What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-11 compared with 2020-02-12 · 493 added, 291 removed, 1544 unchanged (34% of the section changed)

38 unchanged sentences

The Company’s proportionate share of income of AB includes performance-based fees recognized by AB.

The transaction price for the asset management performance obligation for certain hedge fund and alternative investment advisory contracts, provide for a performance-based fee, in addition to the base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time.

As disclosed by management, the transaction price for the asset management performance obligation for certain hedge fund and alternative investment advisory contracts, provide for a performance-based fee, in addition to the base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time.

The performance-based fees are forms of variable consideration and are therefore excluded from the transaction price until it becomes probable that there will not be significant reversal of the cumulative revenue recognized.

1 unchanged sentence

With respect to the constraining factors related to the fund’s market value, management measures assets under management (AUM) using established market-based valuation methods and fair valuation (non-observable market) methods.

As disclosed by management, fair valuation methods, including discounted cash flow models and other methods, are used only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.

The principal considerations for our determination that performing procedures relating to the measurement of equity in net income attributable to AB unitholders - performance-based fees is a critical audit matter are that there was significant judgment by management in assessing the probability that there will not be a significant reversal of the cumulative revenue recognized and in determining the fund’s market value where fair valuation methods are used.

This in turn led to significant auditor judgment, subjectivity and effort in performing procedures relating to performance-based fees, including evaluating evidence related to the constraining factors impacting the amount of variable consideration.

The audit effort also included the involvement of professionals with specialized skill and knowledge to assist in evaluating management’s estimate of the funds’ market value where fair valuation methods are used.

Fair valuation methods, including discounted cash flow models and other methods, are used only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.

The principal considerations for our determination that performing procedures relating to the measurement of equity in net income attributable to AB unitholders - performance-based fees is a critical audit matter are the significant audit effort in performing procedures and evaluating evidence related to these fees, including evaluating evidence related to the constraining factors impacting the amount of variable consideration, and the audit effort also included the involvement of professionals with specialized skill and knowledge to assist in evaluating management’s estimate of the funds’ market value where fair valuation methods are used.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures included testing the effectiveness of controls relating to equity in net income attributable to AB Unitholders, including controls relating to AB’s revenue recognition process for performance-based fees, including controls over the assessment of constraining factors and the valuation of AUM.

These procedures included, among others, testing management’s process for determining performance-based fees, including evaluating the appropriateness of the methods used, testing the contractual claw-back provisions to which the variable consideration is subject and, on a sample basis, evaluating the reasonableness of management’s assumptions related to the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts and the probability of significant fluctuations in the funds’ market value.

These procedures also included, among others, testing management’s process for determining performance-based fees, including evaluating the appropriateness of the methods used, testing the contractual claw-back provisions to which the variable consideration is subject and, on a sample basis, evaluating the reasonableness of management’s assumptions related to the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts and the probability of significant fluctuations in the funds’ market value and, as applicable, the level at which a fund’s value exceeded the contractual threshold required to earn such fees.

In evaluating management’s estimates of the funds’ market value, procedures included the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of prices for a sample of securities used in determining the underlying funds’ market value where fair valuation methods are used, and comparison of management’s estimate of the securities’ fair value to the independently developed ranges.

9 unchanged sentences

Investment in AB $ 1,605,941 $ 1,554,203

Other assets 92 61

Total assets $ 1,606,033 $ 1,554,264

LIABILITIES AND PARTNERS’ CAPITAL

7 unchanged sentences

98,222,942 and 98,092,098 limited partnership units issued and outstanding

1,656,816 1,619,200

AB Holding Units held by AB to fund long-term incentive compensation plans ( 20,171 ) ( 27,436 )

6 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands, except per unit amounts)

Equity in net income attributable to AB Unitholders $ 308,404 $ 266,292 $ 270,647

Income taxes 29,024 27,729 28,250

Net income $ 279,380 $ 238,563 $ 242,397

Net income per unit:

Basic $ 2.88 $ 2.49 $ 2.50

Diluted $ 2.88 $ 2.49 $ 2.50

See Accompanying Notes to Financial Statements.

2 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands)

Other comprehensive (loss) income:

Net income $ 279,380 $ 238,563 $ 242,397

Other comprehensive income (loss):

Foreign currency translation adjustments, before reclassification and tax 8,579 1,900 ( 6,884 )

3 unchanged sentences

Foreign currency translation adjustments, net of tax 8,346 1,739 ( 6,631 )

Unrealized gains on investments:

Unrealized gains arising during period

Income tax benefit

Unrealized gains on investments, net of tax

Changes in employee benefit related items:

2 unchanged sentences

Changes in employee benefit related items ( 1,549 ) ( 3,005 ) 549

Income tax benefit (expense)

Income tax (expense) benefit ( 67 ) 99 ( 49 )

Employee benefit related items, net of tax ( 1,616 ) ( 2,906 ) 500

Other comprehensive (loss) income

Other — — 133

Other comprehensive income (loss) 6,730 ( 1,167 ) ( 5,998 )

Comprehensive income $ 286,110 $ 237,396 $ 236,399

3 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands)

1 unchanged sentence

Balance, beginning of year $ 1,402 $ 1,385 $ 1,411

Net income 288 249 250

Cash distributions to Unitholders ( 280 ) ( 232 ) ( 288 )

3 unchanged sentences

Balance, beginning of year 1,619,200 1,555,892 1,590,776

Net income 279,092 238,314 242,147

Cash distributions to Unitholders ( 270,601 ) ( 222,253 ) ( 280,434 )

3 unchanged sentences

Impact of adoption of revenue recognition standard ASC 606 — — 12,536

Other — — ( 133 )

Balance, end of year 1,656,816 1,619,200 1,555,892

7 unchanged sentences

Changes in employee benefit related items, net of tax ( 1,616 ) ( 2,906 ) 500

Unrealized gain on investments, net of tax

Other — — 133

Balance, end of year ( 33,898 ) ( 40,628 ) ( 39,461 )

4 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands)

Cash flows from operating activities:

Net income $ 279,380 $ 238,563 $ 242,397

Adjustments to reconcile net income to net cash provided by operating activities:

10 unchanged sentences

Cash distributions to Unitholders ( 270,881 ) ( 222,485 ) ( 280,722 )

Capital contributions (to) from AB

Capital contributions from (to) AB 867 ( 270 ) 1,440

Proceeds from exercise of compensatory options to buy AB Holding Units 147 11,511 16,589

3 unchanged sentences

Cash and cash equivalents as of end of the year $ — $ — $ —

Income taxes $ 28,906 $ 26,650 $ 28,766

Non-cash investing activities:

12 unchanged sentences

AB Holding’s principal source of income and cash flow is attributable to its investment in AB limited partnership interests.

AB provides research, diversified investment management and related services globally to a broad range of clients.

AB provides diversified investment management, research and related services globally to a broad range of clients.

Its principal services include:

7 unchanged sentences

AB’s research disciplines include economic, fundamental equity, fixed income and quantitative research.

In addition, AB has experts focused on multi-asset strategies, wealth management and alternative investments.

In addition, AB has expertise in multi-asset strategies, wealth management, environmental, social and corporate governance ( "ESG" ) and alternative investments.

AB provides a broad range of investment services with expertise in:

1 unchanged sentence

• Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;

Passive management, including index and enhanced index strategies;

Alternative investments, including hedge funds, fund of funds, direct lending and private equity;

• Alternative investments, including hedge funds, fund of funds, direct lending, real estate and private equity;

• Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds;

AB’s services span various investment disciplines, including market capitalization ( e.g ., large-, mid- and small-cap equities), term ( e.g ., long-, intermediate- and short-duration debt securities), and geographic location ( e.g ., U.S., international, global, emerging markets, regional and local), in major markets around the world.

• Some passive management, including index and enhanced index strategies.

During the second quarter of 2018, AXA S.A.

7 unchanged sentences

EQH and its subsidiaries 63.3 %

AB Holding 36.0

Unaffiliated holders 0.7

22 unchanged sentences

AB Holding Units held in the consolidated rabbi trust are corporate assets in the name of the trust and are available to the general creditors of AB.

During 2019 and 2018 , AB purchased 6.0 million and 9.3 million AB Holding Units for $ 172.6 million and $ 268.0 million , respectively (on a trade date basis).

These amounts reflect open-market purchases of 2.9 million and 6.5 million AB Holding Units for $ 82.7 million and $ 183.2 million , respectively, with the remainder relating to purchases of AB Holding Units from employees to allow them to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.

Repurchases of AB Holding Units for the years ended December 31, 2020 and 2019 consisted of the following:

Years Ended December 31,

(in millions)

Total amount of AB Holding Units Purchased (1)

Total Cash Paid for AB Holding Units Purchased (1)

$ 149.0 $ 172.6

Open Market Purchases of AB Holding Units Purchased (2)

Total Cash Paid for Open Market Purchases of AB Holding Units (2)

$ 74.0 $ 82.7

(1) Purchased on a trade date basis.

(2) The remainder related to purchases of AB Holding Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.

Each quarter, AB considers whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (“ Exchange Act ”).

8 unchanged sentences

AB used AB Holding Units repurchased during the periods and newly-issued AB Holding Units to fund theses awards.

During 2019 and 2018 , AB Holding issued 0.5 million and 0.9 million AB Holding Units, respectively, upon exercise of options to buy AB Holding Units.

During 2020 and 2019, AB Holding issued 5,182 and 0.5 million AB Holding Units, respectively, upon exercise of options to buy AB Holding Units.

AB Holding used the proceeds of $ 0.1 million and $ 11.5 million, respectively, received from award recipients as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.

3 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands, except per unit amounts)

7 unchanged sentences

Diluted net income per unit $ 2.88 $ 2.49 $ 2.50

We excluded 29,056 options in 2019 , 49,784 options in 2018 and 1,970,741 options in 2017 , from the diluted net income per unit computation due to their anti-dilutive effect.

Years Ended December 31,

2020 2019 2018

Anti-dilutive options excluded from diluted net income 29,056 29,056 49,784

Investment in AB

3 unchanged sentences

Equity in net income attributable to AB Unitholders 308,404 266,292

Changes in accumulated other comprehensive (loss) income

Changes in accumulated other comprehensive income (loss) 6,730 ( 1,167 )

Cash distributions received from AB ( 298,919 ) ( 249,463 )

Additional investments with proceeds from exercises of compensatory options to buy AB Holding Units 147 11,511

Capital contributions to (from) AB

Capital contributions (from) to AB ( 867 ) 270

AB Holding Units retired ( 78,388 ) ( 110,752 )

1 unchanged sentence

Change in AB Holding Units held by AB for long-term incentive compensation plans 7,265 323

Impact of AB's adoption of revenue recognition standard ASC 606

Investment in AB as of December 31, $ 1,605,941 $ 1,554,203

3 unchanged sentences

Options exercised 5,182 511,894

Units issued 3,363,132 4,833,715

Units retired ( 3,237,470 ) ( 3,811,789 )

5 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands)

7 unchanged sentences

AB Holding Units in AB’s consolidated rabbi trust are not considered outstanding for purposes of calculating AB Holding’s ownership interest in AB.

Years Ended December 31,

Years Ended December 31, % Change

2020 2019 2018 2020-19 2019-18

(in thousands)

7 unchanged sentences

Multiplied by:

federal tax 3.5 % 3.5 % 3.5 %

Federal income taxes 28,522 27,197 27,674

24 unchanged sentences

Quarters Ended 2020

December 31 September 30 June 30 March 31

(in thousands, except per unit amounts)

Equity in net income attributable to AB Unitholders $ 101,415 $ 73,874 $ 63,201 $ 69,914

Net income $ 93,196 $ 66,999 $ 56,926 $ 62,259

Basic net income per unit (1)

$ 0.97 $ 0.70 $ 0.59 $ 0.63

Diluted net income per unit (1)

$ 0.97 $ 0.70 $ 0.59 $ 0.63

Cash distributions per unit (2)(3)

$ 0.97 $ 0.69 $ 0.61 $ 0.64

Quarters Ended 2019

December 31 September 30 June 30 March 31

(in thousands, except per unit amounts)

Equity in net income attributable to AB Unitholders $ 87,909 $ 66,722 $ 59,023 $ 52,638

Net income $ 80,022 $ 59,828 $ 52,274 $ 46,439

Basic net income per unit (1)

$ 0.84 $ 0.62 $ 0.54 $ 0.49

Diluted net income per unit (1)

$ 0.84 $ 0.62 $ 0.54 $ 0.49

Cash distributions per unit (2)(3)

$ 0.85 $ 0.63 $ 0.56 $ 0.49

________________________

(1) Basic and diluted net income per unit are computed independently for each of the periods presented.

