T
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
£
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
13-4064930
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
|
|
1345
Avenue of the Americas, New York, N.Y.
|
10105
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title of Class
|
Name of each exchange on which
registered
|
|
units
of limited partnership interest
|
None
|
II
|
||
Part
I
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||
Item
1.
|
1
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1
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4
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||
4
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||
5
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||
5
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6
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13
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||
14
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14
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15
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15
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||
16
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||
17
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||
Item
1A.
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18
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Item
1B.
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25
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Item
2.
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26
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Item
3.
|
27
|
|
Item
4.
|
28
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Part
II
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||
Item
5.
|
29
|
|
Item
6.
|
31
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Item
7.
|
32
|
|
Item
7A.
|
46
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Item
8.
|
48
|
|
Item
9.
|
82
|
|
Item
9A.
|
83
|
|
Item
9B.
|
84
|
|
Part
III
|
||
Item
10.
|
85
|
|
Item
11.
|
91
|
|
Item
12.
|
106
|
|
Item
13.
|
110
|
|
Item
14.
|
113
|
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Part
IV
|
||
Item
15.
|
114
|
|
116
|
Business
|
|
•
|
institutional
clients, including unaffiliated corporate and public employee pension
funds, endowment funds, domestic and foreign institutions and governments,
and various affiliates;
|
|
•
|
retail
clients, including U.S. and offshore mutual funds, variable annuities,
insurance products and sub-advisory
relationships;
|
|
•
|
private
clients, including high-net-worth individuals, trusts and estates,
charitable foundations, partnerships, private and family corporations, and
other entities; and
|
|
•
|
institutional
investors seeking high-quality research and related services, and issuers
of publicly-traded securities seeking equity capital markets
services.
|
|
•
|
To
our institutional clients, we offer separately-managed accounts,
sub-advisory relationships, structured products, collective investment
trusts, mutual funds, hedge funds and other investment vehicles
(“Institutional Services”);
|
|
•
|
To
our retail clients, we offer retail mutual funds sponsored by
AllianceBernstein, our subsidiaries and our affiliated joint venture
companies, sub-advisory services to mutual funds sponsored by third
parties, separately-managed account programs sponsored by various
financial intermediaries worldwide (“Separately-Managed Account Programs”)
and other investment vehicles (collectively, “Retail
Services”);
|
|
•
|
To
our private clients, we offer diversified investment management services
through separately-managed accounts, hedge funds, mutual funds and other
investment vehicles (“Private Client Services”);
and
|
|
•
|
To
institutional investors, we offer research, portfolio strategy and
brokerage-related services, and, to issuers of publicly-traded securities,
we offer equity capital markets services (“Bernstein Research
Services”).
|
|
•
|
Value
equities, generally targeting stocks that are out of favor and considered
undervalued;
|
|
•
|
Growth
equities, generally targeting stocks with under-appreciated growth
potential;
|
|
•
|
Fixed
income securities, including taxable and tax-exempt
securities;
|
|
•
|
Blend
strategies, combining style-pure investment components with systematic
rebalancing;
|
|
•
|
Passive
management, including index and enhanced index
strategies;
|
|
•
|
Alternative
investments, such as hedge funds, currency management strategies, venture
capital and, beginning in 2010, direct real estate investing;
and
|
|
•
|
Asset
allocation services, by which we offer blend strategies
specifically-tailored for our clients (e.g., customized
target-date fund retirement services for defined contribution plan
sponsors).
|
December
31, 2009
|
December
31, 2008
|
December
31, 2007
|
December
31, 2009
|
December
31, 2008
|
December
31, 2007
|
December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Institutional
Services
|
$ | 300,052 | $ | 291,361 | $ | 508,081 | 3.0 | % | (42.7 | )% | ||||||||||
Retail
Services
|
120,697 | 101,643 | 183,165 | 18.7 | (44.5 | ) | ||||||||||||||
Private
Client Services
|
74,753 | 68,947 | 109,144 | 8.4 | (36.8 | ) | ||||||||||||||
Total
|
$ | 495,502 | $ | 461,951 | $ | 800,390 | 7.3 | (42.3 | ) |
(1)
|
Excludes
certain non-discretionary client
relationships.
|
Years Ended December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Institutional
Services
|
$ | 811,164 | $ | 1,240,636 | $ | 1,481,885 | (34.6 | )% | (16.3 | ) % | ||||||||||
Retail
Services
|
888,256 | 1,227,538 | 1,521,201 | (27.6 | ) | (19.3 | ) | |||||||||||||
Private
Client Services
|
589,665 | 849,830 | 960,669 | (30.6 | ) | (11.5 | ) | |||||||||||||
Bernstein
Research Services
|
434,605 | 471,716 | 423,553 | (7.9 | ) | 11.4 | ||||||||||||||
Other(1)
|
187,600 | (239,037 | ) | 332,441 | n/m | n/m | ||||||||||||||
Total
Revenues
|
2,911,290 | 3,550,683 | 4,719,749 | (18.0 | ) | (24.8 | ) | |||||||||||||
Less:
Interest Expense
|
4,411 | 36,524 | 194,432 | (87.9 | ) | (81.2 | ) | |||||||||||||
Net
Revenues
|
$ | 2,906,879 | $ | 3,514,159 | $ | 4,525,317 | (17.3 | ) | (22.3 | ) |
(1)
|
Other
revenues primarily consist of dividend and interest income, investment
gains (losses) and shareholder servicing fees. For additional information,
see “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
in Item 7.
|
December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 19,028 | $ | 22,598 | $ | 49,235 | (15.8 | )% | (54.1 | )% | ||||||||||
Global
and International
|
88,758 | 84,787 | 192,472 | 4.7 | (55.9 | ) | ||||||||||||||
107,786 | 107,385 | 241,707 | 0.4 | (55.6 | ) | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
18,124 | 16,075 | 31,908 | 12.7 | (49.6 | ) | ||||||||||||||
Global
and International
|
34,762 | 38,034 | 88,691 | (8.6 | ) | (57.1 | ) | |||||||||||||
52,886 | 54,109 | 120,599 | (2.3 | ) | (55.1 | ) | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
71,832 | 66,151 | 73,240 | 8.6 | (9.7 | ) | ||||||||||||||
Global
and International(2)
|
41,083 | 37,900 | 44,066 | 8.4 | (14.0 | ) | ||||||||||||||
112,915 | 104,051 | 117,306 | 8.5 | (11.3 | ) | |||||||||||||||
Other(3):
|
||||||||||||||||||||
U.S.
|
9,677 | 6,617 | 12,426 | 46.2 | (46.7 | ) | ||||||||||||||
Global
and International(2)
|
16,788 | 19,199 | 16,043 | (12.6 | ) | 19.7 | ||||||||||||||
26,465 | 25,816 | 28,469 | 2.5 | (9.3 | ) | |||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
118,661 | 111,441 | 166,809 | 6.5 | (33.2 | ) | ||||||||||||||
Global
and International
|
181,391 | 179,920 | 341,272 | 0.8 | (47.3 | ) | ||||||||||||||
Total
|
$ | 300,052 | $ | 291,361 | $ | 508,081 | 3.0 | (42.7 | ) |
(1)
|
Excludes
certain non-discretionary client
relationships.
|
(2)
|
Certain
client assets were reclassified among investment services to more
accurately reflect how these assets are managed by our
firm.
|
(3)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
Years Ended December
31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Investment
Advisory and Services Fees:
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 57,596 | $ | 108,921 | $ | 153,747 | (47.1 | )% | (29.2 | )% | ||||||||||
Global
and International
|
375,914 | 607,431 | 747,957 | (38.1 | ) | (18.8 | ) | |||||||||||||
433,510 | 716,352 | 901,704 | (39.5 | ) | (20.6 | ) | ||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
51,017 | 70,119 | 108,691 | (27.2 | ) | (35.5 | ) | |||||||||||||
Global
and International
|
150,612 | 276,676 | 311,727 | (45.6 | ) | (11.2 | ) | |||||||||||||
201,629 | 346,795 | 420,418 | (41.9 | ) | (17.5 | ) | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
90,798 | 85,333 | 91,144 | 6.4 | (6.4 | ) | ||||||||||||||
Global
and International
|
73,316 | 77,640 | 53,533 | (5.6 | ) | 45.0 | ||||||||||||||
164,114 | 162,973 | 144,677 | 0.7 | 12.6 | ||||||||||||||||
Other(1):
|
||||||||||||||||||||
U.S.
|
1,895 | 2,883 | 4,441 | (34.3 | ) | (35.1 | ) | |||||||||||||
Global
and International
|
9,343 | 11,633 | 10,353 | (19.7 | ) | 12.4 | ||||||||||||||
11,238 | 14,516 | 14,794 | (22.6 | ) | (1.9 | ) | ||||||||||||||
Total
Investment Advisory and Services Fees:
|
||||||||||||||||||||
U.S.
|
201,306 | 267,256 | 358,023 | (24.7 | ) | (25.4 | ) | |||||||||||||
Global
and International
|
609,185 | 973,380 | 1,123,570 | (37.4 | ) | (13.4 | ) | |||||||||||||
810,491 | 1,240,636 | 1,481,593 | (34.7 | ) | (16.3 | ) | ||||||||||||||
Distribution
Revenues(2)
|
— | — | 292 | — | (100.0 | ) | ||||||||||||||
Shareholder
Servicing Fees(2)
|
673 | — | — | n/m | — | |||||||||||||||
Total
|
$ | 811,164 | $ | 1,240,636 | $ | 1,481,885 | (34.6 | ) | (16.3 | ) |
(1)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
(2)
|
For
a description of distribution revenues and shareholder servicing fees,
see “Retail Services”
below.
|
December
31,
|
%
Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 11,253 | $ | 12,086 | $ | 33,488 | (6.9 | )% | (63.9 | )% | ||||||||||
Global
and International
|
26,232 | 28,053 | 56,560 | (6.5 | ) | (50.4 | ) | |||||||||||||
37,485 | 40,139 | 90,048 | (6.6 | ) | (55.4 | ) | ||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
9,552 | 8,494 | 24,637 | 12.5 | (65.5 | ) | ||||||||||||||
Global
and International
|
14,339 | 11,544 | 23,530 | 24.2 | (50.9 | ) | ||||||||||||||
23,891 | 20,038 | 48,167 | 19.2 | (58.4 | ) | |||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
9,635 | 9,857 | 10,627 | (2.3 | ) | (7.2 | ) | |||||||||||||
Global
and International
|
30,263 | 20,178 | 29,855 | 50.0 | (32.4 | ) | ||||||||||||||
39,898 | 30,035 | 40,482 | 32.8 | (25.8 | ) | |||||||||||||||
Other(1):
|
||||||||||||||||||||
U.S.
|
16,416 | 9,851 | 4,468 | 66.6 | 120.5 | |||||||||||||||
Global
and International
|
3,007 | 1,580 | — | 90.3 | n/m | |||||||||||||||
19,423 | 11,431 | 4,468 | 69.9 | 155.8 | ||||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
46,856 | 40,288 | 73,220 | 16.3 | (45.0 | ) | ||||||||||||||
Global
and International
|
73,841 | 61,355 | 109,945 | 20.4 | (44.2 | ) | ||||||||||||||
Total
|
$ | 120,697 | $ | 101,643 | $ | 183,165 | 18.7 | (44.5 | ) |
(1)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
Years Ended December
31,
|
%
Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Investment
Advisory and Services Fees:
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 45,211 | $ | 88,394 | $ | 129,125 | (48.9 | )% | (31.5 | )% | ||||||||||
Global
and International
|
121,514 | 216,561 | 262,369 | (43.9 | ) | (17.5 | ) | |||||||||||||
166,725 | 304,955 | 391,494 | (45.3 | ) | (22.1 | ) | ||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
46,672 | 84,651 | 119,880 | (44.9 | ) | (29.4 | ) | |||||||||||||
Global
and International
|
85,583 | 130,247 | 168,817 | (34.3 | ) | (22.8 | ) | |||||||||||||
132,255 | 214,898 | 288,697 | (38.5 | ) | (25.6 | ) | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
30,219 | 30,888 | 39,644 | (2.2 | ) | (22.1 | ) | |||||||||||||
Global
and International
|
175,595 | 195,373 | 224,335 | (10.1 | ) | (12.9 | ) | |||||||||||||
205,814 | 226,261 | 263,979 | (9.0 | ) | (14.3 | ) | ||||||||||||||
Other(1):
|
||||||||||||||||||||
U.S.
|
8,972 | 3,702 | 1,868 | 142.4 | 98.2 | |||||||||||||||
Global
and International
|
9,429 | 1,297 | — | 627.0 | n/m | |||||||||||||||
18,401 | 4,999 | 1,868 | 268.1 | 167.6 | ||||||||||||||||
Total
Investment Advisory and Services Fees:
|
||||||||||||||||||||
U.S.
|
131,074 | 207,635 | 290,517 | (36.9 | ) | (28.5 | ) | |||||||||||||
Global
and International
|
392,121 | 543,478 | 655,521 | (27.8 | ) | (17.1 | ) | |||||||||||||
523,195 | 751,113 | 946,038 | (30.3 | ) | (20.6 | ) | ||||||||||||||
Distribution
Revenues(2)
|
275,372 | 376,372 | 471,031 | (26.8 | ) | (20.1 | ) | |||||||||||||
Shareholder
Servicing Fees(2)
|
89,689 | 100,053 | 104,132 | (10.4 | ) | (3.9 | ) | |||||||||||||
Total
|
$ | 888,256 | $ | 1,227,538 | $ | 1,521,201 | (27.6 | ) | (19.3 | ) |
(1)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
(2)
|
For
a description of distribution revenues and shareholder servicing fees,
see
below.
|
December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 14,137 | $ | 13,254 | $ | 25,259 | 6.7 | % | (47.5 | )% | ||||||||||
Global
and International
|
11,751 | 11,627 | 25,497 | 1.1 | (54.4 | ) | ||||||||||||||
25,888 | 24,881 | 50,756 | 4.0 | (51.0 | ) | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
10,384 | 8,425 | 16,004 | 23.3 | (47.4 | ) | ||||||||||||||
Global
and International
|
6,941 | 5,709 | 12,175 | 21.6 | (53.1 | ) | ||||||||||||||
17,325 | 14,134 | 28,179 | 22.6 | (49.8 | ) | |||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
30,862 | 29,287 | 29,498 | 5.4 | (0.7 | ) | ||||||||||||||
Global
and International
|
621 | 606 | 676 | 2.5 | (10.4 | ) | ||||||||||||||
31,483 | 29,893 | 30,174 | 5.3 | (0.9 | ) | |||||||||||||||
Other(1):
|
||||||||||||||||||||
U.S.
|
15 | 21 | 25 | (28.6 | ) | (16.0 | ) | |||||||||||||
Global
and International
|
42 | 18 | 10 | 133.3 | 80.0 | |||||||||||||||
57 | 39 | 35 | 46.2 | 11.4 | ||||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
55,398 | 50,987 | 70,786 | 8.7 | (28.0 | ) | ||||||||||||||
Global
and International
|
19,355 | 17,960 | 38,358 | 7.8 | (53.2 | ) | ||||||||||||||
Total
|
$ | 74,753 | $ | 68,947 | $ | 109,144 | 8.4 | (36.8 | ) |
(1)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
Years Ended December
31,
|
% Change
|
|||||||||||||||||||
2009
|
2008(1)
|
2007(1)
|
2009-08 | 2008-07 | ||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Investment
Advisory and Services Fees:
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 143,390 | $ | 232,662 | $ | 286,851 | (38.4 | )% | (18.9 | ) % | ||||||||||
Global
and International
|
113,908 | 191,805 | 244,492 | (40.6 | ) | (21.5 | ) | |||||||||||||
257,298 | 424,467 | 531,343 | (39.4 | ) | (20.1 | ) | ||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
106,131 | 159,622 | 161,078 | (33.5 | ) | (0.9 | ) | |||||||||||||
Global
and International
|
68,693 | 106,358 | 121,628 | (35.4 | ) | (12.6 | ) | |||||||||||||
174,824 | 265,980 | 282,706 | (34.3 | ) | (5.9 | ) | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
152,205 | 154,936 | 142,078 | (1.8 | ) | 9.0 | ||||||||||||||
Global
and International
|
2,126 | 2,336 | 2,316 | (9.0 | ) | 0.9 | ||||||||||||||
154,331 | 157,272 | 144,394 | (1.9 | ) | 8.9 | |||||||||||||||
Other(2):
|
||||||||||||||||||||
U.S.
|
17 | 15 | 23 | 13.3 | (34.8 | ) | ||||||||||||||
Global
and International
|
176 | 43 | 91 | 309.3 | (52.7 | ) | ||||||||||||||
193 | 58 | 114 | 232.8 | (49.1 | ) | |||||||||||||||
Total
Investment Advisory and Services Fees:
|
||||||||||||||||||||
U.S.
|
401,743 | 547,235 | 590,030 | (26.6 | ) | (7.3 | ) | |||||||||||||
Global
and International
|
184,903 | 300,542 | 368,527 | (38.5 | ) | (18.4 | ) | |||||||||||||
586,646 | 847,777 | 958,557 | (30.8 | ) | (11.6 | ) | ||||||||||||||
Distribution
Revenues(3)
|
1,956 | 2,053 | 2,112 | (4.7 | ) | (2.8 | ) | |||||||||||||
Shareholder
Servicing Fees(3)
|
1,063 | — | — | n/m | — | |||||||||||||||
Total
|
$ | 589,665 | $ | 849,830 | $ | 960,669 | (30.6 | ) | (11.5 | ) |
(1)
|
Certain
2008 and 2007 investment advisory fee amounts have been reclassified to
confirm to our 2009 product
classification.
|
(2)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
(3)
|
For
a description of distribution revenues and shareholder servicing fees,
see “Retail Services”
above.
|
Years Ended December
31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Bernstein
Research Services
|
$ | 434,605 | $ | 471,716 | $ | 423,553 | (7.9 | ) | 11.4 |
(1)
|
Direct
and indirect ownership including unallocated Holding Units held in a trust
for our long-term incentive compensation
plans.
|
|
•
|
our
investment performance for clients;
|
|
•
|
our
commitment to place the interests of our clients
first;
|
|
•
|
the
quality of our research;
|
|
•
|
our
ability to attract, retain, and motivate highly skilled, and often highly
specialized, personnel;
|
|
•
|
the
array of investment products we
offer;
|
|
•
|
the
fees we charge;
|
|
•
|
Morningstar/Lipper
rankings for the AllianceBernstein
Funds;
|
|
•
|
our
operational effectiveness;
|
|
•
|
our
ability to further develop and market our brand;
and
|
|
•
|
our
global presence.
|
Item
1A.
|
Risk
Factors
|
|
·
|
adverse
effects on our earnings if acquired intangible assets or goodwill become
impaired;
|
|
·
|
existence
of unknown liabilities or contingencies that arise after closing;
and
|
|
·
|
potential
disputes with counterparties.
|
|
•
|
causing
disruptions in U.S. or global economic conditions, thereby decreasing
investor confidence and making investment products generally less
attractive;
|
|
•
|
inflicting
loss of life;
|
|
•
|
triggering
massive technology failures or delays;
and
|
|
•
|
requiring
substantial capital expenditures and operating expenses to remediate
damage and restore operations.
|
Item 1B.
|
Unresolved
Staff Comments
|
Item 2.
|
Properties
|
Item
3.
|
Legal
Proceedings
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
Quarters Ended 2009
|
||||||||||||||||||||
December 31
|
September 30
|
June 30
|
March 31
|
Total
|
||||||||||||||||
Cash
distributions per AllianceBernstein Unit(1)
|
$ | 0.70 | $ | 0.74 | $ | 0.48 | $ | 0.14 | $ | 2.06 | ||||||||||
Cash
distributions per Holding Unit(1)
|
$ | 0.62 | $ | 0.67 | $ | 0.41 | $ | 0.07 | $ | 1.77 | ||||||||||
Holding
Unit prices:
|
||||||||||||||||||||
High
|
$ | 28.91 | $ | 27.81 | $ | 22.62 | $ | 23.27 | ||||||||||||
Low
|
$ | 24.40 | $ | 17.83 | $ | 14.28 | $ | 10.12 |
Quarters Ended 2008
|
||||||||||||||||||||
December 31
|
September 30
|
June 30
|
March 31
|
Total
|
||||||||||||||||
Cash
distributions per AllianceBernstein Unit(1)
|
$ | 0.37 | $ | 0.70 | $ | 1.06 | $ | 0.94 | $ | 3.07 | ||||||||||
Cash
distributions per Holding Unit(1)
|
$ | 0.29 | $ | 0.60 | $ | 0.96 | $ | 0.83 | $ | 2.68 | ||||||||||
Holding
Unit prices:
|
||||||||||||||||||||
High
|
$ | 38.90 | $ | 57.11 | $ | 67.75 | $ | 78.00 | ||||||||||||
Low
|
$ | 11.49 | $ | 32.00 | $ | 54.50 | $ | 53.63 |
(1)
|
Declared
and paid during the following
quarter.
|
Total Number of Holding Units
Purchased
|
Average Price Paid Per Holding Unit, net of
Commissions
|
Total Number of Holding Units Purchased as Part of
Publicly Announced Plans or Programs
|
Maximum Number (or Approximate Dollar Value) of
Holding Units that May Yet Be Purchased Under the Plans or
Programs
|
|||||||||||||
(a) | (b) | (c) | (d) | |||||||||||||
Period
|
||||||||||||||||
10/1/09-10/31/09(1)
|
3,167 | $ | 24.74 | — | — | |||||||||||
11/1/09-11/30/09
|
— | — | — | — | ||||||||||||
12/1/09-12/31/09(2)
|
292,350 | 25.92 | — | — | ||||||||||||
Total
|
295,517 | $ | 25.91 | — | — |
(1)
|
On
October 2 and 16, 2009, we purchased from employees 2,932 Holding Units
and 235 Holding Units, respectively, to allow them to fulfill statutory
withholding tax requirements at the time of distribution of long-term
incentive compensation awards.
|
(2)
|
On
December 1 and 18, 2009, we purchased from employees 12,086 Holding Units
and 280,264 Holding Units, respectively, to allow them to fulfill
statutory withholding tax requirements at the time of distribution of
long-term incentive compensation
awards.
|
Item
6.
|
Selected
Financial Data
|
Years Ended December 31,
|
||||||||||||||||||||
2009
|
2008(1)
|
2007(1)
|
2006(1)
|
2005(1)
|
||||||||||||||||
(in
thousands, except per unit amounts and unless otherwise
indicated)
|
||||||||||||||||||||
INCOME
STATEMENT DATA:
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Investment
advisory and services fees
|
$ | 1,920,332 | $ | 2,839,526 | $ | 3,386,188 | $ | 2,890,229 | $ | 2,259,392 | ||||||||||
Distribution
revenues
|
277,328 | 378,425 | 473,435 | 421,045 | 397,800 | |||||||||||||||
Bernstein
research services
|
434,605 | 471,716 | 423,553 | 375,075 | 352,757 | |||||||||||||||
Dividend
and interest income
|
26,730 | 91,752 | 284,014 | 266,520 | 152,781 | |||||||||||||||
Investment
gains (losses)
|
144,447 | (349,172 | ) | 29,690 | 62,200 | 29,070 | ||||||||||||||
Other
revenues
|
107,848 | 118,436 | 122,869 | 123,171 | 116,788 | |||||||||||||||
Total
revenues
|
2,911,290 | 3,550,683 | 4,719,749 | 4,138,240 | 3,308,588 | |||||||||||||||
Less:
interest expense
|
4,411 | 36,524 | 194,432 | 187,833 | 95,863 | |||||||||||||||
Net
revenues
|
2,906,879 | 3,514,159 | 4,525,317 | 3,950,407 | 3,212,725 | |||||||||||||||
Expenses:
|
||||||||||||||||||||
Employee
compensation and benefits
|
1,298,053 | 1,454,691 | 1,833,796 | 1,547,627 | 1,262,198 | |||||||||||||||
Promotion
and servicing:
|
||||||||||||||||||||
Distribution
plan payments
|
207,643 | 274,359 | 335,132 | 292,886 | 291,953 | |||||||||||||||
Amortization
of deferred sales commissions
|
54,922 | 79,111 | 95,481 | 100,370 | 131,979 | |||||||||||||||
Other
|
173,250 | 207,506 | 252,468 | 218,944 | 198,004 | |||||||||||||||
General
and administrative
|
558,361 | 539,198 | 574,506 | 574,904 | 378,856 | |||||||||||||||
Interest
on borrowings
|
2,696 | 13,077 | 23,970 | 23,124 | 25,109 | |||||||||||||||
Amortization
of intangible assets
|
21,126 | 20,716 | 20,716 | 20,710 | 20,700 | |||||||||||||||
Total
expenses
|
2,316,051 | 2,588,658 | 3,136,069 | 2,778,565 | 2,308,799 | |||||||||||||||
Operating
income
|
590,828 | 925,501 | 1,389,248 | 1,171,842 | 903,926 | |||||||||||||||
Non-operating
income
|
33,657 | 18,728 | 15,756 | 20,196 | 34,446 | |||||||||||||||
Income
before income taxes
|
624,485 | 944,229 | 1,405,004 | 1,192,038 | 938,372 | |||||||||||||||
Income
taxes
|
45,977 | 95,803 | 127,845 | 75,045 | 64,571 | |||||||||||||||
Net
income
|
578,508 | 848,426 | 1,277,159 | 1,116,993 | 873,801 | |||||||||||||||
Net
income of consolidated entities attributable to non-controlling
interests
|
(22,381 | ) | (9,186 | ) | (16,715 | ) | (8,392 | ) | (5,483 | ) | ||||||||||
Net
income attributable to AllianceBernstein Unitholders
|
$ | 556,127 | $ | 839,240 | $ | 1,260,444 | $ | 1,108,601 | $ | 868,318 | ||||||||||
Basic
net income per AllianceBernstein Unit
|
$ | 2.07 | $ | 3.18 | $ | 4.80 | $ | 4.26 | $ | 3.37 | ||||||||||
Diluted
net income per AllianceBernstein Unit
|
$ | 2.07 | $ | 3.18 | $ | 4.77 | $ | 4.22 | $ | 3.35 | ||||||||||
Operating
margin(2)
|
19.6 | % | 26.1 | % | 30.3 | % | 29.5 | % | 28.0 | % | ||||||||||
CASH
DISTRIBUTIONS PER ALLIANCEBERNSTEIN UNIT(3)
|
$ | 2.06 | $ | 3.07 | $ | 4.77 | $ | 4.42 | $ | 3.33 | ||||||||||
BALANCE
SHEET DATA AT PERIOD END:
|
||||||||||||||||||||
Total
assets
|
$ | 7,214,940 | $ | 8,503,459 | $ | 9,368,754 | $ | 10,601,105 | $ | 9,490,480 | ||||||||||
Debt
|
$ | 248,987 | $ | 284,779 | $ | 533,872 | $ | 334,901 | $ | 407,291 | ||||||||||
Total
Capital
|
$ | 4,701,955 | $ | 4,486,826 | $ | 4,688,878 | $ | 4,624,512 | $ | 4,312,042 | ||||||||||
ASSETS
UNDER MANAGEMENT AT PERIOD END (in millions)
|
$ | 495,502 | $ | 461,951 | $ | 800,390 | $ | 716,921 | $ | 578,552 |
(1)
|
Certain
prior-year amounts have been reclassified to conform to our 2009
presentation. See Note 2
to AllianceBernstein’s
consolidated financial statements in Item 8 for a discussion of
reclassifications.
|
(2)
|
Operating
income less net income attributable to non-controlling interests as a
percentage of net revenue.
|
(3)
|
AllianceBernstein
is required to distribute all of its Available Cash Flow, as defined in
the AllianceBernstein Partnership Agreement, to its unitholders and the
General Partner.
|
Item 7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
As of December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
billions)
|
||||||||||||||||||||
Institutions
|
$ | 300.0 | $ | 291.4 | $ | 508.1 | 3.0 | % | (42.7 | )% | ||||||||||
Retail
|
120.7 | 101.6 | 183.2 | 18.7 | (44.5 | ) | ||||||||||||||
Private
Client
|
74.8 | 69.0 | 109.1 | 8.4 | (36.8 | ) | ||||||||||||||
Total
|
$ | 495.5 | $ | 462.0 | $ | 800.4 | 7.3 | (42.3 | ) |
As of December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
billions)
|
||||||||||||||||||||
Equity
|
||||||||||||||||||||
Value:
|
||||||||||||||||||||
U.S.
|
$ | 44.4 | $ | 47.9 | $ | 108.0 | (7.3 | )% | (55.6 | )% | ||||||||||
Global
& international
|
126.8 | 124.5 | 274.5 | 1.8 | (54.7 | ) | ||||||||||||||
171.2 | 172.4 | 382.5 | (0.7 | ) | (54.9 | ) | ||||||||||||||
Growth:
|
||||||||||||||||||||
U.S.
|
38.1 | 33.0 | 72.5 | 15.4 | (54.5 | ) | ||||||||||||||
Global
& international
|
56.0 | 55.3 | 124.4 | 1.4 | (55.6 | ) | ||||||||||||||
94.1 | 88.3 | 196.9 | 6.6 | (55.2 | ) | |||||||||||||||
Total
Equity
|
265.3 | 260.7 | 579.4 | 1.8 | (55.0 | ) | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
112.3 | 105.3 | 113.4 | 6.7 | (7.1 | ) | ||||||||||||||
Global
& international(1)
|
72.0 | 58.7 | 74.6 | 22.6 | (21.3 | ) | ||||||||||||||
184.3 | 164.0 | 188.0 | 12.4 | (12.8 | ) | |||||||||||||||
Other
(2):
|
||||||||||||||||||||
U.S.
