GAAP Diluted Net Income of $0.67 per Unit
Adjusted Diluted Net Income of $0.73 per Unit
Cash Distribution of $0.73 per Unit
NASHVILLE,
Tenn., April 25, 2024 /PRNewswire/ --
AllianceBernstein L.P. ("AB") and AllianceBernstein Holding L.P.
("AB Holding") (NYSE: AB) today reported financial and operating
results for the quarter ended March 31,
2024.
"Global equity markets continued their strong
gains in the first quarter, while bond market returns reflected a
more cautious stance on inflation and interest rates," said
Seth P. Bernstein, President and CEO
of AllianceBernstein. "AB grew organically, led by active net
inflows of $3.7 billion, or 2.3%
active organic growth. Our retail channel grew by 6% annualized
organically, driven by over 25% organic growth in both taxable
fixed income and municipals. Alternatives and multi-asset grew by
8% organically, positive in every channel. Offsetting these
strengths were persistent equity net outflows. Investment
performance showed steady improvement in equities and remained
strong in fixed income. Reflecting higher year-over-year average
AUM, on an adjusted basis revenues rose 6%, operating income
increased by 12%, and operating margin exceeded 30%, growing 160
basis points year over year. Earnings per Unit and distributions to
unitholders rose by 11%."
(US $ Thousands except
per Unit amounts)
|
1Q 2024
|
|
1Q 2023
|
|
% Change
|
|
4Q 2023
|
|
% Change
|
U.S. GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$ 1,104,151
|
|
$ 1,024,091
|
|
7.8 %
|
|
$ 1,090,720
|
|
1.2 %
|
Operating
income
|
$
241,997
|
|
$
215,260
|
|
12.4 %
|
|
$
238,500
|
|
1.5 %
|
Operating
margin
|
21.2 %
|
|
20.1 %
|
|
110 bps
|
|
20.6 %
|
|
60 bps
|
AB Holding Diluted
EPU
|
$
0.67
|
|
$
0.59
|
|
13.6 %
|
|
$
0.71
|
|
(5.6 %)
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial Measures
(1)
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$
884,176
|
|
$
832,599
|
|
6.2 %
|
|
$
870,927
|
|
1.5 %
|
Operating income
(2)
|
$
267,426
|
|
$
238,524
|
|
12.1 %
|
|
$
253,894
|
|
5.3 %
|
Operating margin
(2)
|
30.3 %
|
|
28.7 %
|
|
160 bps
|
|
29.2 %
|
|
110 bps
|
AB Holding Diluted
EPU
|
$
0.73
|
|
$
0.66
|
|
10.6 %
|
|
$
0.77
|
|
(5.2 %)
|
AB Holding cash
distribution per Unit
|
$
0.73
|
|
$
0.66
|
|
10.6 %
|
|
$
0.77
|
|
(5.2 %)
|
|
|
|
|
|
|
|
|
|
|
(US $
Billions)
|
|
|
|
|
|
|
|
|
|
Assets Under Management ("AUM")
|
|
|
|
|
|
|
|
|
|
Ending AUM
|
$
758.7
|
|
$
675.9
|
|
12.2 %
|
|
$
725.2
|
|
4.6 %
|
Average AUM
|
$
738.9
|
|
$
666.8
|
|
10.8 %
|
|
$
685.4
|
|
7.8 %
|
|
|
(1)
The adjusted financial measures represent
non-GAAP financial measures. See page 12 for reconciliations of
GAAP Financial Results to Adjusted Financial Results and pages
13-14 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, "Retail sales were robust,
driven by strong demand for taxable and municipal fixed income,
leading to Retail net inflows of $4.2
billion. Institutional saw net outflows of $4.2 billion driven by attrition in active and
passive equities, partially offset by growth of
alternatives/multi-asset. The pipeline of awarded but unfunded
Institutional mandates was $11.5
billion at quarter-end. Private Wealth generated net inflows
of $0.5 billion, or 2% annualized.
Bernstein Research revenues decreased by 4% reflecting a subdued
trading environment. We were pleased to close the Bernstein
Research Services joint venture with Societe Generale on
April 1, receiving a $304 million equalization payment prior to
quarter-end, which was used to pay down debt."
