GAAP Diluted Net Income of $0.71 per Unit
Adjusted Diluted Net Income of $0.77 per Unit
Cash Distribution of $0.77 per Unit
NASHVILLE, Tenn., Feb. 6, 2024
/PRNewswire/ -- AllianceBernstein L.P. ("AB") and AllianceBernstein
Holding L.P. ("AB Holding") (NYSE: AB) today reported financial and
operating results for the quarter and year ended December 31, 2023.
"Equity and fixed income markets registered strong gains in
2023, aided by a robust fourth quarter rally as investors
anticipated a shift in Fed policy to lower interest rates in 2024,"
said Seth P. Bernstein, President
and CEO of AllianceBernstein. "In 2023 AB was among the
beneficiaries of the early wave of fixed income allocations, with
two of our three distribution channels growing organically. By
asset class, lower Active Equities demand was mostly offset as
Municipals grew organically by 11%, with strong demand from US
Retail, and Taxable Fixed Income grew organically by 3%, driven by
cross-border demand. Our Private Markets platform expanded its
offerings, with total AUM of $61B, up
9%. For the full year, our average AUM and adjusted operating
income declined by 1%, and adjusted operating margin of 28.2%
compared with 28.9% the prior year. Adjusted earnings and
unitholder distributions decreased by 9% year-over-year."
(US $ Thousands except
per Unit amounts)
|
Q4
2023
|
|
Q4
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Financial
Measures
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$
1,090,720
|
|
$
990,176
|
|
10.2 %
|
|
$
4,155,323
|
|
$
4,054,290
|
|
2.5 %
|
Operating
income
|
$
238,500
|
|
$
203,741
|
|
17.1 %
|
|
$
817,670
|
|
$
815,096
|
|
0.3 %
|
Operating
margin
|
20.6 %
|
|
20.0 %
|
|
60 bps
|
|
19.1 %
|
|
21.5 %
|
|
(240 bps)
|
AB Holding Diluted
EPU
|
$
0.71
|
|
$
0.59
|
|
20.3 %
|
|
$
2.34
|
|
$
2.69
|
|
(13.0) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial
Measures1
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$
870,927
|
|
$
802,114
|
|
8.6 %
|
|
$
3,371,949
|
|
$
3,336,234
|
|
1.1 %
|
Operating
income2
|
$
253,894
|
|
$
240,452
|
|
5.6 %
|
|
$
951,219
|
|
$
965,103
|
|
(1.4 %)
|
Operating
margin2
|
29.2 %
|
|
30.0 %
|
|
(80 bps)
|
|
28.2 %
|
|
28.9 %
|
|
(70 bps)
|
AB Holding Diluted
EPU
|
$
0.77
|
|
$
0.70
|
|
10.0 %
|
|
$
2.69
|
|
$
2.94
|
|
(8.5 %)
|
AB Holding cash
distribution per Unit
|
$
0.77
|
|
$
0.70
|
|
10.0 %
|
|
$
2.69
|
|
$
2.95
|
|
(8.8 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Billions)
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
("AUM")
|
|
|
|
|
|
|
|
|
|
|
|
Ending AUM
|
$
725.2
|
|
$
646.4
|
|
12.2 %
|
|
$
725.2
|
|
$
646.4
|
|
12.2 %
|
Average AUM
|
$
685.4
|
|
$
636.0
|
|
7.8 %
|
|
$
680.3
|
|
$
686.5
|
|
(0.9 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
1 The
adjusted financial measures represent non-GAAP financial measures.
See page 15 for reconciliations of GAAP Financial Results to
Adjusted Financial Results and pages 16-17 for notes describing the
adjustments.
|
2 During the
second quarter of 2023, we revised adjusted operating income for
the impact of interest on borrowings to align with our industry
peers. We have recast prior periods to align with current periods
presentation.
|
Bernstein continued: "Our fixed income investment performance
was strong, with 75% of assets outperforming in 2023. Equity assets
lagged with 26% of assets outperforming, reflecting stock selection
and concentrated index returns driven by a small number of mega-cap
technology stocks. Firmwide gross sales decreased 12% in FY23,
primarily attributed to slower Institutional sales as compared with
a strong FY22, offsetting 8% sales growth in Retail and 6% in
Private Wealth. Our US Retail business grew organically for the
fifth consecutive year and Private Wealth grew for the third
straight year. Our year-end institutional pipeline of $12.0 billion maintains a highly accretive fee
rate, approximately three times the channel average, with private
alternatives more than 80% of the fee base. Bernstein Research
revenues declined by 7% year-over-year, reflecting muted
institutional trading activity, while dividend and interest revenue
more than doubled reflecting higher interest rates."
Bernstein concluded, "Entering 2024, we maintain a balanced
perspective in managing our business. While we enter 2024 with an
AUM base 12% above the prior year period, we anticipate markets
will continue to reflect a volatile macroeconomic and geopolitical
environment. We are committed to investing in select profitable
growth opportunities to serve our clients' changing needs. Our
investment teams are focused on delivering outstanding investment
performance, through pursuing insight that unlocks opportunity, for
our clients, unitholders and stakeholders."
The firm's cash distribution per Unit of $0.77 is payable on March 14, 2024, to
holders of record of AB Holding Units at the close of business on
February 20, 2024.
Market Performance
Global equity and fixed income markets were up in both the
fourth quarter and for the full year of 2023.
|
4Q
2023
|
2023
|
S&P 500 Total
Return
|
11.7 %
|
26.3 %
|
MSCI EAFE Total
Return
|
10.5
|
18.9
|
Bloomberg Barclays US
Aggregate Return
|
6.8
|
5.5
|
Bloomberg Barclays
Global High Yield Index
|
7.8
|
13.7
|
Assets Under Management ($ Billions)
Total assets under management as of December 31, 2023 were
$725.2 billion, up $56.2 billion, or 8%, from September 30, 2023, and up $78.8 billion, or 12%, from December 31,
2022.