|
26.1 | 16.5 | 16.9 | 58.3 | (2.5 | ) | ||||||||||||||
Global
& international(1)
|
19.8 | 20.8 | 16.1 | (4.6 | ) | 29.6 | ||||||||||||||
45.9 | 37.3 | 33.0 | 23.2 | 13.1 | ||||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
220.9 | 202.7 | 310.8 | 9.0 | (34.8 | ) | ||||||||||||||
Global
& international
|
274.6 | 259.3 | 489.6 | 5.9 | (47.0 | ) | ||||||||||||||
Total
|
$ | 495.5 | $ | 462.0 | $ | 800.4 | 7.3 | (42.3 | ) |
(1)
|
Certain
client assets were reclassified among investment services to more
accurately reflect how these assets are managed by our
firm.
|
(2)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
Distribution Channel
|
Investment Service
|
|||||||||||||||||||||||||||||||||||
Institutions
|
Retail
|
Private
Client
|
Total
|
Value
Equity
|
Growth
Equity
|
Fixed
Income(1)
|
Other
(1)(2)
|
Total
|
||||||||||||||||||||||||||||
(in
billions)
|
||||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2008
|
$ | 291.4 | $ | 101.6 | $ | 69.0 | $ | 462.0 | $ | 172.4 | $ | 88.3 | $ | 164.0 | $ | 37.3 | $ | 462.0 | ||||||||||||||||||
Long-term
flows:
|
||||||||||||||||||||||||||||||||||||
Sales/new
accounts
|
16.2 | 23.0 | 7.5 | 46.7 | 8.7 | 6.4 | 24.6 | 7.0 | 46.7 | |||||||||||||||||||||||||||
Redemptions/terminations
|
(56.2 | ) | (25.8 | ) | (8.0 | ) | (90.0 | ) | (46.3 | ) | (22.2 | ) | (19.9 | ) | (1.6 | ) | (90.0 | ) | ||||||||||||||||||
Cash
flow/unreinvested dividends
|
(17.7 | ) | (6.4 | ) | (6.5 | ) | (30.6 | ) | (11.8 | ) | (6.1 | ) | (7.9 | ) | (4.8 | ) | (30.6 | ) | ||||||||||||||||||
Net
long-term (outflows) inflows
|
(57.7 | ) | (9.2 | ) | (7.0 | ) | (73.9 | ) | (49.4 | ) | (21.9 | ) | (3.2 | ) | 0.6 | (73.9 | ) | |||||||||||||||||||
Transfers
|
0.2 | — | (0.2 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Market
appreciation
|
66.1 | 28.3 | 13.0 | 107.4 | 48.2 | 27.7 | 23.5 | 8.0 | 107.4 | |||||||||||||||||||||||||||
Net
change
|
8.6 | 19.1 | 5.8 | 33.5 | (1.2 | ) | 5.8 | 20.3 | 8.6 | 33.5 | ||||||||||||||||||||||||||
Balance
as of December 31, 2009
|
$ | 300.0 | $ | 120.7 | $ | 74.8 | $ | 495.5 | $ | 171.2 | $ | 94.1 | $ | 184.3 | $ | 45.9 | $ | 495.5 |
(1)
|
Certain
client assets were reclassified among investment services to more
accurately reflect how these assets are managed by our
firm.
|
(2)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
Distribution Channel
|
Investment Service
|
|||||||||||||||||||||||||||||||||||
Institutions
|
Retail
|
Private
Client
|
Total
|
Value
Equity
|
Growth
Equity
|
Fixed
Income(1)
|
Other
(1)(2)
|
Total
|
||||||||||||||||||||||||||||
(in
billions)
|
||||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2007
|
$ | 508.1 | $ | 183.2 | $ | 109.1 | $ | 800.4 | $ | 382.5 | $ | 196.9 | $ | 188.0 | $ | 33.0 | $ | 800.4 | ||||||||||||||||||
Long-term
flows:
|
||||||||||||||||||||||||||||||||||||
Sales/new
accounts
|
38.5 | 23.3 | 11.0 | 72.8 | 30.9 | 16.3 | 21.8 | 3.8 | 72.8 | |||||||||||||||||||||||||||
Redemptions/terminations
|
(34.9 | ) | (39.8 | ) | (8.3 | ) | (83.0 | ) | (41.1 | ) | (23.0 | ) | (18.6 | ) | (0.3 | ) | (83.0 | ) | ||||||||||||||||||
Cash
flow/unreinvested dividends
|
(18.0 | ) | (8.6 | ) | (7.4 | ) | (34.0 | ) | (19.1 | ) | (11.5 | ) | (11.5 | ) | 8.1 | (34.0 | ) | |||||||||||||||||||
Net
long-term (outflows) inflows
|
(14.4 | ) | (25.1 | ) | (4.7 | ) | (44.2 | ) | (29.3 | ) | (18.2 | ) | (8.3 | ) | 11.6 | (44.2 | ) | |||||||||||||||||||
Transfers
|
(10.6 | ) | 10.6 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Market
depreciation
|
(191.7 | ) | (67.1 | ) | (35.4 | ) | (294.2 | ) | (180.8 | ) | (90.4 | ) | (15.7 | ) | (7.3 | ) | (294.2 | ) | ||||||||||||||||||
Net
change
|
(216.7 | ) | (81.6 | ) | (40.1 | ) | (338.4 | ) | (210.1 | ) | (108.6 | ) | (24.0 | ) | 4.3 | (338.4 | ) | |||||||||||||||||||
Balance
as of December 31, 2008
|
$ | 291.4 | $ | 101.6 | $ | 69.0 | $ | 462.0 | $ | 172.4 | $ | 88.3 | $ | 164.0 | $ | 37.3 | $ | 462.0 |
(1)
|
Certain
client assets were reclassified among investment services to more
accurately reflect how these assets are managed by our
firm.
|
(2)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
Years Ended December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
billions)
|
||||||||||||||||||||
Distribution
Channel:
|
||||||||||||||||||||
Institutions
|
$ | 284.9 | $ | 426.5 | $ | 491.1 | (33.2 | )% | (13.1 | )% | ||||||||||
Retail
|
105.1 | 145.4 | 180.5 | (27.7 | ) | (19.4 | ) | |||||||||||||
Private
Client
|
68.6 | 93.2 | 104.8 | (26.4 | ) | (11.1 | ) | |||||||||||||
Total
|
$ | 458.6 | $ | 665.1 | $ | 776.4 | (31.1 | ) | (14.3 | ) |
Investment
Service:
|
||||||||||||||||||||
Value
Equity
|
$ | 160.6 | $ | 297.9 | $ | 373.3 | (46.1 | )% | (20.2 | )% | ||||||||||
Growth
Equity
|
86.1 | 152.6 | 186.0 | (43.6 | ) | (17.9 | ) | |||||||||||||
Fixed
Income(1)
|
170.8 | 182.2 | 179.0 | (6.2 | ) | 1.8 | ||||||||||||||
Other(1)(2)
|
41.1 | 32.4 | 38.1 | 26.6 | (14.8 | ) | ||||||||||||||
Total
|
$ | 458.6 | $ | 665.1 | $ | 776.4 | (31.1 | ) | (14.3 | ) |
(1)
|
Certain
client assets were reclassified among investment services to more
accurately reflect how these assets are managed by our
firm.
|
(2)
|
Includes
index, structured, asset allocation services and other non-actively
managed AUM.
|
Years Ended December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
millions, except per unit amounts)
|
||||||||||||||||||||
Net
revenues
|
$ | 2,906.9 | $ | 3,514.2 | $ | 4,525.3 | (17.3 | )% | (22.3 | )% | ||||||||||
Expenses
|
2,316.1 | 2,588.7 | 3,136.1 | (10.5 | ) | (17.5 | ) | |||||||||||||
Operating
income
|
590.8 | 925.5 | 1,389.2 | (36.2 | ) | (33.4 | ) | |||||||||||||
Non-operating
income
|
33.7 | 18.7 | 15.8 | 79.7 | 18.9 | |||||||||||||||
Income
before income taxes
|
624.5 | 944.2 | 1,405.0 | (33.9 | ) | (32.8 | ) | |||||||||||||
Income
taxes
|
46.0 | 95.8 | 127.9 | (52.0 | ) | (25.1 | ) | |||||||||||||
Net
income
|
578.5 | 848.4 | 1,277.1 | (31.8 | ) | (33.6 | ) | |||||||||||||
Net
income of consolidated entities attributable to non-controlling
interests
|
(22.4 | ) | (9.2 | ) | (16.7 | ) | 143.6 | (45.0 | ) | |||||||||||
Net
income attributable to AllianceBernstein Unitholders
|
$ | 556.1 | $ | 839.2 | $ | 1,260.4 | (33.7 | ) | (33.4 | ) | ||||||||||
Diluted
net income per AllianceBernstein Unit
|
$ | 2.07 | $ | 3.18 | $ | 4.77 | (34.9 | ) | (33.3 | ) | ||||||||||
Distributions
per AllianceBernstein Unit(1)
|
$ | 2.06 | $ | 3.07 | $ | 4.77 | (32.9 | ) | (35.6 | ) | ||||||||||
Operating
margin(2)
|
19.6 | % | 26.1 | % | 30.3 | % |
(1)
|
2008
distribution excludes a $35.3 million insurance
reimbursement.
|
(2)
|
Operating
income less net income attributable to non-controlling interests as a
percentage of net revenues.
|
Years Ended December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Investment
advisory and services fees:
|
|
|
|
|||||||||||||||||
Institutions:
|
|
|
|
|||||||||||||||||
Base
fees
|
$ | 792.4 | $ | 1,229.1 | $ | 1,416.0 | (35.5 | )% | (13.2 | )% | ||||||||||
Performance-based
fees
|
18.1 | 11.5 | 65.6 | 56.6 | (82.4 | ) | ||||||||||||||
810.5 | 1,240.6 | 1,481.6 | (34.7 | ) | (16.3 | ) | ||||||||||||||
Retail:
|
||||||||||||||||||||
Base
fees
|
522.8 | 751.0 | 946.0 | (30.4 | ) | (20.6 | ) | |||||||||||||
Performance-based
fees
|
0.4 | 0.1 | — | 394.6 | n/m | |||||||||||||||
523.2 | 751.1 | 946.0 | (30.3 | ) | (20.6 | ) | ||||||||||||||
Private
Client:
|
||||||||||||||||||||
Base
fees
|
575.3 | 846.0 | 943.0 | (32.0 | ) | (10.3 | ) | |||||||||||||
Performance-based
fees
|
11.3 | 1.8 | 15.6 | 521.3 | (88.3 | ) | ||||||||||||||
586.6 | 847.8 | 958.6 | (30.8 | ) | (11.6 | ) | ||||||||||||||
Total:
|
||||||||||||||||||||
Base
fees
|
1,890.5 | 2,826.1 | 3,305.0 | (33.1 | ) | (14.5 | ) | |||||||||||||
Performance-based
fees
|
29.8 | 13.4 | 81.2 | 121.8 | (83.4 | ) | ||||||||||||||
1,920.3 | 2,839.5 | 3,386.2 | (32.4 | ) | (16.1 | ) | ||||||||||||||
Distribution
revenues
|
277.3 | 378.4 | 473.4 | (26.7 | ) | (20.1 | ) | |||||||||||||
Bernstein
research services
|
434.6 | 471.7 | 423.5 | (7.9 | ) | 11.4 | ||||||||||||||
Dividend
and interest income
|
26.7 | 91.8 | 284.0 | (70.9 | ) | (67.7 | ) | |||||||||||||
Investment
gains (losses)
|
144.5 | (349.2 | ) | 29.7 | n/m | n/m | ||||||||||||||
Other
revenues
|
107.9 | 118.5 | 122.9 | (8.9 | ) | (3.6 | ) | |||||||||||||
Total
revenues
|
2,911.3 | 3,550.7 | 4,719.7 | (18.0 | ) | (24.8 | ) | |||||||||||||
Less:
Interest expense
|
4.4 | 36.5 | 194.4 | (87.9 | ) | (81.2 | ) | |||||||||||||
Net
revenues
|
$ | 2,906.9 | $ | 3,514.2 | $ | 4,525.3 | (17.3 | ) | (22.3 | ) |
Years Ended December 31,
|
% Change
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2009-08 | 2008-07 | ||||||||||||||||
(in
millions)
|
||||||||||||||||||||
|
|
|
||||||||||||||||||
Employee
compensation and benefits
|
$ | 1,298.1 | $ | 1,454.7 | $ | 1,833.8 | (10.8 | )% | (20.7 | )% | ||||||||||
Promotion
and servicing
|
435.8 | 561.0 | 683.1 | (22.3 | ) | (17.9 | ) | |||||||||||||
General
and administrative
|
558.4 | 539.2 | 574.5 | 3.6 | (6.1 | ) | ||||||||||||||
Interest
|
2.7 | 13.1 | 24.0 | (79.4 | ) | (45.4 | ) | |||||||||||||
Amortization
of intangible assets
|
21.1 | 20.7 | 20.7 | 2.0 | — | |||||||||||||||
Total
|
$ | 2,316.1 | $ | 2,588.7 | $ | 3,136.1 | (10.5 | ) | (17.5 | ) |
% Change
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2009 - 08 | 2008 - 07 | ||||||||||||||||
(in
millions, except per unit amounts)
|
||||||||||||||||||||
As
of December 31:
|
||||||||||||||||||||
Total
capital
|
$ | 4,702.0 | $ | 4,486.8 | $ | 4,688.9 | 4.8 | % | (4.3 | )% | ||||||||||
Cash
and cash equivalents
|
614.2 | 552.6 | 576.4 | 11.2 | (4.1 | ) | ||||||||||||||
For
the years ended December 31:
|
||||||||||||||||||||
Cash
flow from operations
|
625.5 | 1,364.8 | 1,215.2 | (54.2 | ) | 12.3 | ||||||||||||||
Proceeds
from sales (purchases) of investments, net
|
(3.5 | ) | 21.0 | 26.5 | n/m | (20.6 | ) | |||||||||||||
Capital
expenditures
|
(53.8 | ) | (75.2 | ) | (137.5 | ) | (28.5 | ) | (45.3 | ) | ||||||||||
Distributions
paid to General Partners and unitholders
|
(464.7 | ) | (1,019.7 | ) | (1,364.6 | ) | (54.4 | ) | (25.3 | ) | ||||||||||
Purchases
of Holding Units to fund deferred compensation plan awards,
net
|
(7.0 | ) | (2.4 | ) | (50.9 | ) | 196.1 | (95.4 | ) | |||||||||||
Issuance
of Holding Units to fund deferred compensation plan awards
|
272.2 | 70.9 | — | 284.1 | n/m | |||||||||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
- | 13.5 | 50.1 | (100.0 | ) | (73.0 | ) | |||||||||||||
(Repayment)
issuance of commercial paper, net
|
(36.8 | ) | (260.1 | ) | 175.8 | (85.9 | ) | n/m | ||||||||||||
Available
Cash Flow
|
559.7 | 810.2 | 1,253.2 | (30.9 | ) | (35.3 | ) |
As of December 31,
|
||||||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||||||
Credit
Available
|
Debt
Outstanding
|
Interest
Rate
|
Credit
Available
|
Debt
Outstanding
|
Interest
Rate
|
|||||||||||||||||||
(in
millions)
|
||||||||||||||||||||||||
Revolving
credit facility(1)
|
$ | 751.0 | $ | — | — | % | $ | 715.2 | $ | — | — | % | ||||||||||||
Commercial
paper(1)
|
249.0 | 249.0 | 0.2 | 284.8 | 284.8 | 1.8 | ||||||||||||||||||
Total
revolving credit facility - AllianceBernstein(1)
|
1,000.0 | 249.0 | 0.2 | 1,000.0 | 284.8 | 1.8 | ||||||||||||||||||
Revolving
credit facility – SCB LLC(1)
|
950.0 | — | — | 950.0 | — | — | ||||||||||||||||||
Uncommitted
line of credit – SCB LLC
|
— | — | — | — | — | — | ||||||||||||||||||
Uncommitted
bank facilities – SCB LLC
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 1,950.0 | $ | 249.0 | 0.2 | $ | 1,950.0 | $ | 284.8 | 1.8 |
(1)
|
Commercial
paper and amounts outstanding under the revolving credit facility are
short-term in nature, and as such, recorded value is estimated to
approximate fair value.
|
Contractual Obligations
|
||||||||||||||||||||
Total
|
Less than
1 Year
|
1-3 Years
|
3-5 Years
|
More than
5 Years
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Commercial
paper
|
$ | 249.0 | $ | 249.0 | $ | - | $ | - | $ | - | ||||||||||
Operating
leases, net of sublease commitments
|
2,361.1 | 120.0 | 269.5 | 278.7 | 1,692.9 | |||||||||||||||
Funding
commitments
|
55.9 | 22.7 | 16.0 | 14.8 | 2.4 | |||||||||||||||
Accrued
compensation and benefits
|
295.7 | 166.1 | 66.3 | 32.3 | 31.0 | |||||||||||||||
Unrecognized
tax benefits
|
7.4 | 2.6 | 4.8 | - | - | |||||||||||||||
Total
|
$ | 2,969.1 | $ | 560.4 | $ | 356.6 | $ | 325.8 | $ | 1,726.3 |
|
•
|
Our
optimism regarding improving sales and declining net
outflows: Our ability to sustain our improved investment
performance, as well as the actual performance of the capital markets
and other factors beyond our control, will affect our asset
flows.
|
|
•
|
Our
pipeline of new institutional client mandates not yet funded:
Before they are funded, institutional mandates do not represent legally
binding commitments to fund and, accordingly, the possibility exists that
not all mandates will be funded in the amounts and at the times we
currently anticipate.
|
|
•
|
Our
expectation that we will further globalize our sell-side research
footprint and expand our array of client services in
2010: Factors beyond our control, including the effect
of the performance of the financial markets on our results of operations,
may adversely affect our ability to implement our strategic
initiatives.
|
|
•
|
Our
expectation that corporate earnings will rise: The extent to which
global economies have recently stabilized is not necessarily indicative of
future earnings growth and there are significant obstacles that may
hinder sustained growth. The actual performance of the capital
markets and other factors beyond our control will affect our investment
success for clients and asset
flows.
|
|
•
|
The cash
flow Holding realizes from its investment in AllianceBernstein providing
Holding with the resources necessary to meet its financial
obligations: Holding’s cash flow is dependent on the quarterly cash
distributions it receives from AllianceBernstein. Accordingly, Holding’s
ability to meet its financial obligations is dependent on
AllianceBernstein’s cash flow from its operations, which is subject to the
performance of the capital markets and other factors beyond our
control.
|
|
•
|
Our
expectation that increased levels of AUM should lead to increased revenues
which, when supported by a lower expense base, will generate a greater
amount of income: Unanticipated events and factors, including
pursuit of strategic initiatives, may cause us to expand our expense base,
thus limiting the extent to which we benefit from any positive leverage in
future periods. Growth in our revenues will depend on the level of our
assets under management, which in turn depends on factors such as the
actual performance of the capital markets, the performance of our
investment products and other factors beyond our
control.
|
|
•
|
Our
financial condition and access to public and private debt providing
adequate liquidity for our general business needs: Our financial
condition is dependent on our cash flow from operations, which is subject
to the performance of the capital markets, our ability to maintain and
grow client assets under management and other factors beyond our control.
Our access to public and private debt, as well as the market for debt or
equity we may choose to issue on reasonable terms, may be limited by
adverse market conditions, our profitability and changes in government
regulations, including tax rates and interest
rates.
|
|
•
|
The
possibility that prolonged weakness in the value of client assets under
management may result in impairment of goodwill, intangible assets and the
deferred sales commission asset: To the extent that securities
valuations are depressed for prolonged periods of time, client assets
under management and our revenues, profitability and unit price may be
adversely affected. As a result, subsequent impairment tests may be based
upon different assumptions and future cash flow projections, which may
result in an impairment of goodwill, intangible assets and the deferred
sales commission asset.
|
|
•
|
The outcome
of litigation: Litigation is inherently unpredictable, and
excessive damage awards do occur. Though we have stated that we do not
expect certain legal proceedings to have a material adverse effect on our
results of operations or financial condition, any settlement or judgment
with respect to a legal proceeding could be significant, and could have
such an effect.
|
Item 7A.
|
Quantitative
and Qualitative Disclosures about Market
Risk
|
As of December 31,
|
||||||||||||||||
2009
|
2008
|
|||||||||||||||
Fair Value
|
Effect of
+100
Basis Point
Change
|
Fair Value
|
Effect of
+100
Basis Point
Change
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Fixed
Income Investments:
|
||||||||||||||||
Trading
|
$ | 125,906 | $ | (5,766 | ) | $ | 76,153 | $ | (3,099 | ) | ||||||
Available-for-sale
and other investments
|
178 | (8 | ) | 160 | (7 | ) |
As of December 31,
|
||||||||||||||||
2009
|
2008
|
|||||||||||||||
Fair Value
|
Effect of
-10%
Equity
Price
Change
|
Fair Value
|
Effect of
-10%
Equity
Price
Change
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Equity
Investments:
|
||||||||||||||||
Trading
|
$ | 358,676 | $ | (35,868 | ) | $ | 246,394 | $ | (24,639 | ) | ||||||
Available-for-sale
and other investments
|
290,069 | (29,007 | ) | 255,136 | (25,514 | ) |
Item 8.
|
Financial
Statements and Supplementary Data
|
December 31,
|
||||||||
2009
|
2008
|
|||||||
(in
thousands, except unit amounts)
|
||||||||
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 614,216 | $ | 552,577 | ||||
Cash
and securities segregated, at fair value (cost $985,213 and
$2,568,339)
|
985,331 | 2,572,569 | ||||||
Receivables,
net:
|
||||||||
Brokers
and dealers
|
170,148 | 251,644 | ||||||
Brokerage
clients
|
582,248 | 398,979 | ||||||
Fees,
net
|
346,482 | 377,167 | ||||||
Investments:
|
||||||||
Deferred
compensation-related
|
400,959 | 305,809 | ||||||
Other
|
373,870 | 272,034 | ||||||
Furniture,
equipment and leasehold improvements, net
|
359,674 | 365,804 | ||||||
Goodwill,
net
|
2,893,029 | 2,893,029 | ||||||
Intangible
assets, net
|
223,992 | 243,493 | ||||||
Deferred
sales commissions, net
|
90,187 | 113,541 | ||||||
Other
assets
|
174,804 | 156,813 | ||||||
Total
assets
|
$ | 7,214,940 | $ | 8,503,459 | ||||
LIABILITIES
AND CAPITAL
|
||||||||
Liabilities:
|
||||||||
Payables:
|
||||||||
Brokers
and dealers
|
$ | 120,574 | $ | 110,488 | ||||
Securities
sold not yet purchased
|
31,806 | 167 | ||||||
Brokerage
clients
|
1,430,835 | 2,755,104 | ||||||
AllianceBernstein
mutual funds
|
86,054 | 195,617 | ||||||
Accounts
payable and accrued expenses
|
278,398 | 310,392 | ||||||
Accrued
compensation and benefits
|
316,331 | 360,086 | ||||||
Debt
|
248,987 | 284,779 | ||||||
Total
liabilities
|
2,512,985 | 4,016,633 | ||||||
Commitments
and contingencies (See
Note 11)
|
||||||||
Capital:
|
||||||||
General
Partner
|
48,671 | 45,010 | ||||||
Limited
partners: 274,745,592 and 263,717,610 units issued and
outstanding
|
4,850,601 | 4,485,564 | ||||||
Capital
contributions receivable from General Partner
|
(19,664 | ) | (23,168 | ) | ||||
Holding
Units held for deferred compensation plans
|
(327,384 | ) | (117,600 | ) | ||||
Accumulated
other comprehensive income (loss)
|
(21,862 | ) | (72,147 | ) | ||||
Partners’
capital attributable to AllianceBernstein Unitholders
|
4,530,362 | 4,317,659 | ||||||
Non-controlling
interests in consolidated entities
|
171,593 | 169,167 | ||||||
Total
capital
|
4,701,955 | 4,486,826 | ||||||
Total
liabilities and capital
|
$ | 7,214,940 | $ | 8,503,459 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands, except per unit amounts)
|
||||||||||||
Revenues:
|
||||||||||||
Investment
advisory and services fees
|
$ | 1,920,332 | $ | 2,839,526 | $ | 3,386,188 | ||||||
Distribution
revenues
|
277,328 | 378,425 | 473,435 | |||||||||
Bernstein
research services
|
434,605 | 471,716 | 423,553 | |||||||||
Dividend
and interest income
|
26,730 | 91,752 | 284,014 | |||||||||
Investment
gains (losses)
|
144,447 | (349,172 | ) | 29,690 | ||||||||
Other
revenues
|
107,848 | 118,436 | 122,869 | |||||||||
Total
revenues
|
2,911,290 | 3,550,683 | 4,719,749 | |||||||||
Less:
Interest expense
|
4,411 | 36,524 | 194,432 | |||||||||
Net
revenues
|
2,906,879 | 3,514,159 | 4,525,317 | |||||||||
Expenses:
|
||||||||||||
Employee
compensation and benefits
|
1,298,053 | 1,454,691 | 1,833,796 | |||||||||
Promotion
and servicing:
|
||||||||||||
Distribution
plan payments
|
207,643 | 274,359 | 335,132 | |||||||||
Amortization
of deferred sales commissions
|
54,922 | 79,111 | 95,481 | |||||||||
Other
|
173,250 | 207,506 | 252,468 | |||||||||
General
and administrative
|
558,361 | 539,198 | 574,506 | |||||||||
Interest
on borrowings
|
2,696 | 13,077 | 23,970 | |||||||||
Amortization
of intangible assets
|
21,126 | 20,716 | 20,716 | |||||||||
Total
expenses
|
2,316,051 | 2,588,658 | 3,136,069 | |||||||||
Operating
income
|
590,828 | 925,501 | 1,389,248 | |||||||||
Non-operating
income
|
33,657 | 18,728 | 15,756 | |||||||||
Income
before income taxes
|
624,485 | 944,229 | 1,405,004 | |||||||||
Income
taxes
|
45,977 | 95,803 | 127,845 | |||||||||
Net
income
|
578,508 | 848,426 | 1,277,159 | |||||||||
Net
income of consolidated entities attributable to non-controlling
interests
|
(22,381 | ) | (9,186 | ) | (16,715 | ) | ||||||
Net
income attributable to AllianceBernstein Unitholders
|
$ | 556,127 | $ | 839,240 | $ | 1,260,444 | ||||||
Net
income per AllianceBernstein Unit:
|
||||||||||||
Basic
|
$ | 2.07 | $ | 3.18 | $ | 4.80 | ||||||
Diluted
|
$ | 2.07 | $ | 3.18 | $ | 4.77 |
Year
Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
General
Partner’s Capital
|
||||||||||||
Balance,
beginning of year
|
$ | 45,010 | $ | 45,932 | $ | 46,416 | ||||||
Net
income
|
5,561 | 8,392 | 12,605 | |||||||||
Cash
distributions to General Partner
|
(4,647 | ) | (10,197 | ) | (13,646 | ) | ||||||
Purchases
of Holding Units to fund deferred compensation plan awards,
net
|
5 | — | — | |||||||||
Issuance
of Holding Units to fund deferred compensation plan awards
|
2,722 | 709 | — | |||||||||
Allocation
of Holding Units from the rabbi trust to fund deferred compensation plan
awards
|
8 | 30 | 36 | |||||||||
Forfeitures
of Holding Units under deferred compensation plans
|
(2 | ) | (7 | ) | (1 | ) | ||||||
Compensation
plan accrual
|
14 | 17 | 17 | |||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
— | 135 | 501 | |||||||||
ACM
New Alliance Liquidation
|
— | (1 | ) | — | ||||||||
Impact
of initial adoption of ASC 740
|
— | — | 4 | |||||||||
Balance,
end of year
|
48,671 | 45,010 | 45,932 | |||||||||
Limited
Partners' Capital
|
||||||||||||
Balance,
beginning of year
|
4,485,564 | 4,526,126 | 4,584,200 | |||||||||
Net
income
|
550,566 | 830,848 | 1,247,839 | |||||||||
Cash
distributions to unitholders
|
(460,086 | ) | (1,009,482 | ) | (1,350,965 | ) | ||||||
Purchases
of Holding Units to fund deferred compensation plan awards,
net
|
(6,986 | ) | (2,358 | ) | (50,853 | ) | ||||||
Issuance
of Holding Units to fund deferred compensation plan awards
|
269,445 | 70,158 | — | |||||||||
Allocation
of Holding Units from the rabbi trust to fund deferred compensation plan
awards
|
12,533 | 58,252 | 42,667 | |||||||||
Forfeitures
of Holding Units under deferred compensation plans
|
(13,711 | ) | (10,702 | ) | (4,380 | ) | ||||||
Compensatory
Holding Unit options expense
|
11,889 | 7,737 | 5,947 | |||||||||
Compensation
plan accrual
|
1,387 | 1,642 | 1,683 | |||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
— | 13,390 | 49,550 | |||||||||
ACM
New Alliance Liquidation
|
— | (47 | ) | — | ||||||||
Impact
of initial adoption of ASC 740
|
— | — | 438 | |||||||||
Balance,
end of year
|
4,850,601 | 4,485,564 | 4,526,126 | |||||||||
Capital
Contributions Receivable
|
||||||||||||
Balance,
beginning of year
|
(23,168 | ) | (26,436 | ) | (29,590 | ) | ||||||
Capital
contributions from General Partner
|
4,905 | 4,927 | 4,854 | |||||||||
Compensation
plan accrual
|
(1,401 | ) | (1,659 | ) | (1,700 | ) | ||||||
Balance,
end of year
|
(19,664 | ) | (23,168 | ) | (26,436 | ) | ||||||
Holding
Units Held for Deferred Compensation Plans
|
||||||||||||
Balance,
beginning of year
|
(117,600 | ) | (57,501 | ) | (63,196 | ) | ||||||
Awards
of Holding Units to fund deferred compensation plans
|
(284,708 | ) | (129,149 | ) | (42,703 | ) | ||||||
Amortization
of deferred compensation awards
|
61,211 | 58,341 | 44,017 | |||||||||
Forfeitures
of Holding Units under deferred compensation plans
|
13,713 | 10,709 | 4,381 | |||||||||
Balance,
end of year
|
(327,384 | ) | (117,600 | ) | (57,501 | ) | ||||||
Accumulated
Other Comprehensive Income (Loss)
|
||||||||||||
Balance,
beginning of year
|
(72,147 | ) | 53,105 | 33,167 | ||||||||
Unrealized
gain (loss) on investments, net of tax
|
4,232 | (3,511 | ) | (8,859 | ) | |||||||
Foreign
currency translation adjustment, net of tax
|
39,098 | (96,978 | ) | 18,757 | ||||||||
Changes
in retirement plan related items, net of tax
|
6,955 | (24,763 | ) | 10,040 | ||||||||
Balance,
end of year
|
(21,862 | ) | (72,147 | ) | 53,105 | |||||||
Total
Partners' Capital attributable to AllianceBernstein
Unitholders
|
4,530,362 | 4,317,659 | 4,541,226 | |||||||||
Non-controlling
Interests in Consolidated Entities
|
||||||||||||
Balance,
beginning of year
|
169,167 | 147,652 | 53,515 | |||||||||
Net
income
|
22,381 | 9,186 | 16,715 | |||||||||
Unrealized
gain (loss) on investments
|
159 | (451 | ) | 59 | ||||||||
Foreign
currency translation adjustment
|
4,074 | (3,290 | ) | 1,114 | ||||||||
Cash
distributions to joint venture partners
|
— | (10,387 | ) | (5,904 | ) | |||||||
Contributions
from (distributions to) non-controlling interests of our consolidated
venture capital fund activities
|
(24,188 | ) | 26,457 | 82,153 | ||||||||
Balance,
end of year
|
171,593 | 169,167 | 147,652 | |||||||||
Total
Capital
|
$ | 4,701,955 | $ | 4,486,826 | $ | 4,688,878 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income
|
$ | 578,508 | $ | 848,426 | $ | 1,277,159 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
Amortization
of deferred sales commissions
|
54,922 | 79,111 | 95,481 | |||||||||
Amortization
of non-cash deferred compensation
|
73,101 | 66,078 | 49,815 | |||||||||
Depreciation
and other amortization
|
83,851 | 97,746 | 102,394 | |||||||||
Unrealized
(gains) losses on deferred compensation related
investments
|
(184,384 | ) | 254,686 | 21,701 | ||||||||
Other,
net
|
(19,867 | ) | 13,082 | (6,932 | ) | |||||||
Changes
in assets and liabilities:
|
||||||||||||
Decrease
(increase) in segregated cash and securities
|
1,587,238 | (132,792 | ) | (360,181 | ) | |||||||
Decrease
in receivables
|
66,314 | 331,916 | 1,871,138 | |||||||||
Decrease
(increase) in investments
|
19,787 | (34,189 | ) | (211,909 | ) | |||||||
(Increase)
in deferred sales commissions
|
(31,568 | ) | (9,081 | ) | (84,101 | ) | ||||||
(Increase)
decrease in other assets
|
(18,626 | ) | 6,223 | (14,648 | ) | |||||||
(Decrease)
increase in payables
|
(1,520,959 | ) | 4,658 | (1,625,583 | ) | |||||||
(Decrease)
increase in accounts payable and accrued expenses
|
(21,493 | ) | (50,740 | ) | 25,370 | |||||||
(Decrease)
increase in accrued compensation and benefits
|
(41,361 | ) | (110,346 | ) | 75,477 | |||||||
Net
cash provided by operating activities
|
625,463 | 1,364,778 | 1,215,181 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Purchases
of investments
|
(10,378 | ) | (22,221 | ) | (25,932 | ) | ||||||
Proceeds
from sales of investments
|
6,924 | 43,229 | 52,393 | |||||||||
Additions
to furniture, equipment and leasehold improvements
|
(53,763 | ) | (75,208 | ) | (137,547 | ) | ||||||
Net
cash used in investing activities
|
(57,217 | ) | (54,200 | ) | (111,086 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
(Repayment)
issuance of commercial paper, net
|
(36,751 | ) | (260,146 | ) | 175,750 | |||||||
(Decrease)
increase in overdrafts payable
|
(16,860 | ) | (11,524 | ) | 23,321 | |||||||
Distributions
to General Partner and unitholders
|
(464,733 | ) | (1,019,679 | ) | (1,364,611 | ) | ||||||
Distributions
to Joint Venture Partners
|
— | (10,387 | ) | (5,904 | ) | |||||||
(Distributions
to) contributions from non-controlling interests in consolidated
entities
|
(24,188 | ) | 26,457 | 82,153 | ||||||||
Capital
contributions from General Partner
|
4,905 | 4,927 | 4,854 | |||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
— | 13,525 | 50,051 | |||||||||
Purchases
of Holding Units to fund deferred compensation plan awards,
net
|
(6,981 | ) | (2,358 | ) | (50,853 | ) | ||||||
Other
|
132 | — | — | |||||||||
Net
cash used in financing activities
|
(544,476 | ) | (1,259,185 | ) | (1,085,239 | ) | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
37,869 | (75,232 | ) | 10,783 | ||||||||
Net
increase (decrease) in cash and cash equivalents
|
61,639 | (23,839 | ) | 29,639 | ||||||||
Cash
and cash equivalents as of beginning of the period
|
552,577 | 576,416 | 546,777 | |||||||||
Cash
and cash equivalents as of end of the period
|
$ | 614,216 | $ | 552,577 | $ | 576,416 | ||||||
Cash
paid:
|
||||||||||||
Interest
|
$ | 5,433 | $ | 47,933 | $ | 218,398 | ||||||
Income
taxes
|
64,085 | 132,491 | 87,329 |
|
•
|
Institutional
Services—servicing our institutional clients, including unaffiliated
corporate and public employee pension funds, endowment funds, domestic and
foreign institutions and governments, and affiliates such as AXA and
certain of its insurance company subsidiaries, by means of
separately-managed accounts, sub-advisory relationships, structured
products, collective investment trusts, mutual funds, hedge funds and
other investment vehicles.