Bernstein concluded, "Thus far in the second
quarter, markets have exhibited volatility, reflecting the
uncertain pace of improvement in inflation coupled with heightened
geopolitical conflict. U.S. interest rates are likely to remain
higher for a longer period than expected at the year's outset. Our
global investment teams remain focused on uncovering opportunities
to earn competitive returns for our clients while balancing
attendant risks."
The firm's cash distribution per Unit of
$0.73 is payable on May 23,
2024, to holders of record of AB Holding Units at the close of
business on May 6, 2024.
Market Performance
Global equity and fixed income markets were
mostly up in the first quarter of 2024.
|
1Q 2024
|
S&P 500 Total
Return
|
10.6 %
|
MSCI EAFE Total
Return
|
5.9
|
Bloomberg Barclays US
Aggregate Return
|
(0.8)
|
Bloomberg Barclays
Global High Yield Index - Hedged
|
2.6
|
Assets Under Management
($ Billions)
Total assets under management as of
March 31, 2024 were $758.7
billion, up $33.5 billion, or
5%, from December 31, 2023 and up $82.8
billion, or 12%, from March 31, 2023.
|
|
Institutional
|
|
Retail
|
|
Private
Wealth
|
|
Total
|
Assets Under Management
3/31/2024
|
|
$322.5
|
|
$308.0
|
|
$128.2
|
|
$758.7
|
Net Flows for Three
Months Ended 3/31/2024:
|
|
|
|
|
|
|
|
|
Active
|
|
($1.3)
|
|
$5.3
|
|
($0.3)
|
|
$3.7
|
Passive
|
|
(2.9)
|
|
(1.1)
|
|
0.8
|
|
(3.2)
|
Total
|
|
($4.2)
|
|
$4.2
|
|
$0.5
|
|
$0.5
|
Total net inflows were $0.5 billion in the first quarter, compared to
net outflows of $1.8 billion in the
fourth quarter of 2023 and net inflows of $0.8 billion in the prior year first quarter.
Institutional channel first quarter net outflows
of $4.2 billion compared to net
outflows of $2.5 billion in the
fourth quarter of 2023. Institutional gross sales of $3.3 billion increased sequentially from
$3.0 billion. The pipeline of awarded
but unfunded Institutional mandates decreased sequentially to
$11.5 billion at March 31, 2024
compared to $12.0 billion at
December 31, 2023.
Retail channel first quarter net inflows of
$4.2 billion compared to net inflows
of $1.3 billion in the fourth quarter
of 2023. Retail gross sales of $23.8
billion increased sequentially from $21.0 billion.
Private Wealth channel first quarter net inflows
of $0.5 billion compared to net
outflows of $0.6 billion in the
fourth quarter of 2023. Private Wealth gross sales of $5.5 billion increased sequentially from
$4.3 billion.
First Quarter 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 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
First quarter net revenues of $1.1 billion increased 8% from $1.0 billion in the first quarter of 2023. The
increase was primarily due to higher investment advisory base fees,
distribution revenues and investment gains.
Sequentially, net revenues of $1.1 billion increased 1%. The increase was
primarily due to higher investment advisory base fees and
distribution revenues, partially offset by lower performance-based
fees, Bernstein Research Services revenues and investment
gains.
First quarter Bernstein Research Services
revenues of $96.2 million decreased
4% compared to both prior periods, primarily due to lower customer
trading activity due to the prevailing macro-economic
environment.
Expenses
First quarter operating expenses of $862 million increased 7% from $809 million in the first quarter of 2023. The
increase is primarily due to higher promotion and servicing
expense, employee compensation and benefits expense, and interest
on borrowings, partially offset by lower general and administrative
("G&A") expense. Promotion and servicing expense increased due
to higher distribution-related payments, amortization of deferred
sales commissions, transfer fees and travel and entertainment
expense ("T&E"). Employee compensation and benefits expense
increased due to higher incentive compensation and fringes,
partially offset by lower base compensation. The increase in
interest expense is driven by higher interest rates and average
borrowing. G&A expenses decreased primarily due to the
recognition of a $20.8 million
incentive grant received in connection with our headquarters
relocation to Nashville,
Tennessee, partially offset by higher office-related
expenses which includes rent expense associated with the
commencement of our Hudson Yards lease in New York City, other taxes, portfolio
servicing expense and technology and related expense.