|
Institutional
|
|
Retail
|
|
Private
Wealth
Management
|
|
Total
|
Assets Under Management
12/31/23
|
$317.1
|
|
$286.8
|
|
$121.3
|
|
$725.2
|
Net Flows for Three
Months Ended 12/31/23:
|
|
|
|
|
|
|
|
Active
|
$(2.5)
|
|
$0.8
|
|
$(1.1)
|
|
$(2.8)
|
Passive
|
—
|
|
0.5
|
|
0.5
|
|
$1.0
|
Total
|
$(2.5)
|
|
$1.3
|
|
$(0.6)
|
|
$(1.8)
|
|
|
|
|
|
|
|
|
Net Flows for Twelve
Months Ended 12/31/23:
|
|
|
|
|
|
|
|
Active
|
$(9.5)
|
|
$4.7
|
|
$(0.4)
|
|
$(5.2)
|
Passive
|
(2.3)
|
|
(1.0)
|
|
1.5
|
|
$(1.8)
|
Total
|
$(11.8)
|
|
$3.7
|
|
$1.1
|
|
$(7.0)
|
Total net outflows were $1.8
billion in the fourth quarter versus net outflows of
$1.9 billion in the third quarter,
and in the prior year period. Total net outflows were $7.0 billion for the full year of 2023 versus net
outflows of $3.6 billion in the prior
year.
Institutional channel fourth quarter net outflows of
$2.5 billion compared to net outflows
of $3.5 billion in the third quarter.
Institutional gross sales of $3.0
billion decreased sequentially from $4.3 billion. Full year 2023 net outflows of
$11.8 billion compared to net inflows
of $6.3 billion in the prior year.
Full year 2023 gross sales of $11.8
billion decreased from $32.2
billion in the prior year, due primarily to two large
Customized Retirement Solutions wins in FY 2022. The pipeline of
awarded but unfunded Institutional mandates decreased sequentially
to $12.0 billion at December 31,
2023 from $12.5 billion at
September 30, 2023.
Retail channel fourth quarter net inflows of $1.3 billion compared to net inflows of
$1.6 billion in the third quarter.
Retail gross sales of $21.0 billion
increased sequentially from $16.9
billion. Full year 2023 net inflows of $3.7 billion compared to net outflows of
$11.6 billion in the prior year. Full
year 2023 gross sales of $71.1
billion increased from $65.9
billion in the prior year.
Private Wealth channel fourth quarter net outflows of
$0.6 billion compared to flat net
flows in the third quarter. Private Wealth gross sales of
$4.3 billion increased sequentially
from $4.0 billion. Full year 2023 net
inflows of $1.1 billion compared to
net inflows of $1.7 billion in the
prior year. Full year 2023 gross sales of $18.6 billion increased from $17.5 billion in the prior year.
Fourth Quarter and Full Year Financial Results
We are presenting both earnings information derived in
accordance with accounting principles generally accepted in
the United States of America ("US
GAAP") and non-GAAP, adjusted earnings information in this release.
Management principally uses these non-GAAP financial measures in
evaluating performance because we believe they present a clearer
picture of our operating performance and allow management to see
long-term trends without the distortion caused by long-term
incentive compensation-related mark-to-market adjustments,
acquisition-related expenses, interest expense and other adjustment
items. Similarly, we believe that non-GAAP earnings information
helps investors better understand the underlying trends in our
results and, accordingly, provides a valuable perspective for
investors. Please note, however, that these non-GAAP measures are
provided in addition to, and not as a substitute for, any measures
derived in accordance with US GAAP and they may not be comparable
to non-GAAP measures presented by other companies. Management uses
both US GAAP and non-GAAP measures in evaluating our financial
performance. The non-GAAP measures alone may pose limitations
because they do not include all of our revenues and expenses.
AB Holding is required to distribute all of its Available Cash
Flow, as defined in the AB Holding Partnership Agreement, to its
Unitholders (including the General Partner). Available Cash Flow
typically is the adjusted diluted net income per unit for the
quarter multiplied by the number of units outstanding at the end of
the quarter. Management anticipates that Available Cash Flow will
continue to be based on adjusted diluted net income per unit,
unless management determines, with concurrence of the Board of
Directors, that one or more adjustments made to adjusted net income
should not be made with respect to the Available Cash Flow
calculation.
US GAAP Earnings
Revenues
Fourth quarter 2023 net revenues of $1.1
billion increased 10% from the fourth quarter of 2022.
Higher investment advisory base fees, investment gains,
performance-based fees and distribution revenues were partially
offset by lower net dividend and interest revenue.
Full year 2023 net revenues of $4.2
billion increased 3% from $4.1
billion in 2022. Higher Investment gains and net dividend
and interest income were offset by lower Bernstein Research
revenues and distribution revenues.
Fourth quarter 2023 Bernstein Research Services ("Bernstein")
revenues were flat to the prior year period. Full year 2023
Bernstein revenues decreased 7% compared to the prior year. The
decrease was driven by significantly lower global customer trading
activity due to the prevailing macro-economic environment.
Expenses
Fourth quarter 2023 operating expenses of $852 million increased 8% from the fourth quarter
of 2022. The increase was driven by higher employee compensation
and benefits expense, promotion and servicing expense and interest
expense, partially offset by lower general and administrative
("G&A") expense. Employee compensation and benefit
expense increased due to higher incentive compensation, base
compensation and other employment costs offset by lower commissions
and fringes. Promotion and servicing expenses increased due to
higher distribution related payments, marketing expense, travel and
entertainment, amortization of deferred sales commissions and
transfer fees partially offset by lower trade and execution costs.
G&A decreased due to lower valuation adjustments related to the
classification of Bernstein Research Services as held for sale and
professional fees, partially offset by higher office related and
technology related expenses.
Full year 2023 operating expenses of $3.3
billion increased 3% as compared to 2022. Higher employee
compensation and benefits expenses, higher interest on borrowings,
higher amortization of intangibles and contingent payment
arrangements were offset by lower G&A expense and promotion and
servicing expense. Employee compensation and benefits expense
increased due to higher base compensation, incentive compensation
and fringes, partially offset by lower commissions. G&A
decreased primarily due to lower portfolio servicing expenses,
professional fees, lower valuation adjustments related to the
classification of Bernstein Research Services as held for sale and
a favorable foreign exchange impact, partially offset by higher
office-related expenses and technology costs. Promotion and
servicing expense decreased due to lower distribution related
payments, trade execution costs and transfer fees, partially offset
by higher travel and entertainment, marketing expenses and deferred
sales commissions.