2 unchanged sentences

(3) Cash distributions reflect the impact of AB’s non-GAAP adjustments.

Report of Independent Registered Public Accounting Firm

R eport of Independent Registered Public Accounting Firm

To the General Partner and Unitholders of AllianceBernstein L.P.

1 unchanged sentence

We have audited the accompanying consolidated statements of financial condition of AllianceBernstein L.P.

and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, of changes in partners’ capital and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes and financial statement schedule listed in the index appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, of comprehensive income, of changes in partners’ capital and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

14 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for Leases in 2019.

Definition and Limitations of Internal Control over Financial Reporting

5 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Performance-Based Fees

As described in Notes 2 and 3 to the consolidated financial statements, performance-based fees earned were $132.6 million for the year ended December 31, 2020.

Constraining factors impacting the amount of variable consideration included in the transaction price include the contractual claw-back provisions to which the variable consideration is subject, the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts, the probability of significant fluctuations in the fund’s market value and the level at which the fund’s value exceeds the contractual threshold required to earn such a fee.

The principal considerations for our determination that performing procedures relating to performance-based fees is a critical audit matter are the significant audit effort in performing procedures and evaluating evidence related to these fees, including evaluating evidence related to the constraining factors impacting the amount of variable consideration, and the audit effort also included the involvement of professionals with specialized skill and knowledge to assist in evaluating management's estimate of the funds' market value where fair valuation methods are used.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the Company’s revenue recognition process for performance-based fees, including controls over the assessment of constraining factors and the valuation of AUM.

Developing the independent estimate of securities’ fair value involved testing the completeness and accuracy of data provided by management and independently developing the significant assumptions for the sampled securities.

/s/PricewaterhouseCooper LLP

New York, New York

12 unchanged sentences

AB funds fees 325,407 261,588

Other fees 148,746 148,744

Long-term incentive compensation-related 60,114 50,902

Other 193,261 215,892

Assets of consolidated company-sponsored investment funds:

Cash and cash equivalents 36,506 11,433

Investments 302,582 581,004

Other assets 12,244 19,810

Furniture, equipment and leasehold improvements, net 147,874 145,251

Goodwill 3,082,778 3,076,926

Intangible assets, net 44,496 55,366

1 unchanged sentence

Right-of-use assets 418,455 362,693

Other assets 264,418 330,943

Total assets $ 9,697,840 $ 8,706,092

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND CAPITAL

7 unchanged sentences

Accrued compensation and benefits 335,122 276,829

Debt 675,000 560,000

Total liabilities 5,483,958 4,363,430

8 unchanged sentences

Partners’ capital attributable to AB Unitholders 4,111,523 4,017,101

Non-redeemable non-controlling interests in consolidated entities

Total capital

Total liabilities, redeemable non-controlling interest and capital $ 9,697,840 $ 8,706,092

4 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands, except per unit amounts)

3 unchanged sentences

Dividend and interest income 50,923 104,421 98,226

Investment gains (losses)

Investment (losses) gains (16,401) 38,659 2,653

Other revenues 104,703 97,559 98,676

1 unchanged sentence

Interest expense 15,650 57,205 52,399

Net revenues 3,708,536 3,518,432 3,367,361

Employee compensation and benefits 1,494,198 1,442,783 1,378,811

11 unchanged sentences

Operating income 907,436 823,437 825,314

Net income of consolidated entities attributable to non-controlling interests

Income tax 45,653 41,754 45,816

Net income 861,783 781,683 779,498

Net (loss) income of consolidated entities attributable to non-controlling interests (4,169) 29,641 21,910

Net income attributable to AB Unitholders $ 865,952 $ 752,042 $ 757,588

Net income per AB Unit:

Basic $ 3.19 $ 2.78 $ 2.79

Diluted $ 3.19 $ 2.78 $ 2.78

See Accompanying Notes to Consolidated Financial Statements.

3 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands)

Other comprehensive (loss) income:

Net income $ 861,783 $ 781,683 $ 779,498

Other comprehensive income:

Foreign currency translation adjustments, before reclassification and tax:

23,882 5,986 (19,337)

reclassification adjustment for losses included in net income upon liquidation (216) — (100)

Foreign currency translation adjustments, before tax 24,098 5,986 (19,237)

Income tax expense

Income tax (expense) benefit (854) (383) 620

Foreign currency translation adjustments, net of tax 23,244 5,603 (18,617)

Unrealized gains on investments:

Unrealized gains arising during period

Income tax benefit

Unrealized gains on investments, net of tax

Changes in employee benefit related items:

4 unchanged sentences

Employee benefit related items, net of tax (4,443) (7,593) 1,471

Other comprehensive (loss) gain

Comprehensive income in consolidated entities attributable to non-controlling interests

Other — — 374

Other comprehensive gain (loss) 18,801 (1,990) (16,772)

Comprehensive (loss) income in consolidated entities attributable to non-controlling interests (4,169) 29,788 21,864

Comprehensive income attributable to AB Unitholders $ 884,753 $ 749,905 $ 740,862

4 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands)

1 unchanged sentence

Balance, beginning of year $ 41,225 $ 40,240 $ 41,221

Net income 8,660 7,521 7,576

Cash distributions to General Partner (8,376) (7,042) (8,608)

2 unchanged sentences

Impact of adoption of revenue recognition standard ASC 606 — — 349

Other — — (3)

Balance, end of year 41,776 41,225 40,240

1 unchanged sentence

Balance, beginning of year 4,174,201 4,075,306 4,168,841

Net income 857,292 744,521 750,012

Cash distributions to Unitholders (828,503) (696,470) (849,585)

2 unchanged sentences

Impact of adoption of revenue recognition standard ASC 606 — — 34,601

Other — 844 803

Balance, end of year 4,229,485 4,174,201 4,075,306

12 unchanged sentences

Re-valuation of AB Holding Units held in rabbi trust 1,556 (4,403) 19,022

Other 15 6,692 —

Balance, end of year (57,219) (76,310) (77,990)

4 unchanged sentences

Unrealized gain on investments, net of tax — — —

Other — — 374

Balance, end of year (94,203) (113,004) (110,866)

1 unchanged sentence

Years Ended December 31,

2020 2019 2018

Non-redeemable Non-controlling Interests in Consolidated Entities

Balance, beginning of year — 949 1,564

Net income — 91 69

Foreign currency translation adjustment — 147 (46)

8 unchanged sentences

Years Ended December 31,

2020 2019 2018

(in thousands)

Cash flows from operating activities:

Net income $ 861,783 $ 781,683 $ 779,498

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

Depreciation and other amortization 138,240 166,542 70,000

Unrealized (gains) losses on investments

Unrealized losses (gains) on investments 10,405 (13,431) 23,164

Unrealized (gains) on investments of consolidated company-sponsored investment funds (854) (36,150) (14,217)

Other, net (2,914) 10,281 (6,446)

Changes in assets and liabilities:

Decrease (increase) in securities, segregated

Decrease (increase) in receivables

(Increase) decrease in securities, segregated (658,612) 74,688 (353,204)

(Increase) decrease in receivables (182,684) 223,137 (207,000)

Decrease (increase) in investments 7,597 460,347 (294,383)

(Increase) decrease in investments of consolidated company-sponsored investment funds

(Increase) decrease in deferred sales commissions

Decrease (increase) in investments of consolidated company-sponsored investment funds 279,276 (193,158) 908,804

(Increase) in deferred sales commissions (55,125) (34,177) (8,365)

(Increase) in right-of-use assets (131,765) (11,141) —

(Increase) in other assets

Decrease (increase) in other assets 69,160 (23,140) (152,726)

Increase (decrease) in other assets and liabilities of consolidated company-sponsored investment funds, net 7,169 11,437 (662,934)

(Decrease) increase in payables

(Decrease) in lease liabilities

(Decrease) increase in accounts payable and accrued expenses

(Decrease) increase in accrued compensation and benefits

Increase (decrease) in payables 861,502 (641,369) 1,024,317

Increase (decrease) in lease liabilities 37,695 (107,276) —

Increase (decrease) in accounts payable and accrued expenses 10,666 (56,518) (11,225)

Increase (decrease) in accrued compensation and benefits 46,885 (7,486) 4,341

Net cash provided by operating activities 1,521,421 827,480 1,308,481

Cash flows from investing activities:

Purchases of investments

Proceeds from sales of investments

Purchases of equity method investments (4,079) — —

Purchases of furniture, equipment and leasehold improvements (41,504) (28,303) (32,789)

Proceeds from sales of furniture, equipment and leasehold improvements

Acquisition of businesses, net of cash acquired (13,552) 5,255 —

1 unchanged sentence

Years Ended December 31,

2020 2019 2018

Cash flows from financing activities:

(Repayment) issuance of commercial paper, net

Proceeds from EQH facility

(Repayment) proceeds from bank loans

Proceeds (repayment) of debt 115,000 2,105 (25,454)

(Decrease) increase in overdrafts payable (12,633) (59,924) 3,273

1 unchanged sentence

Capital contributions (to) non-controlling interests in consolidated entities — — (638)

Purchases (redemptions) of non-controlling interests of consolidated company-sponsored investment funds, net

Capital contributions from (to) affiliates

Payments of contingent payment arrangements/purchase of shares

(Redemptions) subscriptions of non-controlling interests of consolidated company-sponsored investment funds, net (219,033) 150,091 (472,143)

Capital contributions (to) from affiliates (867) 269 (1,421)

Interest accretion, net of (payments) on contingent payment arrangements 1,921 (1,991) (1,093)

Additional investments by AB Holding with proceeds from exercise of compensatory options to buy AB Holding Units 147 11,511 16,589

Purchases of AB Holding Units to fund long-term incentive compensation plan awards, net (148,624) (171,930) (267,427)

Other (1,615) (1,580) (2,151)

Net cash used in financing activities (1,102,583) (774,961) (1,608,658)

6 unchanged sentences

Non-cash investing activities:

Fair value of assets acquired (excluding cash acquired of $11.8 million)

Fair value of assets acquired (excluding cash acquired of $0.6 million and $11.8 million) 18,389 28,966 —

Fair value of liabilities assumed 437 16,837 —

10 unchanged sentences

Business Description and Organization

We provide research, diversified investment management and related services globally to a broad range of clients.

We provide diversified investment management, research and related services globally to a broad range of clients.

Our principal services include:

7 unchanged sentences

Our research disciplines include economic, fundamental equity, fixed income and quantitative research.

In addition, we have experts focused on multi-asset strategies, wealth management and alternative investments.

In addition, we have expertise in multi-asset strategies, wealth management, environmental, social and corporate governance ( "ESG" ) and alternative investments.

We provide a broad range of investment services with expertise in:

1 unchanged sentence

• Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;

Passive management, including index and enhanced index strategies;

Alternative investments, including hedge funds, fund of funds, direct lending and private equity;

• Alternative investments, including hedge funds, fund of funds, direct lending, real estate and private equity;

• Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds;

Our services span various investment disciplines, including market capitalization ( e.g ., large-, mid- and small-cap equities), term ( e.g ., long-, intermediate- and short-duration debt securities), and geographic location ( e.g ., U.S., international, global, emerging markets, regional and local), in major markets around the world.

• Some passive management, including index and enhanced index strategies.

During the second quarter of 2018, AXA S.A.