Sequentially, operating expenses increased 1%
from $852 million, driven primarily
by higher promotion and servicing expense and interest expense on
borrowings, offset by lower G&A expense. Promotion and
servicing expense increased due to higher distribution-related
payments, amortization of deferred sales commissions, and trade
execution and clearance expense, offset by lower marketing and
T&E expense. G&A expense decreased primarily due to the
recognition of a $20.8 million
incentive grant in connection with our headquarters relocation to
Nashville, Tennessee, partially
offset by higher other taxes and office-related expenses which
includes rent expense associated with the commencement of our
Hudson Yards lease in New York
City.
Operating Income, Margin and Net Income Per
Unit
First quarter operating income of $242 million increased 12% from $215 million in the first quarter of 2023 and the
operating margin of 21.2% in the first quarter of 2024 increased
110 basis points from 20.1% in the first quarter of 2023.
Sequentially, operating income increased 2% from
$239 million in the fourth quarter of
2023 and the operating margin of 21.2% increased 60 basis points
from 20.6% in the fourth quarter of 2023.
First quarter diluted net income per Unit was
$0.67 compared to $0.59 in the first quarter of 2023 and
$0.71 in the fourth quarter of
2023.
Non-GAAP Earnings
This section discusses our first
quarter 2024 non-GAAP financial results, compared to the first
quarter of 2023 and the fourth quarter of 2023. 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
First quarter adjusted net revenues of
$884 million increased 6% from
$833 million in the first quarter of
2023. The increase was primarily due to higher investment advisory
base fees and investment gains, partially offset by lower
performance-based fees and Bernstein Research Services
revenues.
Sequentially, adjusted net revenues increased 2%
from $871 million. The increase was
primarily due to higher investment advisory base fees, partially
offset by lower performance-based fees and Bernstein Research
revenues.
Adjusted Expenses
First quarter adjusted operating expenses of
$617 million increased 4% from
$594 million in the first quarter of
2023 primarily due to higher employee compensation and benefits
expense and promotion and servicing expense, partially offset by
lower G&A. Employee compensation and benefits expense increased
due to higher incentive compensation and fringes, partially offset
by lower base compensation. Promotion and servicing expense
increased due to higher transfer fees and T&E expense. G&A
expense decreased due to the recognition of a $20.8 million incentive grant in connection with
our headquarters relocation to Nashville,
TN, partially offset by higher office-related expenses which
includes rent expense associated with the commencement of our
Hudson Yards lease in New York
City, other taxes, portfolio servicing expense, and
technology and related expense.
Sequentially, adjusted operating expenses of
$617 million were essentially flat.
Higher employee compensation and benefits expense was partially
offset by lower G&A expense and promotion and servicing
expense. Within employee compensation and benefits, the increase
was driven by higher fringes, base compensation and commissions,
partially offset by lower incentive and other employment costs.
G&A expenses decreased primarily due to the recognition of a
$20.8 million incentive grant in
connection with our headquarters relocation to Nashville, TN, partially offset by higher
office-related expenses which includes rent expense associated with
the commencement of our Hudson Yards lease in New York City. Promotion and servicing expense
decreased primarily due to lower marketing and T&E expenses,
partially offset by higher trade execution costs.
Adjusted operating Income, Margin and Net
Income Per Unit1
First quarter adjusted operating income of
$267 million increased 12% from
$239 million in the first quarter of
2023, and the adjusted operating margin of 30.3% increased 160
basis points from 28.7%.
Sequentially, adjusted operating income of
$267 million increased 5% from
$254 million and the adjusted
operating margin of 30.3% increased 110 basis points from
29.2%.
First quarter adjusted diluted net income per
Unit was $0.73 compared to
$0.66 in the first quarter of 2023
and $0.77 in the fourth quarter
of 2023.