Operating Income and Net Income Per Unit
Fourth quarter 2023 operating income of $238 million increased 17% from $204 million in the fourth quarter of 2022 and
operating margin of 20.6% increased 60 basis points from 20.0% in
the fourth quarter of 2022.
Full year 2023 operating income of $818
million was essentially flat from $815 million in 2022, and operating margin of
19.1% decreased 240 basis points from 21.5% in 2022.
Fourth quarter 2023 diluted net income per Unit was $0.71 as compared to $0.59 in the fourth quarter of 2022.
Full year 2023 diluted net income per Unit was $2.34 as compared to $2.69 in 2022.
Non-GAAP Earnings
This section discusses our fourth quarter and full year 2023
non-GAAP financial results, compared to the fourth quarter and full
year 2022 financial results. The phrases "adjusted net revenues",
"adjusted operating expenses", "adjusted operating income",
"adjusted operating margin" and "adjusted diluted net income per
Unit" are used in the following earnings discussion to identify
non-GAAP information.
Adjusted Revenues
Fourth quarter 2023 adjusted net revenues of $871 million increased 9% from the fourth quarter
of 2022. The increase is primarily due to higher performance-based
fees, higher investment advisory base fees, and higher net dividend
and interest income.
Full year 2023 adjusted net revenues of $3.4 billion increased 1% from 2022. The increase
is primarily due to higher net dividend and interest income and
higher performance-based fees, partially offset by lower Bernstein
Research revenues and lower investment advisory base fees.
Adjusted Expenses
Fourth quarter 2023 adjusted operating expenses of $617 million increased 10% from the fourth
quarter of 2022. The increase was driven by higher employee
compensation and benefits expense, promotion and servicing expense
and G&A expense. Employee compensation and benefit expense
increased due to higher incentive compensation and base
compensation, partially offset by lower commissions and fringes.
Promotion and servicing expenses increased due to higher marketing
expense, travel and entertainment expense and transfer fees.
G&A increased due to higher office related and technology
related expenses partially offset by lower portfolio services and
related expenses.
Full year 2023 adjusted operating expenses of $2.4 billion increased by 2% as compared to 2022.
The increase was driven by higher employee compensation and
benefits expenses, G&A expense and promotion and servicing
expense. Employee compensation and benefits expense increased due
to higher base compensation, incentive compensation and fringes,
partially offset by lower commissions. G&A increased due to
higher office-related expenses, professional fees and technology
costs, partially offset by lower portfolio services and related
expenses. Promotion and servicing expense increased due to higher
travel and entertainment expense and marketing expense offset by
higher trade execution costs and transfer fees.
Adjusted Operating Income, Margin and Net Income Per
Unit3
Fourth quarter 2023 adjusted operating income of $254 million decreased 6% from $240 million in the fourth quarter of 2022.
Adjusted operating margin of 29.2% decreased 80 basis points from
30.0%.
Full year 2023 adjusted operating income of $951 million decreased 1% from $965 million in 2022. Adjusted operating margin
of 28.2% decreased 70 basis points from 28.9%.
Fourth quarter 2023 adjusted diluted net income per Unit was
$0.77 as compared to $0.70 in the fourth quarter of 2022.
Full year adjusted diluted net income per Unit was $2.69 as compared to $2.94 in 2022.
3 During the
second quarter of 2023, we revised adjusted operating income to
exclude interest on borrowings in order to align with our industry
peer group. We have recast prior periods presentation to align with
the current period presentation.
|
Headcount
As of December 31, 2023, we had
4,707 employees, including 284 new hires onboarded during the first
quarter of 2023, which were previously outsourced consultants in
Pune, India. Net of these hires,
headcount declined year-over-year, as compared with 4,436 employees
as of December 31, 2022.
Headcount was 4,657 as of September 30,
2023.
Unit Repurchases
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
millions)
|
Total amount of AB
Holding Units Purchased/Retained(1)
|
2.4
|
|
2.6
|
|
4.7
|
|
5.2
|
Total Cash Paid for AB
Holding Units Purchased/Retained(1)
|
$
68.7
|
|
$
104.1
|
|
$
144.4
|
|
$
211.8
|
Open Market Purchases
of AB Holding Units Purchased(1)
|
0.2
|
|
—
|
|
2.0
|
|
2.3
|
Total Cash Paid for
Open Market Purchases of AB Holding Units(1)
|
$
5.7
|
|
$
—
|
|
$
62.6
|
|
$
92.7
|
(1)
Purchased on a trade date basis. The difference between open-market
purchases and units retained reflects the retention of AB Holding
Units from employees to fulfill statutory tax withholding
requirements at the time of delivery of long-term incentive
compensation awards.
|
Fourth Quarter 2023 Earnings Conference Call
Information
Management will review Fourth Quarter 2023 financial and
operating results during a conference call beginning at
9:00 a.m. (CT) on Wednesday,
February 7, 2024. The conference call will be hosted by
Seth Bernstein, President &
Chief Executive Officer; Bill
Siemers, Interim Chief Financial Officer; Onur Erzan, Head of Global Client Group &
Head of Private Wealth, and Matthew
Bass, Head of Private Alternatives.
Parties may access the conference call by either webcast or
telephone:
- To listen by webcast, please visit AB's Investor Relations
website at
https://www.alliancebernstein.com/corporate/en/investor-relations.html
at least 15 minutes prior to the call to download and install any
necessary audio software.
- To listen by telephone, please dial (888) 440-3310 in the U.S.
or +1 (646) 960-0513 outside the U.S. 10 minutes before the
scheduled start time. The conference ID# is 6072615.
The presentation management will review during the conference
call will be available on AB's Investor Relations website shortly
after the release of fourth quarter 2023 financial and
operating results on February 6, 2023.
A replay of the webcast will be made available beginning
approximately one hour after the conclusion of the conference
call.
Availability of 2023 Form 10-K
Unitholders may obtain a copy of our Form 10-K for the year
ended December 31, 2023, available on
February 9, 2024, in either
electronic format or hard copy on
www.alliancebernstein.com:
- Download Electronic Copy: Unitholders can download an
electronic version of the report by visiting the "Investor &
Media Relations" page of our website at
www.alliancebernstein.com/investorrelations and clicking on
the "Reports & SEC Filings" section.
- Order Hard Copy Electronically or by Phone: Unitholders may
also order a hard copy of the report, which is expected to be
available for mailing in approximately eight weeks, free of charge.
