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

Thank you, Shirley. Hello. And welcome to our fourth quarter 2013 earnings review. This conference call is being webcast and accompanied by a slide presentation that's posted to the Investor Relations section of our website. Our Chairman and CEO, Peter Kraus; CFO, John Weisenseel; and COO, Jim Gingrich will present our financial results and take 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 2013 Form 10-K which we filed this morning. Under Regulation FD, management may only address questions of a material nature from the investment community in a public forum. So please ask all such questions during this call. We are also live tweeting today's earnings call. You can follow us on twitter using our handle @alliancebernstn. Now I'll turn the call over to Peter.

Thanks Andrea, and thank you all for joining us this morning. Let’s start with a firm-wide overview on slide three. Equity markets continued to be quite constructive through the fourth quarter of last year, while debt markets remain challenged. This affected our flows particularly in retail fixed income in Asia ex Japan. Our fourth quarter gross sales declined 21% sequentially and 39% year on year. But gross sales of 80 billion for the year declined just 2%. Net outflows of 10.3 billion for the fourth quarter include 6.8 billion in institutional fixed income assets we lost as a result of AXA’s sale of MONY. You can see how much stronger our flows look when we isolate the impact of AXA’s dispositions as we do on this slide. AXA’s business divestitures account for 7.1 billion of our 2013 outflows and 5.8 billion in 2012. So ex-AXA our total net outflows declined to 5.2 billion in 2013 from 8.6 billion in 2012. Market appreciation increased our AUM by 13.4 billion for the quarter and nearly 31 billion for the year and we finished 2013 with 450 billion in AUM. With strong equity market returns in equity alpha, average AUM was higher at quarter end and yearend as well. Slide four illustrates our quarterly flow trends across channels. In institutions gross sales increased to 5.5 billion from third quarter’s 4.5 billion, absent MONY’s redemptions net flows would have been about 1 billion positive. In retail fourth quarter net flows were 3.9 billion, outflows, the vast majority from Asia ex-Japan as investors in the region shifted from fixed income to equities. Private client fourth quarter net outflows of 800 million were down 75% year on year. So our flow improvement here is clear. We just released January AUM of 445 billion after market closed…

Thank you Peter. My remarks today will focus primarily on our adjusted results, as always you can find our standard GAAP reporting in this presentation appendix, our press release and 10-K. Let’s start with the highlights on slide 15. Fourth quarter adjusted revenues and expenses both increased sequentially. For the year, revenues were up 6% and expenses were down 1%. Our adjusted operating margin in the fourth quarter improved to 29% from 22.6% in the third quarter. In 2013 full year adjusted operating margin increased to 24% from 18.8% in 2012. Adjusted earnings per unit were $0.60 for the quarter versus $0.40 in the third quarter. For the full year adjusted earnings per unit increased 39% to $1.78 from $1.28 in 2012. Now I will review the quarterly GAAP to adjusted operating metrics reconciliation on slide 16. Fourth quarter adjusted operating income was $10 million lower than GAAP operating income primarily due to the following four items. First, we adjusted for the $2 million non-cash real estate charge we took in the fourth quarter, which was included in GAAP expenses. This charge represents the true up of real estate charges recorded in prior periods resulting from changes in market assumptions. Second, we excluded the $11 million reduction in contingent payment arrangements that was recorded as a reduction to GAAP expenses. We reduced our estimated contingent payment liability relating to an acquisition of the Sun America’s alternative investment group in 2010, based on lower projected revenue sharing payments. Third, we excluded 3 million in acquisition related expenses primarily severance and professional fees related to the W.P. Stewart acquisition which were included in GAAP expenses. Fourth, we excluded the 3 million of investment gains related to the 90% non-controlling interest in the venture capital fund from net revenues. We have chosen to…

Please limit your initial questions to two, in order to provide all callers an opportunity to ask questions, you are welcome to return to the queue to ask follow up questions. Our first question comes from the line of Cynthia Mayer from Bank of America-Merrill Lynch, your line is open.

Hi, thanks a lot. You gave a lot of color on performance by strategy which is great but not so much on assets by strategy. So I’m just wondering if you could - or fees by strategy – I’m just wondering if you could give a little color on which strategy is the largest assets at this point both in equities and fixed. Particularly say the 64 billion in retail taxable fixed assets. Is that mostly high yield or is that something else? Thanks.