1 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 March 31, 2024, we had 4,708
employees, compared to 4,566 employees as of March 31, 2023
and 4,707 employees as of December 31,
2023.
Unit Repurchases
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
|
|
(in
millions)
|
Total amount of AB
Holding Units Purchased (1)
|
|
0.1
|
|
0.5
|
Total Cash Paid for AB
Holding Units Purchased (1)
|
|
$
4.3
|
|
$
18.8
|
Open Market Purchases
of AB Holding Units Purchased (1)
|
|
—
|
|
—
|
Total Cash Paid for
Open Market Purchases of AB Holding Units (1)
|
|
$
—
|
|
$
—
|
|
|
(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.
|
First Quarter 2024 Earnings Conference Call
Information
Management will review first quarter 2024
financial and operating results during a conference call beginning
at 9:00 a.m. (CST) on Friday,
April 26, 2024. The conference call will be hosted by Seth Bernstein, President & Chief Executive
Officer; Jackie Marks, Chief
Financial Officer; Onur Erzan, Head
of Global Client Group & Head of Private Wealth, and
Mark Gessner, Head of US Retail.
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 our first quarter 2024
financial and operating results on April 25, 2024.
A replay of the webcast will be made available
beginning approximately one hour after the conclusion of the
conference call.
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 and
subsequent Forms 10-Q. Any or all of the forward-looking statements
made in this news release, Form 10-K, Forms 10-Q, 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 March 31, 2024, including both the
general partnership and limited partnership interests in
AllianceBernstein, AllianceBernstein Holding owned approximately
39.7% of AllianceBernstein and Equitable Holdings ("EQH"), directly
and through various subsidiaries, owned an approximate 61.0%
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)
|
1Q 2024
|
|
1Q 2023
|
|
% Change
|
|
4Q 2023
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
GAAP revenues:
|
|
|
|
|
|
|
|
|
|
Base fees
|
$ 754,239
|
|
$ 692,327
|
|
8.9 %
|
|
$ 713,889
|
|
5.7 %
|
Performance
fees
|
30,166
|
|
36,580
|
|
(17.5)
|
|
62,042
|
|
(51.4)
|
Bernstein research
services
|
96,222
|
|
100,038
|
|
(3.8)
|
|
100,382
|
|
(4.1)
|
Distribution
revenues
|
165,690
|
|
141,078
|
|
17.4
|
|
151,339
|
|
9.5
|
Dividends and
interest
|
44,515
|
|
50,679
|
|
(12.2)
|
|
48,682
|
|
(8.6)
|
Investments
gains
|
11,743
|
|
5,264
|
|
123.1
|
|
14,966
|
|
(21.5)
|
Other
revenues
|
25,293
|
|
26,146
|
|
(3.3)
|
|
25,993
|
|
(2.7)
|
Total
revenues
|
1,127,868
|
|
1,052,112
|
|
7.2
|
|
1,117,293
|
|
0.9
|
Less: Broker-dealer
related interest expense
|
23,717
|
|
28,021
|
|
(15.4)
|
|
26,573
|
|
(10.7)
|
Total net
revenues
|
1,104,151
|
|
1,024,091
|
|
7.8
|
|
