Thank you for standing by. And welcome to the AllianceBernstein First Quarter 2013 Earnings Review. At this time, all participants are in listen-only mode. After the remarks there will be a question-and-answer session, and I will give you instructions on how to ask questions at that time. As a reminder, this conference is being recorded and will be available for replay for one week. I would now like to turn the conference over to the host of this call, the Director of Investor Relations for AllianceBernstein, Ms. Andrea Prochniak. Please go ahead.

Thank you, Sarah. Hello. And welcome to our first quarter 2013 earnings review. This conference call is being webcast and accompanied by a slide presentation that is posted to the Investor Relation section of our website. Our Chairman and CEO, Peter Kraus; and our CFO, John Weisenseel will present our financial results. Our COO, Jim Gingrich is also with us and will join in answering questions after our prepared remarks. Some of the information we present today is forward-looking and subject to certain SEC rules and regulations regarding disclosures. So I’d like to point out the Safe Harbor language on slide one of our presentation. You can also find our Safe Harbor language in the MD&A of our 2012 Form 10-K and in our first quarter 2013 Form 10-Q which we filed this morning. Under Regulation FD, management may only address questions of a material nature from the investment community in the public forum. So, please ask all such questions during this call. Finally, we will be providing twitter updates during today’s call. You can follow us on twitter using our handout at alliancebernstein. Now, I'll turn the call over to Peter.

Thanks Andrea. And thank you for joining us for our first quarter 2013 earnings call. John, Jim and I are pleased to be here with you today and as always John and I will review our operating and financial results for the quarter, and Jim, will join us in answering questions following our prepared remarks. Let’s start with an overview of our results which are on slide three. After finishing 2012, on a high note, first quarter gross sale dipped about 2% sequentially, though they were up 31% from last year’s first quarter. Net inflows of $2.6 billion were down from last quarter’s $5 billion but a far cry from last year’s first quarter net outflows of $12 billion. With net inflows and the strong market performance during the quarter, our period end AUM of $443 billion and average AUM of nearly $437 billion were up from prior periods. Slide four shows flow trends by channel. In institutions, we built on our strong momentum coming into 2013 and in private client we gained ground after particularly tough end to 2012. Both of these channels demonstrated significant improvement in both gross sales and net flows in the first quarter of 2013 versus the prior quarter and year. In retail, we lost steam after last year's tremendous run, particularly in Japan and Asia where sales and net flows had been strongest. Gross sales moderated with (inaudible) causing net in flows to decline steeply versus both prior periods. I’ll go into these flow trends in more detail in my quarterly review by channel. The upside is that our firm-wide net flows were positive for a second straight quarter and our sales redemption to net flows all look very different today than they did year ago. Now, let’s look at our channels beginning with…

Thank you, Peter. My remarks today will focus primarily on our adjusted earnings. As always you can find our standard GAAP reporting in the appendix of this presentation, our press release and our 10-Q. Let’s start with our adjusted financials on slide 14. First quarter adjusted revenues were essentially flat sequentially and up versus the first quarter 2012. Adjusted expenses were slightly lower versus both prior periods. Our adjusted operating margin in the first quarter improved to 21.9% from 20.6% in the fourth quarter and 18% in the first quarter of 2012. Adjusted earnings per unit were $0.38 for the quarter versus $0.40 in the fourth quarter and $0.29 in the prior year quarter. As I discussed during our last earnings call, approximately $0.04 of the fourth quarter’s $0.40 represented a change in estimate of a federal tax benefit relating to the first nine months of 2012. Now I'll review the quarterly GAAP to adjusted operating metrics reconciliation on slide 15. This quarter there were two minor adjustments that make up the difference between GAAP and adjusted operating income. First, we adjusted for the $1 million non-cash real estate charges recorded in GAAP expenses in the first quarter. These were related to true ups of real estate charges recorded in previous quarters. There were no other real estate charges in the first quarter. Second, we excluded from net revenues $1 million of investment losses related to the 90% non-controlling interest in the venture capital fund. Now I'll turn to the adjusted income statement on slide 16. Adjusted net revenues of $577 million for the first quarter were essentially flat versus the fourth quarter and up 3% versus the first quarter 2012. Adjusted operating expenses of $451 million were down 2% versus both prior periods. Adjusted operating income of $126 million…

(Operator Instructions) Your first question comes from the line of [Jacob Robert Lee] from KBW. Your line is open.