Good question, Cynthia, of course we don’t have all that data for you. I guess there hasn’t been that much of a change in the character of the assets quarter-to-quarter. The Asia ex-Japan asset that had suffered some redemptions as I noted are taxable assets in Global High Yield and American Income. Assets that we’re bringing in are also - in fixed income - also credit intensive assets, so they are similar types of assets. So I guess I’d answer the fixed income question that way. On the equity side the equity assets coming in are a range of assets, US equities as we talked about continued success in our whole range of mid to small cap assets, thematic assets where we have had very strong performance in the last six months, and although we have been saying for the last few years that we thought we’d see a turnaround in our core services, we actually have now seen that turnaround. And there are clients who are reallocating to us, because of that performance. If you want more detail, I think you can follow up with Andrea, she’ll be happy to give it to you.

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

I first wanted to ask actually I'll follow-up on what you just said Peter on the clients coming back to you on the equity side on some of the core services and looking at your one year performance for institutional equity, quite strong, three year, five year more mixed and worse in the one year. But I would be curious in your conversations with consultants and other institutions, what those dialogs are obviously your RFP activity has picked up but how far away do you think you are from winning more of the institutional RFPs that you are kind of -- RFPs converting to wins I guess is the question.

Look, Matt, I think that’s always a difficult question to answer. I’ll try to be consistent with what we’ve said in the past. We have noted time and time again that during the period of underperformance in value and growth that there were very clear reasons for that underperformance and it wasn’t due to our research process being broken. It wasn’t due to the fact that that way that we invested was never going to produce returns again; it was due to the preference of investors to buy which we noted many times, safer stocks with higher yields, that’s changed. And we believe that there is a trend there. We believe that that’s going to continue for a while. And I think we noted last quarter we actually had an interesting slide to talk about values, history over the last 50 years or 40 years where we noted periods of time when there was underperformance in periods of time when there was outperformance. This is beginning a period of time where outperformance. I think there are clients that have been with us a long period of time that know that and that’s why they have in their judgment allocated assets to us to take advantage of that. I think the consultant community and clients who are not currently allocated to those strategies are going to watch carefully but probably move cautiously, that’s their nature. I do think that we’re being very outspoken about this and we may convince people more quickly than normally that the performance is really attractive for a couple of reasons. One, because I think we have been consistent on a point and we have had a long period of outperformance over time and these are very consistent teams that have been in place for virtually inception to date. And secondly because investors are so sparsely allocated to these services, because the underperformance went for a period of time, and because people really were not comfortable with volatility that came with those services, there is very little money allocated in these spaces, and so I think that it’s more than likely that money will come back into these spaces sooner versus later because of that low allocation. But I am predicting that you can’t take that to the bank.

Our next question comes from the line of Robert Lee from KBW. Your line is open.

Two questions, first one is maybe John can you give us a little bit of color as we look forward on what we should be thinking about as kind of a comp ratio expectation for ’14, is it still kind of 50% target or since you are kind of beating that we should think that the full year comp ratio is more in line with what expectations are. And then maybe Peter, just give a little bit more color in the different strategies in the other bucket, that’s clearly been a pretty good driver catch-all, but a very good driver of flows, I mean assets in there are up 40% year-over-year if I look at the numbers correctly. So maybe a little bit of kind of more triangular color on which strategy specifically in there are kind of driving that that will be helpful. Thanks.

This is Jim, I will let Peter answer the first question but let me tackle your -- second question, let me tackle your first question. In terms of compensation, let me offer up a couple of thoughts. One is, as we have talked about a number of times we think that if we can grow the company over time there is going to be significant operating leverage in both the non-compensation portion of our P&L but also to a degree in the compensation portion of our P&L. And thinking nearer term, a couple of thoughts, one is, we don’t plan on what performance fees are going to be over the course of the year and so those performance fees are realized. As we sit here today we know that markets are flat to down for the year. And the second thing is that as we look at the opportunities that we have today we see several opportunities to invest to bring in teams and build the business that will have near-term comp implications. So, I think it’s probably prudent to continue to plan on a 50% comp ratio going forward but we'll see how that plays out depending on how the year unfolds.

On your second question, Robert, as noted in the slide I think it says that there are asset allocation assets and alternatives in that bucket but to give you a little bit more color on that, so, again we’ve talked for the last few years on building a multi-asset capability, talked about dynamic asset allocation. We talked about growth in assets in that space. We talked about our focus on the defined contribution space, target date, customized retirement solutions, life-time income solutions, factor funds. All those things that we've been focused on that we started from scratch, you build from zero, continue to grow. And they are growing because they are in demand and because they make sense for large institutional clients just to segue on a second for that. Large institutional clients and [inaudible] clients have two persistent characteristics. One is, they hire numerous managers and two is, they tend to hire managers with good track records. That has two implications. One is every manager has their own risk diversifiers built into them. So, if you hire multiple managers, you have essentially a potential for over-diversification. And secondly is, when you hire managers that always have good track records they tend to be exposed to similar factors. That goes back to the question that Matt asked about deep value. So, these factor funds give institutional investors an opportunity to diversify and to do so in a way that doesn’t upset the apple cart in their manager selection process. Same thing for securities or services like dynamic asset allocation, also a chance to actually create some additional alpha from an asset allocation process different from your existing manager line-up. In the alternative space, we talked about Kurt Feuerman’s business, the long-short business. We've launched other alternative products like real estate and fixed income both the mortgage assets in residential and commercial and we just keep building those businesses and of course we have made some comments about our fund-to-funds business and the performance of that and that keeps growing as well. So, look we are just going to keep adding and those assets are going to keep getting bigger.