|
|
•
|
Retail
Services—servicing our individual clients, primarily by means of retail
mutual funds sponsored by AllianceBernstein or an affiliated company,
sub-advisory relationships with mutual funds sponsored by third parties,
separately-managed account 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.
|
|
•
|
Bernstein
Research Services—servicing institutional investors seeking research,
portfolio strategy and brokerage-related services, and issuers of
publicly-traded securities seeking equity capital markets
services.
|
|
•
|
Value
equities, generally targeting stocks that are out of favor and considered
undervalued;
|
|
•
|
Growth
equities, generally targeting stocks with under-appreciated growth
potential;
|
|
•
|
Fixed
income securities, including taxable and tax-exempt
securities;
|
|
•
|
Blend
strategies, combining style-pure investment components with systematic
rebalancing;
|
|
•
|
Passive
management, including index and enhanced index
strategies;
|
|
•
|
Alternative
investments, such as hedge funds, currency management strategies and
venture capital; and
|
|
•
|
Asset
allocation, by which we offer blend strategies specifically-tailored for
our clients (e.g., customized
target-date fund retirement services for defined contribution plan
sponsors).
|
AXA
and its subsidiaries
|
61.6 | % | ||
Holding
|
36.5 | |||
Unaffiliated
holders
|
1.9 | |||
100.0 | % |
|
•
|
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,
|
|
•
|
payments
in respect of the principal of borrowings,
and
|
|
•
|
amounts
expended for the purchase of assets in the ordinary course of
business.
|
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands, except per unit amounts)
|
||||||||||||
Net
income attributable to AllianceBernstein Unitholders
|
$ | 556,127 | $ | 839,240 | $ | 1,260,444 | ||||||
Weighted
average units outstanding—basic
|
266,300 | 260,965 | 259,854 | |||||||||
Dilutive
effect of compensatory options to buy Holding Units
|
244 | 531 | 1,807 | |||||||||
Weighted
average units outstanding—diluted
|
266,544 | 261,496 | 261,661 | |||||||||
Basic
net income per AllianceBernstein Unit
|
$ | 2.07 | $ | 3.18 | $ | 4.80 | ||||||
Diluted
net income per AllianceBernstein Unit
|
$ | 2.07 | $ | 3.18 | $ | 4.77 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
AllianceBernstein
mutual funds
|
$ | 112,535 | $ | 89,530 | ||||
Unaffiliated
clients (net of allowance of $1,393 in 2009 and $1,488 in
2008)
|
222,660 | 280,288 | ||||||
Affiliated
clients
|
11,287 | 7,349 | ||||||
Total
fees receivables, net
|
$ | 346,482 | $ | 377,167 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
Available-for-sale
|
$ | 18,246 | $ | 7,566 | ||||
Trading:
|
||||||||
Deferred
compensation-related
|
326,364 | 238,136 | ||||||
United
States Treasury Bills
|
28,000 | 52,694 | ||||||
Other
|
130,218 | 31,717 | ||||||
Investments
in limited partnership hedge funds:
|
||||||||
Deferred
compensation-related
|
74,595 | 67,673 | ||||||
Other
|
16,579 | 2,191 | ||||||
Private
equity investments
|
172,747 | 176,823 | ||||||
Other
investments
|
8,080 | 1,043 | ||||||
Total
investments
|
$ | 774,829 | $ | 577,843 |
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
December
31, 2009:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Equity
investments
|
$ | 12,827 | $ | 5,241 | $ | — | $ | 18,068 | ||||||||
Fixed
income investments
|
153 | 27 | (2 | ) | 178 | |||||||||||
$ | 12,980 | $ | 5,268 | $ | (2 | ) | $ | 18,246 | ||||||||
Trading:
|
||||||||||||||||
Equity
investments
|
$ | 217,076 | $ | 141,950 | $ | (350 | ) | $ | 358,676 | |||||||
Fixed
income investments
|
114,606 | 12,278 | (978 | ) | 125,906 | |||||||||||
$ | 331,682 | $ | 154,228 | $ | (1,328 | ) | $ | 484,582 | ||||||||
December
31, 2008:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Equity
investments
|
$ | 11,822 | $ | 264 | $ | (4,680 | ) | $ | 7,406 | |||||||
Fixed
income investments
|
235 | 4 | (79 | ) | 160 | |||||||||||
$ | 12,057 | $ | 268 | $ | (4,759 | ) | $ | 7,566 | ||||||||
Trading:
|
||||||||||||||||
Equity
investments
|
$ | 434,909 | $ | 67 | $ | (188,582 | ) | $ | 246,394 | |||||||
Fixed
income investments
|
79,594 | 65 | (3,506 | ) | 76,153 | |||||||||||
$ | 514,503 | $ | 132 | $ | (192,088 | ) | $ | 322,547 |
|
•
|
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.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Cash
equivalents
|
$ | 178,875 | $ | 177,772 | $ | — | $ | 356,647 | ||||||||
Securities
segregated
|
— | 947,888 | — | 947,888 | ||||||||||||
Receivables
from brokers and dealers
|
(15 | ) | 612 | — | 597 | |||||||||||
Investments
– available-for-sale
|
18,246 | — | — | 18,246 | ||||||||||||
Investments
– trading
|
||||||||||||||||
Mutual
fund investments
|
332,340 | — | — | 332,340 | ||||||||||||
Equity
and fixed income securities
|
90,611 | 32,900 | 731 | 124,242 | ||||||||||||
U.S.
Treasury bills
|
— | 28,000 | — | 28,000 | ||||||||||||
Investments
– private equity
|
2,913 | 62,006 | 97,828 | 162,747 | ||||||||||||
Total
assets measured at fair value
|
$ | 622,970 | $ | 1,249,178 | $ | 98,559 | $ | 1,970,707 | ||||||||
Securities
sold not yet purchased
|
$ | 31,806 | $ | — | $ | — | $ | 31,806 | ||||||||
Total
liabilities measured at fair value
|
$ | 31,806 | $ | — | $ | — | $ | 31,806 |
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Cash
equivalents
|
$ | 184,404 | $ | — | $ | — | $ | 184,404 | ||||||||
Securities
segregated
|
— | 2,524,698 | — | 2,524,698 | ||||||||||||
Receivables
from brokers and dealers
|
(46 | ) | 680 | — | 634 | |||||||||||
Investments
– available-for-sale
|
7,566 | — | — | 7,566 | ||||||||||||
Investments
– trading
|
||||||||||||||||
Mutual
fund investments
|
237,529 | — | — | 237,529 | ||||||||||||
Equity
and fixed income securities
|
25,027 | 6,874 | 423 | 32,324 | ||||||||||||
U.S.
Treasury Bills
|
— | 52,694 | — | 52,694 | ||||||||||||
Investments
– private equity
|
4,694 | — | 162,129 | 166,823 | ||||||||||||
Total
assets measured at fair value
|
$ | 459,174 | $ | 2,584,946 | $ | 162,552 | $ | 3,206,672 | ||||||||
Securities
sold not yet purchased
|
$ | 167 | $ | — | $ | — | $ | 167 | ||||||||
Total
liabilities measured at fair value
|
$ | 167 | $ | — | $ | — | $ | 167 |
|
•
|
Cash
equivalents: We invest excess cash in various money market funds
that are valued based on quoted prices in active markets; these are
included in Level 1 of the valuation hierarchy. We also hold United
Kingdom Treasury Bills, which are valued based on quoted yields in
secondary markets and are included in Level 2 of the valuation
hierarchy.
|
|
•
|
Securities
segregated: We hold United States Treasury Bills, which are
segregated in a special reserve bank custody account as required by Rule
15c3-3 of the Exchange Act. These securities are valued based on quoted
yields in secondary markets, and are included in Level 2 of the valuation
hierarchy.
|
|
•
|
Receivables
from brokers and dealers: We hold several exchange-traded futures
and currency forward contracts with 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.
Our trading investments mainly comprise company-sponsored mutual funds
with exchange listed net asset values, United States Treasury Bills,
exchange-traded options and various separately-managed portfolios
consisting primarily of equity securities with quoted prices in active
markets. These investments are included in Level 1 or Level 2 of the
valuation hierarchy. Trading investments also include separately-managed
portfolios of fixed income securities that are included in Level 2 or
Level 3 of the valuation hierarchy.
|
|
•
|
Investments—private
equity: The valuation of non-public private equity
investments owned by a consolidated venture capital fund requires
significant management judgment due to the absence of quoted market
prices, inherent lack of liquidity and the long-term nature of such
investments. Private equity investments are valued initially at cost. The
carrying values of private equity investments are adjusted either up or
down from cost to reflect expected exit values as evidenced by financing
and sale transactions with third parties, or when determination of a
valuation adjustment is confirmed through ongoing review in accordance
with our valuation policies and procedures. A variety of factors are
reviewed and monitored to assess positive and negative changes in
valuation including, but not limited to, current operating performance and
future expectations of investee companies, industry valuations of
comparable public companies, changes in market outlook and the third party
financing 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. If they contain trading
restrictions, publicly-traded equity investments are included in Level 2
of the valuation hierarchy.
|
|
•
|
Securities
sold not yet purchased: Securities sold not yet purchased,
primarily reflecting short positions in equities and exchange-traded
options, are included in Level 1 of the valuation
hierarchy.
|
Years Ended
December 31,
|
||||||||
2009
|
2008
|
|||||||
(in thousands) | ||||||||
Balance
as of beginning of period
|
$ | 162,552 | $ | 125,020 | ||||
Transfers
out, net
|
(85,606 | ) | — | |||||
Purchases,
net
|
8,170 | 31,070 | ||||||
Realized
(losses) gains, net
|
(1,739 | ) | 9 | |||||
Unrealized
gains, net
|
15,182 | 6,453 | ||||||
Balance
as of end of period
|
$ | 98,559 | $ | 162,552 |
|
December 31,
|
|||||||
|
2009
|
2008
|
||||||
|
(in
thousands)
|
|||||||
|
|
|
||||||
Furniture
and equipment
|
$ | 544,493 | $ | 522,913 | ||||
Leasehold
improvements
|
348,222 | 322,803 | ||||||
|
892,715 | 845,716 | ||||||
Less:
Accumulated depreciation and amortization
|
(533,041 | ) | (479,912 | ) | ||||
Furniture,
equipment and leasehold improvements, net
|
$ | 359,674 | $ | 365,804 |
December 31,(1)
|
||||||||
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
|
|
|||||||
Carrying
amount of deferred sales commissions
|
$ | 571,599 | $ | 521,334 | ||||
Less: Accumulated
amortization
|
(349,697 | ) | (294,775 | ) | ||||
Cumulative
CDSC received
|
(131,715 | ) | (113,018 | ) | ||||
Deferred
sales commissions, net
|
$ | 90,187 | $ | 113,541 |
(1)
|
Excludes
amounts related to fully amortized deferred sales
commissions.
|
2010
|
$ | 41,208 | ||
2011
|
24,717 | |||
2012
|
15,168 | |||
2013
|
7,913 | |||
2014
|
1,050 | |||
2015
|
131 | |||
$ | 90,187 |
As of December 31,
|
||||||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||||||
Credit
Available
|
Debt
Outstanding
|
Interest
Rate
|
Credit
Available
|
Debt
Outstanding
|
Interest
Rate
|
|||||||||||||||||||
(in
millions)
|
||||||||||||||||||||||||
Revolving
credit facility(1)
|
$ | 751.0 | $ | — | — | % | $ | 715.2 | $ | — | — | % | ||||||||||||
Commercial
paper(1)
|
249.0 | 249.0 | 0.2 | 284.8 | 284.8 | 1.8 | ||||||||||||||||||
Total
revolving credit facility – AllianceBernstein(1)
|
1,000.0 | 249.0 | 0.2 | 1,000.0 | 284.8 | 1.8 | ||||||||||||||||||
Revolving
credit facility – SCB LLC(1)
|
950.0 | — | — | 950.0 | — | — | ||||||||||||||||||
Uncommitted
lines of credit – SCB LLC(1)
|
— | — | — | — | — | — | ||||||||||||||||||
Uncommitted
bank facilities – SCB LLC
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 1,950.0 | $ | 249.0 | 0.2 | $ | 1,950.0 | $ | 284.8 | 1.8 |
(1)
|
Commercial
paper and amounts outstanding under the revolving credit facility are
short-term in nature and, as such, recorded value is estimated to
approximate fair value.
|
Payments
|
Sublease
Receipts
|
Net
Payments
|
||||||||||
(in
millions)
|
||||||||||||
2010
|
$ | 126.2 | $ | 6.2 | $ | 120.0 | ||||||
2011
|
133.7 | 3.4 | 130.3 | |||||||||
2012
|
142.8 | 3.6 | 139.2 | |||||||||
2013
|
143.2 | 3.7 | 139.5 | |||||||||
2014
|
142.8 | 3.6 | 139.2 | |||||||||
2015
and thereafter
|
1,702.3 | 9.4 | 1,692.9 | |||||||||
Total
future minimum payments
|
$ | 2,391.0 | $ | 29.9 | $ | 2,361.1 |
Years Ended
December 31,
|
||||||||
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
Change
in projected benefit obligation:
|
||||||||
Projected
benefit obligation at beginning of year
|
$ | 72,230 | $ | 76,731 | ||||
Service
cost
|
— | 2,995 | ||||||
Interest
cost
|
4,420 | 4,996 | ||||||
Actuarial
loss
|
3,427 | 3,891 | ||||||
Plan
curtailment
|
— | (13,133 | ) | |||||
Benefits
paid
|
(2,913 | ) | (3,250 | ) | ||||
Projected
benefit obligation at end of year
|
77,164 | 72,230 | ||||||
Change
in plan assets:
|
||||||||
Plan
assets at fair value at beginning of year
|
33,383 | 56,786 | ||||||
Actual
return on plan assets
|
13,368 | (25,770 | ) | |||||
Employer
contribution
|
12,754 | 5,617 | ||||||
Benefits
paid
|
(2,913 | ) | (3,250 | ) | ||||
Plan
assets at fair value at end of year
|
56,592 | 33,383 | ||||||
Funded
status
|
$ | (20,572 | ) | $ | (38,847 | ) |
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
Unrecognized
net gain (loss) from experience different from that assumed and effects of
changes and assumptions
|
$ | 7,098 | $ | (20,811 | ) | |||
Unrecognized
prior service credit
|
— | (3,844 | ) | |||||
Unrecognized
net plan assets as of January 1, 1987 being recognized over 26.3
years
|
(143 | ) | (108 | ) | ||||
Other
comprehensive income (loss)
|
$ | 6,955 | $ | (24,763 | ) |
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
Unrecognized
net loss from experience different from that assumed and effects of
changes and assumptions
|
$ | (15,151 | ) | $ | (22,249 | ) | ||
Unrecognized
net plan assets as of January 1, 1987 being recognized over 26.3
years
|
459 | 602 | ||||||
Accumulated
other comprehensive loss
|
$ | (14,692 | ) | $ | (21,647 | ) |
2009
|
2008
|
|||||||
|
|
|||||||
Discount
rate on benefit obligations
|
6.05 | % | 6.20 | % | ||||
Annual
salary increases
|
0.00 | 3.11 |
2010
|
$ | 3,438 | ||
2011
|
2,696 | |||
2012
|
4,158 | |||
2013
|
3,257 | |||
2014
|
2,876 | |||
2015-2019
|
24,153 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
Service
cost
|
$ | — | $ | 2,995 | $ | 3,447 | ||||||
Interest
cost on projected benefit obligations
|
4,419 | 4,996 | 4,769 | |||||||||
Expected
return on plan assets
|
(3,110 | ) | (4,590 | ) | (4,310 | ) | ||||||
Amortization
of prior service credit
|
— | (431 | ) | (59 | ) | |||||||
Amortization
of transition asset
|
(143 | ) | (143 | ) | (143 | ) | ||||||
Curtailment
gain recognized
|
— | (3,510 | ) | — | ||||||||
Recognized
actuarial loss
|
431 | — | — | |||||||||
Net
pension charge (benefit)
|
$ | 1,597 | $ | (683 | ) | $ | 3,704 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
|
|
|
||||||||||
Discount
rate on benefit obligations
|
6.20 | % | 6.55 | % | 5.90 | % | ||||||
Expected
long-term rate of return on plan assets
|
8.00 | 8.00 | 8.00 | |||||||||
Annual
salary increases
|
0.00 | 3.14 | 3.14 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
|
|
|||||||
Equity
securities
|
61 | % | 56 | % | ||||
Debt
securities
|
31 | 30 | ||||||
Real
estate
|
8 | 14 | ||||||
100 | % | 100 | % |
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Cash
|
$ | 12 | $ | — | $ | — | $ | 12 | ||||||||
Short-term investments | — | 1,435 | — | 1,435 | ||||||||||||
Mutual
fund
|
4,233 | — | — | 4,233 | ||||||||||||
Offshore
hedge funds
|
— | 6,539 | — | 6,539 | ||||||||||||
Private
investment trusts
|
— | 44,373 | — | 44,373 | ||||||||||||
Total
assets measured at fair value
|
$ | 4,245 | $ | 52,347 | $ | — | $ | 56,592 |
|
•
|
For
2008 awards, executives and those senior officers previously participating
in the Special Option Program were permitted to allocate up to half of
their awards to investments in options to buy Holding Units (see Note
16).
|
|
•
|
For
2006 and 2007 awards, selected senior officers were permitted to elect to
allocate up to a specified portion of their awards to investments in
options to buy Holding Units (“Special Option Program”); the firm matched
this allocation on a two-for-one basis (for additional information about
the Special Option Program, see Note
16).
|
|
•
|
Beginning
with 2003 awards, participants were permitted to allocate their
awards to a combination of notional investments in Holding Units (up
to 50%) and notional investments in certain of our investment
services.
|
|
•
|
For
2002 awards, participants were permitted to allocate their awards to
a combination of notional investments in Holding Units and notional
investments in certain of our investment
services.
|
|
•
|
For
2001 awards, participants were required to allocate at least 50% of their
awards to notional investments in Holding Units and could allocate the
remainder to notional investments in certain of our investment
services.
|
|
•
|
Awards
made for 1999 and 2000 are notionally invested in Holding Units and vested
over periods ranging from eight years to immediate depending on the age of
the participant.
|
|
•
|
Awards
made from 1995 through 1998 generally vested ratably over eight
years.
|
|
•
|
Effective
January 1, 2006, participant accounts were converted to notional
investments in Holding Units or a money market fund, or a combination of
both, at the election of the participant, in lieu of being subject to an
earnings-based calculation. Each participant elected a distribution date,
which could be no earlier than January 2007. Holding issued 834,864
Holding Units in January 2006 in connection with this conversion, with a
market value on that date of approximately $47.2
million.