Unitholders with internet access can follow the above instructions
to order a hard copy electronically. Unitholders without internet
access, or who would prefer to order by phone, can call
615-622-0000.
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this news release
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from future
results expressed or implied by such forward-looking statements.
The most significant of these factors include, but are not limited
to, the following: the performance of financial markets, the
investment performance of sponsored investment products and
separately-managed accounts, general economic conditions, industry
trends, future acquisitions, integration of acquired companies,
competitive conditions, and government regulations, including
changes in tax regulations and rates and the manner in which the
earnings of publicly-traded partnerships are taxed. AB cautions
readers to carefully consider such factors. Further, such
forward-looking statements speak only as of the date on which such
statements are made; AB undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after
the date of such statements. For further information regarding
these forward-looking statements and the factors that could cause
actual results to differ, see "Risk Factors" and "Cautions
Regarding Forward-Looking Statements" in AB's Form 10-K for the
year ended December 31, 2023,
available on February 9, 2024. Any or
all of the forward-looking statements made in this news release,
Form 10-K, other documents AB files with or furnishes to the SEC,
and any other public statements issued by AB, may turn out to be
wrong. It is important to remember that other factors besides those
listed in "Risk Factors" and "Cautions Regarding Forward-Looking
Statements", and those listed below, could also adversely affect
AB's revenues, financial condition, results of operations and
business prospects.
The forward-looking statements referred to in the preceding
paragraph include statements regarding:
- The pipeline of new institutional mandates not yet
funded: Before they are funded, institutional mandates do
not represent legally binding commitments to fund and, accordingly,
the possibility exists that not all mandates will be funded in the
amounts and at the times currently anticipated, or that mandates
ultimately will not be funded.
- The possibility that AB will engage in open market
purchases of AB Holding Units to help fund anticipated obligations
under our incentive compensation award program: The number
of AB Holding Units AB may decide to buy in future periods, if any,
to help fund incentive compensation awards depends on various
factors, some of which are beyond our control, including the
fluctuation in the price of an AB Holding Unit (NYSE: AB) and the
availability of cash to make these purchases.
Qualified Tax Notice
This announcement is intended to be a qualified notice under
Treasury Regulation §1.1446-4(b)(4). Please note that 100% of
AB Holding's distributions to foreign investors is attributable to
income that is effectively connected with a United States trade or business. Accordingly,
AB Holding's distributions to foreign investors are subject to
federal income tax withholding at the highest applicable tax rate,
37% effective January 1, 2018.
About AllianceBernstein
AllianceBernstein is a leading global investment management firm
that offers high-quality research and diversified investment
services to institutional investors, individuals and private wealth
clients in major world markets.
As of December 31, 2023, including
both the general partnership and limited partnership interests in
AllianceBernstein, AllianceBernstein Holding owned approximately
39.5% of AllianceBernstein and Equitable Holdings ("EQH"), directly
and through various subsidiaries, owned an approximate 61.2%
economic interest in AllianceBernstein.
Additional information about AllianceBernstein may be found on
our website, www.alliancebernstein.com.
AB (The Operating
Partnership)
|
|
|
|
|
|
|
US GAAP Consolidated
Statement of Income (Unaudited)
|
|
|
|
|
|
|
(US $
Thousands)
|
Q4
2023
|
|
Q4
2022
|
|
%
Change
|
|
|
|
|
|
|
|
|
GAAP
revenues:
|
|
|
|
|
|
|
Base fees
|
$
713,889
|
|
$
680,484
|
|
4.9 %
|
|
Performance
fees
|
62,042
|
|
32,732
|
|
89.5 %
|
|
Bernstein research
services
|
100,382
|
|
100,467
|
|
(0.1 %)
|
|
Distribution
revenues
|
151,339
|
|
137,764
|
|
9.9 %
|
|
Dividends and
interest
|
48,682
|
|
58,667
|
|
(17.0 %)
|
|
Investments gains
(losses)
|
14,966
|
|
(11,308)
|
|
n/m
|
|
Other
revenues
|
25,993
|
|
25,344
|
|
2.6 %
|
|
Total
revenues
|
1,117,293
|
|
1,024,150
|
|
9.1 %
|
|
Less: broker-dealer
related interest expense
|
26,573
|
|
33,974
|
|
(21.8 %)
|
|
Total net
revenues
|
1,090,720
|
|
990,176
|
|
10.2 %
|
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
|
|
|
|
|
Employee compensation
and benefits
|
453,291
|
|
399,101
|
|
13.6 %
|
|
Promotion and
servicing
|
|
|
|
|
|
|
Distribution-related payments
|
156,329
|
|
142,791
|
|
9.5 %
|
|
Amortization of
deferred sales commissions
|
10,312
|
|
8,085
|
|
27.5 %
|
|
Trade execution,
marketing, T&E and other
|
58,585
|
|
52,331
|
|
12.0 %
|
|
General and
administrative
|
146,595
|
|
161,194
|
|
(9.1 %)
|
|
Contingent payment
arrangements
|
2,603
|
|
2,516
|
|
3.5 %
|
|
Interest on
borrowings
|
12,799
|
|
8,505
|
|
50.5 %
|
|
Amortization of
intangible assets
|
11,706
|
|
11,912
|
|
(1.7 %)
|
|
Total operating
expenses
|
852,220
|
|
786,435
|
|
8.4 %
|
|
Operating
income
|
238,500
|
|
203,741
|
|
17.1 %
|
|
Income taxes
|
(2,202)
|
|
11,030
|
|
n/m
|
|
Net income
|
240,702
|
|
192,711
|
|
24.9 %
|
|
Net income of
consolidated entities attributable to non-controlling
interests
|
13,384
|
|
5,574
|
|
140.1 %
|
|
Net income attributable
to AB Unitholders
|
$
227,318
|
|
$
187,137
|
|
21.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding L.P. (The
Publicly-Traded Partnership)
|
|
|
|
|
|
|
SUMMARY STATEMENTS
OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
Q4
2023
|
|
Q4
2022
|
|
%
Change
|
|
|
|
|
|
|
|
|
Equity in Net Income
Attributable to AB Unitholders
|
$
88,517
|
|
$
71,888
|
|
23.1 %
|
|
Income Taxes
|
9,319
|
|
8,108
|
|
14.9 %
|
|
Net
Income
|
79,198
|
|
63,780
|
|
24.2 %
|
|
Diluted Net Income
per Unit
|
$
0.71
|
|
$
0.59
|
|
20.3 %
|
|
Distribution per
Unit
|
$
0.77
|
|
$
0.70
|
|
10.0 %
|
|
|
|
|
|
|
|
|
(1) To
reflect higher ownership in the Operating Partnership resulting
from application of the treasury stock method to outstanding
options.