Good morning. It’s Rob Lee, as you guys know. Good morning everyone. See my first question would be, may be looking at the private client business and clearly, you’ve had the improvement in moderation and outflows. Could you maybe update us on how -- I know that business has gone through some trials with some turnover in the financial advisors or relationship managers, I guess, more at. Could you just, maybe update us on where your own plans are to, kind of, to re-staff or maybe -- I know you tend to train your own. So that -- are you accelerating maybe, your new training classes and trying to kind of refill the pipeline in that way. I guess, that maybe first question?

Rob, it’s Jim. We’re always in the market, looking to add advisors. You’re correct that we do recruit our own. We typically group those into classes that we can process through our system in the most efficient way possible. We just actually had a class join us at the beginning of October and that means they, if you will, kind of hit the ground, running at the beginning of this year. So that process is going to continue. I actually think in terms of the business overall. As you said, we’re very encouraged by the trends that we’re seeing, both in terms of financial results, how we’re delivering for clients and turnover of our rep As.

Hey, thanks. Maybe my follow-up question, I appreciate the added disclosure around the flows and as a mix but within the other category, where you’ve had -- you had pretty strong flows in the quarter. Maybe you’ve been, I guess, drilled down a little bit in that and give some little bit more color, particularly maybe around fee structures. I’m assuming that other bucket in addition to the bunch of the alternative strategies includes things like the overlay strategies within your DC business. Maybe some color around the various fee structures in there and how that -- what that asset mix maybe?

Sure. Rob, we did try to arrange the assets and the asset flow numbers for you all in a little bit more clear manner. So that you could see what was going on in other because that category was continuing to grow. And I think that the context of the fee question which is asked reasonably regularly is that really there is no changes. In other words, we haven’t seen any decompression in any of our major activities. It is true that the overlay strategies in the DC services or at lower fees are obviously traditional active services, where enhanced services are factor-based strategies. But we haven't seen any negative change there. And indeed as we add in that DC strategy, more value enhanced services like lifetime and retirement strategies, actually these are stronger than they are in the CRS based. So I would say to you that the composition of the fees are unchanged, yet there are some fees there that are less than the active management as you would expect in any passive environment. But the things that we’re adding there lifetime income strategies, alternatives, factor-based funds which we noted in some of the disclosure, those are going to be fees that are better than the base fees that you’ve seen in the business up until now.

Okay. Thanks. I’ll get back in the queue.

Your next question comes from the line of Bill Katz from Citi. Your line is open.

Okay. Thank you. Good morning. A couple of questions. First question, maybe more clarification on the legal cost, could you sort of quantify how much of the benefit was in the particular quarter versus the run rate?

Bill, this is John. As I mentioned that there is two components to legal cost. One are just fees that we pay to external lawyers on various legal matters that they work for us on. And the other components of periodic adjustments too to the legal reserves. These costs obviously swing from period to period and creates volatility in the G&A expense line but to go further below that -- well I’m going to stop right there.

Okay. Broader question is, it seems like the franchises are moving from defense to offense, if you will. Performance is better for us to picking up, your global reach is stronger. What are your thoughts in terms of marketing spend, if you will. Is there any kind of initiative here to maybe get more proactive and maybe bump up some spend to accelerate your organic growth beyond, sort of, your couple of billion dollars a quarter?

So good question, Bill. You’ll recall last year, I think it was in the middle of the year. We had advertising expenditure that was around the fixed income strategies, which we thought was quite successful. We would expect that during the course of the year, we would continue to do things like that. We don't have any particularly planned right now. So we can tell you it’s going to happen in month x or y. But as we incurred those expenses last year and as I suspect your models include this year, we would probably do similar kinds of things. We thought those were successful. They were highly targeted. They were specifically directed at particular channels and distribution world in the client group. And I think they will probably do that in the coming months and years.