|
2009
|
2008
|
2007
|
||||||||||
Risk-free
interest rate
|
1.6 – 2.1 | % | 3.2 | % | 3.5 – 4.9 | % | ||||||
Expected
cash distribution yield
|
5.2 – 6.1 | % | 5.4 | % | 5.6 – 5.7 | % | ||||||
Historical
volatility factor
|
40.0 – 44.6 | % | 29.3 | % | 27.7–30.8 | % | ||||||
Expected
term
|
6.0
– 6.5 years
|
6.0
years
|
6.0
– 9.5 years
|
Holding Units
|
Weighted Average Exercise Price Per Holding
Unit
|
Weighted Average Remaining
Contractual Term
|
Aggregate Intrinsic Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Outstanding
as of December 31, 2008
|
6,685,808 | $ | 66.11 | 6.3 | ||||||||||||
Granted
|
6,565,302 | 17.06 | ||||||||||||||
Exercised
|
— | — | ||||||||||||||
Forfeited
|
(948,888 | ) | 45.09 | |||||||||||||
Expired
|
(254,700 | ) | 30.21 | |||||||||||||
Outstanding
as of December 31, 2009
|
12,047,522 | 41.79 | 7.3 | $ | — | |||||||||||
Exercisable
as of December 31, 2009
|
2,804,042 | 51.91 | 2.9 | — | ||||||||||||
Vested
or expected to vest as of December 31, 2009
|
11,530,174 | 41.26 | 7.3 | — |
Holding Units
|
Weighted Average Grant Date Fair
Value
|
|||||||
Unvested
as of December 31, 2008
|
2,806,846 | $ | 20.71 | |||||
Granted
|
9,843,405 | 26.13 | ||||||
Vested
|
(591,566 | ) | 22.82 | |||||
Forfeited
|
(3,001 | ) | 43.78 | |||||
Unvested
as of December 31, 2009
|
12,055,684 | 25.03 |
Outstanding
as of December 31, 2007
|
260,341,992 | |||
Options
to buy Holding Units exercised
|
315,467 | |||
Holding
Units issued
|
3,063,761 | |||
Holding
Units forfeited
|
(3,610 | ) | ||
Outstanding
as of December 31, 2008
|
263,717,610 | |||
Options
to buy Holding Units exercised
|
- | |||
Holding
Units issued
|
11,030,983 | |||
Holding
Units forfeited
|
(3,001 | ) | ||
Outstanding
as of December 31, 2009
|
274,745,592 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
Earnings
before income taxes:
|
||||||||||||
United
States
|
$ | 539,002 | $ | 669,205 | $ | 1,113,185 | ||||||
Foreign
|
85,483 | 275,024 | 291,819 | |||||||||
Total
|
$ | 624,485 | $ | 944,229 | $ | 1,405,004 | ||||||
Income
tax expense:
|
||||||||||||
Partnership
UBT
|
$ | 2,420 | $ | 9,945 | $ | 30,219 | ||||||
Corporate
subsidiaries:
|
||||||||||||
Federal
|
5,550 | 13,713 | 6,852 | |||||||||
State
and local
|
632 | 1,762 | 2,733 | |||||||||
Foreign
|
32,001 | 78,367 | 87,494 | |||||||||
Current
tax expense
|
40,603 | 103,787 | 127,298 | |||||||||
Deferred
tax expense (benefit)
|
5,374 | (7,984 | ) | 547 | ||||||||
Income
tax expense
|
$ | 45,977 | $ | 95,803 | $ | 127,845 |
Years Ended December 31,
|
||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
UBT
statutory rate
|
$ | 24,979 | 4.0 | % | $ | 37,769 | 4.0 | % | $ | 55,532 | 4.0 | % | ||||||||||||
Corporate
subsidiaries’ federal, state, local and foreign income
taxes
|
32,585 | 5.2 | 77,732 | 8.2 | 83,195 | 5.9 | ||||||||||||||||||
Effect
of ASC 740 adjustments, miscellaneous taxes, and other
|
(1,988 | ) | (0.3 | ) | (11,929 | ) | (1.3 | ) | 2,684 | 0.2 | ||||||||||||||
Income
not taxable resulting from use of UBT business apportionment
factors
|
(9,599 | ) | (1.5 | ) | (7,769 | ) | (0.8 | ) | (13,566 | ) | (1.0 | ) | ||||||||||||
Income
tax expense and effective tax rate
|
$ | 45,977 | 7.4 | $ | 95,803 | 10.1 | $ | 127,845 | 9.1 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in thousands) | ||||||||||||
Balance
as of beginning of period
|
$ | 8,805 | $ | 19,016 | $ | 17,862 | ||||||
Additions
for prior year tax positions
|
174 | 324 | 2,000 | |||||||||
Reductions
for prior year tax positions
|
- | (603 | ) | (1,452 | ) | |||||||
Additions
for current year tax positions
|
1,182 | 1,649 | 3,317 | |||||||||
Reductions
for current year tax positions
|
(52 | ) | (715 | ) | (303 | ) | ||||||
Reductions
related to settlements with tax authorities/closed years
|
(2,744 | ) | (10,866 | ) | (2,408 | ) | ||||||
Balance
as of end of period
|
$ | 7,365 | $ | 8,805 | $ | 19,016 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
Deferred
tax asset:
|
||||||||
Differences
between book and tax basis:
|
||||||||
Deferred
compensation plans
|
$ | 9,593 | $ | 14,704 | ||||
Charge
for mutual fund matters, legal proceedings and claims processing
contingency
|
71 | 4,179 | ||||||
Other,
primarily accrued expenses deductible when paid
|
11,489 | 5,235 | ||||||
Deferred
tax asset
|
21,153 | 24,118 | ||||||
Deferred
tax liability:
|
||||||||
Differences
between book and tax basis:
|
||||||||
Intangible
assets
|
14,056 | 17,075 | ||||||
Translation
adjustment
|
5,902 | 2,700 | ||||||
Other,
primarily undistributed earnings of certain foreign
subsidiaries
|
4,576 | 3,050 | ||||||
24,534 | 22,825 | |||||||
Net
deferred tax asset (liability)
|
$ | (3,381 | ) | $ | 1,293 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
millions)
|
||||||||||||
|
|
|
||||||||||
Institutions
|
$ | 811 | $ | 1,241 | $ | 1,482 | ||||||
Retail
|
888 | 1,227 | 1,521 | |||||||||
Private
client
|
590 | 850 | 961 | |||||||||
Bernstein
research services
|
435 | 472 | 424 | |||||||||
Other
|
187 | (239 | ) | 332 | ||||||||
Total
revenues
|
2,911 | 3,551 | 4,720 | |||||||||
Less:
Interest expense
|
4 | 37 | 195 | |||||||||
Net
revenues
|
$ | 2,907 | $ | 3,514 | $ | 4,525 |
2009
|
2008
|
2007
|
||||||||||
(in
millions)
|
||||||||||||
Net
revenues:
|
|
|
|
|||||||||
United
States
|
$ | 2,038 | $ | 2,258 | $ | 3,013 | ||||||
International
|
869 | 1,256 | 1,512 | |||||||||
Total
|
$ | 2,907 | $ | 3,514 | $ | 4,525 | ||||||
Long-lived
assets:
|
||||||||||||
United
States
|
$ | 3,488 | $ | 3,576 | $ | 3,656 | ||||||
International
|
79 | 40 | 52 | |||||||||
Total
|
$ | 3,567 | $ | 3,616 | $ | 3,708 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
Investment
advisory and services fees
|
$ | 658,476 | $ | 870,524 | $ | 1,027,636 | ||||||
Distribution
revenues
|
277,328 | 378,425 | 473,435 | |||||||||
Shareholder
servicing fees
|
90,141 | 99,028 | 103,604 | |||||||||
Other
revenues
|
6,962 | 6,868 | 6,502 | |||||||||
Bernstein
research services
|
1,138 | 1,233 | 1,583 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
Revenues:
|
||||||||||||
Investment
advisory and services fees
|
$ | 129,012 | $ | 180,689 | $ | 208,786 | ||||||
Bernstein
research services
|
71 | 225 | 606 | |||||||||
Other
revenues
|
568 | 697 | 824 | |||||||||
$ | 129,651 | $ | 181,611 | $ | 210,216 | |||||||
Expenses:
|
||||||||||||
Commissions
and distribution payments to financial intermediaries
|
$ | 6,918 | $ | 9,408 | $ | 7,178 | ||||||
Other
promotion and servicing
|
1,935 | 703 | 1,409 | |||||||||
General
and administrative
|
17,285 | 13,843 | 10,219 | |||||||||
$ | 26,138 | $ | 23,954 | $ | 18,806 | |||||||
Balance
Sheet:
|
||||||||||||
Institutional
investment advisory and services fees receivable
|
$ | 11,287 | $ | 7,349 | $ | 10,103 | ||||||
Other
due (to) from AXA and its subsidiaries
|
(3,888 | ) | (2,679 | ) | (2,405 | ) | ||||||
$ | 7,399 | $ | 4,670 | $ | 7,698 |
December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
Due
from Holding, net
|
$ | 1,484 | $ | 4,825 | $ | 7,460 | ||||||
Due
from unconsolidated joint ventures, net
|
$ | — | $ | — | $ | 255 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(in
thousands)
|
||||||||||||
Net
income
|
$ | 578,508 | $ | 848,426 | $ | 1,277,159 | ||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||
Unrealized
gains (losses) on investments
|
4,391 | (3,962 | ) | (8,800 | ) | |||||||
Foreign
currency translation adjustment
|
43,172 | (100,268 | ) | 19,871 | ||||||||
Changes
in retirement plan related items
|
6,955 | (24,763 | ) | 10,040 | ||||||||
Comprehensive
income
|
633,026 | 719,433 | 1,298,270 | |||||||||
Comprehensive
(income) loss of consolidated entities attributable to
non-controlling interests
|
(26,614 | ) | (5,445 | ) | (17,888 | ) | ||||||
Comprehensive
income attributable to AllianceBernstein Unitholders
|
$ | 606,412 | $ | 713,988 | $ | 1,280,382 |
Quarters Ended 2009
|
||||||||||||||||
December 31
|
September 30
|
June 30
|
March 31
|
|||||||||||||
(in
thousands, except per unit amounts)
|
||||||||||||||||
|
|
|
|
|||||||||||||
Net
revenues
|
$ | 781,861 | $ | 806,014 | $ | 721,440 | $ | 597,564 | ||||||||
Net
income attributable to AllianceBernstein Unitholders
|
$ | 191,640 | $ | 199,341 | $ | 128,295 | $ | 36,851 | ||||||||
Basic
net income per AllianceBernstein Unit(1)
|
$ | 0.71 | $ | 0.74 | $ | 0.48 | $ | 0.14 | ||||||||
Diluted
net income per AllianceBernstein Unit(1)
|
$ | 0.70 | $ | 0.74 | $ | 0.48 | $ | 0.14 | ||||||||
Cash
distributions per AllianceBernstein Unit(2)
|
$ | 0.70 | $ | 0.74 | $ | 0.48 | $ | 0.14 |
Quarters Ended 2008
|
||||||||||||||||
December 31
|
September 30
|
June 30
|
March 31
|
|||||||||||||
(in
thousands, except per unit amounts)
|
||||||||||||||||
|
|
|
|
|||||||||||||
Net
revenues
|
$ | 580,522 | $ | 840,991 | $ | 1,063,624 | $ | 1,029,022 | ||||||||
Net
income attributable to AllianceBernstein Unitholders
|
$ | 91,979 | $ | 219,529 | $ | 280,289 | $ | 247,443 | ||||||||
Basic
net income per AllianceBernstein Unit(1)
|
$ | 0.35 | $ | 0.83 | $ | 1.06 | $ | 0.94 | ||||||||
Diluted
net income per AllianceBernstein Unit(1)
|
$ | 0.35 | $ | 0.83 | $ | 1.06 | $ | 0.94 | ||||||||
Cash
distributions per AllianceBernstein Unit(2) (3)
(4)
|
$ | 0.37 | $ | 0.70 | $ | 1.06 | $ | 0.94 |
(1)
|
Basic
and diluted net income per unit are computed independently for each of the
periods presented. Accordingly, the sum of the quarterly net income per
unit amounts may not agree to the total for the
year.
|
(2)
|
Declared
and paid during the following
quarter.
|
(3)
|
During
the fourth quarter of 2006, we recorded a $56.0 million pre-tax charge
($54.5 million, net of related income tax benefit) for the estimated cost
of reimbursing certain clients for losses arising out of an error we made
in processing claims for class action settlement proceeds on behalf of
these clients, which include some AllianceBernstein-sponsored mutual
funds. During the third quarter of 2008, we recorded approximately $35.3
million in insurance recoveries relating to this error.
AllianceBernstein’s and Holding’s fourth quarter 2006 cash distributions
were based on net income as calculated prior to AllianceBernstein
recording the charge. Accordingly, the related insurance recoveries ($0.13
per unit) were not included in AllianceBernstein’s or Holding’s cash
distribution to unitholders for the third quarter of
2008.
|
(4)
|
During
the fourth quarter of 2008, we recorded an additional $5.1 million ($0.02
per unit) provision for income taxes subsequent to the declaration of the
fourth quarter 2008 cash distribution of $0.37 per unit. As a result, the
cash distribution per unit in the fourth quarter of 2008 is $0.02 higher
than diluted net income per
unit.
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
Item
9A.
|
Controls
and Procedures
|
|
•
|
Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
company;
|
|
•
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP and receipts
and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company;
and
|
|
•
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company’s assets that
could have a material effect on the financial
statements.
|
Item 9B.
|
Other
Information
|
Item 10.
|
Directors,
Executive Officers and Corporate
Governance
|
Name
|
Age
|
Position
|
Peter
S. Kraus
|
57
|
Chairman
of the Board and Chief Executive Officer
|
Dominique
Carrel-Billiard
|
43
|
Director
|
Christopher
M. Condron
|
62
|
Director
|
Henri
de Castries
|
55
|
Director
|
Denis
Duverne
|
56
|
Director
|
Richard
S. Dziadzio
|
46
|
Director
|
Deborah
S. Hechinger
|
59
|
Director
|
Weston
M. Hicks
|
53
|
Director
|
Nick
Lane
|
36
|
Director
|
Lorie
A. Slutsky
|
57
|
Director
|
A.W.
(Pete) Smith, Jr.
|
66
|
Director
|
Peter
J. Tobin
|
65
|
Director
|
Laurence
E. Cranch
|
63
|
General
Counsel
|
James
A. Gingrich
|
51
|
Chairman
and Chief Executive Officer of SCB LLC
|
Robert
H. Joseph, Jr.
|
62
|
Chief
Financial Officer
|
Lori
A. Massad
|
45
|
Chief
Talent Officer – Talent Development and Human Capital
|
David
A. Steyn
|
50
|
Chief
Operating Officer
|
|
•
|
establishing
two committees, the Code of Ethics Oversight Committee (“Ethics
Committee”) and the Internal Compliance Controls Committee (“Compliance
Committee”), composed of our executive officers and other senior
executives to oversee and resolve code of ethics and compliance-related
issues;
|
|
•
|
creating
an ombudsman office, where employees and others can voice concerns on a
confidential basis;
|
|
•
|
initiating
firm-wide compliance and ethics training programs;
and
|
|
•
|
appointing
a Conflicts Officer and establishing a Conflicts Committee to identify and
manage conflicts of interest.
|
Item
11.
|
Executive
Compensation
|
Net
Revenues
|
$ | 2,906,879 | ||
Distribution
Revenues
|
$ | (277,328 | ) | |
Adjusted
Revenues
|
$ | 2,629,551 | ||
Employee
Compensation & Benefits Expense
|
$ | 1,298,053 | ||
Other
Employment Costs
|
$ | (23,806 | ) | |
Adjusted
Employee Compensation & Benefits Expense
|
$ | 1,274,247 | ||
Adjusted
Compensation Ratio
|
48.5 | % |
|
•
|
For
Mr. Steyn, the main elements of his business and operational goals
included: restoring financial leverage to the firm through the
right-sizing, rationalization and re-engineering of the Distribution
Services’ units (Private Clients, Institutions and Retail) and the
Corporate and Fiduciary Services’ units (Finance, Legal and
Compliance, IT and Operations); leading the continued collaboration and
co-operation of the three distribution channels; focusing the distribution
channels on key strategic initiatives and new product launches;
integrating the local management of the overseas offices (in particular
London, Hong Kong, Tokyo and Sydney) into the global management of the
distribution channels; and working with Human Capital and Finance on the
overhaul of the firm’s incentive and deferred compensation
programs.
|
|
•
|
For
Mr. Gingrich, the main elements of his business and operational goals
included: optimizing the revenue and profit contribution of our
Bernstein Research Services unit; further enhancing this unit’s research
capabilities, trading services and product array; extending this unit’s
geographic platform; and attracting, motivating and retaining top
talent.
|
|
•
|
For
Mr. Cranch, the main elements of his business goals included: maintaining
the firm’s good compliance record; sustaining and improving the Legal and
Compliance Department’s level of client service; minimizing litigation
against the firm; and creating a high performance culture among staff in
the Legal and Compliance
department.
|
|
•
|
For
Mr. Joseph, the main elements of his business and operational goals
included: assuming global responsibility for administrative functions and
restructuring our firm’s finance organization to achieve greater
operational efficiency and an improved control environment; leading a
firm-wide initiative to reduce controllable operating expenses by at least
15%; accelerating our firm’s monthly closing process; enhancing management
reporting and decision support; implementing procedures to better allocate
capital, de-risk our firm’s balance sheet and secure an appropriate level
of liquidity; and identifying and developing our firm’s next generation of
finance leaders.
|
Christopher
M. Condron (Chair)
|
Peter
S. Kraus
|
Lorie
A. Slutsky
|
A.W.
(Pete) Smith, Jr.
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock Awards(1)
($)
|
Option Awards(1)
($)
|
Non-Equity Incentive Plan
Compensation
($)
|
Change in Pension Value and Nonqualified Deferred
Compensation Earnings
($)
|
All Other Compensation
($)
|
Total(1)
($)
|
||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||||||||||||||
Peter
S. Kraus(2)
|
2009
|
275,000 | 6,000,000 | 10,452,680 | — | — | — | 4,175,132 | 20,902,812 | ||||||||||||||||||||||||
Chairman
and Chief
|
2008
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Executive
Officer
|
|||||||||||||||||||||||||||||||||
David
A. Steyn
|
2009
|
176,048 | 1,672,503 | — | — | — | — | 16,569 | 1,865,120 | ||||||||||||||||||||||||
Chief
Operating Officer
|
|||||||||||||||||||||||||||||||||
James
A. Gingrich
|
2009
|
200,000 | 1,270,000 | — | 167,225 | — | — | 10,414 | 1,647,639 | ||||||||||||||||||||||||
Chairman
and CEO of
|
|||||||||||||||||||||||||||||||||
SCB
LLC
|
|||||||||||||||||||||||||||||||||
Laurence
E. Cranch
|
2009
|
200,000 | 770,000 | — | 173,684 | — | — | 11,188 | 1,154,872 | ||||||||||||||||||||||||
General
Counsel
|
|||||||||||||||||||||||||||||||||
Robert
H. Joseph, Jr.
|
2009
|
195,000 | 395,000 | 410,011 | — | — | 47,830 | 38,977 | 1,086,818 | ||||||||||||||||||||||||
Chief
Financial Officer
|
2008
|
195,000 | 400,000 | — | — | — | 63,612 | 692,285 | 1,350,897 | ||||||||||||||||||||||||
2007
|
185,000 | 1,050,000 | — | 16,091 | — | 18,664 | 1,088,406 | 2,358,161 | |||||||||||||||||||||||||
Gerald
M. Lieberman
|
2009
|
200,000 | — | 3,382,175 | 1,040,000 | — | — | 3,140,351 | 7,762,526 | ||||||||||||||||||||||||
Former
President and
|
2008
|
200,000 | 1,000,000 | — | — | — | — | 1,827,920 | 3,027,920 | ||||||||||||||||||||||||
Chief
Operating Officer
|
2007
|
200,000 | 4,050,000 | — | 42,908 | — | — | 7,568,795 | 11,861,703 |
(1)
|
The
figures in columns (e) and (f) of the above table provide the amount of
amortization expense incurred by our firm in connection with awards made
to the named executive officers, as required by Item 402(c) of Regulation
S-K. The total compensation figures in column (j) of the above
table do not include the grant date fair value of awards made in
2009. For information about these awards, see “Grants of Plan-based
Awards in 2009” later in this Item
11.
|
(2)
|
Mr.
Kraus joined AllianceBernstein in December 2008. Accordingly,
Mr. Kraus did not receive any compensation in 2008 or 2007. His
compensation structure is set forth in the Kraus Employment
Agreement, the terms of which are described above in
“Compensation Discussion and Analysis—Overview of
our Chief Executive Officer’s Compensation” and described below in
“Potential Payments upon Termination or Change in
Control”.
|
|
Estimated Future Payouts Under Non-Equity
Incentive Plan Awards
|
Estimated Future Payouts Under Equity Incentive
Plan Awards
|
||||||||||||||||||||||||||||||||||||||||||
Name
|
Grant Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
All Other Stock Awards: Number of Shares of
Stock or Units
(#)
|
All Other Option Awards: Number of Securities
Underlying Options
(#)
|
Exercise or Base Price of Option
Awards
($/Sh)
|
Grant Date Fair Value of Stock and Option
Awards
|
|||||||||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
|||||||||||||||||||||||||||||||||
Peter
S. Kraus
|
— | — | — | — | — | — | — | — | — | — | $ | — | ||||||||||||||||||||||||||||||||
David
A. Steyn
|
12/7/09
|
— | — | — | — | — | — | 146,083 | — | — | 3,904,799 | |||||||||||||||||||||||||||||||||
James
A. Gingrich
|
12/7/09
|
— | — | — | — | — | — | 94,650 | — | — | 2,529,995 | |||||||||||||||||||||||||||||||||
1/23/09
|
— | — | — | — | — | — | — | 263,533 | 17.05 | 925,000 | ||||||||||||||||||||||||||||||||||
Laurence
E. Cranch
|
12/7/09
|
— | — | — | — | — | — | 38,534 | — | — | 1,030,014 | |||||||||||||||||||||||||||||||||
1/23/09
|
— | — | — | — | — | — | — | 78,348 | 17.05 | 275,000 | ||||||||||||||||||||||||||||||||||
Robert
H. Joseph, Jr.
|
12/7/09
|
— | — | — | — | — | — | 15,339 | — | — | 410,011 | |||||||||||||||||||||||||||||||||
Gerald
M. Lieberman
|
1/23/09
|
— | — | — | — | — | — | — | 296,297 | 17.05 | 1,040,000 | |||||||||||||||||||||||||||||||||
8/7/09 | — | — | — | — | — | — | 157,898 | — | — | 3,382,175 |
Option
Awards
|
Holding Unit
Awards
|
|||||||||||||||||||||||||||||||||||
Name
|
Number of Securities Underlying Unexercised
Options Exercisable
(#)
|
Number of Securities Underlying Unexercised
Options Unexercisable
(#)
|
Equity Incentive Plan Awards: Number of Securities
Underlying Unexercised Unearned Options
(#)
|
Option Exercise Price
($)
|
Option Expiration
Date
|
Number of Shares or Units of Stock That Have Not
Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
|
Equity Incentive Plan Awards: Number of Unearned
Shares, Units or Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards: Market or Payout
Value of Unearned Shares, Units or Other Rights That Have Not
Vested
($)
|
|||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||||||||||||||||||||
Peter
S. Kraus(1)
|
— | — | — | — | — | 2,177,642 | 61,191,740 | — | — | |||||||||||||||||||||||||||
David
A. Steyn(2)
|
— | — | — | — | — | 146,083 | 4,104,932 | — | — | |||||||||||||||||||||||||||
James
A. Gingrich(2)(3)
|
— | 263,533 | — | 17.05 |
1/23/19
|
94,650 | 2,659,665 | — | — | |||||||||||||||||||||||||||
Laurence
E. Cranch(2)(3)
|
— | 78,348 | — | 17.05 |
1/23/19
|
38,534 | 1,082,805 | — | — | |||||||||||||||||||||||||||
Robert
H. Joseph, Jr.(2)(4)
|
15,000 | — | — | 33.18 |
12/06/12
|
15,339 | 431,026 | — | — | |||||||||||||||||||||||||||
15,000 | — | — | 50.25 |
12/07/11
|
— | — | — | — | ||||||||||||||||||||||||||||
15,000 | — | — | 53.75 |
12/11/10
|
— | — | — | — | ||||||||||||||||||||||||||||
50,000 | — | — | 48.50 |
06/20/10
|
— | — | — | — | ||||||||||||||||||||||||||||
Gerald
M. Lieberman(3)(5)
|
— | 296,297 | — | 17.05 |
1/23/19
|
157,898 | 4,436,934 | — | — |
(1)
|
Mr.
Kraus’s Restricted Holding Unit Award vests ratably on December 19, 2010,
2011, 2012 and 2013.
|
(2)
|
These
restricted Holding Unit awards vest ratably on December 1, 2010, 2011,
2012 and 2013.
|
(3)
|
These
option awards vest ratably on January 23, 2010, 2011, 2012, 2013 and
2014.
|
(4)
|
Mr.
Joseph’s option awards are fully
vested.
|
(5)
|
Mr.
Lieberman's restricted Holding Unit award vests ratably on July 31, 2010,
2011 and 2012.
|
Option Awards
|
Holding Unit Awards
|
|||||||||||||||
Name
|
Number of Units Acquired on
Exercise
(#)
|
Value Realized on
Exercise
($)
|
Number of Holding Units Acquired on
Vesting
(#)
|
Value Realized on Vesting
($)
|
||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||||||||
|
||||||||||||||||
Peter
S. Kraus
|
— | — | 544,410 | 14,116,562 | ||||||||||||
David
A. Steyn
|
— | — | — | — | ||||||||||||
James
A. Gingrich
|
— | — | — | — | ||||||||||||
Laurence
E. Cranch
|
— | — | — | — | ||||||||||||
Robert
H. Joseph, Jr.
|
— | — | — | — | ||||||||||||
Gerald
M. Lieberman
|
— | — | — | — |
Name
|
Plan Name
|
Number of Years Credited
Service
(#)
|
Present Value of Accumulated
Benefit
($)
|
Payments During Last Fiscal
Year
($)
|
|||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|||||||||||
|
|
|
|
|
|||||||||||
Peter
S. Kraus
|
n/a | — | — | — | |||||||||||
David
A. Steyn
|
n/a | — | — | — | |||||||||||
James
A. Gingrich
|
n/a | — | — | — | |||||||||||
Laurence
E. Cranch
|
n/a | — | — | — | |||||||||||
Robert
H. Joseph, Jr.
|
Retirement Plan
|
24 | 537,972 | (1) | — | ||||||||||
Gerald
M. Lieberman
|
n/a | — | — | — |
(1)
|
The
Executive Committee has determined that no new benefits shall be accrued
under the Retirement Plan, effective as of the close of business on
December 31, 2008.
|
Name
|
Executive Contributions in Last
FY
($)
|
Registrant Contributions in Last
FY
($)
|
Aggregate Earnings in Last FY
($)
|
Aggregate Withdrawals/
Distributions
($)
|
Aggregate Balance at Last FYE
($)
|
|||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
|||||||||||||||
|
||||||||||||||||||||
Peter
S. Kraus
|
— | — | — | — | — | |||||||||||||||
David
A. Steyn
|
— | — | 2,194,329 | (1,652,275 | ) | 6,722,898 | ||||||||||||||
James
A. Gingrich
|
— | — | 1,055,504 | (1,419,365 | ) | 4,326,464 | ||||||||||||||
Laurence
E. Cranch
|
— | — | 629,506 | — | 2,445,279 | |||||||||||||||
Robert
H. Joseph, Jr.
|
— | — | 1,331,215 | (954,879 | ) | 4,605,132 | ||||||||||||||
Gerald
M. Lieberman
|
— | — | 507,375 | (2,637,478 | ) | 1,679,427 |
Name
|
Cash Payments(1)
($)
|
Acceleration or Grant of Restricted Holding Unit
Awards(2)
($)
|
Option Awards(3)
($)
|
Other Benefits
($)
|
||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||||||||
|
||||||||||||||||
Peter
S. Kraus
|
||||||||||||||||
Change
in control
|
— | 61,191,740 | — | — | ||||||||||||
Termination
by AllianceBernstein without cause
|
— | 61,191,740 | — | — | ||||||||||||
Termination
by Mr. Kraus for good reason
|
— | 61,191,740 | — | — | ||||||||||||
Death
or disability(4)(5)
|
— | 61,191,740 | — | — | ||||||||||||
David
A. Steyn
|
||||||||||||||||
Death
or disability(6)
|
— | 4,104,932 | — | — | ||||||||||||
James
A. Gingrich
|
||||||||||||||||
Death
or disability(6)
|
— | 2,659,665 | 2,912,040 | — | ||||||||||||
Laurence
E. Cranch
|
||||||||||||||||
Death
or disability(6)
|
— | 1,082,805 | 865,745 | — | ||||||||||||
Robert
H. Joseph, Jr.
|
||||||||||||||||
Death
or disability(6)
|
— | 431,026 | — | — | ||||||||||||
Gerald
M. Lieberman
|
||||||||||||||||
Retirement(6)(7)
|
2,600,000 | 4,436,934 | 3,274,082 | 1,246,263 |
(1)
|
Messrs.
Steyn, Gingrich, Cranch and Joseph are not entitled to any
payments or benefits upon termination of their employment by
AllianceBernstein without cause. Nevertheless, it is our
expectation that each would receive a cash severance
payment. As the amounts of any such payments would be
determined at the time of such termination, we are unable to estimate the
amount of any such payments.
|
(2)
|
Restricted
Holding Unit awards made in December 2009 to Messrs. Steyn, Gingrich,
Cranch and Joseph are subject to a “Rule of 65” retirement
provision. An award recipient qualifies for “retirement” if the
recipient is at least 55 years old and has completed at least 10 years of
service. Any award recipient who qualifies for “retirement”
retains the right to receive distribution of the underlying Holding Units
post-retirement provided the recipient complies with agreements and
covenants in the award agreement until the Holding Units have fully
vested.
|
(3)
|
Options
awarded to Messrs. Gingrich, Cranch and Lieberman, which
are set forth in the
“Outstanding Equity Awards at 2009 Fiscal Year-End” table above,
are subject to a “Rule of 70” retirement provision. An award
recipient qualifies for retirement if the recipient: (i) is at least 65
years old; or (ii) is at least 55 years old and the recipient’s age and
years of service added together equal or exceed 70. An award
recipient who qualifies for retirement continues to vest post-retirement
provided the recipient complies with any agreements and covenants enforced
by AllianceBernstein.
|
(4)
|
The
Kraus Employment Agreement defines “Disability” as a good faith
determination by AllianceBernstein that Mr. Kraus is physically or
mentally incapacitated and has been unable for a period of one hundred and
twenty (120) days in the aggregate during any twelve-month period to
perform substantially all of the duties for which he is responsible
immediately before the commencement of the
incapacity.
|
(5)
|
Upon
termination of Mr. Kraus’s employment due to death or disability,
AllianceBernstein will provide at its expense continued health and welfare
benefits for Mr. Kraus, his spouse and his dependants through the end of
the calendar year in which termination occurs. Thereafter,
until the date Mr. Kraus (or, in the case of his spouse, his spouse)
reaches age 65, AllianceBernstein shall provide Mr. Kraus and his spouse
with access to participation in AllianceBernstein’s medical plans at Mr.
Kraus’s (or his spouse’s) sole expense based on a reasonably determined
fair market value premium rate.
|
(6)
|
“Disability”
is defined in the Incentive Compensation Program award agreements of
Messrs. Steyn, Gingrich, Cranch and Joseph, and in the Special
Option Program award agreements of Messrs. Gingrich, Cranch and Lieberman,
as the inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be
expected to last for a continuous period of not less than 12 months,
as determined by the carrier of the long-term disability insurance program
maintained by AllianceBernstein or its affiliate that covers the executive
officer.
|
(7)
|
For
additional information relating to Mr. Lieberman’s $2,600,000 severance
payment, restricted Holding Unit award and other benefits that he received
in connection with his retirement, see “Compensation Elements for
Executive Officers—Former President and Chief Operating Officer
Arrangements”.
|
Name
|
Fees Earned or Paid in Cash
($)
|
Stock Awards(1)
($)
|
Option Awards(2)
($)
|
Non-Equity Incentive Plan
Compensation
($)
|
Change in Pension Value and Nonqualified Deferred
Compensation Earnings
($)
|
All Other Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Deborah
S. Hechinger
|
56,500 | 30,000 | 30,000 | — | — | — | 116,500 | |||||||||||||||||||||
Weston
M. Hicks
|
67,000 | 30,000 | 30,000 | — | — | — | 127,000 | |||||||||||||||||||||
Lorie
A. Slutsky
|
77,500 | 30,000 | 30,000 | — | — | — | 137,500 | |||||||||||||||||||||
A.W.
(Pete) Smith, Jr.
|
76,000 | 30,000 | 30,000 | — | — | — | 136,000 | |||||||||||||||||||||
Peter
J. Tobin
|
94,000 | 30,000 | 30,000 | — | — | — | 154,000 |
(1)
|
As
of December 31, 2009, our independent directors had outstanding restricted
Holding Unit awards in the following amounts: Ms. Hechinger owned 2,450
Holding Units, Mr. Hicks owned 2,912 Holding Units, Ms. Slutsky owned
3,573 Holding Units, Mr. Smith owned 2,912 Holding Units and Mr. Tobin
owned 3,573 Holding Units.
|
(2)
|
As
of December 31, 2009, our independent directors had outstanding option
awards in the following amounts: Ms. Hechinger owned options to buy 10,945
Holding Units, Mr. Hicks owned options to buy 13,373 Holding Units, Ms.
Slutsky owned options to buy 42,524 Holding Units, Mr. Smith owned options
to buy 13,373 Holding Units and Mr. Tobin owned options to buy 57,774
Holding Units.
|
|
•
|
an
annual retainer of $40,000 (paid quarterly after any quarter during which
a director serves on the Board);
|
|
•
|
a
fee of $1,500 for participating in a meeting of the Board, or any duly
constituted committee of the Board, whether he or she participates in
person or by telephone;
|
|
•
|
an
annual retainer of $15,000 for acting as Chair of the Audit
Committee;
|
|
•
|
an
annual retainer of $7,500 for acting as Chair of the Corporate Governance
Committee; and
|
|
•
|
an
annual equity-based grant under the 1997 Plan consisting
of:
|
|
•
|
restricted
Holding Units having a value of $30,000 based on the closing price of
Holding Units on the NYSE as of the grant date;
and
|
|
•
|
options
to buy Holding Units with a value of $30,000 calculated using the
Black-Scholes method.