9 unchanged sentences

EQH and its subsidiaries 63.3 %

AB Holding 36.0

Unaffiliated holders 0.7

10 unchanged sentences

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ( "FASB" ) issued ASU 2016-02, Leases .

This pronouncement, along with subsequent ASUs issued to clarify certain provisions of ASU 2016-02 is now referred to as Accounting Standards Codification 842 ( "ASC 842" ).

The standard requires a lessee to record most leases on its balance sheet while also disclosing key information about those lease arrangements.

The classification criteria to distinguish between finance and operating leases are generally consistent with the classification criteria to distinguish between capital and operating leases under previous lease accounting guidance.

We adopted this new standard on January 1, 2019 using the modified retrospective method.

Prior comparable periods will not be adjusted under this method.

We applied several practical expedients offered by ASC 842 upon adoption of this standard.

These included continuing to account for existing leases based on judgments made under legacy US GAAP as it relates to determining classification of leases, unamortized initial direct costs and whether contracts are leases or contain leases.

We also used a practical expedient to use hindsight in determining the lease terms (using knowledge and expectations as of the standard's adoption date instead of the previous assumptions under legacy US GAAP) and evaluating impairment of our right-of-use assets in the transition period (using our most up-to-date information).

Adoption of this standard resulted in the recording of operating right-of-use assets and lease liabilities of $438.7 million and $574.5 million, respectively, and financing right-of-use assets and lease liabilities of $2.4 million as of January 1, 2019.

The operating right-of-use assets recognized as of January 1, 2019 are net of deferred rent of $50.0 million and liabilities associated with previously recognized impairments of $85.8 million.

See Note 13, Leases , for additional disclosures.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits a company to reclassify the disproportionate income tax effects of the 2017 Tax Cuts and Job Act ( "2017 Tax Act" ) on items within Accumulated Other Comprehensive Income ( "AOCI" ) to retained earnings.

The FASB refers to these amounts as "stranded tax effects." The ASU also requires certain new disclosures, some of which are applicable for all companies.

We adopted this standard on January 1, 2019.

The adoption of this standard had no impact on our financial condition or results of operations.

Accounting Pronouncements Not Yet Adopted in 2019

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) .

This new guidance relates to the accounting for credit losses on financial instruments.

The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments.

This new guidance related to the accounting for credit losses on financial instruments and introduced an approach based on expected losses to estimate credit losses on certain types of financial instruments.

It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.

The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, with early adoption permitted.

The new guidance will not have a material impact on our financial condition or results of operations.

We adopted this standard prospectively on January 1, 2020.

The adoption of this standard did not have a material impact on our financial condition or results of operations.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment .

The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.

The guidance removed Step 2 of the goodwill impairment test, which had required a hypothetical purchase price allocation.

As a result of the revised guidance, a goodwill impairment will be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

The revised guidance will be applied prospectively and is effective for financial statements issued for fiscal years beginning after December 15, 2019.

The revised guidance will not have a material impact on our financial condition or results of operations.

We adopted this standard prospectively on January 1, 2020.

The adoption of this standard did not have a material impact on our financial condition or results of operations.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement .

The amendment modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures.

The revised guidance is effective for all companies for fiscal years beginning after December 15, 2019, and interim periods within those years.

Companies are permitted to early adopt any eliminated or modified disclosure requirements and delay adoption of the additional disclosure requirements until their effective date.

The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis.

The revised guidance will not have a material impact on our financial condition or results of operations.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20) .

The amendment modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

The revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020, with early adoption permitted.

The revised guidance will not have a material impact on our financial condition or results of operations.

The amendment modified the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures.

We adopted this standard prospectively on January 1, 2020.

The adoption of this standard did not have a material impact on our financial condition or results of operations.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.

The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements that currently exist in US GAAP for capitalizing implementation costs incurred to develop or obtain internal-use software.

Implementation costs would either be capitalized or expensed as incurred depending on the project stage.

The amendment aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements that currently exist in GAAP for capitalizing implementation costs incurred to develop or obtain internal-use software.

Implementation costs are either capitalized or expensed as incurred depending on the project stage.

All costs in the preliminary and post-implementation project stages are expensed as incurred, while certain costs within the application development stage are capitalized.

The revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, with early adoption permitted.

The revised guidance will be adopted prospectively and will not have a material impact on our financial condition or results of operations.

We adopted this standard prospectively on January 1, 2020.

The adoption of this standard did not have a material impact on our financial condition or results of operations.

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The amendment was intended to provide temporary optional expedients and exceptions to the U.S.

GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

This guidance was effective beginning on March 12, 2020, and can be applied to amendments prospectively through December 31, 2022.

An entity may elect to apply the amendments in this update, as well as amendments include in ASU 2021-01 issued in January 2021, as of the beginning of the interim period that includes March 12, 2020.

We adopted these standards prospectively on January 1, 2020.

The adoption of these standards did not have a material impact on our financial condition or results of operations.

Accounting Pronouncements Not Yet Adopted in 2020

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20) .

The amendment modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans.

The revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020.

The revised guidance will not have a material impact on our financial condition or results of operations.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

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The amendments also improve consistent application of and simplify US GAAP for other areas of Topic 740 by clarifying and amending the existing guidance.

The revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020, with early adoption permitted.

Management currently is evaluating the impact that adoption of this standard will have on our consolidated financial statements.

The revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020.

The revised guidance will not have a material impact on our financial condition or results of operations.

Revenue Recognition

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The transaction price for the asset management performance obligation for certain investment advisory contracts, including those associated with hedge funds or other alternative investments, provide for a performance-based fee (including carried interest), in addition to a base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time.

The performance-based fees

are forms of variable consideration and are therefore excluded from the transaction price until it becomes probable that there will not be significant reversal of the cumulative revenue recognized.

At each reporting date, we evaluate the constraining factors, discussed below , surrounding the variable consideration to determine the extent to which, if any, revenues associated with the performance-based fee can be recognized.

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Bernstein Research Services

Bernstein Research Services revenue consists principally of commissions received for trade execution services and providing equity research services to institutional clients.

Bernstein Research Services revenue consists principally of commissions received, and to a lesser but increasing extent, direct payments for trade execution services and providing equity research services to institutional clients.

Brokerage commissions for trade execution services and related expenses are recorded on a trade-date basis when the performance obligations are satisfied.

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If we have a variable interest in an entity that is determined not to be a VIE, the entity is then evaluated for consolidation under the VOE model.

For limited partnerships and similar entities, we are deemed to have a controlling financial interest in a VOE,

and would be required to consolidate the entity, if we own a majority of the entity’s kick-out rights through voting limited partnership interests and limited partners do not hold substantive participating rights (or other rights that would indicate that we do not control the entity).

For limited partnerships and similar entities, we are deemed to have a controlling financial interest in a VOE, and would be required to consolidate the entity, if we own a majority of the entity’s kick-out rights through voting limited partnership interests and limited partners do not hold substantive participating rights (or other rights that would indicate that we do not control the entity).

For entities other than limited partnerships, we are deemed to have a controlling financial interest in a VOE if we own a majority voting interest in the entity.

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As of December 31, 2020 and 2019, we had $130.0 million and $204.0 million, respectively, of cash on deposit with clearing organizations for trade facilitation purposes, which are reported in other assets in our consolidated statements of financial condition.

As of December 31, 2019, we held no U.S.

As of December 31, 2020 and 2019, we held no U.S.

Treasury bills pledged as collateral.

As of December 31, 2018, we held U.S.

Treasury Bills with value totaling $392.4 million, which are reported in other investments in our consolidated statements of financial condition.

These clearing organizations have the ability by contract or custom to sell or re-pledge this collateral.

These clearing organizations have the ability by contract or custom to sell or re-pledge the collateral, if any.

Current Expected Credit Losses- Receivables from Brokerage clients

Receivables from clients is primarily composed of margin loan balances.

The value of the securities owned by clients and held as collateral for these receivables is not reflected in the Consolidated Financial Statements and the collateral was not repledged or sold as of December 31, 2020 and 2019.

We consider these financing receivables to be of good credit quality due to the fact that these receivables are primarily collateralized by the related client investments.

To estimate expected credit losses on margin loans, we applied the collateral maintenance practical expedient by comparing the amortized cost basis of the margin loans with the fair value of the collateral at the reporting date.

Margin loans are limited to a percentage of the total value of the securities held in the client's account against those loans.

AB requires, in the event of a decline in the market value of the securities in a margin account, the client to deposit additional securities or cash so that, at all times, the value of the securities in the account, at a minimum, cover the loan to the client.

As such, AB reasonably expects that the borrower will be able to continually replenish collateral securing the financial asset and does not expect the fair value of collateral to fall below the amortized cost bases of the margin loans and, as a result, we consider the credit risk associated with these receivables to be minimal.

In circumstances when a loan becomes undercollateralized and the client fails to deposit additional securities or cash, AB reserves the right to liquidate the account.

Current Expected Credit Losses - Receivables from Revenue Contracts with Customers

The majority of our revenue receivables are from investment advisory and service fees, and distribution revenues, that are typically paid out of the client accounts or third-party products consisting of cash and securities.

Due to the size of the fees in relation to the value of the cash and securities in account or funds, the account value always exceeds the amortized cost basis of the receivables, resulting in a remote risk of loss.

These receivables have a short duration, generally due within 30-90 days and there is minimal historical evidence of non-payment or market declines that would cause the fair value of the underlying securities to decline below the amortized cost of the receivables.

AB maintains an allowance for credit losses based upon an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific account data.

Once determined uncollectible, aged balances are written off as credit loss expense.

This determination is based on careful analysis of individual receivables and aging schedules, and generally occurs when the receivable becomes over 360 days past due.

Our aged receivables and amounts written off related to credit losses in any year are not material.

Furniture, Equipment and Leasehold Improvements, Net

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We have determined that AB has only one reporting segment and reporting unit.

We test our goodwill annually, as of September 30, for impairment.

Goodwill is tested annually, as of September 30, for impairment utilizing the market approach where the fair value of the reporting unit is based on its unadjusted market valuation (AB Units outstanding multiplied by AB Holding's Unit price) and adjusted market valuations assuming a control premium (when applicable).

The price of a publicly-traded AB Holding Unit serves as a reasonable starting point for valuing an AB Unit because each represents the same fractional interest in our underlying business.

Throughout the year, the carrying value of goodwill is also reviewed for impairment if certain events or changes in circumstances occur, and trigger whether an interim impairment test may be required.

Such changes in circumstances may include, but are not limited to, a sustained decrease in the price of an AB Holding Unit or declines in AB's market capitalization that would suggest that the fair value of the reporting unit is less than the carrying amount;

significant and unanticipated declines in AB’s assets under management or revenues;

and/or lower than expected earnings per unit.

Any of these changes in circumstances could suggest the possibility that goodwill is impaired, but none of these events or circumstances by itself would indicate that it is more likely than not that goodwill is impaired.

Instead, they are merely recognized as triggering events for the consideration of impairment and must be viewed in combination with any mitigating or positive factors.

A holistic evaluation of all events since the most recent quantitative impairment test must be done to determine whether it is more likely than not that the reporting unit is impaired.

As of September 30, 2020, the impairment test indicated that goodwill was not impaired.

We also review the carrying value of goodwill if facts and circumstances occur that suggest possible impairment, such as significant declines in AUM, revenues, earnings or the price of an AB Holding Unit.

There were no facts or circumstances occurring in the fourth quarter of 2020 suggesting possible impairment.

As of January 1, 2020, we adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment .

The guidance removed Step 2 of the goodwill impairment test, which had required a hypothetical purchase price allocation.

As a result of the revised guidance, a goodwill impairment will be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

Under this guidance, the goodwill impairment test no longer includes a determination by management of whether a decline in fair value is temporary;

however, it is important to consider the impact of changing market conditions, including the severity and anticipated duration, is reflected in management's determination of fair value.

Intangible Assets, Net

Intangible assets consist primarily of costs assigned to acquired investment management contracts of Bernstein based on their estimated fair value at the time of acquisition, less accumulated amortization.