Okay. And if I guess, one quick follow-up, I was intrigued by your comments about -- from the funds in the private client business in the $40 million. What percent of your client you think have used that product versus how much more you might be able to penetrate into the channel?

I don't know the percentage directly but I would say to you that we’re seeing increasing penetration of our client base. We have a terrific service. There is great returns, very consistent, run by a terrific team. And we think that there is significant upside for us overtime.

Bill, this is Jim. If you remember that our RIC offering in that product was really just introduced at the beginning of the fourth quarter. So as Peter says we think we have a lot of runway.

Okay. Thanks for taking my questions.

Your next question comes from the line of Matt Kelley from Morgan Stanley. Your line is open.

Great. Thanks. First, I wanted to ask you guys, appreciate the new disclosure by investor service and channels. So thank you for that. Just wondering within the equity active U.S. bucket, obviously, a significant diversion -- positive diversion from past trend there this quarter. Can you kind of break that down for us as to if there's any large fundings in that or if it’s specifically kind of your Small and SMID cap products or what else it might be in that bucket that’s causing the change?

I think -- look I think overall -- this is Jim. I think overall just, maybe, this is more than answer than you want. But I think they were really encouraged by the breadth of what we’re seeing overall in the business. In terms of both, product channel and region, relative to -- and we’re making progress, I think across the board. With respect to equities, there are number of good things that are happening. We had a very strong quarter for us to select equity services both in a long-only and a long-short form. But we’re also strengthened in a number of other areas, some of which you mentioned. So there is a lot of good stuff happening that we’re very encouraged about. I think this is also a little bit you're seeing the result of a few years of new product development and track records having been developed and client-to-client group having made greater connections with the end-clients and the retail distribution side as well as institutional. These things take time. We’ve always said they take time but if you’re consistent at it and you produce consistent results, you’re going to get positive responses and we’re beginning to see that.

Okay. And then along those lines, I guess, I’m curious to get your takes. Everyone’s focused on operating margin expansion coming more from the, kind of, the cost saves. And as you want these new products over the last few years, are there any and not just one but a few products or kind of areas where you think you could get significant scale enough to really drive margin expansion that way as well.

Well, look, I think our core business as well as the new businesses that we’re developing, we’re very mindful of managing costs. I think you have seen of late that that this company is doing a terrific job in that regard. And our operating leverage, we would expect to continue to be quite strong if we can grow the business. So, I don't think there's certainly as you would anticipate that there are some products that have slightly higher incremental margins than others. But overall if we look forward, if we can grow the topline, our expectations and we will continue to manage cost tightly and try and deliver a large portion of that to the bottom line.

Okay. And then one last one for me and then, I will jump back in the queue. But in terms of your fixed income taxable flows, strong first quarter after really, really strong last year. So, I’m just wondering you kind of had a volatile month-to-month and I know it’s not a month-to-month business but you’ve got a volatile trend there recently. So, I’m just wondering kind of like, coming out of first quarter and into April and in second quarter, how were you feeling about momentum from here in that business?

Well, I think we made some efforts, trying to identify where the volatility was in the quarter in January. And we actually said that that was a little bit unique. I think we referred to January as an aberration. I had to give you some sense as to how we feel about the quarter and what’s likely going forward.

Okay. Great. Thanks very much.

Your next question comes from the line of Cynthia Mayer from Bank of America Merrill Lynch. Your line is open.

Hi. Good morning. Thanks a lot. Just one clarification on the tax rate. Sorry, if I missed this but is this quarter’s 9% rate a good rate for the balance of the year?

Cynthia, as I mentioned, we expect it to continue to be volatile because of the differentiation between the very low U.S. domestic tax rate and the higher foreign rates. And to the extent as we forecast, the income for the year, we expect there is movement between domestic to foreign, that's going to have a big very large volatility factor in terms of the effective tax rate. When you look at this quarter, again the 9%, 100 basis points of that was really unique to this quarter and it had to do with these foreign lease assignment payments that are not deductible for foreign tax purposes. So, I think you can look at the 9% take off the 100 basis points and we should probably trend somewhere around there give or take I think for the year.