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
Plan
Category
|
Number of securities to be issued upon
exercise of outstanding options, warrants and
rights
|
Weighted average exercise price
of outstanding options, warrants and
rights
|
Number of securities remaining available for
future issuance
|
|||||||||
|
(a)
|
(b)
|
(c)
|
|||||||||
|
||||||||||||
Equity
compensation plans approved by security holders
|
12,047,522 | $ | 41.79 | 6,256,646 | ||||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
12,047,522 | $ | 41.79 | 6,256,646 |
Name and Address of Beneficial
Owner
|
Amount and Nature of Beneficial
Ownership Reported on Schedule
|
Percent of Class
|
|||||||
AXA(1)(2)(3)(4)
|
25
avenue Matignon 75008
Paris,
France
|
170,121,745 | (5) | 61.9 | % |
(1)
|
Based
on information provided by AXA Financial, on December 31, 2009, AXA and
certain of its subsidiaries beneficially owned all of AXA Financial’s
outstanding common stock. For insurance regulatory purposes the shares of
common stock of AXA Financial beneficially owned by AXA and its
subsidiaries have been deposited into a voting trust (“Voting Trust”), the
term of which has been extended until May 12, 2012. The trustees of the
Voting Trust (the “Voting Trustees”) are Henri de Castries, Denis Duverne
and Christopher M. Condron, each of whom serves on the AXA Management
Board. The Voting Trustees have agreed to exercise their voting rights to
protect the legitimate economic interests of AXA, but with a view to
ensuring that certain minority shareholders of AXA do not exercise control
over AXA Financial or certain of its insurance
subsidiaries.
|
(2)
|
Based
on information provided by AXA, as of December 31, 2009, 14.12% of the
issued ordinary shares (representing 22.20% of the voting power) of AXA
were owned directly and indirectly by two French mutual insurance
companies engaged in the Property & Casualty insurance business and
the Life & Savings insurance business in France (the “Mutuelles
AXA”).
|
(3)
|
The
Voting Trustees and the Mutuelles AXA, as a group, may be deemed to be
beneficial owners of all AllianceBernstein Units beneficially owned by AXA
and its subsidiaries. By virtue of the provisions of the Voting Trust
Agreement, AXA may be deemed to have shared voting power with respect to
the AllianceBernstein Units. AXA and its subsidiaries have the power to
dispose or direct the disposition of all shares of the capital stock of
AXA Financial deposited in the Voting Trust. The Mutuelles AXA, as a
group, may be deemed to share the power to vote or to direct the vote and
to dispose or to direct the disposition of all the AllianceBernstein Units
beneficially owned by AXA and its subsidiaries. The address of each of AXA
and the Voting Trustees is 25 avenue Matignon, 75008 Paris, France. The
address of the Mutuelles AXA is 26, rue Drouot, 75009 Paris,
France.
|
(4)
|
By
reason of their relationships, AXA, the Voting Trustees, the Mutuelles
AXA, AXA America Holdings, Inc. (a wholly-owned subsidiary of AXA), AXA IM
Rose Inc. (a 95.29%-owned subsidiary of AXA), AXA Financial, AXA
Equitable, AXA Financial (Bermuda) Ltd. (a wholly-owned subsidiary of AXA
Financial), Coliseum Reinsurance Company (a wholly-owned subsidiary of AXA
Financial), ACMC Inc. (a wholly-owned subsidiary of AXA Financial), MONY
Life Insurance Company (a wholly-owned subsidiary of AXA Financial) and
MONY Life Insurance Company of America (a wholly-owned subsidiary of MONY
Life Insurance Company) may be deemed to share the power to vote or to
direct the vote and to dispose or direct the disposition of all or a
portion of the 168,146,626 AllianceBernstein
Units.
|
(5)
|
As
indicated above in note 4, AXA IM Rose Inc. is a 95.29%-owned subsidiary
of AXA, meaning that 4.71% of the AllianceBernstein Units beneficially
owned by AXA IM Rose Inc. as of December 31, 2009 were not beneficially
owned by AXA. As a result, as of December 31, 2009, AXA
beneficially owned 168,146,626 AllianceBernstein Units, or 61.2% of the
issued and outstanding AllianceBernstein
Units.
|
Name of Beneficial
Owner
|
Number of Holding Units and Nature of
Beneficial Ownership
|
Percent of Class
|
||||||
|
||||||||
Peter
S. Kraus(1)(2)
|
2,441,789 | 2.4 | % | |||||
Dominique
Carrel-Billiard(1)
|
— | * | ||||||
Christopher
M. Condron(1)
|
35,000 | * | ||||||
Henri
de Castries(1)
|
2,000 | * | ||||||
Denis
Duverne(1)
|
2,000 | * | ||||||
Richard
S. Dziadzio(1)
|
— | * | ||||||
Deborah
S. Hechinger(3)
|
4,675 | * | ||||||
Weston
M. Hicks(4)
|
12,565 | * | ||||||
Nick
Lane(1)
|
— | * | ||||||
Lorie
A. Slutsky(1)(5)
|
38,415 | * | ||||||
A.W.
(Pete) Smith, Jr.(6)
|
9,084 | * | ||||||
Peter
J. Tobin(1)(7)
|
52,627 | * | ||||||
David
A. Steyn(1)(8)
|
155,662 | * | ||||||
James
A. Gingrich(1)(9)
|
201,142 | * | ||||||
Laurence
E. Cranch(1)(10)
|
61,905 | * | ||||||
Robert
H. Joseph, Jr.(1)(11)
|
214,114 | * | ||||||
Gerald
M. Lieberman(12)
|
217,157 | * | ||||||
All
directors and executive officers of the General Partner as a group (18
persons)(13)(14)
|
3,488,867 | 3.4 | % |
*
|
Number
of Holding Units listed represents less than 1% of the Units
outstanding.
|
(1)
|
Excludes
Holding Units beneficially owned by AXA and its subsidiaries. Ms. Slutsky
and Messrs. Kraus, Carrel-Billiard, de Castries, Condron, Duverne,
Dziadzio, Lane, and Tobin are directors and/or officers of AXA, AXA IM,
AXA Financial, and/or AXA Equitable. Messrs. Kraus, Steyn, Gingrich,
Cranch and Joseph are directors and/or officers of the General
Partner.
|
(2)
|
In
connection with the commencement of Mr. Kraus’s employment, on December
19, 2008, he was granted 2,722,052 restricted Holding Units. Subject to
accelerated vesting clauses in the Kraus Employment Agreement (e.g., immediate vesting
upon AXA ceasing to control the management of AllianceBernstein’s business
or Holding ceasing to be publicly traded and certain qualifying
terminations of employment), Mr. Kraus’s restricted Holding Units will
vest ratably on each of the first five anniversaries of December 19, 2008,
commencing December 19, 2009, provided, with respect to each installment,
Mr. Kraus continues to be employed by AllianceBernstein on the vesting
date. Mr. Kraus sold 280,263 Holding Units to cover withholding tax
obligations when his first tranche of Holding Units
vested.
|
(3)
|
Includes
2,225 Holding Units Ms. Hechinger can acquire within 60 days under an
AllianceBernstein option plan.
|
(4)
|
Includes
4,653 Holding Units Mr. Hicks can acquire within 60 days under an
AllianceBernstein option plan.
|
(5)
|
Includes
33,804 Holding Units Ms. Slutsky can acquire within 60 days under an
AllianceBernstein option plan.
|
(6)
|
Includes
4,653 Holding Units Mr. Smith can acquire within 60 days under an
AllianceBernstein option plan.
|
(7)
|
Includes
49,054 Holding Units Mr. Tobin can acquire within 60 days under an
AllianceBernstein option plan.
|
(8)
|
Includes
146,083 restricted Holding Units Mr. Steyn was awarded in December
2009.
|
(9)
|
Includes
52,706 Holding Units Mr. Gingrich can acquire within 60 days under an
AllianceBernstein option plan, 94,650 restricted Holding Units awarded in
December 2009 and 24,576 restricted Holding Units to which he previously
allocated portions of incentive compensation
awards.
|
(10)
|
Includes
15,669 Holding Units Mr. Cranch can acquire within 60 days under an
AllianceBernstein option plan, 38,533 restricted Holding Units awarded in
December 2009 and 7,703 restricted Holding Units to which he previously
allocated portions of incentive compensation
awards.
|
(11)
|
Includes
95,000 Holding Units Mr. Joseph can acquire within 60 days under
AllianceBernstein option plans, 15,339 restricted Holding Units awarded in
December 2009 and 64,679 restricted Holding Units to which he previously
allocated portions of incentive compensation
awards.
|
(12)
|
Includes
59,259 Holding Units Mr. Lieberman can acquire within 60 days under an
AllianceBernstein option plan and 157,898 restricted Holding Units awarded
under the Lieberman Retirement Agreement. For additional
information regarding he Lieberman Retirement Agreement, see “Compensation Elements for
Executive Officers—Former President and Chief Operating Officer
Arrangements” in Item 11.
|
(13)
|
Includes
317,023 Holding Units the directors and executive officers as a group can
acquire within 60 days under AllianceBernstein option
plans.
|
(14)
|
Includes
333,139 restricted Holding Units awarded in December 2009 to the executive
officers as a group and 98,608 restricted Holding Units to which the
executive officers as a group previously allocated portions of incentive
compensation awards.
|
Name of Beneficial
Owner
|
Number of Shares and Nature of
Beneficial Ownership
|
Percent of Class
|
||||||
|
||||||||
Peter
S. Kraus
|
— | * | ||||||
Dominique
Carrel-Billiard(2)
|
140,053 | * | ||||||
Christopher
M. Condron(3)
|
3,408,754 | * | ||||||
Henri
de Castries(4)
|
6,493,930 | * | ||||||
Denis
Duverne(5)
|
2,537,149 | * | ||||||
Richard
S. Dziadzio(6)
|
202,036 | * | ||||||
Deborah
S. Hechinger
|
— | * | ||||||
Weston
M. Hicks
|
— | * | ||||||
Nick
Lane(7)
|
9,232 | * | ||||||
Lorie
A. Slutsky(8)
|
5,804 | * | ||||||
A.W.
(Pete) Smith, Jr.
|
— | * | ||||||
Peter
J. Tobin(9)
|
23,969 | * | ||||||
David
A. Steyn
|
— | * | ||||||
James
A. Gingrich
|
— | * | ||||||
Laurence
E. Cranch
|
— | * | ||||||
Robert
H. Joseph, Jr.
|
— | * | ||||||
Gerald
M. Lieberman
|
— | * | ||||||
All
directors and executive officers of the General Partner as a group (18
persons)(10)
|
12,820,927 | * |
*
|
Number
of shares listed represents less than 1% of the outstanding AXA common
stock.
|
(1)
|
Holdings
of AXA American Depositary Shares (“ADS”) are expressed as their
equivalent in AXA common stock. Each AXA ADS represents the right to
receive one AXA ordinary share.
|
(2)
|
Includes
87,653 shares Mr. Carrel-Billiard can acquire within 60 days under option
plans. Also includes 268 unvested AXA performance shares, which are paid
out when vested based on the price of AXA at that
time.
|
(3)
|
Includes
1,051,533 shares and 1,544,743 ADSs Mr. Condron can acquire within 60 days
under option plans. Also includes 193,096 unvested performance units,
which are paid out when vested based on the price of ADSs at that time;
payout will be 70% in cash and 30% in
ADSs.
|
(4)
|
Includes
4,831,150 shares Mr. de Castries can acquire within 60 days under option
plans. Also includes 175,099 unvested AXA performance shares, which are
paid out when vested based on the price of AXA at that
time.
|
(5)
|
Includes
1,708,368 shares Mr. Duverne can acquire within 60 days under option
plans. Also includes 143,766 unvested AXA performance shares, which are
paid out when vested based on the price of AXA at that
time.
|
(6)
|
Includes
169,880 shares Mr. Dziadzio can acquire within 60 days under option plans.
Also includes 21,080 unvested performance units, which are paid out when
vested based on the price of ADSs at that time; payout will be 70% in cash
and 30% in ADSs.
|
(7)
|
Includes
6,212 ADSs Mr. Lane can acquire within 60 days under options
plans.
|
(8)
|
Includes
944 ADSs Ms. Slutsky can acquire within 60 days under option
plans.
|
(9)
|
Includes
5,579 ADSs Mr. Tobin can acquire within 60 days under option
plans.
|
(10)
|
Includes
7,848,584 shares and 1,557,478 ADSs the directors and executive officers
as a group can acquire within 60 days under option
plans.
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
Parties(1)
|
General Description of
Relationship(2)
|
Amounts Received or Accrued for in
2009
|
||||
|
|
|||||
AXA
Asia Pacific(2)(3)
|
|
$ | 31,441,000 | |||
AXA
Equitable(3)
|
We
provide investment management services and ancillary accounting,
valuation, reporting, treasury and other services to the general and
separate accounts of AXA Equitable and its insurance company
subsidiaries.
|
$ |
29,751,000
(of
which $418,000 relates to the ancillary services)
|
|||
EQAT,
AXA Enterprise Trust and AXA Premier VIP Trust
|
We
serve as sub-adviser to these open-end mutual funds, each of which is
sponsored by a subsidiary of AXA Financial.
|
$ | 27,619,000 | |||
AXA
Life Japan Limited(2)(3)
|
$ | 11,400,000 | ||||
MONY
Life Insurance Company and its subsidiaries(3)(4)
|
We
provide investment management services and ancillary accounting
services.
|
$ |
8,576,000
(of
which $150,000 relates to the ancillary services)
|
|||
AXA
Sun Life(2)(3)
|
$ | 4,271,000 | ||||
AXA
Bermuda(2)(3)
|
$ | 3,531,000 | ||||
AXA
France(2)(3)
|
$ | 2,179,000 | ||||
AXA
Winterthur(2)(3)
|
$ | 2,010,000 | ||||
AXA
Rosenberg Investment Management Asia Pacific(2)(3)
|
$ | 1,939,000 | ||||
AXA
(Canada)(2)(3)
|
$ | 1,710,000 | ||||
AXA
U.K. Group Pension Scheme(2)
|
$ | 1,634,000 | ||||
AXA
Corporate Solutions(2)(3)
|
$ | 1,313,000 | ||||
AXA
Germany(2)(3)
|
$ | 966,000 | ||||
AXA
Belgium(2)(3)
|
$ | 618,000 | ||||
AXA
Mediterranean(2)(3)
|
$ | 176,000 | ||||
AXA
Reinsurance Company(2)(3)
|
$ | 171,000 | ||||
AXA
Foundation, Inc., a subsidiary of AXA Financial(2)
|
$ | 159,000 | ||||
Other
AXA subsidiaries(2)
|
$ | 187,000 |
(1)
|
AllianceBernstein
or one of its subsidiaries is a party to each
transaction.
|
(2)
|
We
provide investment management services unless otherwise
indicated.
|
(3)
|
This
entity is a subsidiary of AXA. AXA is an indirect parent of
AllianceBernstein.
|
(4)
|
Subsidiaries
include MONY Life Insurance Company of America and U.S. Financial Life
Insurance Company.
|
Parties(1)(2)
|
General Description of
Relationship
|
Amounts Paid or Accrued
for in 2009
|
||||
|
|
|
||||
AXA
Business Services Pvt. Ltd.
|
AXA
Business Services provides data processing services and support for
certain investment operations functions.
|
$ | 6,921,000 | |||
AXA
Advisors
|
AXA
Advisors distributes certain of our Retail Products and provides Private
Client referrals.
|
$ | 6,918,000 | |||
AXA
Equitable
|
We
are covered by various insurance policies maintained by AXA
Equitable.
|
$ | 3,872,000 | |||
AXA
Equitable
|
AXA
Equitable provides certain data processing services and related
functions.
|
$ | 2,591,000 | |||
AXA
Advisors
|
AXA
Advisors sells shares of our mutual funds under Distribution Services and
Educational Support agreements.
|
$ | 1,935,000 | |||
AXA
Group Solutions Pvt. Ltd.
|
AXA
Group Solution Pvt. Ltd provides maintenance and development support for
applications.
|
$ | 1,586,000 | |||
AXA
Technology Services India Pvt. Ltd.
|
AXA
Technology Services India Pvt. Ltd. provides certain data processing
services and functions.
|
$ | 1,317,000 | |||
GIE
Informatique AXA (“GIE”)
|
GIE
provides cooperative technology development and procurement services to us
and to various other subsidiaries of AXA.
|
$ | 998,000 |
(1)
|
AllianceBernstein
is a party to each transaction.
|
(2)
|
Each
entity is a subsidiary of AXA. AXA is an indirect parent of
AllianceBernstein.
|
Item
14.
|
Principal
Accounting Fees and Services
|
2009
|
2008
|
|||||||
(in thousands) | ||||||||
Audit
fees(1)
|
$ | 6,173 | $ | 7,490 | ||||
Audit
related fees(2)
|
2,439 | 2,408 | ||||||
Tax
fees(3)
|
2,167 | 2,376 | ||||||
All
other fees(4)
|
5 | 5 | ||||||
Total
|
$ | 10,784 | $ | 12,279 |
(1)
|
Includes
$87,675 and $105,000 paid for audit services to Holding in 2009 and 2008,
respectively.
|
(2)
|
Audit
related fees consist principally of fees for audits of financial
statements of certain employee benefit plans, internal control reviews and
accounting consultation.
|
(3)
|
Tax
fees consist of fees for tax consultation and tax compliance
services.
|
(4)
|
All
other fees in 2009 and 2008 consisted of miscellaneous non-audit
services.
|
Item
15.
|
Exhibits,
Financial Statement Schedules
|
(a)
|
There
is no document filed as part of this Form
10-K.
|
(b)
|
Exhibits.
|
Exhibit
|
Description
|
2.01
|
Agreement
between Federated Investors, Inc. and Alliance Capital Management L.P.
dated as of October 28, 2004 (incorporated by reference to Exhibit 2.1 to
Form 10-Q for the quarterly period ended September 30, 2004, as filed
November 8, 2004).
|
3.01
|
Amended
and Restated Certificate of Limited Partnership dated February 24, 2006 of
Holding (incorporated by reference to Exhibit 99.06 to Form 8-K, as filed
February 24, 2006).
|
3.02
|
Amendment
No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited
Partnership of Holding (incorporated by reference to Exhibit 3.1 to Form
10-Q for the quarterly period ended September 30, 2006, as filed November
8, 2006).
|
3.03
|
Amended
and Restated Agreement of Limited Partnership dated October 29, 1999 of
Alliance Capital Management Holding L.P. (incorporated by reference to
Exhibit 3.2 to Form 10-K for the fiscal year ended December 31, 2003, as
filed March 10, 2004).
|
3.04
|
Amended
and Restated Certificate of Limited Partnership dated February 24, 2006 of
AllianceBernstein (incorporated by reference to Exhibit 99.07 to Form 8-K,
as filed February 24, 2006).
|
3.05
|
Amendment
No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited
Partnership of AllianceBernstein (incorporated by reference to Exhibit 3.2
to Form 10-Q for the quarterly period ended September 30, 2006, as filed
November 8, 2006).
|
3.06
|
Amended
and Restated Agreement of Limited Partnership dated October 29, 1999 of
Alliance Capital Management L.P. (incorporated by reference to Exhibit 3.3
to Form 10-K for the fiscal year ended December 31, 2003, as filed March
10, 2004).
|
3.07
|
Certificate
of Amendment to the Certificate of Incorporation of AllianceBernstein
Corporation (incorporated by reference to Exhibit 99.08 to Form 8-K, as
filed February 24, 2006).
|
3.08
|
AllianceBernstein
Corporation By-Laws with amendments through February 24, 2006
(incorporated by reference to Exhibit 99.09 to Form 8-K, as filed February
24, 2006).
|
Amended
and Restated AllianceBernstein Incentive Compensation Award Program (as
amended and restated as of December 7, 2009).
|
|
Post-December
1, 2009 Award Provisions under the Amended and Restated AllianceBernstein
Incentive Compensation Award Program.
|
|
Form
of 2009 Award Agreement under Incentive Compensation Award Program and
1997 Long Term Incentive Plan.
|
|
Retirement
Agreement between Gerald M. Lieberman, AllianceBernstein Corporation and
AllianceBernstein L.P. dated as of June 9, 2009.
|
|
Summary
of AllianceBernstein L.P.’s Lease at 1345 Avenue of the Americas, New
York, New York 10105.
|
|
Guidelines
for Transfer of AllianceBernstein L.P. Units.
|
|
10.07
|
Form
of Award Agreement under the Special Option Program (incorporated by
reference to Exhibit 10.05 to Form 10-K for the fiscal year ended December
31, 2008, as filed February 23, 2009).
|
10.08
|
Amended
and Restated Commercial Paper Dealer Agreement, dated as of February 10,
2009, among Banc of America Securities LLC, Merrill Lynch Money Markets
Inc., Deutsche Bank Securities Inc. and AllianceBernstein L.P.
(incorporated by reference to Exhibit 10.11 to Form 10-K for the fiscal
year ended December 31, 2008, as filed February 23,
2009).
|
10.09
|
Employment
Agreement among Peter S. Kraus, AllianceBernstein Corporation,
AllianceBernstein Holding L.P. and AllianceBernstein L.P., dated as of
December 19, 2008 (incorporated by reference to Exhibit 99.02 to Form 8-K,
as filed December 24, 2008).
|
10.10
|
Revolving
Credit Agreement dated as of January 25, 2008 among Sanford C. Bernstein
& Co., LLC, as Borrower, AllianceBernstein L.P., as U.S. Guarantor,
Citibank, N.A., as Administrative Agent, Citigroup Global Markets Inc., as
Arranger, JPMorgan Chase Bank, N.A. and Bank of America, N.A., as
Co-Syndication Agents, HSBC Bank USA, National Association, as
Documentation Agent, and the financial institutions whose names appear on
the signature pages as “Banks” (incorporated by reference to Exhibit 10.08
to Form 10-K for the fiscal year ended December 31, 2007, as filed
February 25, 2008).
|
10.11
|
Amended
and Restated 1997 Long Term Incentive Plan, as amended through November
28, 2007 (incorporated by reference to Exhibit 10.02 to Form 10-K for the
fiscal year ended December 31, 2007, as filed February 25,
2008).
|
10.12
|
Supplement
dated November 2, 2007 to the Revolving Credit Facility (incorporated by
reference to Exhibit 10.10 to Form 10-K for the fiscal year ended December
31, 2007, as filed February 25, 2008). (See Exhibit
10.14.)
|
Exhibit
|
Description
|
10.13
|
Amended
and Restated Issuing and Paying Agency Agreement, dated as of May 3, 2006
(incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarterly
period ended March 31, 2006, as filed May 8, 2006).
|
10.14
|
Revolving
Credit Facility dated as of February 17, 2006 among AllianceBernstein
L.P., as Borrower, Bank of America, N.A., as Administrative Agent, Banc of
America Securities LLC, as Arranger, Citibank N.A. and The Bank of New
York, as Co-Syndication Agents, Deutsche Bank Securities Inc. and JPMorgan
Chase Bank, N.A., as Co-Documentation Agents, and The Various Financial
Institutions Whose Names Appear on the Signature Pages as “Banks”
(incorporated by reference to Exhibit 10.1 to Form 10-K for the fiscal
year ended December 31, 2005, as filed February 24,
2006).
|
10.15
|
Investment
Advisory and Management Agreement for MONY Life Insurance Company
(incorporated by reference to Exhibit 10.4 to Form 10-K for the fiscal
year ended December 31, 2004, as filed March 15, 2005).
|
10.16
|
Investment
Advisory and Management Agreement for the General Account of AXA Equitable
Life Insurance Company (incorporated by reference to Exhibit 10.5 to Form
10-K for the fiscal year ended December 31, 2004, as filed March 15,
2005).
|
10.17
|
Alliance
Capital Management L.P. Partners Plan of Repurchase adopted as of February
20, 2003 (incorporated by reference to Exhibit 10.2 to Form 10-K for the
fiscal year ended December 31, 2002, as filed March 27,
2003).
|
10.18
|
Services
Agreement dated as of April 22, 2001 between Alliance Capital Management
L.P. and AXA Equitable Life Insurance Company (incorporated by reference
to Exhibit 10.19 to Form 10-K for the fiscal year ended December 31, 2001,
as filed March 28, 2002).
|
10.19
|
Alliance
Capital Management L.P. Annual Elective Deferral Plan (incorporated by
reference to Exhibit 99 to Form S-8, as filed November 6,
2000).
|
10.20
|
Extendible
Commercial Notes Dealer Agreement, dated as of December 14, 1999
(incorporated by reference to Exhibit 10.10 to the Form 10-K for the
fiscal year ended December 31, 1999, as filed March 28,
2000).
|
10.21
|
Amended
and Restated Investment Advisory and Management Agreement dated January 1,
1999 among Alliance Capital Management Holding L.P., Alliance Corporate
Finance Group Incorporated, and AXA Equitable Life Insurance Company
(incorporated by reference to Exhibit (a)(6) to Form 10-Q/A for the
quarterly period ended September 30, 1999, as filed on September 28,
2000).
|
10.22
|
Amended
and Restated Accounting, Valuation, Reporting and Treasury Services
Agreement dated January 1, 1999 between Alliance Capital Management
Holding L.P., Alliance Corporate Finance Group Incorporated, and AXA
Equitable Life Insurance Company (incorporated by reference to Exhibit
(a)(7) to the Form 10-Q/A for the quarterly period ended September 30,
1999, as filed September 28, 2000).
|
10.23
|
Alliance
Capital Accumulation Plan (incorporated by reference to Exhibit 10.11 to
Form 10-K for the fiscal year ended December 31, 1988, as filed March 31,
1989).
|
AllianceBernstein
Consolidated Ratio of Earnings to Fixed Charges in respect of the years
ended December 31, 2009, 2008 and 2007.
|
|
Subsidiaries
of AllianceBernstein.
|
|
Consent
of PricewaterhouseCoopers LLP.
|
|
Certification
of Mr. Kraus furnished pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
|
|
Certification
of Mr. Joseph furnished pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
|
|
Certification
of Mr. Kraus furnished for the purpose of complying with Rule 13a-14(b) or
Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
|
Certification
of Mr. Joseph furnished for the purpose of complying with Rule 13a-14(b)
or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
|
List
of comparable companies utilized by McLagan Partners to generate 2009
compensation benchmarking data.
|
|
AllianceBernstein
L.P.
|
|
Date:
February 11, 2010
|
By:
|
/s/ Peter S. Kraus
|
|
|
Peter
S. Kraus
|
|
|
Chairman
of the Board and Chief Executive
Officer
|
Date:
February 11, 2010
|
/s/ Robert H. Joseph,
Jr.
|
|
Robert
H. Joseph, Jr.
|
|
Chief
Financial Officer
|
Date:
February 11, 2010
|
/s/ Edward J. Farrell
|
|
Edward
J. Farrell
|
|
Chief
Accounting Officer
|
/s/ Peter S. Kraus
|
/s/ Deborah S. Hechinger
|
|
Peter
S. Kraus
|
Deborah
S. Hechinger
|
|
Chairman
of the Board
|
Director
|
|
/s/ Dominique
Carrel-Billiard
|
/s/ Weston M. Hicks
|
|
Dominique
Carrel-Billiard
|
Weston
M. Hicks
|
|
Director
|
Director
|
|
/s/ Christopher M. Condron
|
/s/ Nick Lane
|
|
Christopher
M. Condron
|
Nick
Lane
|
|
Director
|
Director
|
|
/s/ Henri de Castries
|
/s/ Lorie A. Slutsky
|
|
Henri
de Castries
|
Lorie
A. Slutsky
|
|
Director
|
Director
|
|
/s/ Denis Duverne
|
/s/ A.W. (Pete ) Smith,
Jr.
|
|
Denis
Duverne
|
A.W.