1,090,720
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses:
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
452,772
|
|
434,163
|
|
4.3
|
|
453,291
|
|
(0.1)
|
Promotion and
servicing
|
|
|
|
|
|
|
|
|
|
Distribution-related payments
|
172,982
|
|
148,381
|
|
16.6
|
|
156,329
|
|
10.7
|
Amortization of
deferred sales commissions
|
11,799
|
|
8,154
|
|
44.7
|
|
10,312
|
|
14.4
|
Trade execution,
marketing, T&E and other
|
54,991
|
|
50,630
|
|
8.6
|
|
58,585
|
|
(6.1)
|
General and
administrative
|
137,910
|
|
139,653
|
|
(1.2)
|
|
146,595
|
|
(5.9)
|
Contingent payment
arrangements
|
2,558
|
|
2,444
|
|
4.7
|
|
2,603
|
|
(1.7)
|
Interest on
borrowings
|
17,370
|
|
13,713
|
|
26.7
|
|
12,799
|
|
35.7
|
Amortization of
intangible assets
|
11,772
|
|
11,693
|
|
0.7
|
|
11,706
|
|
0.6
|
Total operating
expenses
|
862,154
|
|
808,831
|
|
6.6
|
|
852,220
|
|
1.2
|
Operating
income
|
241,997
|
|
215,260
|
|
12.4
|
|
238,500
|
|
1.5
|
Income taxes
|
16,042
|
|
11,342
|
|
41.4
|
|
(2,202)
|
|
n/m
|
Net income
|
225,955
|
|
203,918
|
|
10.8
|
|
240,702
|
|
(6.1)
|
Net income of
consolidated entities attributable to non-controlling
interests
|
8,028
|
|
9,767
|
|
(17.8)
|
|
13,384
|
|
(40.0)
|
Net income attributable
to AB Unitholders
|
$ 217,927
|
|
$ 194,151
|
|
12.2 %
|
|
$ 227,318
|
|
(4.1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding L.P. (The Publicly-Traded
Partnership)
|
|
|
|
|
|
|
|
|
|
SUMMARY STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
1Q 2024
|
|
1Q 2023
|
|
% Change
|
|
4Q 2023
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
Equity in Net Income
Attributable to AB Unitholders
|
$
86,281
|
|
$
76,382
|
|
13.0 %
|
|
$
88,517
|
|
(2.5) %
|
Income Taxes
|
9,059
|
|
8,945
|
|
1.3
|
|
9,319
|
|
(2.8)
|
Net Income
|
$
77,222
|
|
$
67,437
|
|
14.5 %
|
|
$
79,198
|
|
(2.5) %
|
Net Income -
Diluted
|
$
77,222
|
|
$
67,437
|
|
14.5 %
|
|
$
79,198
|
|
(2.5) %
|
Diluted Net Income per Unit
|
$
0.67
|
|
$
0.59
|
|
13.6 %
|
|
$
0.71
|
|
(5.6) %
|
Distribution per Unit
|
$
0.73
|
|
$
0.66
|
|
10.6 %
|
|
$
0.77
|
|
(5.2) %
|
|
|
|
|
|
|
|
|
|
|
|
Units Outstanding
|
1Q 2024
|
|
1Q 2023
|
|
% Change
|
|
4Q 2023
|
|
% Change
|
AB L.P.
|
|
|
|
|
|
|
|
|
|
Period-end
|
287,322,525
|
|
285,654,435
|
|
0.6 %
|
|
286,609,212
|
|
0.2 %
|
Weighted average -
basic
|
286,875,671
|
|
285,725,829
|
|
0.4
|
|
283,761,105
|
|
1.1
|
Weighted average -
diluted
|
286,875,671
|
|
285,725,829
|
|
0.4
|
|
283,761,105
|
|
1.1
|
AB Holding L.P.
|
|
|
|
|
|
|
|
|
|
Period-end
|
115,163,604
|
|
113,476,219
|
|
1.5 %
|
|
114,436,091
|
|
0.6 %
|
Weighted average -
basic
|
114,704,111
|
|
113,547,020
|
|
1.0
|
|
111,586,555
|
|
2.8
|
Weighted average -
diluted
|
114,704,111
|
|
113,547,020
|
|
1.0
|
|
111,586,555
|
|
2.8
|
AllianceBernstein L.P.