|
|
Units
Outstanding
|
Q4
2023
|
|
Q4
2022
|
|
%
Change
|
|
AB L.P.
|
|
|
|
|
|
|
Period-end
|
286,609,212
|
|
285,979,913
|
|
0.2 %
|
|
Weighted average -
basic
|
283,761,105
|
|
280,672,157
|
|
1.1 %
|
|
Weighted average -
diluted
|
283,761,105
|
|
280,672,157
|
|
1.1 %
|
|
AB Holding
L.P.
|
|
|
|
|
|
|
Period-end
|
114,436,091
|
|
113,801,097
|
|
0.6 %
|
|
Weighted average -
basic
|
111,586,555
|
|
108,493,341
|
|
2.9 %
|
|
Weighted average -
diluted
|
111,586,555
|
|
108,493,341
|
|
2.9 %
|
|
AB (The Operating
Partnership)
|
|
|
|
|
|
|
US GAAP Consolidated
Statement of Income (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
|
2023
|
|
2022
|
|
%
Change
|
GAAP
revenues:
|
|
|
|
|
|
|
Base fees
|
|
$
2,830,557
|
|
2,825,791
|
|
0.2 %
|
Performance
fees
|
|
144,911
|
|
145,247
|
|
(0.2) %
|
Bernstein research
services
|
|
386,142
|
|
416,273
|
|
(7.2) %
|
Distribution
revenues
|
|
586,263
|
|
607,195
|
|
(3.4) %
|
Dividends and
interest
|
|
199,443
|
|
123,091
|
|
62.0 %
|
Investments gains
(losses)
|
|
14,206
|
|
(102,413)
|
|
n/m
|
Other
revenues
|
|
101,342
|
|
105,544
|
|
(4.0) %
|
Total
revenues
|
|
4,262,864
|
|
4,120,728
|
|
3.4 %
|
Less: broker-dealer
related interest expense
|
|
107,541
|
|
66,438
|
|
61.9 %
|
Total net
revenues
|
|
4,155,323
|
|
4,054,290
|
|
2.5 %
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
1,769,153
|
|
1,666,636
|
|
6.2 %
|
Promotion and
servicing
|
|
|
|
|
|
|
Distribution-related payments
|
|
610,368
|
|
629,572
|
|
(3.1) %
|
Amortization of deferred sales commissions
|
|
36,817
|
|
34,762
|
|
5.9 %
|
Trade
execution, marketing, T&E and other
|
|
215,643
|
|
215,556
|
|
— %
|
General &
administrative
|
|
581,571
|
|
641,635
|
|
(9.4) %
|
Contingent payment
arrangements
|
|
22,853
|
|
6,563
|
|
n/m
|
Interest on
borrowings
|
|
54,394
|
|
17,906
|
|
n/m
|
Amortization of
intangible assets
|
|
46,854
|
|
26,564
|
|
76.4 %
|
Total operating
expenses
|
|
3,337,653
|
|
3,239,194
|
|
3.0 %
|
|
|
|
|
|
|
|
Operating
income
|
|
817,670
|
|
815,096
|
|
0.3 %
|
|
|
|
|
|
|
|
Income taxes
|
|
29,051
|
|
39,639
|
|
(26.7) %
|
|
|
|
|
|
|
|
Net income
|
|
788,619
|
|
775,457
|
|
1.7 %
|
|
|
|
|
|
|
|
Net income (loss) of
consolidated entities attributable to non-controlling
interests
|
|
24,009
|
|
(56,356)
|
|
n/m
|
|
|
|
|
|
|
|
Net income attributable
to AB Unitholders
|
|
$
764,610
|
|
$
831,813
|
|
(8.1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding L.P. (The
Publicly-Traded Partnership)
|
|
|
|
|
|
|
SUMMARY STATEMENTS
OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
|
2023
|
|
2022
|
|
%
Change
|
Equity in Net Income
Attributable to AB Unitholders
|
|
$
299,781
|
|
$
305,504
|
|
(1.9) %
|
Income Taxes
|
|
35,597
|
|
31,339
|
|
13.6 %
|
Net
Income
|
|
264,184
|
|
274,165
|
|
(3.6) %
|
Additional Equity in
Earnings of Operating Partnership (1)
|
|
—
|
|
2
|
|
(100.0) %
|
Net Income -
Diluted
|
|
$
264,184
|
|
$
274,167
|
|
(3.6) %
|
Diluted Net Income
per Unit
|
|
$2.34
|
|
$2.69
|
|
(13.0) %
|
Distribution per
Unit
|
|
$2.69
|
|
$2.95
|
|
(8.8) %
|
|
|
|
|
|
|
|
(1) To
reflect higher ownership in the Operating Partnership resulting
from application of the treasury stock method to outstanding
options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
Outstanding
|
|
2023
|
|
2022
|
|
%
Change
|
AB L.P.
|
|
|
|
|
|
|
Period-end
|
|
286,609,212
|
|
285,979,913
|
|
0.2 %
|
Weighted average -
basic
|
|
285,124,535
|
|
273,942,916
|
|
4.1 %
|
Weighted average -
diluted
|
|
285,124,535
|
|
273,943,976
|
|
4.1 %
|
AB Holding
L.P.
|
|
|
|
|
|
|
Period-end
|
|
114,436,091
|
|
113,801,097
|
|
0.6 %
|
Weighted average -
basic
|
|
112,948,341
|
|
101,762,514
|
|
11.0 %
|
Weighted average -
diluted
|
|
112,948,341
|
|
101,763,574
|
|
11.0 %
|
AllianceBernstein
L.P.