(Pete) Smith, Jr.
|
|
Director
|
Director
|
|
/s/ Richard S. Dziadzio
|
/s/ Peter J. Tobin
|
|
Richard
S. Dziadzio
|
Peter
J. Tobin
|
|
Director
|
Director
|
Description
|
Balance at Beginning of
Period
|
Charged (Credited) to Costs and
Expenses
|
Deductions
|
Balance at End of Period
|
||||||||||||
(in
thousands)
|
||||||||||||||||
For
the year ended December 31, 2007
|
$ | 1,113 | $ | 955 | $ | 276 | (a) | $ | 1,792 | |||||||
For
the year ended December 31, 2008
|
$ | 1,792 | $ | (192 | ) | $ | 112 | (b) | $ | 1,488 | ||||||
For
the year ended December 31, 2009
|
$ | 1,488 | $ | (88 | ) | $ | 7 | (c) | $ | 1,393 |
(a)
|
Includes
accounts written-off as uncollectible of $267 and a net reduction of the
allowance balance of $9.
|
(b)
|
Includes
accounts written-off as uncollectible of $31 and a net reduction to the
allowance balance of $81.
|
(c)
|
Includes
accounts written-off as uncollectible of $41 and a net addition to the
allowance balance of $34.
|
Age
of Participant
|
|
As of Effective Date
|
Vesting Period
|
Up
to and including 61
|
4
years
|
62
|
3
years
|
63
|
2
years
|
64
|
1
year
|
65
or older
|
Fully
vested at grant
|
Options
|
Vesting Period
|
Initial
Award
|
5
years (20% in each year)
|
Match
|
10
years (20% in each of years 6 through
10)
|
Options
|
Expiration Date
|
Initial
Award
|
10
years from grant date
|
Match
|
11
years from grant date
|
Age
of Participant as of Effective
Date
|
Vesting Period
|
Up
to and including 47
|
8
years
|
48
|
7
years
|
49
|
6
years
|
50-57
|
5
years
|
58
|
4
years
|
59
|
3
years
|
60
|
2
years
|
61
|
1
year
|
62
or older
|
Fully
vested at grant
|
Senior
Vice President or above:
|
90
days
|
Vice
President:
|
60
days
|
Assistant
Vice President or below:
|
30
days
|
AllianceBernstein
l.p.
|
||
AllianceBernstein
Holding l.p.
|
||
By:
|
/s/ David A. Steyn
|
|
David
A. Steyn
|
||
Chief
Operating Officer
|
1.
|
$___________
2009 Award
|
2.
|
____________
Restricted Units have been awarded pursuant to this
Agreement.
|
3.
|
The per Holding Unit
price used to determine the number of Restricted Units awarded
hereunder is $_____ per Holding Unit, which was the closing price of a
Holding Unit as published for composite transactions on the New York Stock
Exchange on December 7, 2009.
|
4.
|
Restrictions
lapse with respect to the Holding Units in accordance with the following
schedule:
|
Date
|
Percentage
of Awarded Holding Units Vested on the Date
Indicated
|
December
1, 2010
|
25.0%
|
December
1, 2011
|
50.0%
|
December
1, 2012
|
75.0%
|
December
1, 2013
|
100.0%
|
Sincerely,
|
||
ALLIANCEBERNSTEIN
CORPORATION
|
||
By:
|
/s/ Laurence E. Cranch
|
|
Laurence
E. Cranch
|
||
Executive
Vice President and General Counsel
|
||
ALLIANCEBERNSTEIN
L.P.
|
||
By:
|
ALLIANCEBERNSTEIN
CORPORATION,
|
|
its
General Partner
|
||
By:
|
/s/ Laurence E. Cranch
|
|
Laurence
E. Cranch
|
||
Executive
Vice President and General Counsel
|
AGREED
TO AND ACCEPTED BY
|
|
/s/ Gerald M. Lieberman
|
|
Gerald
M. Lieberman
|
|
June 10, 2009
|
|
Date
|
Parties
and Documents
|
1
|
Demised
Premises
|
4
|
Monthly
Fixed Rent
|
7
|
Electricity
|
12
|
Tax
Escalation
|
15
|
Expense
Escalation
|
17
|
Cleaning
|
19
|
Maintenance
and Repairs
|
22
|
Alterations
|
23
|
Miscellaneous
Matters Relating to Improvements
|
24
|
SNDA
& Estoppel
|
25
|
Insurance
and Liability
|
26
|
Use
|
27
|
Term
|
28
|
Services
|
29
|
Casualty/Condemnation
|
33
|
Assignment/Subletting
|
34
|
Rights
to Additional Space
|
35
|
Default
and Landlord Remedies
|
37
|
Access
|
38
|
Notices
|
39
|
Landlord:
|
1345
Leasehold LLC, a Delaware limited liability company
(“Landlord”)
|
Tenant:
|
AllianceBernstein
L.P. (formerly known as Alliance Capital Management L.P.), a Delaware
limited partnership (“Alliance”)
|
Floor
(entire floor unless
otherwise noted)
|
Delivery
Date
|
Concourse
(part) (Sup15 §23(a), Sup17 §13, Sup23 §2a)
|
Delivered.
|
Ground
Floor (part)
**
|
The
Ground Floor (part) formerly leased to Alliance has been surrendered and
deleted from the demised premises. Landlord has leased the
Ground Floor (part) to Wachovia Bank, National Association (“Wachovia”)
pursuant to the Agreement of Lease dated December 22, 2003 (the “Wachovia
Lease”), for a term coterminous with Alliance's lease which Wachovia may
extend pursuant to its three 5-year extension options. If the
term of the Wachovia Lease expires or terminates prior to the expiration
or termination of Alliance’s lease, then, on the day after said
termination, the Ground Floor (part) will be added back to the demised
premises on substantially the same terms (including the rent terms) as
were in effect prior to its surrender and deletion from the demised
premises (Sup21 §3). For more information regarding the terms
of the surrender of Ground Floor part, see below.
|
2,
8, 9, 11 through 14 (Sup15 §2(a); Ltr2; Sup16
§11)
|
Delivered.
|
10
(Sup19 §3(a))
***
|
Delivered.
|
15
(Sup12 §2(a))
|
Delivered.
|
16
(Sup12 §2(b))
|
Delivered.
|
17
(Sup16 §2(b); Sup17 §2(b); Sup18 §2(b); Sup22 §2(b))
|
Delivered.
|
31
(part) (Sup7 §2(c))
|
Delivered.
|
31
(part) (Sup24 §2(a))
|
Anticipated
to be May 1, 2010.
|
32
(Sup6 §2)
|
Delivered.
|
33
(Sup7 §2(a))
|
Delivered.
|
34
(NW Cor. 94) (Sup8 §2(a))
|
Delivered.
|
34
(NW Cor. 95) (Sup8 §1(c))
|
Delivered.
|
34
(balance) (Sup7 §2(b))
|
Delivered.
|
35
(Sup14 §2(a))
|
Delivered.
|
36
(Sup14 §2(b))
|
Delivered.
|
37
(NE Cor.) (orig. intro.)
|
Delivered.
|
37
(NW Cor.) (orig. §46.01)
|
Delivered.
|
37
(SE Cor.) (Sup1 §2)
|
Delivered.
|
37
(SW Cor.) (Sup5 §2)
|
Delivered.
|
38
(orig. intro.)
|
Delivered.
|
39
(Sup4 §2)
|
Delivered.
|
40,
41 and 45 (Sup9 §3(a); LTR1 par 2)
|
Delivered.
|
42
(Sup25 §2(a))
|
Delivered.
|
43
and 44 (Sup26 §2(a))
|
Anticipated
to be May 1, 2011.
|
·
|
Enforcement: Landlord
will make reasonable efforts to enforce the Wachovia Lease (including the
rent obligations). If Wachovia defaults under the Wachovia
Lease, then Alliance may, at its option, participate in any action
Landlord takes in respect of said default. If Landlord does not
take any action, then Alliance may, at its option, (1) cause the Landlord
to assign its right to proceed against Wachovia, in which case Alliance
may then proceed directly against Wachovia provided that Alliance
indemnifies Landlord from any loss arising from such action, or (2)
require the Landlord to proceed against Wachovia in which case Alliance
will reimburse Landlord within 30 days after demand for any reasonable
out-of-pocket expenses incurred by Landlord in respect of enforcing the
Wachovia Lease (Sup21 §4(f)).
|
·
|
Amendments,
Terminations, Extensions and Consents: Landlord is prohibited
from amending the Wachovia Lease or waiving any provision thereof without
first obtaining Alliance’s consent. Alliance must be reasonable
in respect of consenting to any amendment that would not have an economic
or adverse impact on Alliance and Alliance’s failure to respond to a
request for such a consent within 5 business days of receipt is deemed
consent. Landlord is prohibited from terminating the term of
the Wachovia Lease except in the event of a default thereunder or
extending the term of the Wachovia Lease except pursuant to the express
provisions thereof without first obtaining Alliance's consent (Sup21
§5(a)). Landlord is prohibited from granting its consent to any
matter contemplated by the Wachovia Lease (e.g., subleases and
alterations) without first obtaining Alliance’s
consent. Alliance's rights in respect of Wachovia signage is
summarized in more detail below. Alliance is required to be
reasonable in granting its consent to any such matter if Landlord is
obligated to be reasonable under the Wachovia Lease. Alliance
is required to respond in the same time period as Landlord is obligated to
respond to any request for consent and Alliance will be deemed to have
given its consent if it fails to respond (Sup21 §5(c); LTR3
§3).
|
·
|
Signage: Wachovia
is prohibited from displaying signage on the window, doors or the exterior
of the perimeter walls of its demised premises unless Wachovia obtains the
prior written reasonable consent of the Landlord and said signage is in
conformity with the building standard sign program (Wachovia Lease
§46.2(e)). However, Wachovia has the right to install signage
on the interior and exterior of the demised premises that conforms with
Wachovia's standard national or NYC signage program provided that said
signage pertains primarily to general retail banking, safe deposits or
electronic banking and not to certain permitted ancillary uses (e.g.
brokerage, insurance, investment services). Nevertheless,
Wachovia has the right to display temporary signage which describes said
ancillary uses in certain designated areas provided that Wachovia is
obligated to remove said signage if either Landlord or Alliance reasonably
believes that said temporary signage is not in keeping with the quality or
character of the building. The size and location of signage on
or visible from the exterior of the Ground Floor (part) is subject to the
reasonable approval and Landlord and Alliance. Wachovia also
has the right to display promotional banners provided the size, color and
location of said banners is subject to the reasonable approval of Landlord
and Alliance. Landlord's (and, therefore, Alliance's) failure
to respond within 15 business days to any request for consent regarding
signage is deemed consent (Wachovia Lease
§46.3(a)).
|
·
|
Assignment/Subletting
Profits: Landlord and Alliance will share equally any sublease
or assignment of lease profits payable to Landlord under the Wachovia
Lease (Sup21 §6(a)).
|
·
|
Hold
Over by Wachovia: If Wachovia holds over following the
termination of the Wachovia Lease term, then Landlord will promptly
commence summary dispossess proceedings and will use commercially
reasonable efforts to evict Wachovia. Landlord will pay to
Alliance any amounts recovered from Wachovia arising from said proceedings
after first deducting Landlord's actual out-of-pocket expenses, provided
that if the amounts paid over by Landlord exceed the sums paid by Alliance
in respect of the Ground Floor (part) for the corresponding period, then
Landlord will be permitted to retain 50% of said excess (Sup21
§8).
|
·
|
Reimbursement
of Landlord on Account of Payments to Cushman & Wakefield,
Inc.: Alliance will reimburse Landlord up to $601,854.52 in
respect of any amounts paid by Landlord to Cushman & Wakefield, Inc.
arising from Sup21 (Sup21 §10).
|
12/01/01
through 11/30/06:
|
$7,000
(Sup17 §13(b)(i))
|
12/01/06
through 11/30/11:
|
$8,250
(Sup17 §13(b)(ii))
|
12/01/11
through 12/31/19:
|
$9,500
(Sup17 §13(b)(iii))
|
From the termination or expiration of the Hearst Lease through 04/30/09: |
$203,589.75
(Sup19 §3(b)(1))
|
05/01/09
through 04/30/14:
|
$219,747.67
(Sup19 §3(b)(2))
|
05/01/14
through 12/31/19:
|
$235,905.58
(Sup19 §3(b)(3))
|
Check
Meters:
|
All
floors have check meters except for Floors 31 (part), 32-34, and 37-39,
which will have check meters on or before November 1, 2009 (Sup9 §5) and
Floor 42, which will have check meters on or before May 1, 2011 (Sup25
§4(c)(i)). The check meters measure electricity demand and
consumption for each floor during a calendar month. Alliance
pays Landlord, within 30 days after receipt of a bill, Landlord’s cost of
the electricity consumed based on the applicable rate charged to the
Landlord by the supplying utility, plus a 2% administrative fee (Sup9
§5(b) and (c); Sup12 §4(b) and (c); Sup14 §4(b) and (c); Sup15 §4(b) and
(c); Sup22 §4(b); Sup24 §4(b); Sup25 §4(c); Sup26
§4(b)). Landlord will provide check meters for any portion of
the Concourse (part) space measuring at least 3,000 contiguous rsf (Sup15
§23(f)(i)). If the check meters for Floors 31 (part), 32-34,
and 37-39 are not installed by November 1, 2009, then Alliance will pay
Landlord what Landlord’s electrical consultant determines to be Landlord’s
cost for such electricity, provided that Alliance may dispute such
determination in accordance with a specified procedure.
|
Dispute:
|
Each
bill is binding on Alliance unless Alliance disputes such bill within 90
days of receipt. In case of a dispute, Alliance’s electrical
consultant will submit its determination within such 90 day period and
Landlord and Alliance will seek a resolution. Upon Alliance’s
request, Landlord will make available its utility bills for the building
for at least the last 3 years. If Landlord and Alliance cannot agree, they
will choose a third electrical consultant to perform a limited review
(Sup12, §5(c)(ii); Sup12 §4(c)(ii); Sup14 §4(c)(ii); Sup15 §4(c)(ii);
Sup22 §4(c)(ii); Sup24 §4(c)(ii); Sup25 §4(c)(iii); Sup26
§4(b)).
|
Wattage:
|
6
watts per usable square foot excluding building HVAC systems and other
base building systems (Sup9 §5(e); Sup12 §4(e); Sup14 §4(e);
Sup15 §4(e); Sup22 §4(e); Sup24 §4(e); Sup25 §4(e); Sup26
§4(e)).
|
Additional
Capacity:
|
Upon
notice from Alliance, Landlord will provide Alliance with (1) an
additional 400 amperes in the aggregate for the 15th
and 16th
floors (Sup12 §4(e)), and (2) up to another 1,800 amperes for the entire
demised premises (Sup14 §4(f)). Such notice will be given by Alliance on
or before, with regard to the 15th
and 16th
floors, the date Alliance delivers to Landlord its plans for its initial
fit-out of the 15th
floor (but in no event later than June 30, 2001), and, with regard to the
rest of the demised premises, by December 31, 2001 (Sup12 §4(e) and Sup14
§4(e)). Alliance is responsible for any construction costs it
would incur in connection with alterations relating to such additional
electricity supply, as well as a pro-rata share of Landlord’s construction
costs (Sup12 §4(e); Sup14 §4(e); and Sup15 §4(f)).
|
Discontinuance
of Service:
|
Landlord
may discontinue furnishing electricity to Alliance only if Landlord
simultaneously discontinues service to 80% of the other building tenants
(Sup15 §4(d)), upon 60 days’ written notice, provided such period is
extended as reasonably necessary to permit Alliance to obtain electricity
from the utility company servicing the Building. In such case,
Alliance may use the existing wiring. The cost of installation
of any additional wiring will be borne, if such discontinuance is
voluntary, by Landlord, and if such discontinuance is involuntary, by
Landlord and Alliance with Alliance’s share equal to the total cost of
such additional wiring multiplied by a fraction, the numerator of which is
remaining months of the Lease term and the denominator of which is as
follows:
|
Floor(s)
|
Denominator
|
2,
8-14
|
188
(Sup15 §4(d))
|
15,
16
|
248
(Sup12 §4(d) and (h); Sup15 §4(d))
|
17
|
182
for the space demised by Sup22, 214 for the space demised by Sup18 and 219
for all other space on Floor 17 (Sup22 §4(d)).
|
31
(part), 32-34, 37-41, 45
|
294
(Sup9 §15(d); Sup15 §4(d))
|
31
(part)
|
116
(Sup24 §4(d))
|
35
and 36
|
237
(Sup14 §4(d); Sup15 §4(d))
|
42
|
150
(Sup25 §4(d))
|
43
and 44
|
104
(Sup26 §4(d))
|
Electricity Rent Inclusion
Factor for Floors 31 (part), 32-34, and 37-39:
|
Until
November 1, 2009, the charge for electricity for Floors 31 (part), 32-34,
and 37-39 (the “ERIF”) is included in fixed annual rent (orig.
§7.02(a)). Such charge, however, is separately quantified (as
listed below) and is subject to increase or decrease (but in no event
below $2.75 per s.f. per annum) in proportion to increases or decreases in
Landlord’s electricity costs for the building (orig.
§7.02(a)).
|
Floor
(entire floor unless otherwise noted)
|
Original
ERIF
|
31(part),
33, 34
|
$249,902.46
(Sup7 §3(g))
|
32
|
$104,337.75
(Sup6 §3(c))
|
37
(NE Cor.), 38
|
$127,187.50
(orig. §7.02(a))
|
37
(NW Cor.)
|
$27,500.00
(orig. §46.02(d))
|
37
(SE Cor.)
|
$13,750.00
(Sup1 §3(e)
|
37
(SW Cor.)
|
$27,912.50
(Sup5 §3(c))
|
39
|
$96,937.50
(Sup4 §3(c))
|
Electricity Rent Inclusion
Factor for 42nd Floor:
|
Until
May 1, 2011, the charge for electricity for Floor 42 is included in fixed
annual rent. The initial amount of such charge is $5.81 per
s.f. and is subject to increase or decrease (but in no event below $5.81
per s.f. per annum) in proportion to increases or decreases in Landlord’s
electricity costs for the building as well based on Alliance’s electricity
consumption. A determination by Landlord of a change in the
rent inclusion charge as a result of a survey of electrical consumption in
the Demised Premises will be binding on Alliance unless Alliance disputes
such determination within 30 days of receipt of such
determination. If Alliance disputes such determination, it will
have its own electrical consultant at its own cost attempt to resolve the
dispute in consultation with Landlord’s electrical
consultant. If they cannot agree on a resolution, they will
choose a third electrical consultant who’s decision will control (Sup25
§4(b)).
|
Supplies:
|
At
Landlord’s option, Alliance is required to purchase (for a reasonable
charge) from Landlord all lighting tubes, lamps, bulbs and ballasts used
in the demised premises (orig. §7.05(b)).
|
Concourse
Space:
|
Subject
to the following sentence, for any portion of the demised premises located
on the concourse consisting of less than 3,000 contiguous rsf, Alliance
will pay an ERIF of $0.75/rsf, subject to increase if Alliance uses the
space for anything other than storage (Sup15 §23(f)(ii)). For
the portion of the demised premises located on the concourse and leased
pursuant to Sup23, however, Landlord will provide electricity at no
additional charge provided that if Landlord determines on a reasonable
basis that Alliance is consuming excessive electricity, then Landlord may
commence charging Alliance for such electricity on either (at Landlord’s
option) a rent inclusion or submeter
basis.
|
FLOOR
|
BASE YEAR
|
PERCENTAGE
|
Ground
Floor (part)
|
1999/2000
(Sup13§3(c)(1)).
|
0.483%
(Sup13
§3(c)(2))
|
2,
8, 9, 11-14
|
Average
of 2000/01 and 2001/02 (Sup15 §3(d)(i)).
|
14.72%
(Sup15
§3(d)(ii); Sup19 §2(d))
|
10
|
Average
of 2000/01 and 2001/02 (Sup15 §3(d)(i)).
|
2.11%
(Sup19 §3(d))
|
15
|
1999/2000
(Sup12 §3(a)(4)(a)).
|
2.150%
(Sup12
§3 (a)(4)(b))
|
16
|
1999/2000
(Sup12 §3(b)(4)(a)).
|
2.150%
(Sup12
§3(b)(4)(b))
|
17
|
Average
of 2000/01 and 2001/02 (Sup16 §3(d)(i); Sup17 §3(d)(i); Sup18 §3(d)(i))
Except with respect to the Sup22 17th
floor space, for which it is the average of 2003/04 and 2004/05 (Sup22
§3(d)(i)).
|
2.147%
(Sup16 §3(d)(ii); Sup17 §3(d)(ii); Sup18 §3(d)(ii);
Sup22 §3(d)(ii))
|
31
(part), 33, 34
|
Average
of 1994/95 and 1995/96 (Sup7 §(3)(f)(i)). Beginning on
11/01/09, changed to 1995/96 (Sup9 §4(e)).
|
5.130%
(Sup7
§3(f)(ii))
|
31
(part)
|
Average
of 2007/08 and 2008/09 (Sup24 §3(d)(i)).
|
1.35%
(Sup24 §3(d)(ii))
|
32
|
1993/94 (Sup6
§3(b)(i)). Beginning on 11/01/09, changed to
1995/96 (Sup9 §4(e)).
|
2.150%
(Sup6
§3(b)(ii))
|
35
|
2000/01
(Sup14 §3(a)(4)(a)).
|
2.150%
(Sup14
§3(a)(4)(b))
|
36
|
2000/01
(Sup14 §3(b)(4)(a)).
|
2.150%
(Sup14
§3(b)(4)(b))
|
37
(NE Cor.), 38
|
1985/86 (orig.
§4.01(a)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
2.820%
(orig.
§4.01(a)(ii)
|
37
(NW Cor.)
|
1985/86 (orig.
§4.01(a)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
0.610%
(orig.
§46.02(b))
|
37
(SE Cor.)
|
1985/86
(Sup1 §3(a)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
0.300%
(Sup1
§3(b))
|
37
(SW Cor.)
|
1988/89 (Sup5,
§3(b)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
0.618%
(Sup5
§3(b)(ii)
|
39
|
1988/89 (Sup4
§3(b)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
2.150%
(Sup4
§3(b)(ii))
|
40,
41, 45
|
1995/96 (Sup9
§4(d)(i)).
|
6.446%
(Sup10
§2(a))
|
42
|
1988/89
(Sup25 §3(d)(i)(a)). Beginning on 5/1/11, changed to average of
2007/08 and 2008/09 (Sup25 §3(d)(i)(b)).
|
2.24%
(Sup25
§3(d)(ii))
|
43
and 44
|
Average
of 2007/08 and 2008/09 (Sup26 §3(d)(i)).
|
4.45%
(Sup26
§3(d)(ii))
|
Floor
|
Base
|
Percentage
|
Ground
(part)
|
Expenses
for 1999 calendar year (Sup13 §3(c)(3)).
|
0.483%
(Sup13
§3(c)(4))
|
2,
8, 9, 11-14
|
Expenses
for 2001 calendar year (Sup15 §3(d)(ii)).
|
15.67%
(Sup15
§3(d)(iv); Sup19 §2(c))
|
15
|
Expenses
for 1999 calendar year (Sup12 §3(a)(4)(c)).
|
2.290%
(Sup12
§3(c)(4)(d))
|
16
|
Expenses
for 1999 calendar year (Sup12 §3(b)(4)(c)).
|
2.290%
(Sup12
§3(b)(4))
|
17
|
Expenses
for 2001 calendar year (Sup16 §3(d)(iii); Sup17 §3(d)(iii); Sup18
§3(d)(iii)), except for the Sup22 17th
floor space, for which it is 2004 (Sup22 §3(d)(iii)).
|
2.288%
(Sup16 §3(d)(iv); Sup17 §3(d)9iv); Sup18 §3(d)(iv) and Sup22
§3(d)(iv))
|
31
(part), 33, 34
|
Expenses
for 1995 calendar year (Sup7 §3(f)(iii); Sup9 §4(e)).
|
5.450%
(Sup7
§3(f)(iv))
|
31
(part)
|
Expenses
for 2008 calendar year (Sup24 §3(d)(iii)).
|
1.43%
(Sup24
§3(d)(iv))
|
32
|
Expenses
for 1993 calendar year (Sup6 §3(b)(iii)). As of 11/01/09,
changed to expenses for calendar year 1995 (Sup9 §4(e)).
|
2.290%
(Sup6
§3(b)(iv))
|
35
|
Expenses
for 2000 calendar year (Sup14 §3(a)(4)(c)).
|
2.290%
(Sup14
§3(a)(4)(d))
|
36
|
Expenses
for 2000 calendar year (Sup14 §3(b)(4)(c)).
|
2.290%
(Sup14
§3(b)(4)(d))
|
37
(NE Cor.) and 38
|
$6,509,748 (orig
§5.01(a)(i)). As of 11/01/09, changed to expenses for 1995
calendar year (Sup9 §4(e)).
|
3.000%
(orig
§5.01(a)(iv))
|
37
(NW Cor.)
|
$6,509,748 (orig.
§5.01(a)(i)). As of 11/01/09, changed to expenses for 1995
calendar year (Sup9 §4(e)).
|
0.650%
(orig.
§46.01(b))
|
37
(SE Cor.)
|
$6,509,748 (Sup1
§5.01(a)(i)). As of 11/01/09, changed to expenses for calendar
year 1995 (Sup9 §4(e)).
|
0.330%
(Sup1
§3(c))
|
37
(SW Cor.)
|
Expenses
for calendar year 1989 (Sup5 §3(b)(iii)). As of 11/01/09,
changed to expenses for calendar year 1995 (Sup9 §4(e)).
|
0.659%
(Sup5
§3(b)(iv)
|
39
|
Expenses
for calendar year 1989 (Sup4 §3(b)(iii)). As
of 11/01/09, changed to expenses for calendar year 1995 (Sup9
§4(e)).
|
2.290%
(Sup4
§3(b)(iv))
|
40,
41, 45
|
Expenses
for calendar year 1995 (Sup9 §4(d)9iii)).
|
6.865%
(Sup11 §2(c))
|
42
|
Expenses
for calendar year 1989 (Sup25 §3(d)(iii)(a)). As of 5/1/11,
changed to expenses for calendar year 2008 (Sup25
§3(d)(iii)(b)).
|
2.38%
(Sup25
§3(d)(iv))
|
43
and 44
|
Expenses
for calendar year 2008 (Sup26 §3(d)(iii)).
|
4.73%
(Sup26
§3(d)(iv))
|
Services:
|
The
Cleaning Contractor provides certain cleaning services for the office
areas and lavatories of the demised premises (§1(a)). The
cleaning services provided do not include the cleaning of below-grade
space, kitchen, pantry or dining space, storage, shipping, computer or
word-processing space, or private or executive lavatories
(§1(b)). The Cleaning Contractor is not responsible for
removing debris and rubbish from areas under construction in the demised
premises (§2). The quality of the cleaning services will be
comparable to that provided in first class buildings in midtown Manhattan
(§1(a)).
|
Access:
|
The
Cleaning Contractor has access to the demised premises from 6 p.m. to 2
a.m. on business days. The Cleaning Contractor has the right to
use Alliance’s light, power and water, as reasonably required
(§1(a)).
|
Term:
|
The
cleaning agreements are co-terminous with the Lease (§2).
|
Fee:
|
Alliance
pays the Cleaning Contractor, for the office space, a fixed monthly fee of
$310,465.73, plus an amount equal to the fee for Floor 36 multiplied by
the percentage increase in the labor rate in 2000 over 1999, plus an
amount equal to the fee for Floors 2, 8, 9, 11-14 multiplied by the
percentage increase in the labor rate in 2001 over 2000, plus an amount
equal to the fee for Floor 10 multiplied by the percentage increase in the
labor rate in 2001 over 2000 (CAO §3; CAO-2 §3; CAO-3 §3; CAO-4
§3; CAO-5 §3; CAO-6 §3; CAO-7 §3; CAO-8 §3; CAO-9 §3; CAO-11
§3). Alliance pays the Cleaning Contractor a fixed monthly fee
of $2,833.33 for the ground floor space (CAG §3). The fixed
monthly fee for cleaning the office space will increase by $11,087.73 plus
an adjustment based on the increase in the labor rate in 2008 over 2007
with the addition of remainder of Floor 31 to demised premises (CAO-10 §3)
and will increase by $36,604.68 plus an adjustment based on the increase
in the labor rate in 2008 over 2007 with the addition of Floor 10 to
demised premises (CAO-12 §3). The fixed monthly fee is
inclusive of sales tax and is payable in advance on the first of each
month (§3). Payment for any additional cleaning services will
be made by Alliance within 20 days of demand. The cost of such additional
services must be comparable to services provided in comparable buildings
(§1(a)). In addition to the fixed fee, Alliance pays the
Cleaning Contractor a percentage of annual increases in cleaning costs
(which annual increases are equal to the annual percentage increase in
porters’ wages over a porter’s wage base year) over an amount representing
base year cleaning costs. The percentage for the office space
is 53.899% (CAO §3 and §4; CAO-2 §3; CAO-3 §3; CAO-4 §3; CAO-5 §3; CAO-6
§3; CAO-7 §3; CAO-8 §3; CAO-9 §3; CAO-11 §3) and 0.483% for the ground
floor space (CAG §4). The percentage for the office space will
increase by 1.46% (CAO-10 §3) to with the addition of the remainder of
Floor 31 and will increase by 4.82% with the addition of Floors 43 and
44. The other variables in such calculation are as
follows:
|
Floor
|
Base Year for
Porter’s Wages
|
Base for Cleaning Costs
|
Ground
(part)
|
1999
(CAG §4)
|
$6,286,271.55
(CAG §4)
|
2,
8-14
|
2001
(CAO-5, §4)
|
$6,444,056.97
(CAO-5, §4)
|
15
and 16
|
1999
(CAO-3 §4)
|
$6,247,986
(CAO-3, §4)
|
17
(except for the part demised by Sup22)
|
2001
(CAO-6 §4; CAO-7 §4; CAO-8 §4)
|
$6,629,645.81
|
17
(the part demised by Sup22)
|
2004
(CAO-9 §4)
|
$7,606,434.69
(CAO-9 §4)
|
31
(part) , 32-34, 37-41 and 45
|
1995
(CAO §4(a)(i))
|
$5,827,772
(CAO §4(a)(iii))
|
31
(the part demised by Sup24)
|
2008
(CAO-10 §4)
|
$8,408,948.97
(CAO-10 §4)
|
35
and 36
|
2000
(CAO-4 §4)
|
$6,381,693
(CAO-4 §4)
|
42
|
2008
(CAO-11 §4)
|
$8,408,948.97
(CAO-11 §4)
|
43
and 44
|
2008
(CAO-12 §4)
|
$8,408,948.97
(CAO-12 §4)
|
Dispute
with Cleaning Contractor:
|
If
Alliance believes that the Cleaning Contractor is not adequately
performing under a cleaning agreement, and the Cleaning Contractor has not
corrected such inadequate performance within 10 days after notice,
Alliance may arbitrate whether the Cleaning Contractor is adequately
performing. If a majority of the required arbitrators find that
the Cleaning Contractor is not adequately performing, then the Cleaning
Contractor will correct such inadequate performance within 10 days of such
finding. If Contractor fails to do so, Alliance may terminate
the cleaning agreement upon 10 days notice. (§5).
|
Default
by Alliance:
|
If
Alliance fails to make a payment due under a cleaning agreement within 15
days of notice of such failure, the Cleaning Contractor may, upon 10 days
notice terminate the cleaning agreement if Alliance also fails to make
such payment within such 10 day period. In case of such
termination, Alliance may only use the approved cleaning contractor for
the building (§6). If a payment is not made within 3 days of
notice of such failure, such payment accrues interest from the due date at
prime rate, provided that Cleaning Contractor is not obligated to give
such notice more than twice a year (§12).
|
Rent
Credit:
|
Alliance
is entitled to a credit against the monthly installment of fixed rent in
the amount of $169,479.10 per month (Sup9 §4(c); Sup10 §2(c); Sup11 §2(c);
LTR1; Sup12 §3(a)(3) and §3(b)(3); Sup14 §3(a)(3) and §3(b)(3); Sup15
§3(c)) Sup16 §3(c); Sup17 §3(c); Sup18 §3(c) and Sup22 §3(c) plus an
amount equal to the credit for Floor 36 multiplied by the percentage
increase in the labor rate in 2000 over 1999 (Sup14
§3(b)(3)). The monthly credit will increase by (i) $92,734.38
plus an adjustment based on the increase in the labor rate in 2001 over
2000 with the addition of Floors 2, 8, 9, 11-14 to the demised premises
(Sup15 §3(c); Sup19 §2(c)), (ii) by $13,296.17 plus an adjustment based on
the increase in the labor rate in 2001 over 2000 with the addition of
Floor 10 to the demised premises (Sup19 §3(c)); (iii) by $11,087.72 plus
an adjustment based on the increase in the labor rate in 2008 over 2007
with the addition of remainder of Floor 31 to the demised premises (Sup24
§3(c)); (iv) by $220,539.40 plus an adjustment based on the increase in
the labor rate in 2008 over 2007 on May 1, 2011 (Sup25 §3(c)); and (v) by
$439,256.17 plus an adjustment based on the increase in the labor rate in
2008 over 2007 on May 1, 2011.
|
Termination
of Cleaning Agreement:
|
In
the event the cleaning agreement for the office space is terminated,
Landlord will provide cleaning services and Alliance will pay Landlord on
a monthly basis for the office space (assuming that all of the office
space demised under the lease is delivered to Alliance at that time)
60.17% (Sup26 §7(a)) of annual increases in cleaning costs (which annual
increases are equal to annual percentage increases in porter’s wages) over
Landlord’s cleaning costs for the entire building during the first full
calendar year after the Cleaning Agreement’s termination (orig. §6.04, as
modified by Sup9 §8(a)). Landlord’s cleaning cost escalation
statements are final and determinative unless Alliance challenges such
statement in writing within 90 days (Sup7 §6(d)) of
receipt. Alliance must make payment in accordance with such
statement pending dispute resolution. Landlord and Alliance
will resolve any dispute by arbitration with 3 arbitrators, each of whom
will have at least 10 years’ experience in the operation and management of
major Manhattan office buildings (orig.