Okay. Great. And then on the equity outlook, it seems like your equity performance is really strong in small-cap and SMID-cap, and I'm wondering those are typically products with capacity issues and where the products that typically don't have capacity issues, the performances isn’t quite as strong. So, do you have -- do you see any limits to where those can go? Would you be able to somehow shepherd people towards some other products, if you begin to hit those limits? And also I guess if those products selling best in the retail? Thanks.

The small and SMID-cap products actually sell across retail and institutional, very good following in both places and frankly in a global marketplace. Our capacity limits for both services, SMID is obviously much larger and there is actually a fair bit of room. I think that the Large Cap equity services have been challenges us over a time, although you'll notice there are some Large Cap equity services like equity being the most significant where returns are terrific and flows are obviously, as we said pretty positive. So, I don't think we feel today that in the equity platform that we've got limiting capacity constraints overall. There are clearly some products that will have capacity limitations and we will be tough on closing them. We've said many times, that we are going to be much more demanding on capacity because we've got a more diversified portfolio that will let us continue to grow and we want to be able to create returns for our clients.

Okay. Great. Thanks.

Your next question comes from the line of Michael Kim from Sandler O’Neill. Your line is open. Michael Kim - Sandler O’Neill: Hey, guys. Good morning. First, Peter, the franchise has certainly evolved over the last four, five years or so. Just thinking about product development, infrastructure and the firm’s culture, so now that it seems like a lot of that work has been done, particularly on those fronts and your newer strategies are starting to generate some meaningful AUM growth. Just curious, what some of the initiatives or strategies that you are thinking about today, or that will kind of help drive the next stage of growth if you will?

Well. Thanks for those comments, Michael. Look, I think that there are some very interesting opportunities in Europe. And particularly in the equity world, we’ve seen European equity market that has been pretty well pummeled by -- in all directions. We think that there are attractive valuations in the European equity business. We've got some interesting services. Some are low beta equity services that have outperformed the general indices over the last few years and now have almost three-year track records. I think that there are also interesting ideas for us in the multi-asset category where we have a dynamic asset allocation, shown a pretty good track record over the last three years. And there are services that are based on that activity that are outcome oriented that both institutional clients and individual clients are looking at them. And lastly, we talked about this factor -- these factor funds although they are quite small. We think that people's interest in been exposed to systemic beta in value, growth and income are also interesting and eliciting lots of discussion today. We talked about the low vol that continues to be of interest and is outperforming significantly at the present time. So, I think those are areas that we have developed that are getting a lot of attention on the equity side. On fixed income, we talked about our building businesses structured credit, our building business and RMB funds, our expanding business and just global credit, our expanding business in the developing corporate world. There are some good opportunities there as well as that are building for us where we’ve got strong performance and where clients are seeing us as leaders in these spaces. So, I don’t want to go on and on. But I think that there are lots of things that have been built in the firm over the last few years that are beginning to take hold. We’ve talked a lot about real estate. In the past, we continued to think real estate lending is an interesting opportunity, both in the commercial side in particular as well as the residential side, so good opportunities for us, Michael. Good opportunities. Michael Kim - Sandler O’Neill: Okay. That’s helpful. And then just as it relates to your institutional equities business, assuming performance continues to improve and pension plans ultimately start to think about moving up the risk curve. How do you see that playing out for your strategies? I realize the pool of competitors has shrunk. But just trying to get a better understanding of maybe the balance between some built-up demand for sort of disciplined deep value mandates versus maybe more of a secular shift away from sort of style box allocation if you will?