|
|
|
|
ASSETS UNDER MANAGEMENT | March 31,
2024
|
|
|
|
($ Billions)
|
|
|
|
Ending and Average
|
Three Months Ended
|
|
|
3/31/24
|
|
3/31/23
|
|
Ending Assets Under
Management
|
$758.7
|
|
$675.9
|
|
Average Assets Under
Management
|
$738.9
|
|
$666.8
|
Three-Month Changes By Distribution
Channel
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
|
|
Total
|
|
Beginning of Period
|
$
317.1
|
|
$
286.8
|
|
$
121.3
|
|
$
725.2
|
|
Sales/New
accounts
|
3.3
|
|
23.8
|
|
5.5
|
|
32.6
|
|
Redemption/Terminations
|
(3.4)
|
|
(16.9)
|
|
(4.9)
|
|
(25.2)
|
|
Net Cash
Flows
|
(4.1)
|
|
(2.7)
|
|
(0.1)
|
|
(6.9)
|
|
Net Flows
|
(4.2)
|
|
4.2
|
|
0.5
|
|
0.5
|
|
Investment
Performance
|
9.6
|
|
17.0
|
|
6.4
|
|
33.0
|
|
End of Period
|
$
322.5
|
|
$
308.0
|
|
$
128.2
|
|
$
758.7
|
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
|
$
247.5
|
|
$
62.1
|
|
$
208.6
|
|
$
61.1
|
|
$
11.4
|
|
$
134.5
|
|
$
725.2
|
|
Sales/New
accounts
|
11.7
|
|
0.7
|
|
12.1
|
|
5.3
|
|
—
|
|
2.8
|
|
32.6
|
|
Redemption/Terminations
|
(14.3)
|
|
(0.1)
|
|
(7.0)
|
|
(2.5)
|
|
(0.1)
|
|
(1.2)
|
|
(25.2)
|
|
Net Cash
Flows
|
(3.6)
|
|
(3.9)
|
|
(0.5)
|
|
0.1
|
|
—
|
|
1.0
|
|
(6.9)
|
|
Net Flows
|
(6.2)
|
|
(3.3)
|
|
4.6
|
|
2.9
|
|
(0.1)
|
|
2.6
|
|
0.5
|
|
Investment
Performance
|
22.8
|
|
5.9
|
|
(1.1)
|
|
—
|
|
(0.1)
|
|
5.5
|
|
33.0
|
|
End of Period
|
$
264.1
|
|
$
64.7
|
|
$
212.1
|
|
$
64.0
|
|
$
11.2
|
|
$
142.6
|
|
$
758.7
|
Three-Month Net Flows By Investment Service (Active
versus Passive)
|
|
|
Actively
Managed
|
|
Passively
Managed (1)
|
|
Total
|
|
Equity
|
$
(6.2)
|
|
(3.3)
|
|
$
(9.5)
|
|
Fixed Income
|
7.5
|
|
(0.1)
|
|
7.4
|
|
Alternatives/Multi-Asset Solutions
(2)
|
2.4
|
|
0.2
|
|
2.6
|
|
Total
|
$
3.7
|
|
$
(3.2)
|
|
$
0.5
|
|
|
(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
|
$
240.8
|
|
$
184.9
|
|
$
125.5
|
|
$
551.2
|
|
Non-U.S.
Clients
|
81.7
|
|
123.1
|
|
2.7
|
|
207.5
|
|
Total
|
$
322.5
|
|
$
308.0
|
|
$
128.2
|
|
$
758.7
|
AB L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP
FINANCIAL RESULTS TO
ADJUSTED FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
(US $ Thousands,
unaudited)
|
|
3/31/2024
|
|
12/31/2023
|
|
9/30/2023
|
|
6/30/2023
|
|
3/31/2023
|
|
12/31/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues, GAAP basis
|
|
$
1,104,151
|
|
$
1,090,720
|
|
$
1,032,056
|
|
$
1,008,456
|
|
$
1,024,091
|
|
$
990,176
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution-related
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
(165,690)
|
|
(151,339)
|
|
(149,049)
|
|
(144,798)
|
|
(141,078)
|
|
(137,764)
|
|
|
|
Investment advisory
services fees
|
(19,090)
|
|
(15,302)
|
|
(16,156)
|
|
(14,005)
|
|
(15,456)
|
|
(13,112)
|
|
|
|
Pass through
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory
services fees
|
(15,513)
|
|
(27,162)
|
|
(14,567)
|
|
(11,046)
|
|
(9,763)
|
|
(7,730)
|
|
|