Intangible assets consist primarily of costs assigned to acquired investment management contracts based on their estimated fair value at the time of acquisition, less accumulated amortization.

Intangible assets are recognized at fair value and generally are amortized on a straight-line basis over their estimated useful life ranging from six years to 20 years.

As of December 31, 2019, intangible assets, net of accumulated amortization, of $55.4 million on the consolidated statement of financial condition consists of $41.9 million of finite-lived intangible assets subject to amortization, of which $15.5 million relates to the Bernstein acquisition, and $13.5 million of indefinite-lived intangible assets not subject to amortization in regard to other acquisitions.

As of December 31, 2018, intangible assets, net of accumulated amortization, of $79.4 million on the consolidated statement of financial condition consisted of $65.9 million of finite-lived intangible assets subject to amortization, of which $36.2 million related to the Bernstein acquisition, and $13.5 million of indefinite-lived intangible assets not subject to amortization in regard to other acquisitions.

As of December 31, 2020, intangible assets, net of accumulated amortization, of $44.5 million on the consolidated statement of financial condition consists of $29.2 million of finite-lived intangible assets subject to amortization and $15.3 million of indefinite-lived intangible assets not subject to amortization.

As of December 31, 2019, intangible assets, net of accumulated amortization, of $55.4 million on the consolidated statement of financial condition consisted of $41.9 million of finite-lived intangible assets subject to amortization, of which $15.5 million related to the Bernstein acquisition (which was fully amortized as of December 31, 2020), and $13.5 million of indefinite-lived intangible assets not subject to amortization in regard to other acquisitions.

The gross carrying amount of finite-lived intangible assets totaled $65.1 million as of December 31, 2020 and $468.9 million as of December 31, 2019, and accumulated amortization was $35.9 million as of December 31, 2020 and $427.0 million as of December 31, 2019.

Amortization expense was $21.4 million for 2020, $28.8 million for 2019 and $27.8 million for 2018.

Estimated annual amortization expense for 2020 is approximately $21 million, $5 million in year two, then approximately $4 million in years three through five.

Estimated annual amortization expense for 2021 is approximately $6 million, $5 million in years two through four, then approximately $4 million in year five.

We periodically review indefinite-lived intangible assets for impairment as events or changes in circumstances indicate that the carrying value may not be recoverable.

If the carrying value exceeds fair value, we perform additional impairment tests to measure the amount of the impairment loss, if any.

During the fourth quarter of 2019, we recorded an impairment charge of $3.1 million relating to our 2016 acquisition of Ramius Alternative Solutions LLC.

Due to the loss of acquired investment management contracts during 2019, the carrying value of the finite-lived intangible assets exceeded the fair value of the contracts.

During the fourth quarter of 2020, we recorded an impairment of $1.5 million relating to our 2016 acquisition of Ramius Alternative Solutions LLC.

Due to the loss of acquired investment management contracts during 2020, the carrying value of the finite-lived intangible assets exceeded the fair value of the

We determined the fair value of the contracts using a discounted cashflow model.

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We pay commissions to financial intermediaries in connection with the sale of shares of open-end company-sponsored mutual funds sold without a front-end sales charge (“ back-end load shares ”).

These commissions are capitalized as deferred sales commissions and amortized over periods not exceeding five and one-half years for U.S.

These commissions are capitalized as deferred sales commissions and amortized over periods not exceeding one year for U.S.

fund shares and four years for Non-U.S.

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We use our incremental borrowing rate based on the information available as of the lease commencement date in determining the present value of lease payments.

Our lease terms may include options to extend or

terminate the lease.

Our lease terms may include options to extend or terminate the lease.

These options to extend or terminate are assessed on a lease-by-lease basis, and the ROU assets and lease liabilities are adjusted when it is reasonably certain that an option will be exercised.

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If our expected payment amount subsequently changes, the obligation is modified in the current period resulting in a gain or loss.

Both gains and losses resulting from changes to expected payments and the accretion of these obligations to their expected payment amounts are reflected within contingent payment arrangements in our consolidated statements of income.

statements of income.

During the fourth quarter of 2020, we recorded an impairment of the contingent consideration payable of $1.4 million relating to our 2016 acquisition of Ramius Alternative Solutions LLC.

Mutual Fund Underwriting Activities

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AB Holding Units held in the consolidated rabbi trust are corporate assets in the name of the trust and are available to the general creditors of AB.

During 2019 and 2018, we purchased 6.0 million and 9.3 million AB Holding Units for $172.6 million and $268.0 million, respectively (on a trade date basis).

These amounts reflect open-market purchases of 2.9 million and 6.5 million AB Holding Units for $82.7 million and $183.2 million, respectively, with the remainder relating to purchases of AB Holding Units from employees to allow them to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.

Purchases of AB Holding Units reflected on the consolidated statements of cash flows are net of AB Holding Units purchased by employees as part of a distribution reinvestment election.

Repurchases of AB Holding Units for the years ended December 31, 2020 and 2019 consisted of the following:

Years Ended December 31,

(in millions)

Total amount of AB Holding Units Purchased (1)

Total Cash Paid for AB Holding Units Purchased (1)

$ 149.0 $ 172.6

Open Market Purchases of AB Holding Units Purchased (2)

Total Cash Paid for Open Market Purchases of AB Holding Units (2)

$ 74.0 $ 82.7

(1) Purchased on a trade date basis.

(2) The remainder related to purchases of AB Holding Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.

Each quarter, we consider whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (“ Exchange Act ”).

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We used AB Holding Units repurchased during the periods and newly-issued AB Holding Units to fund these awards.

During 2019 and 2018, AB Holding issued 0.5 million and 0.9 million AB Holding Units, respectively, upon exercise of options to buy AB Holding Units.

During 2020 and 2019, AB Holding issued 5,182 and 0.5 million AB Holding Units, respectively, upon exercise of options to buy AB Holding Units.

AB Holding used the proceeds of $0.1 million and $11.5 million, respectively, received from award recipients as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.

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We report all changes in comprehensive income in the consolidated statements of comprehensive income.

Comprehensive income includes net income, as well as unrealized gains and losses on investments classified as available-for-sale (for 2017), foreign currency translation adjustments, actuarial gains (losses) and prior service cost.

Comprehensive income includes net income, as well as foreign currency translation adjustments, actuarial gains (losses) and prior service cost.

Deferred taxes were not recognized on foreign currency translation adjustments for foreign subsidiaries which had earnings that were considered permanently invested outside the United States.

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Year Ended December 31,

2020 2019 2018

(in thousands)

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Investment advisory and services fees

Base fees $ 2,462,810 $ 2,372,429 $ 2,244,068

Performance-based fees 132,626 99,615 118,143

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All-in-management fees 331,268 291,999 254,477

12b-1 fees 75,973 80,268 87,166

Other 122,540 82,776 76,919

Other revenues

Shareholder servicing fees 82,317 77,394 75,974

Other 21,240 17,924 19,211

3,688,518 3,430,316 3,315,390

Not subject to contracts with customers:

Dividend and interest income, net of interest expense 35,273 47,216 45,827

Investment gains (losses)

Investment (losses) gains (16,401) 38,659 2,653

Other revenues 1,146 2,241 3,491

20,018 88,116 51,971

Total net revenues $ 3,708,536 $ 3,518,432 $ 3,367,361

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Year Ended December 31,

2020 2019 2018

(in thousands, except per unit amounts)

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Diluted net income per AB Unit $ 3.19 $ 2.78 $ 2.78

We excluded 29,056 options in 2019, 49,784 options in 2018 and 1,970,741 options in 2017, from the diluted net income per unit computation due to their anti-dilutive effect.

Years Ended December 31,

2020 2019 2018

Anti-dilutive options excluded from diluted net income 29,056 29,056 49,784

Cash and Securities Segregated Under Federal Regulations and Other Requirements

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(in thousands)

Treasury Bills

Equity securities:

Long-term incentive compensation-related $ 34,351 $ 36,665

Seed capital 75,766 70,464

Other 55,439 73,202

Exchange-traded options 7,527 6,931

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Long-term incentive compensation-related 25,762 14,237

Seed capital 16,646 33,124

Time deposits 18,602 18,281

Other 19,282 13,890

Total investments $ 253,375 $ 266,794

Total investments related to long-term incentive compensation obligations of $60.1 million and $50.9 million as of December 31, 2020 and 2019, respectively, consist of company-sponsored mutual funds and hedge funds.

For long-term incentive compensation awards granted before 2009, we typically made investments in company-sponsored mutual funds and hedge funds that were notionally elected by plan participants and maintained them (and continue to maintain them) in a consolidated rabbi trust or separate custodial account.

rabbi trust or separate custodial account.

The rabbi trust and custodial account enable us to hold such investments separate from our other assets for the purpose of settling our obligations to participants.

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The notional value, fair value and gains and losses recognized in investment gains (losses) as of December 31, 2020 and 2019 for derivative instruments (excluding derivative instruments relating to our options desk trading activities discussed below ) not designated as hedging instruments were as follows:

Value Derivative

Assets Derivative

Liabilities Gains

(in thousands)

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Total return swaps 52,061 94 1,847 (15,242)

Option swaps 2,486 — 2,146 (2,374)

Total derivatives $ 489,985 $ 21,741 $ 30,537 $ (35,589)

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Total return swaps 91,201 110 1,764 (21,164)

Option swaps 354 — 126 (126)

Total derivatives $ 584,535 $ 13,491 $ 19,259 $ (38,421)

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Gains and losses on derivative instruments are reported in investment gains (losses) on the consolidated statements of income.

We may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments.

We may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments.

We minimize our counterparty exposure through a credit review and approval process.

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As of December 31, 2020 and 2019, we held $7.5 million and $6.9 million, respectively, of long exchange-traded equity options, which are included in other investments on our consolidated statements of financial condition.

In addition, as of December 31, 2019 and 2018, we held $12.3 million and $3.8 million, respectively, of short exchange-traded equity options, which are included in securities sold not yet purchased on our consolidated statements of financial condition.

In addition, as of December 31, 2020 and 2019, we held $12.5 million and $12.3 million, respectively, of short exchange-traded equity options,

which are included in securities sold not yet purchased on our consolidated statements of financial condition.

Our options desk provides our clients with equity derivative strategies and execution for exchange-traded options on single stocks, exchange-traded funds and indices.

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Offset in the

Cash Collateral

Condition Net

Condition Financial

Instruments Collateral Cash Collateral

(in thousands)

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Securities borrowed $ 7,808 $ — $ 7,808 $ (7,344) $ — $ 464

Derivatives $ 21,741 $ — $ 21,741 $ — $ (380) $ 21,361

Long exchange-traded options $ 7,527 $ — $ 7,527 $ — $ — $ 7,527

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Securities borrowed $ 38,993 $ — $ 38,993 $ (38,993) $ — $ —

Derivatives $ 13,491 $ — $ 13,491 $ — $ (251) $ 13,240

Long exchange-traded options $ 6,931 $ — $ 6,931 $ — $ — $ 6,931

Offsetting of liabilities as of December 31, 2020 and 2019 was as follows:

Liabilities Gross

Offset in the

Condition Net

of Liabilities

Cash Collateral

Condition Financial

Instruments Collateral Cash Collateral

(in thousands)

December 31, 2020

Securities loaned

Derivatives $ 30,537 $ — $ 30,537 $ — $ (6,374) $ 24,163

Short exchange-traded options $ 12,486 $ — $ 12,486 $ — $ — $ 12,486

December 31, 2019

Securities loaned

Derivatives $ 19,259 $ — $ 19,259 $ — $ (4,276) $ 14,983

Short exchange-traded options $ 12,348 $ — $ 12,348 $ — $ — $ 12,348

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Valuation of our financial instruments by pricing observability levels as of December 31, 2020 and 2019 was as follows (in thousands):

NAV Expedient (1)

Level 1 Level 2 Level 3 NAV Expedient (1)

December 31, 2020:

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Treasury Bills) — 1,752,906 — — — 1,752,906

Derivatives 118 21,623 — — — 21,741

Equity securities 147,705 17,565 125 161 — 165,556

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Limited partnership hedge

— — — — 42,408 42,408

Time deposits (3)

— — — — 18,602 18,602

Other investments 7,011 — — — 12,271 19,282

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Short exchange-traded options 12,486 — — — — 12,486

Derivatives 1,834 28,703 — — — 30,537

Contingent payment arrangements — — 27,750 — — 27,750

Total liabilities measured at fair value $ 19,625 $ 28,703 $ 27,750 $ — $ — $ 76,078

NAV Expedient (1)

Level 1 Level 2 Level 3 NAV Expedient (1)

December 31, 2019:

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Treasury Bills) — 1,094,866 — — — 1,094,866

Treasury Bills

Derivatives 939 12,552 — — — 13,491

Equity securities 170,946 8,952 119 314 — 180,331

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Limited partnership hedge

— — — — 47,361 47,361

Time deposits (3)

— — — — 18,281 18,281

Other investments 5,883 — — — 8,007 13,890

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Short exchange-traded options 12,348 — — — — 12,348

Derivatives 871 18,388 — — — 19,259

Contingent payment arrangements — — 22,911 — — 22,911

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(3) Investments carried at amortized cost that are not measured at fair value in accordance with GAAP.