§6.01(d)).
|
Alliance’s
Responsibility
|
Alliance
will make repairs to the demised premises necessitated by its acts,
omissions, occupancy or negligence (except for fire or other casualty
caused by Alliance’s negligence if Landlord’s insurance is not invalidated
thereby) (orig. §9.01).
|
Landlord’s
Responsibility
|
Landlord
will maintain the building and its common areas in a manner appropriate to
a first class office building. The building exterior, the
window sills outside the window and the windows are not part of the
demised premises (orig. §9.01).
|
Approval:
|
All
alterations require Landlord’s prior written approval, which will not be
unreasonably withheld or delayed, provided that it does not (1) affect the
structural integrity of the building, (2) affect the exterior of the
building, or (3) adversely affect the building’s systems without, in
Landlord’s opinion, adequate mitigation (orig. §8.01).
|
Landlord’s
Reimbursement:
|
Alliance
will reimburse Landlord’s out-of-pocket costs incurred in reviewing
alterations (orig. §8.01).
|
Contractors:
|
Landlord’s
affiliate will act as general contractor for any alteration work performed
anywhere in the demised premises for one year after the delivery of the
2nd
and 8th-14th
floors, for a fee not to exceed 6% of the aggregate cost of such
work. In acting as general contractor, Landlord’s affiliate
will obtain competitive bids from at least 3 subcontractors approved by
Landlord for each category of work, except that there is only one approved
subcontractor for air conditioning balancing work (although Alliance may
have another subcontractor verify the work) and there are only 2
unaffiliated subcontractors for the base building work (Sup15
§6(a)). Alliance and Plaza Construction Corp., Landlord's
affiliate, have subsequently entered into that certain Master Agreement
dated January 27, 2004 pursuant to which Plaza Construction Corp. will
provide construction management services to Alliance in respect of
construction projects at the building. Landlord must have given
its approval of any contractors performing
alterations. Alliance will inform the Landlord of the name of
any contractors or subcontractors Alliance proposes to do any alterations
at least 10 days prior to work commencement (orig. §8.01
2(a)).
|
Insurance
Certificates:
|
Prior
to commencing any alterations, Alliance will deliver to Landlord an
insurance certificate evidencing the existence of workmen’s compensation
insurance covering all persons involved in such alterations and reasonable
comprehensive general liability and property damage insurance with
coverage of at least $1 million single limit (orig.
§8.01(7)).
|
Records:
|
Alliance
will keep records of alterations exceeding $25,000 in cost and provide
copies of such records to Landlord within 45 days of demand (orig.
§8.07).
|
38th/39th
Floor Staircase:
|
Alliance
has the right to install a staircase between the 38th
and 39th
floors provided that Landlord approves the plans therefor and the
staircase is installed in compliance with Articles 8 and 45 of the lease
(Sup4 §14).
|
Expiration
of Term:
|
All
improvements installed by Landlord are the property of the Landlord (orig.
§8.03) and all permanent improvements (including, therefore, any kitchen,
pantry or dining room) will remain at the expiration of the term without
Alliance being obligated to remove such permanent
improvements. (orig. §8.04) All fixtures (other than
trade fixtures) installed by Landlord become the property of the Landlord,
and will remain as part of the demised premises, upon expiration of the
lease. All furnishings and trade fixtures supplied by Alliance
at its expense are Alliance’s property and, with regard to Alliance’s
furniture and movable office equipment only (Sup7 §6(e)), will be removed
upon the expiration of the lease term following the lease expiration
unless Landlord notifies Alliance (within 30 days after Alliance’s notice,
which notice will be given at least 3 months prior to expiration of the
lease term) that such property may remain in the demised premise following
the lease term expiration (orig. §8.05). Alliance has no
obligation to remove any staircases in the demised premises (Sup9
§21).
|
Emergency
Generator:
|
Alliance
is permitted to install a 2800 KW Detroit diesel emergency generator
back-up power system in specified locations in the building (Sup27
§2(b)). Alliance is permitted to connect the back-up power
system to the building’s emergency generator system. Up to 1500
KW of the power generated by the back-up power system will back-up the
building’s emergency generator system (Sup27 §2(d)). Landlord
will operate and maintain the back-up power system at Alliance’s expense
and, as part of such obligation, Landlord will enter into a maintenance
contract for same subject to the reasonable approval of Alliance (Sup27
§2(d)). Alliance is obligated to pay a one-time fee for such
emergency generator rights equal to $75,000, adjusted for inflation based
on increases in the Consumer Price Index (Sup27
§2(f)). Alliance will pay for its proportionate share (based on
KW capacity) of fuel purchased for the emergency generator system and has
the right, subject to Landlord’s reasonable approval, to install its own
fuel storage tanks (Sup27 §2(g)). The back-up power system will
remain and not be removed at the end of the lease term (Sup27
§2(i)). Alliance has, through 1/31/10, a limited right of first
offer to lease space to install another emergency
generator. Alliance has 15 days to accept any such offer (Sup27
§3).
|
Communications
Antenna or Dish:
|
Alliance
has the right, subject to the other alteration provisions of the Lease and
to all applicable legal requirements, to install a communications antenna
or dish on the roof in a location reasonably determined by
Landlord. Landlord may require Alliance to relocate the
antenna, at Landlord’s expense, to mitigate interference with other uses,
so long as the antenna is able to function in its relocated position,
provided that if such relocation does mitigate the interference, Landlord
may require Alliance to remove the antenna so long as no other antennas
are allowed to be installed on the roof and Landlord bears the cost of
such removal and the unamortized value of the antenna. If
deemed reasonably advisable by Landlord’s engineer, Landlord will, at
Alliance’s expense, reinforce the area under the antenna and, upon lease
expiration, Alliance will remove the antenna and restore any damage caused
thereby. Alliance will pay Landlord one-half of fair market
rent for the roof space used by the antenna. Alliance, under
Landlord’s supervision (the cost of which Alliance is obligated to
reimburse, has access to the roof and other areas of the building as
reasonably necessary to maintain and repair the antenna (Sup9
§20).
|
Communications
Wiring:
|
Landlord
will provide Alliance a reasonable area in a common vertical riser shaft
in the building for the installation of data, communications and security
system cabling.
|
Initial
Fit-Out of Balance of 31st Floor:
|
Alliance,
at its expense, will prepare a complete set of plans for the work, which
is subject to the reasonable approval of Landlord (orig.
§45.01). Although Alliance is permitted to use its own
engineer, such plans ultimately are subject to the reasonable approval of
Landlord’s designated engineer. There is no deadline for the
delivery to Landlord of the plans for Alliance’s initial fit-out (Sup24
§6(a)). Landlord will provide Alliance with a $762,240
allowance for the hard costs and certain soft costs of the
fit-out. The allowance can be disbursed in installments upon
Alliance’s request and any unused portion will be credited against fixed
rent (Sup24 §6(b)(i)). Alliance may use the allowance to pay
for construction work undertaken in the demised premises leased prior to
Sup24, but if Alliance draws on the allowance prior to May 1, 2010 then
the allowance will be reduced by the future value of the amount drawn upon
calculated at 6% per year (Sup24 §6(b)(ii)).
|
Initial
Fit-Out of 42nd
Floor:
|
Alliance,
at its expense, will prepare a complete set of plans for the work, which
is subject to the reasonable approval of Landlord (orig.
§45.01). Although Alliance is permitted to use its own
engineer, such plans ultimately are subject to the reasonable approval of
Landlord’s designated engineer. There is no deadline for the
delivery to Landlord of the plans for Alliance’s initial fit-out (Sup25
§6(a)). Landlord will provide Alliance with a $1,266,090
allowance for the hard costs and certain soft costs of the
fit-out. The allowance can be disbursed in installments upon
Alliance’s request and any unused portion will be credited against fixed
rent (Sup25 §6(b)). If, however, Alliance draws on the
allowance prior to May 1, 2011 then the allowance will be reduced by the
future value of the amount drawn upon calculated at 6% per year (Sup25
§6(b)(ii)).
|
Initial
Fit-Out of 43rd
and 44th
Floors:
|
Alliance,
at its expense, will prepare a complete set of plans for the work, which
is subject to the reasonable approval of Landlord (orig.
§45.01). Although Alliance is permitted to use its own
engineer, such plans ultimately are subject to the reasonable approval of
Landlord’s designated engineer. There is no deadline for the
delivery to Landlord of the plans for Alliance’s initial fit-out (Sup26
§6(a)).
|
Subordination,
Non-Disturbance and Attornment:
|
The
Lease is subordinate to all present and future mortgages and ground leases
only to the extent Alliance receives a subordination, non-disturbance and
attornment agreement from the holder thereof (orig. §11.01; Sup15
§8). Alliance will not exercise any right to terminate the
lease due to an act or omission of Landlord without first giving notice of
such act or omission to any mortgagee or ground lessor of which Alliance
has been notified and giving such mortgagee or ground lessor an
opportunity to cure such act or omission within a reasonable period of
time after such notice provided that such mortgagee or ground lessor
notifies Alliance that it will commence and continue to remedy such act or
omission (orig. §11.02). Alliance and the property’s mortgagee
are parties to a subordination, non-disturbance and attornment agreement
(SNDA-M). Alliance and the property’s ground lessor are parties
to a subordination, non-disturbance and attornment agreement
(SNDA-G).
|
Estoppel:
|
Alliance
will provide an estoppel certificate within 10 days after Landlord’s
request. The estoppel certificate will certify:
(a) that the Lease is
unmodified and in full force and effect or, if there has been any
modification that the same is in full force and effect as modified and
state any such modification;
(b) whether the term of the
Lease has commenced and rent become payable thereunder; and whether
Alliance has accepted possession of the demised premises;
(c) whether or not there are
then existing any defenses or offsets which are not claims under paragraph
(e) below against the enforcement of any of the agreements, terms,
covenants, or conditions of the Lease any modification thereof upon the
part of Alliance to be performed or complied with, and, if so, specifying
the same;
(d) the dates to which the
fixed annual rent, and additional rent, and other charges hereunder, have
been paid; and
(e) whether or not Alliance has
made any claim against Landlord under the Lease and if so the nature
thereof and the dollar amount, if any, of such claim (orig.
§36).
|
Insurance:
|
Alliance
will reimburse Landlord for any increases in Landlord’s fire insurance
caused by Alliance (orig. §10.03).
|
Landlord
|
Landlord
is not liable for damage or injury to property or persons unless caused by
or due to the negligence of Landlord or its agents, servants or employees
(orig. §12.01). Alliance will look solely to Landlord’s estate
in the Building for the satisfaction of any judgment (orig.
§12.05).
|
Alliance:
|
Alliance
will reimburse Landlord for all costs incurred by Landlord that Landlord
does not recover from insurance resulting from Alliance’s breach under the
lease, by reason of damage or injury caused by Alliance in connection with
the moving of Alliance’s property except as provided in the lease, and by
reason of the negligence of Alliance or its agents, servants or employees
in the use or occupancy of the demised premises (orig.
§12.03). Alliance will indemnify, defend and save Landlord
harmless from any liability arising from Alliance’s use of the demised
premises, breach of the lease, or holding over, except for any liability
arising from Landlord’s negligence (orig. 35.01).
|
Waiver
of Subrogation
|
Both
parties are required to obtain waivers of their insurer’s rights of
subrogation provided that such waiver does not result in an additional
expense to the party waiving the right of subrogation, unless the other
party agrees to be responsible for such additional expense (orig.
§12.06(a) and (b)).
|
General:
|
The
demised premises are permitted to be used for executive and general
offices (orig. §2). Landlord represents that such use does not
violate the certificate of occupancy for the demised premises (orig.
§17). The demised premises may not be used for a banking office
open to street traffic or certain other undesirable businesses (orig.
§42.01).
|
Dwyer
Unit:
|
Alliance
may, subject to Landlord’s consent which may not be unreasonably withheld,
install in the demised premises a Dwyer Unit at its sole cost expense
provided that:
(a) it
is used for Alliance’s employees and guests;
(b) no
installation of ventilation equipment is required and no odors emanate
from the demised premises from the use thereof;
(c) no
additional air conditioning service is required thereby;
(d) use
of the unit is expressly subject to the extra cleaning and water
consumption provisions of the lease; and
(e) Alliance
will engage an extermination service (orig. §49.01; Sup7
§18).
|
Dining:
|
Alliance
may, subject to Landlord’s consent which may not unreasonably be withheld,
install a dining room with kitchen for use by Alliance’s employees and
guests in the demised premises (Sup7 §18), provided that such facilities
(a) comply with all applicable laws, (b) are properly ventilated and (c)
all wet garbage is bagged and stored so that no odor emanates therefrom
(orig. §49.06). If Alliance installs such facilities, then (a)
Alliance will pay landlord the cost of an extermination service and (b)
will have a refrigerated garbage storage room or other means of disposing
of garbage therefrom reasonably satisfactory to Landlord (orig. 32.08 (as
modified by Sup9 §6(b)); orig. §49.02), but such refrigerated room will
only be required if such wet garbage creates an odor or pest problem
(orig. §49.02). Alliance may install additional dining
facilities on any floor of the demised premises comparable to the dining
facility located on the 39th
floor (as it existed as of 8/16/94). (Sup9 §25)
|
Corporate
Training Facility:
|
Subject
to the other terms of the lease and all applicable laws, Alliance may use
a portion of the demised premises for a corporate training facility (Sup5
§11(c)).
|
Concourse:
|
Subject
to the following sentence, the portion of demised premises located on the
concourse may be used for storage, mailroom, computer printing room,
incidental office, dining room or cafeteria purposes and any other legal
purpose (Sup15 §23(e)). The portion of the demised premises
located on the concourse and leased pursuant to Sup23, however, may be
used only for storage purposes except that Alliance may also install
electrical switches therein in certain specified
locations (Sup23 §4).
|
Expiration
Date:
|
December
31, 2019 (Sup15 §12(a)).
|
|
Early
Termination (45th
Floor):
|
Provided
Alliance never occupies the 45th
floor, Alliance may upon written notice to Landlord given on or before
1/1/15, terminate the Lease with respect to the 45th
floor effective 12/31/16 without penalty (Sup15, §21).
|
|
Landlord’s
5 Year Extension Option:
|
·
|
Landlord
may upon written notice to Alliance given on or before 11/30/16, extend
the term from 12/31/19 to 12/31/24 (Sup15 §13(a)(i)).
|
·
|
Fixed
annual rent during such extension period would be at the rate of the
average fixed annual rent per s.f. being paid by Alliance on 12/30/19 for
all of its space in building (other than ground floor, concourse or
subconcourse space). The method of calculating escalations
would remain unchanged for such period (Sup15 §13(a)(ii) and (iii); Sup21
§9(a)).
|
|
Alliance’s
5 Year Extension Option:
|
·
|
If
Landlord extends the term to 12/31/24 as provided above, then on or before
12/31/16, Alliance may extend the term to 12/31/29 (Sup15
§13(b)).
|
·
|
Fixed
annual rent during such extension period would be at the rate of the
average fixed annual rent per s.f. being paid by Alliance on 12/30/19 for
all of its space in the building (other than concourse or subconcourse
space). The method of calculating escalations would remain
unchanged for such period (Sup15 §13(b)).
|
|
·
|
Upon
exercise of this 5 year extension option, Alliance loses its right to
exercise its 10 year extension option described below.
|
|
Alliance’s
10 Year Extension Option:
|
·
|
Alliance
has the option to extend the term for 10 years (Sup9 §12(a)) to expire on
12/31/29 if Landlord does not exercise its 5 year extension option, or
12/31/34 if Landlord does exercise its 5 year extension option and
Alliance does not exercise its 5 year extension option.
|
·
|
If
Landlord does not exercise its 5 year extension option, the exercise
deadline for Alliance’s 10 year extension option is no later than 1/31/17,
but no earlier than 12/1/16 (Sup15 §13(c)). If Landlord does
exercise its 5 year extension option and Alliance does not exercise its 5
year extension option, then the exercise deadline for Alliance’s 10 year
extension option is 12/31/21 (Sup9 §12(a)(i)).
|
|
·
|
As
conditions to the exercise of Alliance’s 10 year extension option, as of
the date of exercise and as of the first day of the extension period (i)
Alliance can not be in default of beyond applicable notice and grace
periods of its obligation to pay fixed annual rent, tax escalations and
expense escalations, and (ii) Alliance and its affiliates must occupy at
least 200,000 rsf (Sup9 §12(a)(ii) and (iii)).
|
|
·
|
The
fixed annual rent for Alliance’s 10 year extension period is 95% of fair
market rent determined as of 36 months before what would have been the
expiration of the term if the term had not been extended by Alliance’s ten
year extension option, as determined by Landlord and notified to Alliance
in writing within 30 days thereafter, plus an increase in proportion to
the increase over such 36 month period of the average of the CPI for Urban
Consumers and CPI for Urban Wage Earners (both New York, NY-Northeast NJ,
base year 1982-84 =100, “All Items”) (Sup9 §12(b)). If Alliance
disputes Landlord’s determination of the rent, then Landlord and Alliance
will resolve the dispute according to a specified arbitration process
(Sup9 §12(b) and §16).
|
|
·
|
For
purposes of calculating real estate tax escalations, the base year during
such extension period is 2019/20 if Landlord does not exercise its 5 year
extension option, or 2024/25 if Landlord does exercise its 5 year
extension option (Sup9 §12(c)(i); Sup15 §13(b) and (c)). For
purposes of calculating expense escalations, the base year for building
expenses during such extension period is calendar year 2019 if Landlord
does not exercise its 5 year extension option, or calendar year 2024 if
Landlord does exercise its 5 year extension option. (Sup9 §12(c)(ii) and
(iii); Sup15 §13(b) and (c)).
|
Electricity:
|
See
page 14.
|
|
Elevator:
|
Passenger: Service will
be provided as necessary on business days between 8 am and 6 pm and
sufficient service at all other times (orig. §32.01). In case
of special events at the demised premises, upon 24 hours notice from
Alliance, Landlord will provide 2 dedicated elevators staffed by Landlord
personnel, the labor cost of which will be reimbursable by Alliance within
30 days of demand (Sup9 §24(a)). Landlord is required to have,
in 1996, reconfigured the elevators so that the 32nd
floor and the 37th,
38th
and 39th
floors are served by the same elevators (Sup6, §4(c)).
Freight: Landlord will
provide reasonable freight elevator service on business days from 8 am to
6 pm and after-hours service at landlord’s established rates (orig.
§32.01). During tenant’s initial fit-out of the remainder of
the 31st
floor, and the 42nd,
43rd
and 44th
floors, Alliance has priority but not exclusive use of one freight
elevator and non-priority use of a second freight elevator at no charge
(Sup14 §13(a); Sup15 §16(a); Sup24 §10(a); Sup25 §10; Sup26
§10). Subject to the terms of the alterations provisions and so
long as Alliance is leasing floors 31 (part) through
41, Alliance has the right, at its expense, to make alterations
so that any elevator servicing Floors 31 (part) through 41 can stop on any
other floor leased by Alliance (Sup15 §24).
|
|
HVAC:
|
Regular
Service:
During regular hours of operation on business days as from time to
time determined by Landlord, but always at least from 8 am to 6 pm, but
excluding 9pm to 8 am (orig. §32.02(a)).
|
|
After-Hours
Service: Available upon reasonable notice at
Landlord’s established rates, payable upon presentation of bill, provided
that:
|
||
·
|
if
any other tenants in the same air conditioning zone obtain after-hours
service, the charge therefore will be equitably pro-rated (orig.
§32.02(d)), and
|
|
·
|
Landlord
will provide HVAC to Alliance free of charge on any non-business day that
the New York Stock Exchange is open (Sup9
§24(b)).
|
Supplemental
AC: Subject to the lease
provisions (including the alterations section) and all applicable laws,
Alliance may at its expense install self-contained package
air-conditioning units in the demised premises. Alliance is
responsible for the maintenance and repair of such
units. Alliance may connect such units to any existing
supplementary air-conditioning systems located in the demised premises as
of the date the lease commenced with respect to the 37th
and 38th
floors (orig. §32.10). Alliance has the right to install at its
own expense additional supplemental air conditioning in the demised
premises subject to service being available from Landlord at Landlord’s
established per ton per annum connected load and line charge (Sup5
§11(d)). Alliance has the right to install a supplemental air
conditioning system on the 31 (part)-34th,
and 37th-39th
floors and Landlord will provide condenser water therefor at a connected
load and line charge fee of $500 per ton per annum increased after 1991 in
proportion to the lease’s expense escalations (Sup6 §17;
Sup7 §19).
|
Condenser Water:
|
||
·
|
Floors
2, 8-14: Alliance has reserved 190 tons of condenser water for
use on the 2nd
and 8th-14th
floors, with an option to reserve up to an additional 80 tons upon written
notice to Landlord on or before 8/30/04. Landlord’s charge for
such condenser water is $568.35 plus annual increases based on the
percentage increases in building and parking expenses. Alliance
begins paying for such condenser water upon use (but no later after 1 year
after delivery of the 2nd
and 8th
through 14th
floors). If Alliance requires more than 270 tons of condenser
water for such space, then Landlord will use best efforts to obtain
additional condenser from the building’s existing supply and, if
unsuccessful, will enter into good faith discussions regarding the
installation of an additional cooling tower and allocation of costs
relating thereto (Sup15 §16(b)).
|
|
·
|
Floors
15-16: The 15th
floor has an existing supply of 12 tons of condenser water and the 16th
floor has an existing supply of 11 tons of condenser
water. Alliance has the right to install at its own expense,
pursuant to the alterations provisions of the Lease, a supplemental
air-conditioning system on the 15th
and 16th
floors. Alliance was to have reserved its requirements of condenser water
for such supplemental system from the existing supply on or before May 1,
1999 and of additional condenser water (up to 100 tons) by June 30, 2001
(Sup14 §13(b)(ii)). We have been advised by Judd S. Meltzer Co.
Inc., however, that Landlord has agreed to reduce such available tonnage
to 60 tons in exchange for increasing the available tonnage to 100 tons
with respect to Floors 35-36. Landlord’s charge for such
condenser water is $552/ton per annum plus annual increases over a 1997
base year (Sup12 §14).
|
|
·
|
Floors
2, 8-14, 17 (part): Alliance was required to notify the
Landlord of the amount of additional condenser water required by Alliance
for its premises on Floors 2, 8-14 and 17 (part), which amount cannot
exceed 20 tons, by August 31, 2002. Alliance begins paying
for such condenser water upon use at a rate equal to $594.90 per ton per
annum increased annually from 2001 at the same percentage rate that
building operating expenses increase (Sup16 §10(b)).
|
|
·
|
Floors
31 (part) - 34, 40, 41, 45: We have been advised by Judd S.
Meltzer Co. Inc. that Alliance has exercised its right to have Landlord
supply Alliance with 250 tons condenser water for use in supplemental air
conditioning units on Floors 31 (part)-34 or 40, 41 and 45 at a cost
$250/ton/yr for the first 250 tons/yr and $500/ton/yr (plus annual
increases over the 1994 expenses base year). Any condenser
water already being provided for Floors 31(part)-34 and 40, 41 and 45 are
included in determining such rates. Alliance pays for the
condenser water that Landlord has agreed to commit to Alliance, regardless
of whether Alliance actually uses it (Sup9 §24(f)).
|
|
·
|
Floors
35-36: Alliance may purchase up to 60 tons (in the aggregate)
of condenser water for use in connection with its supplemental
air-conditioning on the 35th
and 36th
floors. We have been advised, however, by Judd S. Meltzer Co. Inc. that
Landlord has agreed to increase such available tonnage to 100 tons in
exchange for reducing the available tonnage of additional condenser water
to 60 tons with respect to Floors 15-16. Alliance must reserve
the condenser water it wishes to purchase by February 8, 2001 (in respect
of the 35th
floor) and December 31, 2001 (in respect of the 36th
floor) Landlord’s charge for such condenser water is $568.35/ton per annum
plus annual increases over a 1999 base year (Sup14
§13(b)).
|
|
Standards:
|
||
·
|
indoor
conditions to be 75° 50% RH when outdoor conditions are 92° DB and 74° WB;
indoor conditions to be 70° when outdoor conditions are 11°
|
|
·
|
outdoor
air at a minimum of 20 cfm per person
|
|
assumes
occupancy of 1 person per 100 usf, electric demand load of 5 watts per
usf, and appropriate use of blinds (Sup9
§24(c)(ii)).
|
Water:
|
Landlord
is required to supply an adequate quantity for ordinary lavatory,
drinking, cleaning and pantry purposes. Water consumed for any
additional purposes is subject to charge therefor and, separate
metering. Alliance is subject to charge and separate metering
for water used for any additional purposes.
|
Housekeeping
Supplies:
|
Landlord
must approve, in its reasonable discretion, suppliers of laundry, linen,
towels, drinking water, ice and similar supplies to be consumed in the
demised premises. Landlord may designate exclusive suppliers of
any such supply provided that such suppliers’ rates and quality are
comparable to other suppliers (orig. §32.05).
|
Food
& Beverages:
|
Landlord must approve, in
its reasonable discretion any vendor of food or beverages to be consumed
in the demised premises (orig. §32.06).
|
Cleaning:
|
See
page 21.
|
Building
Directory and Concierge:
|
Alliance
is provided with its proportionate share (based upon the same percentage
used in calculating Alliance’s share of operating expense escalations) of
listings for itself, and any other person or entity in occupancy of the
demised premises and their employees. Landlord may reduce the
number of such listings provided that Alliance always has its share in
proportion to the space it occupies in the building (Sup6
§23).
So
long as Alliance and its affiliates are in occupancy of at least 200,000
rsf, Alliance, at no additional cost, is permitted to station 1 or, if
practicable, 2 of its employees at the lobby’s concierge desk with a
telephone, an employee telephone directory, guest passes and an
identifying sign (Sup9 §10(f)).
|
Signage
and Flag:
|
So
long as Alliance and its affiliates are in occupancy of at least 200,000
rsf, Alliance has exclusive right to name the building after itself or,
subject to Landlord’s consent, any of its affiliates, and Alliance has the
right to install signage with its name and logo:
· above
the lobby entrance (which may be illuminated subject to Landlord’s
reasonable approval, but not neon, and provided that any other exterior
signage is subject to Alliance’s approval),
· on
the building plaza kiosks (with signage for the building’s retail tenants
on such kiosks subject to Alliance’s reasonable approval and any other
kiosk signage or retail signage subject to Alliance’s
approval),
· behind
the lobby concierge desk (which may be illuminated subject to Landlord’s
reasonable approval, but not neon, and which will be the only sign behind
the lobby concierge desk, although Landlord may install less prominent
signage for other tenants elsewhere in the lobby subject to Alliance’s
reasonable approval), and
· place “tombstone”
signs on the building plaza
If
occupancy decreases to less than 200,000, Landlord may remove Alliance’s
signage (Sup9 §10(a)). Landlord has reasonable approval rights
as to the design and location of Alliance’s signage. All
installation, maintenance and removal work relating to Alliance’s signage
will be performed by Landlord at Alliance’s reasonable expense (Sup9
§10(b)).
So
long as Alliance and its affiliates are in occupancy of at least 200,000
rsf, Alliance may fly a flag bearing its name and logo, the design of
which is subject to landlord’s reasonable approval, from a flagpole on the
building plaza. No other flagpole may be installed on the
building plaza without Alliance’s approval (Sup9 §10(d)).
Landlord
is prohibited from installing any signage in the area of the lobby’s upper
elevator bank for an Alliance competitor occupying Floors 46-50, or a
majority thereof (Sup13 §19(d)).
|
General
Contractor:
|
Landlord’s
affiliate will act as general contractor for any alteration work performed
anywhere in the demised premises for one year after Landlord delivers the
2nd
and 8th-
14th
floors to Alliance following substantial completion of Landlord’s work
thereon, for a fee not to exceed 6% of the aggregate cost of such work
(Sup15 §6(a)). Alliance and Plaza Construction Corp., Landlord's
affiliate, have subsequently entered into that certain Master Agreement
dated January 27, 2004 pursuant to which Plaza Construction Corp. will
provide construction management services to Alliance in respect of
construction projects at the building.
|
Parking:
|
37
spaces in the building garage at the garage’s standard rates and terms,
but the first 25 are at a 10% discount if Alliance reserved such spaces
before the Sup9 Adjustment Date (Sup9 §18; Sup12
§12). Landlord’s parking obligations continue so long as
Landlord is the garage operator or so long as the garage is generally
available to building tenants (Sup15 §22).
|
Allowances
and Credits:
|
The
following allowances and credit may have been used or
applied:
10th
Floor: $130,000 credit against fixed annual rent due from and
after Floor 10 is included in the demised premises (Sup19
§9).