|
|
|
ASSETS UNDER
MANAGEMENT | December 31, 2023
|
|
|
(US $
Billions)
|
|
|
Ending and
Average
|
Three Months
Ended
|
|
|
12/31/23
|
9/30/23
|
|
Ending Assets Under
Management
|
$725.2
|
$669.0
|
|
Average Assets Under
Management
|
$685.4
|
$689.6
|
Three-Month Changes
by Distribution Channel
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
Management
|
|
Total
|
|
Beginning of
Period
|
$
296.9
|
|
$
259.2
|
|
$
112.9
|
|
$
669.0
|
|
Sales/New
accounts
|
3.0
|
|
21.0
|
|
4.3
|
|
28.3
|
|
Redemption/Terminations
|
(2.5)
|
|
(16.7)
|
|
(4.9)
|
|
(24.1)
|
|
Net Cash
Flows
|
(3.0)
|
|
(3.0)
|
|
—
|
|
(6.0)
|
|
Net
Flows
|
(2.5)
|
|
1.3
|
|
(0.6)
|
|
(1.8)
|
|
Investment
Performance
|
22.7
|
|
26.3
|
|
9.0
|
|
58.0
|
|
End of
Period
|
$
317.1
|
|
$
286.8
|
|
$
121.3
|
|
$
725.2
|
Three-Month Changes
by Investment Service
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Active
|
|
Equity
Passive (1)
|
|
Fixed
Income
Taxable
|
|
Fixed
Income
Tax-Exempt
|
|
Fixed
Income
Passive (1)
|
|
Alternatives/
Multi-Asset
Solutions (2)
|
|
Total
|
|
Beginning of
Period
|
$
226.8
|
|
$
56.0
|
|
$
195.0
|
|
$
55.6
|
|
$
9.4
|
|
$
126.2
|
|
$
669.0
|
|
Sales/New
accounts
|
9.2
|
|
0.2
|
|
10.2
|
|
5.5
|
|
1.3
|
|
1.9
|
|
28.3
|
|
Redemption/Terminations
|
(10.9)
|
|
(0.1)
|
|
(8.4)
|
|
(3.6)
|
|
(0.1)
|
|
(1.0)
|
|
(24.1)
|
|
Net Cash
Flows
|
(3.3)
|
|
(0.6)
|
|
(1.2)
|
|
—
|
|
—
|
|
(0.9)
|
|
(6.0)
|
|
Net
Flows
|
(5.0)
|
|
(0.5)
|
|
0.6
|
|
1.9
|
|
1.2
|
|
—
|
|
(1.8)
|
|
Investment
Performance
|
25.7
|
|
6.6
|
|
13.0
|
|
3.6
|
|
0.8
|
|
8.3
|
|
58.0
|
|
End of
Period
|
$
247.5
|
|
$
62.1
|
|
$
208.6
|
|
$
61.1
|
|
$
11.4
|
|
$
134.5
|
|
$
725.2
|
Three-Month Net
Flows by Investment Service (Active versus Passive)
|
|
|
Actively
Managed
|
|
Passively
Managed (1)
|
|
Total
|
|
Equity
|
$
(5.0)
|
|
$
(0.5)
|
|
$
(5.5)
|
|
Fixed Income
|
2.5
|
|
1.2
|
|
3.7
|
|
Alternatives/Multi-Asset Solutions
(2)
|
(0.3)
|
|
0.3
|
|
—
|
|
Total
|
$
(2.8)
|
|
$
1.0
|
|
$
(1.8)
|
(1) Includes
index and enhanced index services.
|
(2)
Includes certain multi-asset solutions and services not included in
equity or fixed income services.
|
AllianceBernstein
L.P.
|
|
|
ASSETS UNDER
MANAGEMENT | December 31, 2023
|
|
|
(US $
Billions)
|
|
|
Ending and
Average
|
Twelve Months
Ended
|
|
|
12/31/23
|
12/31/22
|
|
Ending Assets Under
Management
|
$725.2
|
$646.4
|
|
Average Assets Under
Management
|
$680.3
|
$686.5
|
Twelve-Month Changes
by Distribution Channel
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
Management
|
|
Total
|
|
Beginning of
Period
|
$
297.3
|
|
$
242.9
|
|
$
106.2
|
|
$
646.4
|
|
Sales/New
accounts
|
11.8
|
|
71.1
|
|
18.6
|
|
101.5
|
|
Redemption/Terminations
|
(12.6)
|
|
(58.1)
|
|
(17.5)
|
|
(88.2)
|
|
Net Cash
Flows
|
(11.0)
|
|
(9.3)
|
|
—
|
|
(20.3)
|
|
Net
Flows
|
(11.8)
|
|
3.7
|
|
1.1
|
|
(7.0)
|
|
Transfers
|
0.1
|
|
(0.1)
|
|
—
|
|
—
|
|
Investment
Performance
|
31.5
|
|
40.3
|
|
14.0
|
|
85.8
|
|
End of
Period
|
$
317.1
|
|
$
286.8
|
|
$
121.3
|
|
$
725.2
|
Twelve-Month Changes
by Investment Service
|
|
|
|
|
|
|
|
|
|
|
Equity
Active
|
|
Equity
Passive (1)
|
|
Fixed
Income
Taxable
|
|
Fixed
Income
Tax-Exempt
|
|
Fixed
Income
Passive (1)
|
|
Alternatives/
Multi-Asset
Solutions (2)
|
|
Total
|
|
Beginning of
Period
|
$
217.9
|
|
$
53.8
|
|
$
190.3
|
|
$
52.5
|
|
$
9.4
|
|
$
122.5
|
|
$
646.4
|
|
Sales/New
accounts
|
37.3
|
|
1.3
|
|
36.4
|
|
16.5
|
|
1.7
|
|
8.3
|
|
101.5
|
|
Redemption/Terminations
|
(43.8)
|
|
(0.3)
|
|
(27.3)
|
|
(11.1)
|
|
(0.3)
|
|
(5.4)
|
|
(88.2)
|
|
Net Cash
Flows
|
(9.0)
|
|
(5.0)
|
|
(2.5)
|
|
0.3
|
|
0.1
|
|
(4.2)
|
|
(20.3)
|
|
Net
Flows
|
(15.5)
|
|
(4.0)
|
|
6.6
|
|
5.7
|
|
1.5
|
|
(1.3)
|
|
(7.0)
|
|
Investment
Performance
|
45.1
|
|
12.3
|
|
11.7
|
|
2.9
|
|
0.5
|
|
13.3
|
|
85.8
|
|
End of
Period
|
$
247.5
|
|
$
62.1
|
|
$
208.6
|
|
$
61.1
|
|
$
11.4
|
|
$
134.5
|
|
$
725.2
|
Twelve-Month Net
Flows by Investment Service (Active versus Passive)
|
|
|
Actively
Managed
|
|
Passively
Managed (1)
|
|
Total
|
|
Equity
|
$
(15.5)
|
|
$
(4.0)
|
|
$
(19.5)
|
|
Fixed Income
|
12.3
|
|
1.5
|
|
$
13.8
|
|
Alternatives/Multi-Asset Solutions
(2)
|
(2.0)
|
|
0.7
|
|
$
(1.3)
|
|
Total
|
$
(5.2)
|
|
$
(1.8)
|
|
$
(7.0)
|
(1) Includes
index and enhanced index services.