|
Other
revenues
|
(8,761)
|
|
(8,811)
|
|
(8,661)
|
|
(8,096)
|
|
(9,343)
|
|
(10,055)
|
|
|
|
Impact of consolidated
company-sponsored
investment funds
|
(8,374)
|
|
(13,670)
|
|
1,931
|
|
(2,975)
|
|
(10,409)
|
|
(2,512)
|
|
|
|
Incentive
compensation-related items
|
(2,547)
|
|
(3,509)
|
|
238
|
|
(4,905)
|
|
(5,443)
|
|
(16,889)
|
|
|
Adjusted Net Revenues
|
|
$
884,176
|
|
$
870,927
|
|
$
845,792
|
|
$
822,631
|
|
$
832,599
|
|
$
802,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income, GAAP basis
|
|
$
241,997
|
|
$
238,500
|
|
$
175,250
|
|
$
188,661
|
|
$
215,260
|
|
$
203,741
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
(206)
|
|
(206)
|
|
(206)
|
|
(206)
|
|
(206)
|
|
(206)
|
|
|
|
Incentive
compensation-related items
|
1,097
|
|
1,126
|
|
1,354
|
|
1,103
|
|
1,608
|
|
378
|
|
|
|
EQH award
compensation
|
215
|
|
179
|
|
142
|
|
215
|
|
191
|
|
134
|
|
|
|
Acquisition-related
expenses
|
14,981
|
|
14,879
|
|
44,941
|
|
20,525
|
|
17,725
|
|
33,474
|
|
|
|
Interest on borrowings
(1)
|
17,370
|
|
12,800
|
|
13,209
|
|
14,672
|
|
13,713
|
|
8,505
|
|
|
|
|
Total non-GAAP
adjustments
|
33,457
|
|
28,778
|
|
59,440
|
|
36,309
|
|
33,031
|
|
42,285
|
|
|
|
Less: Net income
(loss) of consolidated
entities attributable to non-controlling interests
|
8,028
|
|
13,384
|
|
(2,164)
|
|
3,023
|
|
9,767
|
|
5,574
|
|
|
Adjusted Operating
Income(1)
|
$
267,426
|
|
$
253,894
|
|
$
236,854
|
|
$
221,947
|
|
$
238,524
|
|
$
240,452
|
|
|
Operating Margin, GAAP basis excl.
non-controlling interests
|
21.2 %
|
|
20.6 %
|
|
17.2 %
|
|
18.4 %
|
|
20.1 %
|
|
20.0 %
|
|
|
Adjusted Operating
Margin(1)
|
30.3 %
|
|
29.2 %
|
|
28.0 %
|
|
27.0 %
|
|
28.7 %
|
|
30.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP EPU TO ADJUSTED
EPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
($ Thousands except per
Unit amounts, unaudited)
|
3/31/2024
|
|
12/31/2023
|
|
9/30/2023
|
|
6/30/2023
|
|
3/31/2023
|
|
12/31/2022
|
|
|
Net Income - Diluted, GAAP
basis
|
$
77,222
|
|
$
79,198
|
|
$
56,991
|
|
$
60,558
|
|
$ 67,437
|
|
$ 63,780
|
|
|
Impact on net income of
AB non-GAAP adjustments
|
6,176
|
|
6,228
|
|
17,077
|
|
8,124
|
|
7,401
|
|
12,394
|
|
|
Adjusted Net Income - Diluted
|
$
83,398
|
|
$
85,426
|
|
$
74,068
|
|
$
68,682
|
|
$ 74,838
|
|
$ 76,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Net Income per Holding Unit, GAAP
basis
|
$
0.67
|
|
$
0.71
|
|
$
0.50
|
|
$
0.53
|
|
$
0.59
|
|
$
0.59
|
|
|
Impact of AB non-GAAP
adjustments
|
0.06
|
|
0.06
|
|
0.15
|
|
0.08
|
|
0.07
|
|
0.11
|
|
|
Adjusted Diluted Net Income per Holding
Unit
|
$
0.73
|
|
$
0.77
|
|
$
0.65
|
|
$
0.61
|
|
$
0.66
|
|
$
0.70
|
|
|
(1)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 investment advisory and service 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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SOURCE AllianceBernstein