Other investments include (i) an investment in a software publishing company that does not have a readily available fair value ($1.0 million as of December 31, 2019), (ii) an investment in a start-up company that does not have a readily available fair value ($0.9 million as of both December 31, 2019 and 2018), (iii) an investment in an equity method investee that is not measured at fair value in accordance with GAAP ($2.9 million and $3.4 million as of December 31, 2019 and 2018, respectively), and (iv) broker dealer exchange memberships that are not measured at fair value in accordance with GAAP ($3.2 million and $3.1 million as of December 31, 2019 and 2018, respectively).

Other investments include (i) an investment in a software publishing company that does not have a readily available fair value ($2.1 million and $1.0 million as of December 31, 2020 and 2019, respectively), (ii) investments in start-up companies that do not have a readily available fair value (these investments were $0.3 million and $0.9 million as of December 31, 2020 and 2019, respectively), (iii) investments in equity method investees that are not measured at fair value in accordance with GAAP ($6.5 million and $2.9 million as of December 31, 2020 and 2019, respectively), and (iv) broker dealer exchange memberships that are not measured at fair value in accordance with GAAP ($3.3 million and $3.2 million as of December 31, 2020 and 2019, respectively).

We provide below a description of the fair value methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:

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In addition, some securities are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.

• Derivatives:

We hold exchange-traded futures with counterparties that are included in Level 1 of the valuation hierarchy.

In addition, we also hold currency forward contracts, interest rate swaps, credit default swaps, option swaps and total return swaps with counterparties that are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.

In addition, we also hold currency forward contracts, interest rate swaps, credit default swaps, option swaps

and total return swaps with counterparties that are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.

We hold exchange-traded options that are included in Level 1 of the valuation hierarchy.

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At each reporting date, we estimate the fair values of the contingent consideration expected to be paid upon probability-weighted AUM and revenue projections, using unobservable market data inputs, which are included in Level 3 of the valuation hierarchy.

During the year ended December 31, 2019 we had transfers of $3.2 million from Level 2 to Level 1 securities.

During the year ended December 31, 2018, we had no transfers from Level 2 to Level 1 securities.

During the years ended December 31, 2020 and 2019, there were no transfers between Level 2 and Level 3 securities.

The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as equity securities, is as follows:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(in thousands)

Balance as of beginning of period $ 119 $ 142

Purchases — —

Realized gains (losses), net — —

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Balance as of end of period $ 125 $ 119

Transfers into and out of all levels of the fair value hierarchy are reflected at end-of-period fair values.

Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the consolidated statements of income.

As of January 1, 2018 we had an investment in a private equity fund focused exclusively on the energy sector (fair value of $1.0 million) that was classified as Level 3 and written down during the second quarter of 2018.

This investment’s valuation was based on a market approach, considering recent transactions in the fund and the industry.

We acquired Autonomous Research LLP (" Autonomous ") in 2019 and Ramius Alternative Solutions LLC in 2016, both of which included contingent consideration arrangements as part of the purchase price.

As part of acquisitions made by the Company, we may enter into contingent consideration arrangements as part of the purchase price.

The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as contingent payment arrangements, is as follows:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(in thousands)

Balance as of beginning of period $ 22,911 $ 7,336

Addition 4,400 17,384

Accretion 3,105 2,542

Changes in estimates (1,366) (3,051)

Payments (1,300) (1,300)

Balance as of end of period $ 27,750 $ 22,911

During 2019, we recorded a $17.4 million contingent consideration payable for our 2019 acquisition based on projected fee revenues over a five-year measurement period.

The liability was valued using expected revenue growth rates ranging from 0.7% to 2.5% and a discount rate of 10.4%, reflecting a 3.5% risk-free rate, based on our cost of debt, and a 6.9% market price of risk adjustment rate.

Additionally, we recorded a $3.1 million change in estimate for the contingent consideration payable relating to our 2016 acquisition.

The liability relating to our 2016 acquisition was valued using a revised revenue growth rate of 50% over the remaining measurement periods and a 3.0% discount rate.

During 2018, we amended the contingent payment relating to our 2016 acquisition by modifying the earnout structure and extending it one year.

As part of this amendment, we recorded a change in estimate of $2.4 million related to the contingent consideration.

As of December 31, 2019 and 2018, acquisition-related contingent consideration liabilities were $22.9 million and $7.3 million, respectively.

The liabilities were valued using expected revenue growth rates and discount rates.

The expected revenue growth rates range from 0.7% to 50.0%, with a weighted average of 4.9%, calculated using cumulative revenues and range of revenue growth rates (excluding revenue growth from additional AUM contributed from existing clients).

The discount rates ranged from 1.9% to 10.4%, with a weighted average of 8.0%, calculated using total contingent liabilities and range of discount rates.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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Leasehold improvements 284,080 266,365

841,046 841,743

Accumulated depreciation and amortization (693,172) (696,492)

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Deferred sales commissions, net $ 64,066 $ 36,296

(1) Prior year amounts have been reclassified to conform to our 2019 presentation.

Amortization expense was $27.4 million, $15.0 million and $21.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Estimated future amortization expense related to the December 31, 2020 net asset balance, assuming no additional CDSC is received in future periods, is as follows (in thousands):

2021 $ 28,980

AB has an $800.0 million committed, unsecured senior revolving credit facility (the " Credit Facility ") with a group of commercial banks and other lenders, which matures on September 27, 2023.

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The Credit Facility also includes customary events of default (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or lender’s commitments may be terminated.

Also, under such provisions, upon the occurrence of certain insolvency- or bankruptcy-related events of default, all amounts payable under the Credit Facility would automatically become immediately due and payable, and the lender’s commitments automatically would terminate.

Also, under such provisions, upon the occurrence of certain insolvency- or bankruptcy-related events of default, all amounts payable under the

Credit Facility would automatically become immediately due and payable, and the lender’s commitments automatically would terminate.

Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility.

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During 2020 and 2019, we did not draw upon the Credit Facility.

In addition to the Credit Facility, on November 4, 2019, AB established a $900.0 million committed, unsecured senior credit facility (“ EQH Facility ”) with EQH.

AB also has a $900.0 million committed, unsecured senior credit facility (“ EQH Facility ”) with EQH.

The EQH Facility matures on November 4, 2024 and is available for AB's general business purposes.

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EQH also may terminate the facility immediately upon a change of control of our general partner.

As of December 31, 2019, AB had $560.0 million outstanding under the EQH Facility with an interest rate of approximately 1.6%.

Average daily borrowings on the EQH Facility during 2019 for the 57 days it was available were $358.6 million with a weighted average interest rate of approximately 1.6%.

As of December 31, 2019, we had no commercial paper outstanding.

As of December 31, 2018, AB had $523.2 million in commercial paper outstanding with a weighted average interest rate of approximately 2.7%.

As of December 31, 2020 and 2019, AB had $675.0 million and $560.0 million outstanding under the EQH Facility with interest rates of approximately 0.2% and 1.6%, respectively.

Average daily borrowings on the EQH Facility during 2020 and for the 57 days it was available in 2019 were $470.8 million and $358.6 million, respectively, with weighted average interest rates of approximately 0.5% and 1.6%, respectively.

In addition to the EQH Facility, on September 1, 2020, AB established a new $300.0 million uncommitted, unsecured senior credit facility (“ EQH Uncommitted Facility ”) with EQH.

The EQH Uncommitted Facility matures on September 1, 2024 and is available for AB's general business purposes.

Borrowings under the EQH Unsecured Facility generally bear interest at a rate per annum based on prevailing overnight commercial paper rates.

The EQH Uncommitted Facility contains affirmative, negative and financial covenants which are substantially similar to those in the EQH Facility.

As of December 31, 2020, we had no amounts outstanding on the EQH Uncommitted Facility and have not drawn on it since its inception.

As of both December 31, 2020 and 2019, we had no commercial paper outstanding.

The commercial paper is short term in nature, and as such, recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value hierarchy).

Average daily borrowings of commercial paper for the 317 days commercial paper was outstanding in 2019 was $438.6

million with a weighted average interest rate of 2.6%.

Average daily borrowings for 2018 were $350.3 million with a weighted average interest rate of approximately 2.0%.

AB also has a $200.0 million committed, unsecured senior revolving credit facility (the " Revolver ") with a leading international bank, which matures on November 16, 2021.

Average daily borrowings of commercial paper for 2020 were $83.2 million with a weighted average interest rate of 0.4%.

Average daily borrowings of commercial paper for the 317 days commercial paper was outstanding in 2019 were $438.6 million with a weighted average interest rate of approximately 2.6%.

AB has a $200.0 million committed, unsecured senior revolving credit facility (the " Revolver ") with a leading international bank, which matures on November 16, 2021.

The Revolver is available for AB's and SCB LLC's business purposes, including the provision of additional liquidity to meet funding requirements primarily related to SCB LLC's operations.

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The Revolver contains affirmative, negative and financial covenants that are identical to those of the Credit Facility.

As of December 31, 2019 we had no amounts outstanding under the Revolver.

As of December 31, 2018, we had $25.0 million outstanding under the Revolver with an interest rate of 3.4%.

Borrowings under the Revolver bear interest at a rate per annum, which will be, at our option, a rate equal to an applicable margin, which is subject to adjustment based on the credit ratings of AB, plus one of the following indices:

London Interbank Offered Rate;

a floating base rate;

or the Federal Funds rate.

As of both December 31, 2020 and 2019 we had no amounts outstanding under the Revolver.

Average daily borrowings for 2020 and 2019 were $16.5 million and $23.5 million, respectively, with weighted average interest rates of 1.6% and 3.2%, respectively.

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Since 2010, we have sub-leased over one million square feet of office space.

The liability relating to our global space consolidation initiatives was $85.8 million as of December 31, 2018.

Upon adoption of ASC 842 on January 1, 2019, we recorded this liability as a reduction to our operating right-of-use assets.

Leases included in the consolidated statements of financial condition as of December 31, 2019 were as follows:

Classification

December 31, 2019

On January 1, 2019, the previously recorded liability related to our global space consolidation initiatives of $85.8 million was offset as a reduction to our operating right-of-use assets.