Yeah. I think you said a couple of things in that comment that are quite provocative. One is that, if you were an investor looking for concentrated less benchmark sensitive exposure to deep value or growth, the number of managers that are prosecuting that investment process in disciplined way over a long period of time is as you know quite small. And the asset in that category are also quite small because the performance has been tough and many investors have allocated away. As institutions look at their allocations, much of their equity performance or equity allocation is driven by -- I’ll call it Large Cap benchmark weighted exposures. In those, large-cap benchmark weighted exposures whether they are passive or otherwise, there are significant risks today. We’ve talked about them, four, six to nine months, most of that being around the high dividend paying stocks, which are valued at high multiples. And I think institutions are mindful of that and they are trying to figure out, what is the right way to expose the capital of the pension plans and the long-term savers to risk anomalies that are different than the exposures they have. And I think that's where our platform has particular strength, because we have had consistency. Yeah, it’s been challenged performances in some of the areas but those are the places that investors are very underexposed and we do think that that’s an upside for us. Michael Kim - Sandler O’Neill: Okay. I will stick with the two questions. Thanks.

Your next question comes from the line of Marc Irizarry from Goldman Sachs. Your line is open.

Great. Thanks Peter. Can you talk a little bit more about the institutional business? Your pipeline sort have been in this $7 billion, $8 billion range for a while I guess and you’ve got a more diverse mix of products that you are capable of selling into the institutional world and I guess maybe this hits a little bit on the asset allocation team or the portfolio of solutions team for institutions. But is that increasingly, when we think about the growth in the institutional world view, is it really about packaging more of everything that you do rather than just sort of more products specialist type of point and product solutions, just more sort of a broad portfolio solutions on the institutional business?

Well, in a word, Mark, I think it’s both, but one is that the $7 billion to $8 billion pipeline has been consistent for a little bit now. And it’s probably doubled what it was when I first came and our institutional pipeline was in the force. So we’ve seen substantial growth in that business and obviously pipeline is the unfunded piece. And we’re seeing reasonably attractive fundings inter quarter. So that activity has actually been satisfying. I’ve always said that we’ve kept our dialogues with the consultant community and clients, even though we’ve had a lot of challenged performance in last four years. That is paying off because people are now recognizing that we have a more diversified platform. There is an increasing level of interest in some of the global credit work that we’ve done and you’ve seen that taking hold. You can’t miss the fact that investors are looking carefully at their equity exposures and how to expose capital going forward in different areas than market cap weighted benchmarks and traditional value and growth or style based investing. And that I think has had a positive impact for us because we’ve talked about these things and we’ve been innovative in discussing that. So look, I think that we’ve got a broader platform. I think we are engaged with clients on many more services than we had in the past. We had the good fortune in the past of having a particularly high-performing, large-cap, global equity opportunity that everybody wanted, that was a good thing but it was very concentrated. I think now we’ve got a much more diversified discussion going on with clients and when you have that and you’ve got good services across that diversification, you can populate the various asset opportunities across the platform and build up diverse and more consistent business and that’s what I think is going on.

Okay. And then just sticking with the theme of diversity, I guess if you look at the retail business in areas like Japan or maybe Asia, ex-Japan, how diversified are your sort of product offerings out there. Is there a little bit of sort of hot product or concentration risk in some of those regions where there is maybe one or two strategies that are really towing the load and are you more aggressively getting into those channels with newer products?

When I made the comment in my first thought that we had eight new products in Hong Kong that were approved this year. And that’s important because in those services, our both multi-asset services as well as equity services, as well as additional fixed-income services. And you are right that we have a terrific brand in Asia and that brand has been focused around American income and global high yields and those are good things because people know us for that. But it also allows us to expand into other services, the Renminbi bond fund which I think is over $1 billion was completely new service. No one ever really heard of it before we did it. I think we won a few awards and it continues to grow, as the Chinese bond market is continuing to grow and there is lots of interesting information about what is happening in that bond market and the rate of that growth. So, I would say to you, in Asia, we are experiencing a interesting opportunity there where the core business which has been the fixed-income business is beginning to expand. The product diversification is also beginning to take route, and we’re developing new ideas and new services in that space. So there is some historical concentration, but I think there is actually now factual evidence that that’s beginning to diversify.

Okay. Great. Thanks.

(Operator Instructions) And your next question comes from the line of Cynthia Mayer from Bank of America Merrill Lynch. Your line is open.