|
(2)
Includes certain multi-asset solutions and services not included in
equity or fixed income services.
|
By Client
Domicile
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private
Wealth
|
|
Total
|
|
U.S. Clients
|
$
235.8
|
|
$
172.5
|
|
$
118.7
|
|
$
527.0
|
|
Non-U.S.
Clients
|
81.3
|
|
114.3
|
|
2.6
|
|
198.2
|
|
Total
|
$
317.1
|
|
$
286.8
|
|
$
121.3
|
|
$
725.2
|
AB
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP FINANCIAL RESULTS TO ADJUSTED FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
(US $ Thousands,
unaudited)
|
|
12/31/2023
|
|
9/30/2023
|
|
6/30/2023
|
|
3/31/2023
|
|
12/31/2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues, GAAP
basis
|
|
$
1,090,720
|
|
$
1,032,056
|
|
$
1,008,456
|
|
$
1,024,091
|
|
$
990,176
|
|
$
4,155,323
|
|
$
4,054,290
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution-related
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
(151,339)
|
|
(149,049)
|
|
(144,798)
|
|
(141,078)
|
|
(137,764)
|
|
(586,263)
|
|
(607,195)
|
|
|
Investment advisory
services
fees
|
(15,302)
|
|
(16,156)
|
|
(14,005)
|
|
(15,456)
|
|
(13,112)
|
|
(60,919)
|
|
(57,139)
|
|
|
Pass through
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory
services
fees
|
(27,162)
|
|
(14,567)
|
|
(11,046)
|
|
(9,763)
|
|
(7,730)
|
|
(62,538)
|
|
(65,116)
|
|
|
Other
revenues
|
(8,811)
|
|
(8,661)
|
|
(8,096)
|
|
(9,343)
|
|
(10,055)
|
|
(34,910)
|
|
(38,959)
|
|
|
Impact of consolidated
company-
sponsored investment funds
|
(13,670)
|
|
1,931
|
|
(2,975)
|
|
(10,409)
|
|
(2,512)
|
|
(25,123)
|
|
57,436
|
|
|
Incentive
compensation-related
items
|
(3,509)
|
|
238
|
|
(4,905)
|
|
(5,443)
|
|
(16,889)
|
|
(13,621)
|
|
(7,083)
|
|
Adjusted Net
Revenues
|
|
$
870,927
|
|
$
845,792
|
|
$
822,631
|
|
$
832,599
|
|
$
802,114
|
|
$
3,371,949
|
|
$
3,336,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income,
GAAP basis
|
|
$
238,500
|
|
$
175,250
|
|
$
188,661
|
|
$
215,260
|
|
$
203,741
|
|
$
817,670
|
|
$
815,096
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
(206)
|
|
(206)
|
|
(206)
|
|
(206)
|
|
(206)
|
|
(825)
|
|
(825)
|
|
|
Incentive
compensation-related
items
|
1,126
|
|
1,354
|
|
1,103
|
|
1,608
|
|
378
|
|
5,192
|
|
3,461
|
|
|
EQH award
compensation
|
179
|
|
142
|
|
215
|
|
191
|
|
134
|
|
727
|
|
606
|
|
|
Acquisition-related
expenses
|
14,879
|
|
44,941
|
|
20,525
|
|
17,725
|
|
33,474
|
|
98,070
|
|
72,503
|
|
|
Interest on
borrowings4
|
12,800
|
|
13,209
|
|
14,672
|
|
13,713
|
|
8,505
|
|
54,394
|
|
17,906
|
|
|
Sub-total of
non-GAAP
adjustments
|
28,778
|
|
59,440
|
|
36,309
|
|
33,031
|
|
42,285
|
|
157,558
|
|
93,651
|
|
|
Less: Net income (loss)
of
consolidated entities
attributable to non-controlling
interests
|
13,384
|
|
(2,164)
|
|
3,023
|
|
9,767
|
|
5,574
|
|
24,009
|
|
(56,356)
|
|
Adjusted Operating
Income 4
|
|
$
253,894
|
|
$
236,854
|
|
$
221,947
|
|
$
238,524
|
|
$
240,452
|
|
$
951,219
|
|
$
965,103
|
|
Operating Margin,
GAAP basis excl.
non-controlling interests
|
20.6 %
|
|
17.2 %
|
|
18.4 %
|
|
20.1 %
|
|
20.0 %
|
|
19.1 %
|
|
21.5 %
|
|
Adjusted Operating
Margin4
|
29.2 %
|
|
28.0 %
|
|
27.0 %
|
|
28.7 %
|
|
30.0 %
|
|
28.2 %
|
|
28.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP EPU TO ADJUSTED EPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
($ Thousands except per
Unit amounts,
unaudited)
|
12/31/2023
|
|
9/30/2023
|
|
6/30/2023
|
|
3/31/2023
|
|
12/31/2022
|
|
2023
|
|
2022
|
|
Net Income -
Diluted, GAAP basis
|
$
79,198
|
|
$
56,991
|
|
$
60,558
|
|
$
67,437
|
|
$
63,780
|
|
$
264,184
|
|
$
274,167
|
|
Impact on net income of
AB non-GAAP
adjustments
|
6,228
|
|
17,077
|
|
8,124
|
|
7,401
|
|
12,394
|
|
39,355
|
|
25,468
|
|
Adjusted Net Income
- Diluted
|
$
85,426
|
|
$
74,068
|
|
$
68,682
|
|
$
74,838
|
|
$
76,174
|
|
$
303,539
|
|
$
299,635
|
|
Diluted Net Income
per Holding Unit,
GAAP basis
|
$
0.71
|
|
$
0.50
|
|
$
0.53
|
|
$
0.59
|
|
$
0.59
|
|
$
2.34
|
|
$
2.69
|
|
Impact of AB non-GAAP
adjustments
|
0.06
|
|
0.15
|
|
0.08
|
|
0.07
|
|
0.11
|
|
0.35
|
|
0.25
|
|
Adjusted Diluted Net
Income per
Holding Unit
|
$
0.77
|
|
$
0.65
|
|
$
0.61
|
|
$
0.66
|
|
$
0.70
|
|
$
2.69
|
|
$
2.94
|
|
4 During the
second quarter of 2023, we adjusted operating income to exclude
interest on borrowings in order to align with our industry peer
group. We have recast prior periods presentation to align with the
current period presentation.