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

Thank you very much for taking my questions and I really appreciate the very comprehensive press release and supplement very, very helpful. First question has a sort of, if you could go back maybe from a macro perspective Peter [and also] prognostication with this. But just given the likelihood for the U.S. tapering what breaks the dynamic of the elevated traction outside the United Stated and Asia, I guess mainly the correlated question is, is there enough momentum on the gross sales side in the rest of the business to sort of migrate from outflows to inflows as we work through this year?

Yes, it’s a good question Bill, look, I think that we are really excited about the growth in positive flows, positive flows not outflows, positive flows all over the world with the exception of Asia ex-Japan. And we believe that we have got positive momentum there. We have got strong equity performance, strong fixed income performance, more services available, more innovative products, W.P. Stewart, CPH Capital. These are all additive and all of services that have strong track records that are saleable today. In Asia ex-Japan two things, one is, many of those innovative services and new services are going on platforms in Asia as well. And as I noted in my commentary, equity rotation in Asia in the last two quarters grew substantially. Now what happens in January given the down markets, we'll see. Clearly the emerging market concern had an impact on our global high yield service. I expect over 2014 emerging market exposures will resolve themselves, meaning that I think that the volatility will decline. And so that should have a positive impact on accelerating outflows, if you will. We also have announced a new dividend class in global high yield that competes with other smaller competitors who have announced gross dividend classes and that will help our capabilities as well in that marketplace. I was just in Taiwan, we have an incredibly strong brand there, an incredibly strong relationships and I think that that will play to our strength over time. I can’t predict what will happen with those flows. And I think that they will probably be volatile, but I believe that we have got a very strong market presence and very strong share; and as I say new services to bring out and over time emerging market credit which is actually pretty attractive today in terms of yield is going to have an attractive impact in that market.

Our next question comes from the line of Michael Kim from Sandler O’Neill; your line is opened. Michael Kim - Sandler O’Neill: Couple of questions; first, just following up on the fixed income side, be curious to get your take on the opportunity seemingly developing for institutional managers, assuming pension plans, increasingly shifting to more defensive asset allocations, now that there may be closer to being fully funded. And then second; just as it relates to product development, you’ve obviously had good success thus far raising a lot of assets from newer strategies, but just wondering if there are any particular offerings that, or may be approaching three or even five year track records that have strong performance and may be positioned for a step up in demand?

Well on the latter part of your question, Michael, there are a number of services that we are excited about. It’s -- Peter has mentioned, our unconstrained bond service is having significant success in the institutional channel. Our Select Long/Short services which while an acquisition is a service that we put in [indiscernible] form is having a lot of traction. We in the real estate debt space, similarly we are very excited about what that holds. So as you go across from fixed income to equities to alternatives there are activities and developments, but I think we are excited about every place we look. In our core services, equity opportunities -- it is global opportunities I think we call it, and it’s got a great three year track record and now five year track record and that’s changing. So now that's a really top decile performer. And in our emerging market growth area, we've also got now very strong three year track records and so some of those core services, Michael, that are not necessarily new but that we’ve been working on for the last few years are actually now in top quartile or top decile positions. And we think that that is going to create incremental flow for us as well. I also think in the fixed income space, as Jim mentioned the unconstrained bond, is also and we mentioned this is also an interesting growth in the defined benefit plans and large institutional investors moving to liquid credit. So credit instruments where there is clearly not that much liquidity in the market, but there’s attractive credit spreads. We see that in the commercial mortgage space, we see that in the residential mortgage space, we see that in middle market lending, and we see that in the unconstrained bond space. And so that’s a trend that we think will continue to grow.

Our next question comes from the line of Cynthia Mayer from Bank of America Merrill Lynch; your line is opened.

Thanks for the follow-up. Just a couple of follow-ups actually, one is just to understand on the -- if I look back, back to the last somewhere you had picked performance fees, you know six and a seven, in those days it seemed like there was sort of an echo of the performance fees in income, and but this time you guys had strong performance fees but comp actually went down, so should I soon go going forward to for next year that the performance fees don’t really affect the comp?