15th
Floor: $987,725 for tenant’s initial fit-out and professional
fees relating thereto. Any portion not used for such purposes
is credited against fixed annual rent (Sup12 §6(b)).
|
16th
Floor: $987,725 for cost of initial fit out and professional
fees relating thereto. Any portion not used for such purposes
is credited against fixed annual rent (Sup12
§6(c)).
|
Casualty:
|
In
case of casualty, Landlord is required to restore the building and/or the
demised premises (other than property installed by or on behalf of
Alliance). Fixed annual rent and additional rent is abated to
the extent that the demised premises or a portion thereof are unrentable
and are not occupied by Alliance for the conduct of its
business. In case of substantial casualty affecting the demised
premises, Alliance may terminate the lease if Landlord’s restoration is
not completed within 1 year, subject to extension of up to an additional 6
months for circumstances beyond Landlord’s reasonable control. (orig.
§13.01). In case the building or the demised premises are
substantially damaged in the last 2 years of the term, either Landlord or
Alliance may cancel the lease upon notice given within 60 days of such
casualty (orig. §13.02). Landlord may terminate the lease upon
30 days’ notice given within 120 days of a casualty that so damages the
building that Landlord decides to demolish it or not rebuild it (orig.
§13.03).
|
Condemnation:
|
In
case of a total condemnation of the demised premises, the lease terminates
(orig. §14.01). In case of a condemnation other than a total
condemnation of the demised premises, the lease will continue, but fixed
annual rent and additional rent, will be abated proportionately, provided
that if more than 25% of the demised premises is condemned, Alliance may
terminate the lease upon 30 days notice given within 30 days after such
condemnation (orig. §14.02). Landlord is required to repair any
damage caused by such condemnation (orig. §14.02). In case of a
condemnation of more than 25% of the demised premises, Landlord will, to
the extent of the condemnation award, repair damage caused by such
condemnation within 6 months of the condemnation, as such period may be
extended due to force majeure. If Landlord fails to complete
repairs within 6 months, as extended due to force majeure, Alliance may
terminate upon 30 days’ notice (orig. §14.04). In case of any
partial condemnation within the last 2 years of the term, either party may
terminate the lease within 32 days of the condemnation upon 30 days notice
(orig. §14.04). In case of a temporary taking of all or part of
the of the demised premises, there will be no abatement of rent, but
Alliance is entitled to any condemnation award and if such temporary
taking occurs in the last 3 years of the terms, Alliance may terminate the
lease upon 30 days’ notice given within the 30 days of title vesting in
such condemnation (orig. §14.05).
|
Subletting
the demised premises, assigning the Lease, allowing others to use the
demised premises, and advertising for a subtenant or assignee are not
permitted without the consent of Landlord (§15.01), which consent will not
unreasonably be withheld (§15.05) except with regard to the ground floor
portion of the demised premises. Landlord has no recapture
rights. Alliance may, without Landlord’s consent, assign or
sublet to a corporation into or with which Alliance is merged, with an
entity to which substantially all of Alliance’s assets are transferred, or
to an entity which controls or is controlled by Alliance or is under
common control with Alliance, subject to a net worth test
(§15.02). Also, Alliance may, without Landlord’s consent,
permit an affiliate (defined as “an entity which controls or is controlled
by Alliance or is under common control with Alliance”) to occupy all or a
portion of the premises (orig. §15.08). Any permitted
assignment or sublease will not be effective until Alliance delivers to
Landlord a recordable sublease or assignment agreement reasonably
satisfactory to Landlord pursuant to which the subtenant or assignee
assumes all of Alliance’s obligations under the Lease. Alliance
will remain fully liable under the lease for the payment of rent and the
performance of all of Alliance’s other obligations under the Lease
notwithstanding any such assignment or sublease (orig.
§15.03).
|
|
Landlord’s
Consent to assignment or sub-subletting by an assignee or
subtenant:
|
Landlord’s
consent will not be unreasonably withheld or delayed, provided that such
further assignment or sub-sublease is subject to all of the other terms
and conditions of the Lease regarding assignment and subletting (Sup7
§12(b)).
|
Profits:
|
If
Alliance assigns the lease or sublets any portion of the demised premises
other than to a corporation into which Alliance is merged or consolidated,
or to which Alliance’s assets are transferred or to any entity which
controls or is controlled by Alliance or is under common control with
Alliance, then Alliance will pay Landlord 50% of any profits after first
deducting reasonable expenses incurred in connection with such
assignment/sublease amortized on a straight line basis over the balance of
the lease term (in case of an assignment) or over the term of the sublease
(in case of a sublease) (orig. §15.07). For the first 50% of
rsf of demised premises other than ground floor space (including Floors 2
and 8-14 after such floors are delivered to Alliance (Sup15 §19(a))
assigned or sublet by Alliance, Alliance will have the right to deduct as
such a reasonable expense a “Tenant Improvement Deduction”, determined as
of the commencement date of such sublease or assignment, and calculated as
follows:
((A/2
– B) ÷ C) x D, where
A =
amortized value of Alliance leasehold improvements (regardless of whether
paid for with tenant allowance) based upon the average value of Alliance’s
unamortized leasehold improvements on a per rentable square foot basis for
all of the demised premises other than any concourse space (Sup15 §19(b)
or ground floor space (Sup20 §2(a)), amortized on a straight line basis
from completion date until 10/31/09 (if located on Floors 37-39 and
completed prior to 8/16/94 and such calculation is being made prior to the
delivery of Floors 2 and 8-14 (Sup15 §19(a))) or the lease expiration date
(in all other cases)
B =
total landlord cash contribution or allowance to Alliance for leasehold
improvements under the lease,
C =
total rsf of the demised premises, and
D =
rsf of the space being sublet or assigned. (Sup9 §13(d))
In
determining profits, Alliance is permitted to take into account its
electricity expenses under the lease and cleaning expenses (whether under
separate agreement with Landlord’s contractor or pursuant to the lease)
(Sup9 §13(d)), and its rental cost for the space being sublet or assigned
will be determined using an average, on a rentable square foot basis, of
its rental cost for the entire demised premises other than any concourse
space or ground floor space (Sup20 §2(b)) except with respect to any
sublease or assignment of the 2nd,
8th-14th
or 17th
(part) floors made before Alliance ever occupies such space (which
is the case for Floor 10 (Sup19 §6(b)) in which case Alliance’s rental
cost will be based on its actual rental without including any deduction
for unamortized tenant improvements (Sup15 §19(d); Sup16 §12, Sup17 §11;
Sup18 §11). If Alliance subleases any part of Floors 2 and 8-14
or assigns the Lease with respect thereto after first occupying such
space, then Alliance will have the right to take a “Tenant Improvement
Deduction” as provided above.
|
Ground
Floor:
|
Alliance
has the right of first offer to lease all or a portion of the space
occupied by European American Bank as of August 16, 1994, upon such space
(or portion thereof) becoming available, at 95% of fair market rent (as
determined by Landlord but subject to a specified arbitration process if
Landlord and Alliance cannot agree within 60 days of Alliance’s acceptance
of the offer) (Sup9 §14(a)). So long as Alliance and its
affiliates occupy at least 200,000 rsf of the building, Landlord is
restricted from leasing such space to a competitor of Alliance (Sup9
§14(a)(ii)). This right of first offer is not subject to the condition
that Alliance not be in default beyond the expiration of applicable notice
and cure periods under any of the terms, provisions and conditions of the
Lease.
|
24th
and 25th
Floors:
|
[Note: The
24th
and the 25th
floors are currently used for the building’s mechanical equipment and are
not leased to tenants.]
|
26th,
27th
and 28th
Floors:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 26th,
27th
and 28th
floors (or a portion of any such floor, if offered to Alliance as a
partial floor), upon availability (Sup9 §14(c)). We have been
advised by Judd S. Meltzer Co. Inc. that this space is presently leased to
Avon pursuant to a lease which expires on October 31, 2016 and that Avon
has three 5-year extension options which are superior to Alliance’s right
of first offer.
|
29th
Floor:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 29th
floor (or a portion thereof, if offered to Alliance as a partial floor),
upon availability (Sup9 §14(c)). We have been advised by Judd
S. Meltzer Co. Inc. that this space is presently leased to Dean Witter
pursuant to a lease which expires on February 28, 2005 and that Avon has
superior rights to this right of first offer.
|
30thFloor:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 30th
floor (or a portion of any such floor, if offered to Alliance as a partial
floor), upon availability (Sup9 §14(c)). We have been advised
by Judd S. Meltzer Co. Inc. that this space is presently leased to
Rubenstein pursuant to a lease which expires on December 31, 2009 and that
Rubenstein has one 5-year extension option which may be preempted by
Alliance.
|
46th
through 50th
Floors:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 49th
and 50th
floors (or a portion of any such floor, if offered to Alliance as a
partial floor), upon availability (Sup9 §14(c)). This right of first offer
also applies to the 46th
through 48th
floors (Sup10 §4(b); Sup14 §16). We have been advised by Judd S. Meltzer
Co. Inc. that this space is presently leased to Pimco pursuant to a lease
which expires on December 31, 2016 and that there are no superior rights
to this right of first offer.
|
All
other space:
|
We
have been advised by Judd S. Meltzer Co. Inc. that the companies listed
below have leased the floors under leases expiring as
follows:
|
||
Tenant
|
Floor(s)
|
Lease Expiration
|
|
Arthur
Andersen
|
3
through 7
|
04/30/04
|
|
Linklaters
|
19
|
11/30/13
|
|
Stern
Stewart
|
20
|
04/30/08
|
|
Smith
Barney
|
21
and 22
|
04/30/05
|
|
Nichimen
|
23
|
04/30/12
|
|
Alliance
has the right of first offer to lease all other space in the building it
does not already lease or that is not subject to another of Alliance’s
rights of first offer, upon availability, at fair market rent (as
determined by landlord but subject to a specified arbitration process if
Landlord and Alliance cannot agree within 60 days of Alliance’s acceptance
of the offer) (Sup15 §9(a)(1); Sup16 §14). This right of first
offer is subject to the conditions that Alliance and its affiliates are in
occupancy of at least 400,000 rsf and is subject to any rights of first
offer or refusal held by any other building occupant or tenant existing as
of August 3, 2000 (Sup15 §9(a)(i) and
(ii)). (Note: We have been advised by Judd S.
Meltzer Co. Inc. that the following superior rights
exist: Linklaters has two 5-year extension options with respect
to the 19th
floor, Smith Barney has one 5-year extension option with respect to the
21st
and 22nd
floors; Nichimen has one 5-year extension option with respect to the
23rd
floor and Avon has rights to the 23rd
floor.) Alliance may not exercise such right of first offer
during the last 10 years of the term unless (i) Alliance simultaneously
extends the lease term pursuant to the Lease, or (ii) such offer is made
during the period beginning 10 years before the expiration date and ending
5 years before the expiration date and is for 2 or fewer floors (provided
that if it is for more than 2 floors and Alliance wishes to accept the
offer, Alliance must accept Landlord’s terms (including, perhaps, a
non-coterminous expiration date) for those excess floors) (15 Sup,
§9(a)(iii)(7)).
|
Events
of Default:
|
Landlord
may terminate the lease upon 10 days’ notice if:
|
|
(i)
|
Alliance
fails to pay fixed annual rent or any other lease payment within 10 days
after notice from Landlord of such failure;
|
|
(ii)
|
Alliance
fails to cure its default under any of its other obligations under the
lease, or fails to re-occupy the demised premises after abandoning the
demised premises, within 30 days after notice from Landlord (reduced to 5
days in case of default under Alliance’s obligation to use the demised
premises in conformance with the certificate of occupancy or Alliance’s
failure to provide an estoppel), but if such default cannot be cured
within such period, such period is extended as necessary to permit
Alliance with diligence and good faith, to cure such default;
or
|
|
(iii)
|
an
execution or attachment against Alliance or its property results in a
party other than Alliance continuing to occupy the demised premises after
30 days’ notice from Landlord (orig. §19.01).
|
|
Upon
termination, Landlord may re-enter the demised premises and dispossess
Alliance (orig. §19.02).
|
||
Alliance’s
obligation to pay fixed annual rent and additional rent survives any
termination of the lease due to Alliance’s default (orig.
§19.03). Upon such termination, Alliance will pay landlord
re-letting expenses and at Landlord’s option, either a lump sum
representing the present value of the excess of Alliance’s combined fixed
annual rent and additional rent over the rental value for the terminated
portion of the term, or on a monthly basis the excess of Alliance’s
combined fixed annual rent and additional rent over the rent received from
any re-letting of the demised premises for the period representing the
terminated lease term (orig. §20.01).
|
||
Landlord’s
Right to Cure:
|
If
Alliance fails to cure a default within any applicable grace period after
notice of such default (provided that no notice is required in case of
emergency), then Landlord may cure such default and bill Alliance for the
cost of such cure, which bill will be due upon receipt (orig.
§21.01).
|
|
Right
to Contest:
|
Alliance
may contest any law that Alliance is obligated to comply with under the
lease and compliance thereunder, provided that:
|
|
(a)
|
such
non-compliance will not subject Landlord to criminal prosecution or
subject the building to lien or sale;
|
|
(b)
|
such
non-compliance does not violate any fee mortgage, ground lease or
leasehold mortgage thereon;
|
|
(c)
|
Alliance
will deliver a bond or other security to Landlord; and
|
|
(d)
|
Alliance
will diligently prosecute such contest.
|
|
Arbitration:
|
Where
arbitration is required by the lease, unless otherwise expressly provided,
the arbitration will be in New York City in accordance with the Commercial
Arbitration Rules of the American Arbitration Association and the lease,
and judgment may be entered in any court having jurisdiction (orig.
§33.01).
|
|
Limits
on Alliance’s Remedies:
|
Alliance
cannot, in response to Landlord’s act or omission, terminate the lease or
set-off rent before giving any ground lessor or mortgagee of the fee or
ground leasehold estate for which Alliance has been given an address
notice of such act or omission and a reasonable period of time to
cure. Such ground lessor or mortgagee, however, has no
obligation to cure such act or
omission.
|
Landlord:
|
Landlord
may enter the demised premises to perform alteration work, to inspect the
demised premises or to exhibit the demised premises to prospective
purchasers, mortgagees or lessors of the building and (during the last 6
months of the term) to prospective lessees of the demised premises,
provided that Landlord provides Alliance advance notice (which may be
oral) of such entry (orig. §16.01). Landlord will exercise
reasonable diligence so as to minimize the disturbance (orig.
§16.01).
|
Carter-Wallace,
Inc.
|
Carter-Wallace,
Inc. is allowed, once a month upon reasonable notice during business
hours, access in the vicinity of column 63 on the northeast side of the
41st
floor to service a humidifier, provided that Carter-Wallace, Inc. will
move such portion of humidifier off the 41st
floor if Alliance reasonably requires Carter-Wallace, Inc. to do so as
part of Alliance’s alteration work on the 41st
floor (LTR1, par 2).
|
All
notices required to be given by the lease or by law are required to be in
writing. Notices, which are required to be sent by certified or
registered mail, are deemed sent by the sender and received by the
recipient when deposited in the exclusive care and custody of the U.S.
mail. Notices to Landlord are to be addressed as
follows:
1345 Leasehold Limited
Partnership
c/o Fisher
Brothers
299 Park Avenue
New York, New
York
|
|
with
a copy to:
|
|
Fisher Brothers
299 Park Avenue
New York, New
York
Attn: General
Counsel
|
|
(orig.
§31.01)
|
No
transfer of ownership of the units of AllianceBernstein L.P. (the private
partnership) is permitted without prior approval of AllianceBernstein and
AXA Equitable Life Insurance Company (“AXA Equitable).
Under
the terms of the Transfer Program, transfers of ownership will be
considered once every calendar quarter.
|
To
sell your Units to a third party:
|
To
donate the Units:
|
|||||
q
|
You
must first identify the buyer for your Units. AllianceBernstein
can not maintain a list of prospective buyers nor will AllianceBernstein
act as a buyer.
|
q
|
The
donor must obtain approval of AllianceBernstein and AXA Equitable for the
transfer of units.
|
|||
q
|
The
unitholder and the prospective buyer must submit a request for transfer of
ownership of the Units and obtain approval of AllianceBernstein and AXA
Equitable for the transaction.
|
q
|
Documentation
required for consideration of approval includes:
|
|||
q
|
Documentation
required for consideration of approval includes:
|
-
|
Unit
Certificate(s)
|
|||
-
|
Unit
Certificate(s)
|
-
|
Executed
“Stock” Power Form, with guaranteed signature
|
|||
-
|
Executed
“Stock” Power Form, with guaranteed signature
|
-
|
Letter
from Transferee
|
|||
-
-
|
Letter
from Seller
Letter
from Purchaser
|
q
|
Additional
required documentation should be verified with AllianceBernstein’s
transfer agent, BNY Mellon Shareowner Services, at
866-737-9896.
|
|||
To
have private Units re-registered to your name if they have been left to
you by a deceased party:
|
To
re-register your certificate to reflect a legal change of name or change
in custodian:
|
|||||
q
|
The
beneficiary must obtain approval of Alliance Capital and AXA Equitable for
the transfer of units.
|
q
|
The
unitholder must obtain approval of AllianceBernstein and AXA Equitable for
the change of name/registration on the unit
certificate.
|
|||
q
|
Documentation
required for consideration of approval includes:
|
q
|
Documentation
required for consideration of approval includes:
|
|||
-
|
Unit
Certificate(s)
|
-
|
Unit
Certificate(s)
|
|||
-
|
Executed
“Stock” Power Form, with guaranteed signature
|
-
|
Executed
“Stock” Power Form, with guaranteed signature
|
|||
-
-
|
Copy
of death certificate
Required
Inheritance Tax Waiver for applicable states
|
-
|
Specific
instruction letter indicating the manner in which the new unit certificate
should be registered
|
|||
q
|
Additional
required documentation (which varies by state) should be verified with
AllianceBernstein’s transfer agent, BNY Mellon Shareowner Services, at
866-737-9896
|
q
|
Additional
required documentation should be verified with AllianceBernstein’s
transfer agent, BNY Mellon Shareowner Services, at
866-737-9896.
|
David
Lesser
|
|
Legal
and Compliance Department – Transfer Program
|
|
AllianceBernstein
L.P.
|
|
1345
Avenue of the Americas
|
|
New
York, NY 10105
|
|
Phone:
(212) 969-1429
|
Years Ended December
31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
|
(in
thousands)
|
|||||||||||
Fixed Charges: | ||||||||||||
Interest
Expense
|
$ | 2,696 | $ | 13,077 | $ | 23,970 | ||||||
Estimate
of Interest Component In Rent Expense (1)
|
- | - | - | |||||||||
Total
Fixed Charges
|
2,696 | 13,077 | 23,970 | |||||||||
Earnings:
|
||||||||||||
Income
Before Income Taxes and Non-Controlling
|
624,485 | 944,229 | 1,405,004 | |||||||||
Interest
in Earnings of Consolidated Entities
|
||||||||||||
Other
|
21,307 | (72,965 | ) | (6,861 | ) | |||||||
Fixed
Charges
|
2,696 | 13,077 | 23,970 | |||||||||
Total
Earnings
|
$ | 648,488 | $ | 884,341 | $ | 1,422,113 | ||||||
Consolidated
Ratio Of Earnings To Fixed Charges
|
240.54 | 67.63 | 59.33 |
(1)
|
AllianceBernstein
L.P. has not entered into financing leases during these
periods.
|
1.
|
I
have reviewed this annual report on Form 10-K of AllianceBernstein
L.P.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: February
11, 2010
|
/s/ Peter S. Kraus
|
|
Peter
S. Kraus
|
||
Chief
Executive Officer
|
||
AllianceBernstein
L.P.
|
1.
|
I
have reviewed this annual report on Form 10-K of AllianceBernstein
L.P.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: February
11, 2010
|
/s/ Robert H. Joseph, Jr.
|
|
Robert
H. Joseph, Jr.
|
||
Chief
Financial Officer
|
||
AllianceBernstein
L.P.
|
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Exchange Act; and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date: February
11, 2010
|
/s/ Peter S. Kraus
|
|
Peter
S. Kraus
|
||
Chief
Executive Officer
|
||
AllianceBernstein
L.P.
|
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Exchange Act; and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date: February
11, 2010
|
/s/ Robert H. Joseph, Jr.
|
|
Robert
H. Joseph, Jr.
|
||
Chief
Financial Officer
|
||
AllianceBernstein
L.P.
|
McLagan
comparable companies
|
300
North Capital, LLC
|
Aberdeen
Asset Management, Inc.
|
Acadian
Asset Management, LLC
|
Adams
Express Company, The
|
Adams
Street Partners, LLC
|
Aegon
USA Realty Advisors, Inc.
|
AIG
Investments
|
Alcatel-Lucent
Investment Management Corporation
|
Fred
Alger Management, Inc.
|
AllianceBernstein
L.P.
|
Allianz
of America, Inc.
|
Allianz
Global Investors
|
Allstate
Investments, LLC
|
American
Century Investments
|
Ameriprise
Financial, Inc.
|
Analytic
Investments, LLC
|
Artio
Global Management LLC
|
Ashfield
Capital Partners, LLC
|
Aurora
Investment Management L.L.C.
|
Aviva
Investors
|
AXA
Equitable
|
AXA
Investment Managers
|
AXA
Rosenberg Investment Management Ltd.
|
Babson
Capital Management LLC
|
Banco
Santander
|
Bank
of America
|
Bank
of Ireland Corporate Banking
|
Bank
of New York Mellon (The)
|
Bank
of Nova Scotia (The)
|
Barclays
Capital Group
|
Barclays
Global Investors, N.A.
|
Baring
Asset Management, Inc.
|
BB&T
Asset Management, Inc.
|
BlackRock
Financial Management, Inc.
|
BMO
Financial Group
|
BNP
Paribas Asset Management Inc.
|
BNY
Mellon Asset Management
|
Boston
Company Asset Management, LLC, The
|
Brandes
Investment Partners, L.P.
|
Brandywine
Global Investment Management, LLC
|
Bridgeway
Capital Management, Inc.
|
Bridgewater
Associates, Inc.
|
Brown
Advisory Holdings Incorporated
|
Brown
Brothers Harriman & Co.
|
CAI
Cheuvreux
|
Calyon
|
Capital
Group Companies, Inc., The
|
CIBC
World Markets
|
Citadel
Investment Group, LLC
|
Calamos
Investments
|
Capital
One Financial
|
Capital
Growth Management
|
Christian
Brothers Investment Services, Inc.
|
Cigna
Investment Management, LLC
|
Citigroup
|
Commerzbank
|
Copper
Rock Capital Partners, LLC
|
Credit
Suisse
|
CUNA
Mutual Group
|
D.A.
Davidson & Co.
|
Declaration
Management & Research LLC
|
Delaware
Investments
|
Deutsche
Bank
|
Deutsche
Asset Management
|
Diamond
Hill Capital Management, Inc.
|
Dimensional
Fund Advisors Inc.
|
Dresdner
Kleinwort
|
Dreyfus
Corporation
|
Driehaus
Capital Management LLC
|
DuPont
Capital Management
|
Dwight
Asset Management, LLC
|
Eaton
Vance Management
|
Edward
Jones
|
Empirical-Research
|
Epoch
Investment Partners, Inc.
|
EquiLend
|
Evergreen
Investment Mgmt Co. (Wachovia)
|
Exelon
Corp.
|
FAF
Advisors, Inc. (US Bancorp)
|
FBR
Capital Markets Corp.
|
Federated
Investors, Inc.
|
Fidelity
Investments
|
Fifth
Third Asset Management
|
First
Quadrant Corporation
|
Fischer,
Francis Trees & Watts, Inc.
|
Fortis
Financial Services LLC
|
Fortis
Investment Management USA, Inc.
|
Fox-Pitt
Kelton Cochran Caronia Waller
|
Franklin
Templeton Investments
|
Frost
National Bank
|
GE
Asset Management
|
Goldman
Sachs & Co.
|
Goldman
Sachs Asset Management
|
Great-West
Life Assurance Company
|
Harris
Investment Management Inc.
|
Hartford
Investment Management Company
|
Harvard
Management Company, Inc.
|
Heitman
|
Henderson
Global Investors (North America) Inc.
|
Howard
Hughes Medical Institute
|
HSBC
Global Asset Mgmt/Halbis Capital Mgmt
|
HBBC
Global Banking and Markets
|
Invesco
Plc
|
ICMA
Retirement Corporation
|
ING
|
ING
Investment Management
|
INTECH
Investment Management LLC
|
Investment
Counselors of Maryland, LLC
|
ITG
|
Jackson
National Life
|
Jacobs
Levy Equity Management, Inc.
|
Janney
Montgomery Scott Inc.
|
Janus
Capital Group
|
Jennison
Associates, LLC
|
John
Hancock Financial Services
|
JP
Investment Bank
|
JPMorgan
Asset Management
|
Kayne
Anderson Rudnick Investment Mgmt, LLC
|
Landesbank
Baden-Wurttemburg - US offices
|
Lazard
Capital Markets
|
Legal
& General Investment Mgmt (America)
|
Legg
Mason & Co., LLC
|
Loomis,
Sayles & Company, L.P.
|
Man
Group plc
|
Matthews
International Capital Management LLC
|
MEAG
New York Corporation (Munich RE)
|
Mellon
Capital Management
|
Mercer
Global Investments
|
Merrill
Lynch & Co., Inc.
|
MetLife
Investments
|
MFS
Investment Management
|
Mitsubushi
Securities
|
Mizuho
Alternative Investments
|
Morgan
Keegan & Company, Inc.
|
Morgan
Stanley
|
Morgan
Stanley Investment Management
|
Morgan
Stanley Asset Management
|
Natixis
|
Natixis
Global Associates
|
National
Railroad Retirement Investment Trust
|
Natixis
Global Asset Management, L.P.
|
Nationwide
|
New
York Life Investment Management LLC
|
NFJ
Investment Group L.P.
|
Nicholas
Applegate Capital Management
|
Nikko
Asset Management Americas, Inc.
|
Nomura
Asset Management U.S.A. Inc.
|
Nomura
Corporate Research & Asset Management
|
Nomura
Securities
|
Northwestern
Mutual Life Insurance Company
|
Numeric
Investors LLC
|
Nuveen
Investments
|
NWQ
Investment Management Company, LLC
|
Old
Mutual Asset Management
|
Old
Mutual Capital, Inc.
|
Oppenheimer
Capital LLC
|
Oppenheimer
Funds, Inc.
|
Pacific
Life Insurance Company
|
PartnerReinsurance
Capital Markets Corp.
|
PIMCO
Advisors, L.P.
|
Pioneer
Investment Management, USA
|
Piper
Jaffray
|
Pitcairn
Financial Group
|
PPM
America, Inc.
|
Principal
Global Investors
|
ProFund
Advisors LLC / ProShare Advisors LLC
|
Promark
Global Advisors (formerly GM Asset Mgmt)
|
Prudential
Financial
|
Putnam
Investments
|
Pyramis
Global Advisors
|
Pzena
Investment Management, LLC
|
Qwest
Asset Management Company
|
Rabobank
Nederland
|
Raymond
James & Associates
|
RCM
Capital Management LLC
|
Reich
& Tang Asset Management
|
RidgeWorth
Capital Management Inc. (SunTrust)
|
Robert
W. Baird & Co. Inc.
|
Royal
Bank of Canada
|
Royal
Bank of Scotland
|
RS
Investment Management Co. LLC
|
Russell
Investments
|
Rydex
Investments
|
SCM
Advisors LLC
|
Sands
Capital Management, LLC
|
Santa
Barbara Asset Management, LLC
|
Schroder
Investment Management N. A. Inc.
|
Charles
Schwab Investment Management, Inc.
|
Sentinel
Investments (National Life of Vermont)
|
Skandinaviska
Endskilda Banken
|
Societe
Generale
|
Southwest
Securities
|
Sovereign
Bank
|
Standard
Life Investments (USA) Limited
|
Standish
Mellon Asset Management
|
State
Street Bank & Trust Company
|
State
Street Global Advisors
|
Stone
& Youngberg
|
SunTrust
Banks
|
Susquehanna
International Group
|
Swiss
Re Asset Management
|
Symphony
Asset Management LLC
|
T.
Rowe Price Associates, Inc.
|
TD
Securities
|
Thompson,
Siegel & Walmsley, LLC
|
Thornburg
Investment Management
|
Thrivent
Financial for Lutherans
|
TIAA-CREF
|
Tradewinds
Global Investors, LLC
|
Trilogy
Global Advisors, LLC
|
Trust
Company of the West
|
UBS
|
UBS
Global Asset Management
|
UMB
Financial Corporation
|
Unicredit
|
University
of California, Office of the Treasurer
|
Urdang
Capital Management/Urdang Securities Mgmt
|
UTIMCO
(University of TX Investment Mgmt Company)
|
Vanguard
Group, Inc., The
|
Verizon
Investment Management Corp.
|
Victory
Capital Management (KeyCorp)
|
Virtus
Investment Partners, Inc.
|
Voyageur
Asset Management Inc.
|
Wachovia
Corporation
|
Waddell
& Reed, Inc.
|
Wells
Capital Management
|
Wellington
Management Company, LLP
|
Western
Asset Management Company
|
Westwood
Holdings Group, Inc.
|
William
Blair & Company, L.L.C.
|
Williams
College
|
Winslow
Capital Management Inc.
|
WisdomTree
Investments, Inc.
|