Hi. Thanks for the follow-up. I guess just a follow up on that. I am wondering, on the bond products sold in Asia, have you seen any impact from the yen. And then just on the issue of the legal expense. Is there any way to at least quantify the change to reserves and presumably that’s like a non-cash benefit? Thanks.

I’ll let John illustrate you on a legal response. But I’ll comment on the yen. You didn’t get the message in what we are going to say there. Look on the yen, no, I don’t think there’s been any positive or negative impact of any size right on the change or the depreciation of the yen other than the obvious, which is the Japanese equity market has been pretty strong and that’s had some positive impact on our Japanese value equity business in Japan in terms of positive performance, also little bit on international value which is exposed there positively. So I would say I can’t see any big impact on the fixed-income business as a result of the depreciation of the yen right now, Cynthia. I’ll let John come in on the other…

Thanks, Peter. Cynthia, it’s John again. Just to maybe help you out here without again giving specific numbers. As I mentioned in my comments that the G&A number was $105 million for the quarter and I talked about the difference between that $118 million in the fourth quarter and the primary driver being the legal expenses. I’ll just go on to say that the $118 million was typically higher than expected than the normal in terms of G&A. And the $105 million is lower. And you shouldn’t count on the $105 million in G&A expenses as a run rate going forward. So I think we should leave it at that and hopefully that will help you in terms of your projections.

Okay. Okay. Thanks a lot.

Your next question comes from the line of Matt Kelley from Morgan Stanley. Your line is open.

Thanks for taking another question from me. I just wanted to ask since you guys have a large institutional presence. We hear a lot about kind of the barbell approach. And I think you guys have kind of a unique view because you are both passive and active and alternative. So from your view, what are you seeing from institutional clients both inside the U.S. and outside the U.S. as well as Sovereign Wealth Funds in terms of what exactly they are doing from an asset allocation standpoint?

Well, by the way it’s different in both the regions and in the type of funds. So the Sovereign Wealth Funds don’t always act exactly like the defined benefit plans. The Sovereign Wealth Funds some, for example, are cash flow positive. They are just growing like weeds. And they’ve got a different risk parameter to them than a U.S. defined benefit plan which is decided to basically terminate over time and has got a shrinking footprint. So it’s a little difficult to generalize, but I’ll try in any case recognizing that there’re some qualifications to my comments. I think the asset allocation issue is a little bit more subtle than how much do I have in equities and how much do I have in bonds. I think the discussion that clients are having is how do they move away from, I’ll say it in broad terms in the traditional market calculated indices. So whether it’s the Lehman Egg or it’s Barclays index, or it’s some other fixed-income index, or obviously equity market calculated indices. How do you start to expose capital to different kinds of risks other than those that are embedded in those indices. Those indices obviously have most of the capital in them. But there is clearly a desire to look for alpha beyond that. And I think that that’s the search that institutions are engaged in. And it happens in various different way. So the institutions are looking for fixed-income products that have positive convexity. They are looking for fixed-income opportunities that have interest in credit exposures. They are looking for fixed-income opportunities. They have interesting exposures to corporates that they don’t normally get in the indices. In the equity services, they are looking for systemic beta. They are looking for opportunities for concentrated managers. They are looking for different capitalization opportunities, looking for different time horizons, looking for different volatility exposures. So that’s where I think the diversification is in the institutional space. I don’t think it’s as much in how much do I have in equities and how much do I have in bonds. It’s more of this rotation -- I won’t call rotation but search for different risk within those services. And frankly, I think that’s a good exercise because if you are constantly dominated by these market cap weighted indices, you’ve got a sort of unknown risks that you are exposed to or let say you may understand the risk but risk that you are not actually doing something about. And I think that that has the characteristic of hurting returns over time because you’re constantly driven by where the money in the market cap weighted indices is going. You are sort of always invested in the crowded trade by definition. And I think trying to find a way to allocate capital away from that crowded trade is what institutions are attempting to do.

Great. Thanks very much for that.

With no further questions in queue, I’ll turn the call back over to Ms. Prochniak.