Well obviously performance fees do affect comp meaning that, I don’t want to give anyone the impression that we have performance fees and we don’t pay investors. That’s just not happening. Of course we’re paying the investors their share of the performance fees. But you have to remember the leveragability in the business, and we know we have said all along that if we can grow revenues, we will be able to take the comp to revenue ratio down, and so that’s what happened with the performance fees. Not all performance fees have comp to revenue ratios of 50% or greater.

Cynthia, this is John. Just to add to Peter’s comment. I think the way you should look at this is that, at the end of the third quarter we’ve mentioned to you that we were accruing at 50% ratio year-to-date and the was based upon what our outlook for revenue was for the full year and keeping in light in terms of what we thought we had to pay our folks a competitive market rate. And so what happened here with the fourth quarter with the huge run-off in the markets, the revenues were much higher than we had projected at the end of the third quarter, we were still able to pay our folks the same amount or a bit more than we have expected at the end of the third quarter and still lower the comp ratio. So I think you should just look at it in light of that and looking forward to 2014 to Jim’s comment given what we’re seeing in the markets in January and the investments that we’re making in our business is prudent to continue this year with the 50% comp ratio at this juncture.

Got it, that’s really helpful. And then just going back to retail fixed income if I look at page 28, it looks like those strategies underperformed for the last year while overall fixed income seems like it outperformed. But just looking at the retail fixed income, how important is one year performance to those clients versus other like the macro that you are talking about or it’s maybe absolute yield level or things like that. How important is that performance and does that further pressure outflows or you really think it’s really more about macro and yield?

So the performance numbers you are looking at are benchmark numbers and those are while important, they are a little bit less significant than competitive performance and absolute yield, those are the two things that really drive the sales in that market. But if you look at the charts that we gave you that reflects industry growth sales changes, there is no way you could get away from the tidal wave of a 60% decline in gross sales in the industry. And that was reflective of the taper action and concerns in emerging markets. I think the taper action is pretty clearly communicated, so that’s a lot less of a surprise and as I said I think emerging markets will resolve themselves, meaning I think that they are not going to continue to fall like a knife. I think they will be revalued, they are being revalued and at a certain point, currencies adjust and yields become particularly attractive, and when that occurs, global high yield is going to be an attractive fund from yield point of view and investors will come back into that market.

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

Thanks for taking another question from me. I am not sure how much you can provide on this but of the 44 billion that you guys have in other services as of yearend, just curious, any detail or breakdown you can give us of what’s funds-to-funds? What’s allocation? What’s long/short or anything like that would be helpful. And how you think about each of those individual buckets which have the strongest potential for growth from here?

So I appreciate your question, but we’re not yet at a position to sort of break out all that detail. But I’ll give you some -- again some color. All of those areas are growing, and you have to remember what I said earlier, we started at zero, we decided to build these businesses, we have been at it now for the better part of call it three years. And we haven’t reduced our concentration or focus on growing any of those three. As Jim mentioned, the U.S. select long/short is now in 40 act form. We recognized the trend in the 40 act world and alternatives. We have populated a number of 40 act funds that have short track records but are coming up to three years by the middle to the end of ‘14. So I think that we believe that that area will continue to grow in all three of the components that we mentioned. So the asset allocation service, the single manager services and the fund-to-fund service, all three are going to grow.

[Operator Instructions]. Our next question comes from the line of Bill Katz from Citi. Your line is open.

Thanks for taking the follow up as well. Let’s come back to expenses for a moment. Is there anything on the non-comp side that was particularly unusual in the quarter or maybe better way to answer is as you look into 2014, do you see any major reinvestments and within that could you update us on where you are in terms of residual savings on real estate consolidation?

Sure, Bill it’s John, I think we always thought the fourth quarter is really in terms of both promotion and servicing and G&A is just a bit of a bounce back from the third quarter where we had the lower summer client business activity and the expenses were lower than typically we would expect. So I think right now kind of where we are is kind of more the normal that you would expect going forward. If things could top a bit higher from time to time in different quarters depending upon the level of T&E based upon client activity or where have additional marketing expenses relating to client conferences. I think pretty much we’re right now, is what one should expect going forward with the potential for a tad higher from time-to-time. As far as the real estate savings, as I mentioned, we have realized 70 million over the past couple of years, so that’s already in the numbers. And so everything that we have identified and we have written-off, those savings have been realized. So, anything going forward if we are able to on ad hoc basis identify a floor to in future quarters, they would resolve the incremental write-offs as well as incremental savings. And we would notify you of what those would be at that particular point of time.

There are no further questions in queue at this time. I will turn the call back over to Ms. Prochniak.

Thank you. Thanks everyone for participating in our conference call today. Do you any follow-up; feel free to contact investor relations. Thanks and have a great day.