended (“Securities
Act”) for their report on the unaudited condensed consolidated interim financial
information because that report is not a “report” or a “part” of registration
statements prepared or certified by PricewaterhouseCoopers LLP within the
meaning of Sections 7 and 11 of the Securities Act.




Item
3.   Quantitative and Qualitative
Disclosures About Market Risk





There
have been no material changes to AllianceBernstein’s market risk for the
quarterly period ended March 31, 2009.




Item 4.Controls
and Procedures





Disclosure
Controls and Procedures





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 of 1934, as amended, 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 participation of the Chief Executive Officer
and the Chief Financial Officer, of the effectiveness of the design and
operation of the 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.





Changes
in Internal Control over Financial Reporting





No change
in our internal control over financial reporting occurred during the first
quarter of 2009 that materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.






32