What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-04-29 compared with 2021-10-28 · 53 added, 66 removed, 209 unchanged (36% of the section changed)

3 unchanged sentences

(in thousands, except unit amounts)

September 30,

2022 December 31,

Investment in AB $ 1,588,232 $ 1,623,764

Other assets — 92

Total assets $ 1,588,232 $ 1,623,764

17 unchanged sentences

(in thousands, except per unit amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Equity in net income attributable to AB Unitholders $ 94,353 $ 88,907

8 unchanged sentences

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Net income $ 85,928 $ 81,087

Other comprehensive income (loss):

Other comprehensive (loss):

Foreign currency translation adjustments, before tax ( 4,317 ) ( 2,732 )

Income tax benefit 99 38 90 116

Income tax benefit (expense) 30 ( 30 )

Foreign currency translation adjustments, net of tax ( 4,287 ) ( 2,762 )

1 unchanged sentence

Amortization of prior service cost 2 ( 2 )

Recognized actuarial gain 264 149 202 613

Recognized actuarial gain (loss) 84 ( 274 )

Changes in employee benefit related items 86 ( 276 )

Income tax (expense) ( 2 ) ( 1 ) ( 1 ) ( 31 )

Employee benefit related items, net of tax 266 151 207 592

Other comprehensive (loss) income ( 3,014 ) 6,061 ( 5,005 ) 1,426

Income tax (expense) benefit ( 3 ) 2

Employee benefit (expense) related items, net of tax 83 ( 274 )

Other comprehensive (loss) ( 4,204 ) ( 3,036 )

Comprehensive income $ 81,724 $ 78,051

3 unchanged sentences

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

General Partner’s Capital

15 unchanged sentences

Balance, end of period ( 47,402 ) ( 51,973 )

Accumulated Other Comprehensive (Loss) Income

Accumulated Other Comprehensive (Loss)

Balance, beginning of period ( 32,705 ) ( 33,898 )

7 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Changes in assets and liabilities:

Decrease (increase) in other assets 92 ( 60 )

(Decrease) in other liabilities ( 1,348 ) ( 1,334 )

Decrease in other assets — 92

(Decrease) increase in other liabilities ( 1,146 ) 5,778

Net cash provided by operating activities 127,143 104,141

1 unchanged sentence

Investments in AB with proceeds from exercise of compensatory options to buy AB Holding Units

( 3,402 ) ( 147 )

Net cash used in investing activities — ( 1,914 )

1 unchanged sentence

Cash distributions to Unitholders ( 127,672 ) ( 98,045 )

Capital contributions from AB 1,914 865

Capital contributions from (to) AB 529 ( 6,096 )

Proceeds from exercise of compensatory options to buy AB Holding Units — 1,914

6 unchanged sentences

Notes to Condensed Financial Statements

September 30, 2021

March 31, 2022

The words “we” and “our” refer collectively to AllianceBernstein Holding L.P.

13 unchanged sentences

• Retail Services – servicing its retail clients, primarily by means of retail mutual funds sponsored by AB or an affiliated company, sub-advisory relationships with mutual funds sponsored by third parties, separately-managed account programs sponsored by financial intermediaries worldwide and other investment vehicles.

• Private Wealth Management Services – servicing its private clients, including high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds, mutual funds and other investment vehicles.

• Private Wealth Services – servicing its private clients, including high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds, mutual funds and other investment vehicles.

• Bernstein Research Services – servicing institutional investors, such as pension fund, hedge fund and mutual fund managers, seeking high-quality fundamental research, quantitative services and brokerage-related services in equities and listed options.

9 unchanged sentences

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

As of September 30, 2021, EQH owned approximately 4.1 % of the issued and outstanding units representing assignments of beneficial ownership of limited partnership interests in AB Holding (“AB Holding Units”).

As of March 31, 2022, EQH owned approximately 4.0 % of the issued and outstanding units representing assignments of beneficial ownership of limited partnership interests in AB Holding (“AB Holding Units”).