|
AB
Notes to Consolidated Statements of
Income and Supplemental Information
(Unaudited)
Adjusted Net Revenues
Net Revenue, as adjusted, is reduced to exclude all of the
company's distribution revenues, which are recorded as a separate
line item on the consolidated statement of income, as well as a
portion of investment advisory services fees received that is used
to pay distribution and servicing costs. For certain products,
based on the distinct arrangements, certain distribution fees are
collected by us and passed through to third-party client
intermediaries, while for certain other products, we collect
investment advisory services fees and a portion is passed through
to third-party client intermediaries. In both arrangements, the
third-party client intermediary owns the relationship with the
client and is responsible for performing services and distributing
the product to the client on our behalf. We believe offsetting
distribution revenues and certain investment advisory services fees
is useful for our investors and other users of our financial
statements because such presentation appropriately reflects the
nature of these costs as pass-through payments to third parties
that perform functions on behalf of our sponsored mutual funds
and/or shareholders of these funds. Distribution-related
adjustments fluctuate each period based on the type of investment
products sold, as well as the average AUM over the period. Also, we
adjust distribution revenues for the amortization of deferred sales
commissions as these costs, over time, will offset such
revenues.
We adjust investment advisory and services fees and other
revenues for pass through costs, primarily related to our transfer
agent and shareholder servicing fees. Also, we adjust for certain
performance-based fees passed through to our investment advisors.
These fees do not affect operating income, as such, we exclude
these fees from adjusted net revenues.
We adjust for the revenue impact of consolidating
company-sponsored investment funds by eliminating the consolidated
company-sponsored investment funds' revenues and including AB's
fees from such consolidated company-sponsored investment funds and
AB's investment gains and losses on its investments in such
consolidated company-sponsored investment funds that were
eliminated in consolidation.
Adjusted net revenues exclude investment gains and losses and
dividends and interest on employee long-term incentive
compensation-related investments. Also, we adjust for certain
acquisition related pass through performance-based fees and
performance related compensation.
Adjusted Operating Income
Adjusted operating income represents operating income on a US
GAAP basis excluding (1) real estate charges (credits), (2) the
impact on net revenues and compensation expense of the investment
gains and losses (as well as the dividends and interest) associated
with employee long-term incentive compensation-related investments,
(3) the equity compensation paid by EQH to certain AB executives,
as discussed below, (4) acquisition-related expenses, (5)
interest on borrowings and (6) the impact of consolidated
company-sponsored investment funds.
Real estate charges (credits) incurred have been excluded
because they are not considered part of our core operating results
when comparing financial results from period to period and to
industry peers. However, beginning in the fourth quarter of 2019,
real estate charges (credits), while excluded in the period in
which the charges (credits) are recorded, are included ratably over
the remaining applicable lease term.
Prior to 2009, a significant portion of employee compensation
was in the form of long-term incentive compensation awards that
were notionally invested in AB investment services and generally
vested over a period of four years. AB economically hedged the
exposure to market movements by purchasing and holding these
investments on its balance sheet. All such investments had vested
as of year-end 2012 and the investments have been delivered to the
participants, except for those investments with respect to which
the participant elected a long-term deferral. Fluctuation in the
value of these investments is recorded within investment gains and
losses on the income statement. Management believes it is useful to
reflect the offset achieved from economically hedging the market
exposure of these investments in the calculation of adjusted
operating income and adjusted operating margin. The non-GAAP
measures exclude gains and losses and dividends and interest on
employee long-term incentive compensation-related investments
included in revenues and compensation expense.
The board of directors of EQH granted to Seth P. Bernstein, our CEO, equity awards in
connection with EQH's IPO. Additionally, equity awards were granted
to Mr. Bernstein and other AB executives for their membership on
the EQH Management Committee. These individuals may receive
additional equity or cash compensation from EQH in the future
related to their service on the Management Committee. Any awards
granted to these individuals by EQH are recorded as compensation
expense in AB's consolidated statement of income. The compensation
expense associated with these awards has been excluded from our
non-GAAP measures because they are non-cash and are based upon
EQH's, and not AB's, financial performance.
Acquisition-related expenses have been excluded because they are
not considered part of our core operating results when comparing
financial results from period to period and to industry peers.
Acquisition-related expenses include professional fees and the
recording of changes in estimates to contingent payment
arrangements associated with our acquisitions. Beginning in the
first quarter of 2022, acquisition-related expenses also include
certain compensation-related expenses, amortization of intangible
assets for contracts acquired and accretion expense with respect to
contingent payment arrangements.
We adjust operating income to exclude interest on borrowings in
order to align with our industry peer group.
We adjusted for the operating income impact of consolidating
certain company-sponsored investment funds by eliminating the
consolidated company-sponsored funds' revenues and expenses and
including AB's revenues and expenses that were eliminated in
consolidation. We also excluded the limited partner interests we do
not own.
Adjusted Operating Margin
Adjusted operating margin allows us to monitor our financial
performance and efficiency from period to period without the
volatility noted above in our discussion of adjusted operating
income and to compare our performance to industry peers on a
basis that better reflects our performance in our core business.
Adjusted operating margin is derived by dividing adjusted operating
income by adjusted net revenues.
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content:https://www.prnewswire.com/news-releases/alliancebernstein-holding-lp-announces-fourth-quarter-results-302055124.html
SOURCE AllianceBernstein