Leases included in the consolidated statements of financial condition as of December 31, 2020 and 2019 were as follows:

Classification December 31, 2020 December 31, 2019

(in thousands)

Operating Leases

Operating lease right-of-use assets

Right-of-use assets

Operating lease liabilities

Lease liabilities

Operating lease right-of-use assets Right-of-use assets $ 416,007 $ 360,185

Operating lease liabilities Lease liabilities 503,174 465,907

Finance Leases

Property and equipment, gross

Right-of-use assets

Amortization of right-of-use assets

Right-of-use assets

Property and equipment, gross Right-of-use assets 5,167 3,825

Amortization of right-of-use assets Right-of-use assets (2,719) (1,317)

Property and equipment, net 2,448 2,508

Finance lease liabilities

Lease liabilities

The components of lease expense included in the consolidated statements of income as of December 31, 2019 were as follows:

Finance lease liabilities Lease liabilities 2,375 2,544

The components of lease expense included in the consolidated statements of income for the years ended December 31, 2020 and 2019 were as follows:

Year Ended December 31,

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(in thousands)

Operating lease cost

General and administrative

Operating lease cost General and administrative $ 90,212 $ 106,085

Financing lease cost:

Amortization of right-of-use assets

General and administrative

Interest on lease liabilities

Interest expense

Amortization of right-of-use assets General and administrative 1,755 1,317

Interest on lease liabilities Interest expense 86 71

Total finance lease cost 1,841 1,388

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General and administrative 38,208 40,786

Sublease income

General and administrative

Sublease income General and administrative (38,622) (55,522)

Net lease cost $ 91,639 $ 92,737

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Maturities of lease liabilities are as follows:

Operating Leases

Financing Leases

Year ending December 31,

(in thousands)

Operating Leases Financing Leases Total

Year ending December 31, (in thousands)

2021 $ 110,046 $ 1,142 $ 111,188

2022 100,631 757 101,388

2023 93,379 526 93,905

2024 90,359 23 90,382

2025 25,516 — 25,516

Thereafter 136,759 — 136,759

Total lease payments 556,690 2,448 $ 559,138

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Present value of lease liabilities $ 503,174 $ 2,375

During October 2018, we signed a lease, which commences in mid-2020, relating to 218,976 square feet of space at our new Nashville headquarters.

During October 2018, we signed a lease, which commenced in the fourth quarter of 2020, relating to 218,976 square feet of space at our newly constructed Nashville headquarters.

Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 15-year initial lease term is $134.0 million.

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Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20 year lease term is approximately $448.0 million.

During the fourth quarter of 2020, we exercised an option to return a half floor of this space, which reduced our square footage from approximately 190,000 to 166,000 square feet and our base rent obligation from $448.0 million to $393.0 million.

Lease term and discount rate:

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Operating leases (2)

135,919 11,108

Finance leases 1,695 1,469

(1) Represents non-cash activity and, accordingly, is not reflected in the consolidated statements of cash flows.

(2) Represents net non-cash activity of new lease obligations, extensions and reductions of existing lease obligations.

Commitments and Contingencies

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The future minimum payments under non-cancelable leases, sublease commitments and related payments we are obligated to make, net of sublease commitments of third party lessees to make payments to us, as of December 31, 2020, are as follows:

Sublease Receipts

Payments Sublease Receipts Net Payments

(in millions)

2021 $ 115.4 $ 35.5 $ 79.9

2022 103.8 31.8 72.0

2023 96.5 31.3 65.2

2024 93.1 30.8 62.3

2025 45.4 — 45.4

2026 and thereafter 526.6 — 526.6

Total future minimum payments $ 980.8 $ 129.4 $ 851.4

See Note 13 for material lease commitments.

Legal Proceedings

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management cannot determine whether further developments relating to any individual matter that is pending or threatened, or all of them combined, will have a material adverse effect on our results of operation, financial condition or liquidity in any future reporting period.

As general partner of AllianceBernstein U.S.

During 2010, as general partner of AllianceBernstein U.S.

Real Estate L.P.

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As of December 31, 2020, we had funded $22.4 million of this commitment.

As general partner of AllianceBernstein U.S.

During 2014, as general partner of AllianceBernstein U.S.

Real Estate II L.P.

(“ Real Estate Fund II ”), we committed to invest $28.0 million in the Real Estate Fund II.

(“ Real Estate Fund II ”), we committed to invest $27.3 million, as amended in 2020, in the Real Estate Fund II.

As of December 31, 2020, we had funded $20.8 million of this commitment.

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The balances of consolidated VIEs and VOEs included in our consolidated statements of financial condition were as follows:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(in thousands)

VIEs VOEs Total VIEs VOEs Total

Cash and cash equivalents $ 36,370 $ 136 $ 36,506 $ 9,623 $ 1,810 $ 11,433

Investments 242,541 60,041 302,582 404,624 176,380 581,004

Other assets 4,859 7,385 12,244 9,618 10,192 19,810

Total assets $ 283,770 $ 67,562 $ 351,332 $ 423,865 $ 188,382 $ 612,247

Liabilities $ 7,741 $ 22,879 $ 30,620 $ 12,147 $ 18,870 $ 31,017

Redeemable non-controlling interest 82,753 19,606 102,359 273,219 52,342 325,561

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Total liabilities, redeemable non-controlling interest and partners' capital $ 283,770 $ 67,562 $ 351,332 $ 423,865 $ 188,382 $ 612,247

During 2020, we deconsolidated five funds in which we had a seed investment of approximately $94.6 million due to no longer having a controlling financial interest.

These funds had significant consolidated assets and liabilities as of December 31, 2019.

Cash and cash equivalents include cash on hand, demand deposits, overnight commercial paper and highly liquid investments with original maturities of three months or less.

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Valuation of consolidated company-sponsored investment funds' financial instruments by pricing observability levels as of December 31, 2020 and 2019 was as follows (in thousands):

Level 1 Level 2 Level 3 Total

December 31, 2020:

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Balance as of beginning of period $ 854 $ 8,373

Deconsolidated funds (135) —

Transfers (out) in 552 (9,445)

Realized gains (losses), net

Unrealized gains (losses), net

Purchases 259 9,213

Sales (571) (7,467)

Realized (losses) gains, net (99) 14

Unrealized (losses) gains, net (242) 143

Accrued discounts 1 23

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As of December 31, 2020 and 2019, the VIEs held $3.7 million and $0.3 million (net), respectively, of futures, forwards, options and swaps within their portfolios.

For the years ended December 31, 2019 and 2018, we recognized $3.3 million and $1.5 million of gains, respectively, on these derivatives.

For the years ended December 31, 2020 and 2019, we recognized $0.6 million of losses and $3.3 million of gains, respectively, on these derivatives.

These gains and losses are recognized in investment gains (losses) in the consolidated statements of income.

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These gains and losses are recognized in the investment gains (losses) in the consolidated statements of income.

As of December 31, 2019 and 2018, the VOEs held $0.5 million and $0.2 million of cash collateral payable to trade counterparties.

As of December 31, 2020 and 2019, the VOEs held zero and $0.5 million, respectively, of cash collateral payable to trade counterparties.

This obligation to return cash is reported in the liabilities of consolidated company-sponsored investment funds in our consolidated statements of financial condition.

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Offsetting of derivative assets of consolidated company-sponsored investment funds as of December 31, 2020 and 2019 was as follows:

Gross Amounts of Recognized Assets

Gross Amounts Offset in the Statement of Financial Condition

Net Amounts of Assets Presented in the Statement of Financial Condition

Cash Collateral

Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Assets Presented in the Statement of Financial Condition Financial

Instruments Cash Collateral

(in thousands)

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Offsetting of derivative liabilities of consolidated company-sponsored investment funds as of December 31, 2020 and 2019 was as follows:

Gross Amounts of Recognized Liabilities

Gross Amounts Offset in the Statement of Financial Condition

Net Amounts of Liabilities Presented in the Statement of Financial Condition

Cash Collateral

Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Liabilities Presented in the Statement of Financial Condition Financial

Instruments Cash Collateral

Pledged Net Amount

(in thousands)

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Non-Consolidated VIEs

As of December 31, 2019, the net assets of company-sponsored investment products that are non-consolidated VIEs are approximately $79.3 billion, and our maximum risk of loss is our investment of $8.4 million in these VIEs and advisory fee receivables from these VIEs, which are not material.

As of December 31, 2020, the net assets of company-sponsored investment products that are non-consolidated VIEs are approximately $73.4 billion, our maximum risk of loss is our investment of $7.1 million in these VIEs and our advisory fees receivable from these VIEs are $77.6 million.

SCB LLC is registered as a broker-dealer under the Exchange Act and is subject to the minimum net capital requirements imposed by the U.S.

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Our U.K.-based broker-dealer is a member of the London Stock Exchange.

As of December 31, 2019, it was subject to financial resources requirements of $14.9 million imposed by the Financial Conduct Authority of the United Kingdom and had aggregate regulatory financial resources of $30.2 million, an excess of $15.3 million.

As of December 31, 2020, it was subject to financial resources requirements of $47.5 million imposed by the Financial Conduct Authority of the United Kingdom and had aggregate regulatory financial resources of $53.4 million, an excess of $5.9 million over the required level.

AllianceBernstein Investments, Inc., another one of our subsidiaries and the distributor and/or underwriter for certain company-sponsored mutual funds, is registered as a broker-dealer under the Exchange Act and is subject to the minimum net capital requirements imposed by the SEC.

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In margin transactions, we extend credit to the customer, subject to various regulatory and internal margin requirements.

These transactions are collateralized by cash or securities

in the customer’s account.

These transactions are collateralized by cash or

securities in the customer’s account.

In connection with these activities, we may execute and clear customer transactions involving the sale of securities not yet purchased.

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In accordance with industry practice, we record customer transactions on a settlement date basis, which generally is two business days after trade date for our U.K.

We are exposed to risk of loss on these transactions in the event of the customer’s or broker’s inability to meet the terms of their contracts, in which case we may have to purchase or sell financial instruments at prevailing market prices.

We are exposed to risk of loss on these transactions in the event of the customer’s inability to meet the terms of their contracts, in which case we may have to purchase or sell financial instruments at prevailing market prices.

The risks we assume in connection with these transactions are not expected to have a material adverse effect on our financial condition or results of operations.

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Employer contributions are discretionary and generally limited to the maximum amount deductible for federal income tax purposes.

Aggregate contributions for 2019, 2018 and 2017 were $14.4 million, $15.0 million and $14.4 million, respectively.

Aggregate contributions were $15.6 million, $14.4 million and $15.0 million for 2020, 2019 and 2018, respectively.

We maintain several defined contribution plans for foreign employees working for our subsidiaries in the United Kingdom, Australia, Japan and other locations outside the United States.

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Our policy is to satisfy our funding obligation for each year in an amount not less than the minimum required by the Employee Retirement Income Security Act of 1974, as amended, and not greater than the maximum amount we can deduct for federal income tax purposes.

We contributed $4.0 million to the Retirement Plan during 2019.

We did not make a contribution to the Retirement Plan during 2020.

We do not currently anticipate that we will contribute to the Retirement Plan during 2021.

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The amounts recognized in other comprehensive income (loss) for the Retirement Plan for 2020, 2019 and 2018 were as follows:

2020 2019 2018

(in thousands)

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Prior service cost 24 24 24

Income tax benefit (expense)

(4,065) (7,910) 1,894

Income tax (expense) benefit (216) 312 (207)

Other comprehensive (loss) income $ (4,281) $ (7,598) $ 1,687

The loss of $7.6 million recognized in 2019 primarily was due to changes in the discount rate and lump sum interest rates ($21.7 million), offset by actual earnings exceeding expected earnings on plan assets ($11.3 million), changes in the mortality assumption ($1.2 million), the recognized actuarial loss ($1.1 million) and changes in the census data ($0.1 million).

The loss of $4.3 million recognized in 2020 was primarily due to changes in the discount rate and lump sum interest rates ($16.7 million), offset by actual earnings exceeding expected earnings on plan assets ($10.4 million), changes in the mortality assumption ($1.0 million), the recognized actuarial loss ($1.4 million) and changes in the census data ($0.4 million).

The loss of $7.6 million recognized in 2019 was primarily due to changes in the discount rate and lump sum interest rates ($21.7 million), offset by actual earnings exceeding expected earnings on plan assets ($11.3 million), changes in the mortality assumption ($1.2 million), the recognized actuarial loss ($1.1 million) and changes in the census data ($0.1 million).

The gain of $1.7 million recognized in 2018 primarily was due to changes in the discount rate and lump sum interest rates ($9.7 million), the recognized actuarial loss ($1.1 million) and changes in the mortality assumption ($0.4 million), offset by actual earnings exceeding expected earnings on plan assets ($9.2 million), and changes in the census data ($0.2 million).

The loss of $3.1 million recognized in 2017 primarily was due to changes in the discount rate and lump sum interest rates ($11.9 million) and changes in the census data ($1.4 million), offset by actual earnings exceeding expected earnings on plan assets ($8.5 million), the recognized actuarial loss ($1.1 million) and changes in the mortality assumption ($0.7 million).

Foreign retirement plans and an individual's retirement plan maintained by AB are not material to AB's consolidated financial statements.

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The reconciliation of the 2020 amounts recognized in other comprehensive income for the Retirement Plan as compared to the consolidated statement of comprehensive income ( "OCI Statement" ) is as follows:

Retirement Plan

Retired Individual Plan

Foreign Retirement Plans

OCI Statement

Retirement Plan Retired Individual Plan Foreign Retirement Plans OCI Statement

(in thousands)

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Changes in employee benefit related items (4,065) (56) (135) (4,256)

Income tax benefit (expense)

Income tax (expense) benefit (216) (2) 31 (187)

Employee benefit related items, net of tax $ (4,281) $ (58) $ (104) $ (4,443)

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Prior service cost (707) (731)

(60,332) (56,268)

Income tax benefit 296 513

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Benefit payments are expected to be paid as follows (in thousands):

2026 - 2030 45,955

Net expense under the Retirement Plan consisted of:

Year Ended December 31,

2020 2019 2018

(in thousands)

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Years Ended December 31,

2020 2019 2018

Discount rate on benefit obligations 3.35 % 4.40 % 3.90 %

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Previously, mortality was projected generationally using the MP-2019 improvements scale.

The base mortality assumption was updated to the Society of Actuaries Pri-2012 base mortality table for private sector plans, with a white-collar adjustment, using the contingent annuitant table for beneficiaries of deceased participants.

Previously, the mortality assumption was the RP-2014 white-collar mortality table for males and females adjusted back to 2006 using the MP-2014 improvement scale.

The base mortality assumption used is the Society of Actuaries Pri-2012 base mortality table for private sector plans, with a white-collar adjustment, using the contingent annuitant table for beneficiaries of deceased participants.

The Internal Revenue Service (“ IRS ”) recently updated the mortality tables used to determine lump sums.

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The Retirement Plan’s asset allocation percentages consisted of:

Equity 55 % 47 %

Debt securities 36 41

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The objective of the investment program is to enhance the portfolio of the Retirement Plan through total return (capital appreciation and income), thereby promoting the ongoing ability of the plan to meet future liabilities and obligations, while minimizing the need for additional contributions.

The guidelines specify an allocation weighting of 10% to 35% for liability hedging investments (target of 20%), 15% to 40% for return seeking investments (target of 27%), 5% to 35% for risk mitigating investments (target of 14%), 10% to 35% for diversifying investments (target of 21%) and 5% to 35% for dynamic asset allocation (target of 18%).

The guidelines specify an allocation

weighting of 10% to 35% for liability hedging investments (target of 20%), 15% to 40% for return seeking investments (target of 27%), 5% to 35% for risk mitigating investments (target of 14%), 10% to 35% for diversifying investments (target of 21%) and 5% to 35% for dynamic asset allocation (target of 18%).

Investments in mutual funds, hedge funds (and other alternative investments), and other commingled investment vehicles are permitted under the guidelines.

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The valuation of our Retirement Plan assets by pricing observability levels as of December 31, 2020 and 2019 was as follows (in thousands):

Level 1 Level 2 Level 3 Total

December 31, 2020

Cash $ 458 $ — $ — $ 458

Treasury Strips — 26,599 — 26,599

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Investments at fair value $ 76,688 $ 26,599 $ — $ 125,022

Level 1 Level 2 Level 3 Total

December 31, 2019

Cash $ 230 $ — $ — $ 230

Treasury Strips — 27,318 — 27,318

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with additional non-U.S.

The second fund invests in inflation-indexed fixed-income securities and similar bonds issued by non-U.S.

One fund invests in inflation-indexed fixed-income securities and similar bonds issued by non-U.S.

governments and various commodities;

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equity diversification to its value and growth equity selections, designed to deliver a long-term premium to the S&P 500 with greater consistency across a range of market environments;

investments measured at net asset value, including three hedge funds that seek to provide attractive risk-adjusted returns over full market cycles with less volatility than the broad equity markets by allocating all or substantially all of their assets among portfolio managers through portfolio funds that employ a broad range of investment strategies;

• investments measured at net asset value, including three hedge funds that seek to provide attractive risk-adjusted returns over full market cycles with less volatility than the broad equity markets by allocating all or substantially all of

their assets among portfolio managers through portfolio funds that employ a broad range of investment strategies;

one private investment trust that invests primarily in equity securities of non-U.S.

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Options to Buy

Units Weighted

Per Option Weighted

Term (Years) Aggregate

Outstanding as of December 31, 2019 159,349 $ 23.93 2.1

Exercised (5,182) 28.46

Forfeited — —

Expired (5,182) 28.46

Outstanding as of December 31, 2020 148,985 23.61 1.2 $ 1.5

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Vested or expected to vest as of December 31, 2020 148,985 23.61 1.2 1.5

The total intrinsic value of options exercised during 2019, 2018 and 2017 was $3.7 million, $8.9 million and $8.3 million, respectively.

Under the fair value method, compensation expense is measured at the grant date based on the estimated fair value of the options awarded (determined using the Black-Scholes option valuation model) and is recognized over the required service period.

The total intrinsic value of options exercised during 2020, 2019 and 2018 was $32,368, $3.7 million and $8.9 million, respectively.

We recorded no compensation expense related to option grants in 2020, 2019 or 2018 as no options were granted.

As of December 31,

2019, there was no compensation expense related to unvested option grants not yet recognized in the consolidated statement of income.

As of December 31, 2020, there was no compensation expense related to unvested option grants not yet recognized in the consolidated statement of income.

Restricted AB Holding Unit Awards

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These AB Holding Units give the Eligible Directors, in most instances, all the rights of other AB Holding Unitholders, subject to such restrictions on transfer as the Board may impose.

We awarded 45,420, 53,720 and 50,252 restricted AB Holding Units, respectively, in 2019, 2018 and 2017 with grant date fair values per restricted AB Holding Unit of $29.26 and $29.90 in 2019, $26.90 in 2018, and $21.25 and $24.80 in 2017.

All of the restricted AB Holding Units vest ratably over three or four years.

We award restricted AB Holding Units that vest ratably over three or four years.

We fully expensed these awards on each grant date, as there is no service requirement.

We recorded compensation expense relating to these awards of $1.3 million, $1.4 million and $1.1 million, respectively, for the years ended December 31, 2019, 2018 and 2017.

On April 28, 2017, the Board removed Peter S.

Kraus from his position as Chairman of the Board and Chief Executive Officer (" CEO ").

As a result of his removal, we accelerated the vesting on the remaining two tranches under his June 2012 employment agreement and delivered the AB Holding Units to him in June 2017.

During 2017, we recorded $10.2 million of compensation expense relating to Mr.

Kraus's restricted AB Holding Unit grant.

Grant details related to these awards is as follows:

2020 2019 2018

Restricted Units Awarded 50,232 45,420 53,720

Weighted Average Grant Date Fair Value (1)

$ 23.69 $ 29.33 $ 26.90

Compensation Expense (in millions) $ 1.2 $ 1.3 $ 1.4

(1) Prior period amounts have been adjusted to conform with current period presentation.

On April 28, 2017, Seth P.

Bernstein was appointed President and CEO pursuant to an employment agreement, effective May 1, 2017.

Bernstein was appointed President and Chief Executive Officer (" CEO") pursuant to an employment agreement, effective May 1, 2017.

In connection with the commencement of his employment, Mr.

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We recorded compensation expense relating to Mr.

Bernstein's restricted AB Holding Unit grants of $0.9 million, $0.9 million and $0.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Under the Incentive Compensation Program, we awarded 5.8 million restricted AB Holding Units in 2019 (which included 5.4 million restricted AB Holding Units in December for the 2019 year-end awards as well as 0.4 million additional restricted AB Holding Units granted earlier during the year relating to the 2018 year-end awards), 6.5 million restricted AB Holding Units in 2018 (which included 6.2 million restricted AB Holding Units in December for the 2018 year-end awards as well as 0.3 million additional restricted AB Holding Units granted earlier during the year relating to the 2017 year-end awards), and 6.3 million restricted AB Holding Units in 2017 (which included 6.1 million restricted AB Holding Units in December for the 2017 year-end awards as well as 0.2 million additional restricted AB Holding Units granted earlier during the year related to the 2016 year-end awards).

The grant date fair values per restricted AB Holding Unit ranged between $26.69 and $30.01 in 2019, $24.95 and $26.69 in 2018, and $23.00 and $24.95 in 2017.

Bernstein's restricted AB Holding Unit grants of $0.9 million for each of the years ended December 31, 2020, 2019 and 2018, respectively.

Under the Incentive Compensation Program, we awarded 5.3 million restricted AB Holding Units in 2020 (which included 5.0 million restricted AB Holding Units in December for the 2020 year-end awards as well as 0.3 million additional restricted AB Holding Units granted earlier during the year relating to the 2019 year-end awards), with grant date fair values per restricted AB holding unit ranging between $28.75 to $32.10.

We awarded 5.8 million restricted AB Holding Units in 2019 (which included 5.4 million restricted AB Holding Units in December for the 2019 year-end awards as well as 0.4 million additional restricted AB Holding Units granted earlier during the year relating to the 2018 year-end awards), with grant date fair values per restricted AB holding unit ranging between $26.69 to $30.01.

We awarded 6.5 million restricted AB Holding Units in 2018 (which included 6.2 million restricted AB Holding Units in December for the 2018 year-end awards as well as 0.3 million additional restricted AB Holding Units granted earlier during the year related to the 2017 year-end awards), with grant date fair values per restricted AB holding unit ranging between $24.95 to $26.69.

Restricted AB Holding Units awarded under the Incentive Compensation Program generally vest in 25% increments on December 1 st of each of the four years immediately following the year in which the award is granted.

We also award restricted AB Holding Units in connection with certain employment and separation agreements, as well as relocation-related performance awards, with vesting schedules ranging between two and five years.

The fair value of the restricted AB Holding Units is amortized over the required service period as employee compensation expense.

We awarded 1.9 million, 2.6 million and 1.8 million restricted AB Holding Units in 2019, 2018 and 2017, respectively, with grant date fair values per restricted AB Holding Unit ranging between $27.32 and $30.85 in 2019, $25.05 and $30.25 in 2018, and $21.25 and $25.65 in 2017.

We recorded compensation expense relating to restricted AB Holding Unit grants in connection with certain employment and separation agreements of $36.7 million, $32.2 million and $21.6 million, respectively, for the years ended December 31, 2019, 2018 and 2017.

Grant details related to these awards is as follows:

2020 2019 2018

(in millions excluding share prices)

Restricted Units Awarded 0.4 1.9 2.6

Grant Date Fair Value Range $18.80 - $35.42 $27.32 - $30.85 $25.05 - $30.25

Compensation Expense $ 32.1 $ 36.7 $ 32.2

The fair value of the restricted AB Holding Units is amortized over the requisite service period as compensation expense.

Changes in unvested restricted AB Holding Units during 2020 are as follows:

Weighted Average

Units Weighted Average

Grant Date Fair

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Unvested as of December 31, 2019 19,287,080 $ 26.88

Granted 5,702,830 31.66

Vested (5,946,667) 26.07

Forfeited (178,669) 26.50

Unvested as of December 31, 2020 18,864,574 28.58

The total grant date fair value of restricted AB Holding Units that vested during 2019, 2018 and 2017 was $201.4 million, $169.1 million and $177.0 million, respectively.

The total grant date fair value of restricted AB Holding Units that vested was $155.0 million, $201.4 million and $169.1 million during 2020, 2019 and 2018, respectively.

As of December 31, 2020, the 18,864,574 unvested restricted AB Holding Units consist of 13,957,907 restricted AB Holding Units that do not have a service requirement and have been fully expensed on the grant date and 4,906,667 restricted AB Holding Units that have a service requirement and will be expensed over the required service period.

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Options exercised 5,182 511,894

Units issued 3,363,132 4,833,715

Units retired (1)

(3,238,970) (3,815,571)

Outstanding as of December 31, 270,509,658 270,380,314

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Years Ended December 31,

2020 2019 2018

(in thousands)

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United States $ 743,687 $ 697,501 $ 672,221

Foreign 163,749 125,936 153,093

Total $ 907,436 $ 823,437 $ 825,314

Income tax expense:

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Corporate subsidiaries:

Federal 1,495 (943) (4,030)

State and local 904 975 2,888

Foreign 44,086 32,290 36,529

Current tax expense 49,841 41,518 40,638

Deferred tax (4,188) 236 5,178

Income tax expense $ 45,653 $ 41,754 $ 45,816

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Years Ended December 31,

2020 2019 2018

(in thousands)

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Foreign subsidiaries taxed at different rates 33,969 3.7 26,719 3.3 30,689 3.7

2017 Tax Act — — — — 1,155 0.1

FIN 48 reserve (release) (1,886) (0.2) 2,765 0.3 (5,177) (0.6)

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Years Ended December 31,

2020 2019 2018

(in thousands)

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Interest and penalties, if any, relating to tax positions are recorded in income tax expense on the consolidated statements of income.

The total amount of interest expense recorded in income tax expense during 2019, 2018 and 2017 was $0.7 million, $0.1 million and $0.3 million, respectively.

The total amount of accrued interest recorded on the consolidated statements of financial condition as of December 31, 2019, 2018 and 2017 was $1.1 million, $0.3 million and $0.7 million, respectively.

There were $0.2 million of penalties accrued as of December 31, 2019.

There were no accrued penalties as of December 31, 2018 or 2017.

The total amount of interest expense recorded in income tax expense (credit) during 2020, 2019 and 2018 was $(0.4) million, $0.7 million and $0.1 million, respectively.

As of December 31, 2020, there is no accrued interest recorded on the consolidated statements of financial condition.

The total amount of accrued interest recorded on the consolidated statements of financial condition as of December 31, 2019 and 2018 was $1.1 million and $0.3 million, respectively.

There were no penalties accrued as of December 31, 2020.

There was $0.2 million of penalties accrued as of December 31, 2019 and there were no accrued penalties as of December 31, 2018.

Generally, the company is no longer subject to U.S.

federal, state or local income tax examinations by tax authorities for any year prior to 2016, except as set forth below.

During the third quarter of 2018, the City of New York notified us of an examination of AB's UBT returns for the years 2013 through 2016.

The examination is ongoing.

As a result of the settlement of the New York City UBT tax audit for the years 2013 through 2016, the gross unrecognized tax benefit was reduced by approximately $2.9 million.

The company also reduced the amount of accrued interest and penalties by $1.3 million.

During the fourth quarter of 2020, the City of New York notified us of an examination of AB's UBT returns for the years 2017 through 2019.

The examination is ongoing and no provision with respect to this examination has been recorded.

Currently, there are no income tax examinations at our significant non-U.S.

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Years that remain open and may be subject to examination vary under local law and range from one to seven years.

At December 31, 2019, it is reasonably possible that $4.2 million of our unrecognized tax benefits will change within the next twelve months due to completion of tax authority exams.

At December 31, 2020, it is not reasonably possible that any of our unrecognized tax benefits will change within the next twelve months due to completion of tax authority exams.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Other, primarily accrued expenses deductible when paid 4,737 3,106

47,527 41,903

valuation allowance (3,025) (2,026)

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Right-of-use asset 4,975 5,191

Other 1,760 1,672

Deferred tax liability 17,716 17,067

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Valuation allowances of $3.0 million and $2.0 million were established as of December 31, 2020 and 2019, respectively, primarily due to significant negative evidence that net operating loss ( "NOL" ) carryforwards will not be utilized, given the future losses expected to be incurred by the applicable subsidiaries.

We had NOL carryforwards at December 31, 2019 and 2018 of approximately $46.2 million and $32.4 million, respectively.

The majority of our foreign NOL carryforwards have an indefinite expiration period.

We had NOL carryforwards at December 31, 2020 and 2019 of approximately $51.0 million and $46.2 million, respectively, in certain foreign locations with an indefinite expiration period.

The deferred tax asset is included in other assets in our consolidated statement of financial condition.

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Years Ended December 31,

2020 2019 2018

(in thousands)

Institutions $ 512,914 $ 480,144 $ 479,068

Retail 1,811,948 1,619,832 1,494,445

Private Wealth Management 882,672 904,505 883,234

Bernstein Research Services 459,744 407,911 439,432

Other 56,908 163,245 123,581

Total revenues 3,724,186 3,575,637 3,419,760

Interest expense 15,650 57,205 52,399

Net revenues $ 3,708,536 $ 3,518,432 $ 3,367,361

Our AllianceBernstein Global High Yield Portfolio, an open-end fund incorporated in Luxembourg (ACATEUH:

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and international operations, as of and for the years ended December 31, were as follows:

2020 2019 2018

(in thousands)

2 unchanged sentences

International 1,749,008 1,543,327 1,427,094

Total $ 3,708,536 $ 3,518,432 $ 3,367,361

Long-lived assets:

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International 53,453 54,349

Total $ 3,339,214 $ 3,313,839

Major Customers

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HSBC is not under any obligation to sell a specific amount of AB Fund shares.

EQH and the general and separate accounts of Equitable Life (including investments by the separate accounts of Equitable Life in the funding vehicle EQ Advisors Trust) accounted for approximately 3% of our total revenues for each of the years ended December 31, 2019, 2018 and 2017.

EQH and the general and separate accounts of Equitable Financial Life Insurance Company (" Equitable Financial ") (including investments by the separate accounts of Equitable Financial in the funding vehicle EQ Advisors Trust) accounted for approximately 3% of our total revenues for each of the years ended December 31, 2020, 2019 and 2018.

AXA and its subsidiaries accounted for approximately 2% of our total revenues for each of the years ended December 31, 2020, 2019 and 2018.

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Years Ended December 31,

2020 2019 2018

(in thousands)

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Bernstein Research Services 3 2 33

$ 1,972,531 $ 1,799,541 $ 1,692,365

EQH, AXA and their respective Subsidiaries

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In addition, EQH, AXA and their respective subsidiaries distribute company-sponsored mutual funds, for which they receive commissions and distribution payments.

Also, we are covered by various insurance policies maintained by EQH, AXA and their respective subsidiaries and we pay fees for technology and other services provided by EQH, AXA and their respective subsidiaries.

Also, we are covered by various insurance policies maintained by EQH and we pay fees for technology and other services provided by EQH, AXA and their respective subsidiaries.

Additionally, see Note 12, Debt , for disclosures related to our credit facility with EQH.

Aggregate amounts included in the consolidated financial statements for transactions with EQH, AXA and their respective subsidiaries, as of and for the years ended December 31, are as follows:

2020 2019 2018 2020 2019 2018

(in thousands)

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Other revenues 1,330 1,013 1,104 353 482 625

$ 117,231 $ 110,329 $ 105,914 $ 86,783 $ 78,581 $ 79,003

Commissions and distribution payments to financial intermediaries $ 3,952 $ 3,956 $ 3,964 $ 14,848 $ 16,693 $ 17,603

General and administrative 2,281 2,466 2,615 8,928 11,501 12,391

5,463 3,644 1,485 — — —

$ 11,696 $ 10,066 $ 8,064 $ 23,776 $ 28,194 $ 29,994

Balance Sheet:

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Other due to EQH, AXA and their respective subsidiaries (1,280) (2,111) (4,703) (5,234)

EQH Facility (675,000) (560,000) — —

$ (667,533) $ (553,157) $ 559 $ 5,608

(1) Prior period EQH 2019 is now presented to conform to current periods presentation.

Other Related Parties

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The net receivable balance included in the consolidated statements of financial condition as of December 31, 2020 and 2019 was $10.2 million and $10.1 million, respectively.

Acquisitions are accounted for under ASC 805, Business Combinations .

On April 1, 2019, we acquired a 100% interest in Autonomous, an institutional research firm.

On the acquisition date, we made a cash payment of $6.5 million and recorded a contingent consideration payable of $17.4 million based on projected fee revenues over a five-year measurement period.

The excess of the purchase price over the current fair value of identifiable net assets acquired of $5.6 million resulted in the recognition of $10.2 million of goodwill and $8.1 million of intangible assets relating to customer relationships and trademarks.

Also, in accordance with US GAAP, additional cash payments and contingent consideration payable to the owners of Autonomous on the acquisition date are considered compensation expense to be amortized over two-year and five-year periods, respectively, not purchase price consideration, due to service conditions at the time of acquisition.

The Autonomous acquisition did not have a material impact on our financial condition or results of operations.

As a result, we have not provided supplemental pro forma information.

Related Party Master Repurchase Agreement

During April 2020, we provided a $125 million credit facility, through a Master Repurchase Agreement (" MRA "), to one of our sponsored private investment funds, of which $30 million was drawn upon as of April 28, 2020 and repaid in full in May 2020.

No additional amounts were drawn during the remainder of 2020.

The amounts drawn upon the MRA, which were payable on demand, were collateralized by assets of the fund, could have been repaid at any time prior to maturity and bore interest based upon the interest rate established at the time of each borrowing.

This credit facility expired on December 31, 2020.

Non-controlling Interests

Non-controlling interest in net income for the years ended December 31, 2020, 2019 and 2018 consisted of the following:

2020 2019 2018

(in thousands)

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Consolidated company-sponsored investment funds $ — $ — $ (119)

Other — 92 188

Total non-redeemable non-controlling interest — 92 69

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Total non-controlling interest in net income (loss) $ (4,169) $ 29,641 $ 21,910

On June 20, 2014, we acquired an 81.7% ownership interest in CPH Capital Fondsmaeglerselskab A/S (“ CPH ”), a Danish asset management firm that manages global core equity assets for institutional investors.

As a result of additional share purchases made in each year since 2015, we have a 100% ownership interest in CPH as of December 31, 2019.

Non-redeemable non-controlling interest as of December 31, 2019 and 2018 consisted of the following:

(in thousands)

Consolidated company-sponsored investment funds

Total non-redeemable non-controlling interest

Redeemable non-controlling interest as of December 31, 2020 and 2019 consisted of the following:

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Quarters Ended 2020

December 31 September 30 June 30 March 31

(in thousands, except per unit amounts)

Net revenues $ 1,062,893 $ 900,038 $ 871,449 $ 874,156

Net income attributable to AB Unitholders $ 286,335 $ 207,976 $ 177,321 $ 194,320

Basic net income per AB Unit (1)

$ 1.06 $ 0.77 $ 0.65 $ 0.71

Diluted net income per AB Unit (1)

$ 1.06 $ 0.77 $ 0.65 $ 0.71

Cash distributions per AB Unit (2)(3)

$ 1.05 $ 0.76 $ 0.68 $ 0.71

Quarters Ended 2019

December 31 September 30 June 30 March 31

(in thousands, except per unit amounts)

Net revenues $ 987,304 $ 877,867 $ 857,799 $ 795,462

Net income attributable to AB Unitholders $ 248,865 $ 187,811 $ 166,252 $ 149,114

Basic net income per AB Unit (1)

$ 0.92 $ 0.69 $ 0.61 $ 0.55

Diluted net income per AB Unit (1)

$ 0.92 $ 0.69 $ 0.61 $ 0.55

Cash distributions per AB Unit (2)(3)

$ 0.93 $ 0.70 $ 0.63 $ 0.56

(1) Basic and diluted net income per unit are computed independently for each of the periods presented.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data