AllianceBernstein Corporation (an indirect wholly-owned subsidiary of EQH, “General Partner”) is the general partner of both AB Holding and AB.

AllianceBernstein Corporation owns 100,000 general partnership units in AB Holding and a 1.0 % general partnership interest in AB.

As of September 30, 2021, the ownership structure of AB, expressed as a percentage of general and limited partnership interests, was as follows:

As of March 31, 2022, the ownership structure of AB, expressed as a percentage of general and limited partnership interests, was as follows:

EQH and its subsidiaries 63.0 %

1 unchanged sentence

Unaffiliated holders 0.7

Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an approximate 64.7 % economic interest in AB as of September 30, 2021.

Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an approximate 64.5 % economic interest in AB as of March 31, 2022.

Basis of Presentation

5 unchanged sentences

The condensed statement of financial condition as of December 31, 2021 was derived from audited financial statements.

Certain disclosures included in the annual financial statements have been condensed or omitted from these financial statements as they are not required for interim financial statements under principles generally accepted in the United States of America ("GAAP") and the rules of the Securities and Exchange Commission.

AB Holding records its investment in AB using the equity method of accounting.

2 unchanged sentences

Subsequent Events

We have evaluated subsequent events through the date that these financial statements were filed with the Securities and Exchange Commission and there were no events requiring disclosure.

We have evaluated subsequent events through the date that these financial statements were filed with the SEC and did not identify any subsequent events that would require disclosure in these financial statements.

Cash Distributions

1 unchanged sentence

Available Cash Flow is defined as the cash distributions AB Holding receives from AB minus such amounts as the General Partner determines, in its sole discretion, should be retained by AB Holding for use in its business (such as the payment of taxes) or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow.

On October 28, 2021, the General Partner declared a distribution of $ 0.89 per unit, representing a distribution of Available Cash Flow for the three months ended September 30, 2021.

Each general partnership unit in AB Holding is entitled to

receive distributions equal to those received by each AB Holding Unit.

The distribution is payable on November 24, 2021 to holders of record at the close of business on November 8, 2021.

On April 29, 2022, the General Partner declared a distribution of $ 0.90 per unit, representing a distribution of Available Cash Flow for the three months ended March 31, 2022.

Each general partnership unit in AB Holding is entitled to receive distributions equal to those received by each AB Holding Unit.

The distribution is payable on May 26, 2022 to holders of record at the close of business on May 9, 2022.

Long-term Incentive Compensation Plans

3 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.

Repurchases of AB Holding Units for the three and nine months ended September 30, 2021 and 2020 consisted of the following:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Repurchases of AB Holding Units for the three months ended March 31, 2022 and 2021 consisted of the following:

Three Months Ended March 31,

(in millions)

Total amount of AB Holding Units Purchased (1)

1.0 0.3 2.9 2.5

Total Cash Paid for AB Holding Units Purchased (1)

Total amount of AB Holding Units Purchased/Retained (1)

Total Cash Paid for AB Holding Units Purchased/Retained (1)

$ 14.0 $ 37.4

Open Market Purchases of AB Holding Units Purchased (1)

0.9 0.2 2.3 2.4

Total Cash Paid for Open Market Purchases of AB Holding Units (1)

$ 44.9 $ 6.7 $ 103.7 $ 51.8

(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.

The difference between open-market purchases and units retained reflects the retention of AB Holding Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.

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”).

2 unchanged sentences

Repurchases are subject to regulations promulgated by the SEC as well as certain price, market volume and timing constraints specified in the plan.

The plan adopted during the third quarter of 2021 expired at the close of business on October 27, 2021.

We did not adopt a plan during the first quarter of 2022.

AB may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under its incentive compensation award program and for other corporate purposes.

During the first nine months of 2021 and 2020, AB awarded to employees and Eligible Directors 3.6 million and 0.5 million restricted AB Holding Unit awards, respectively.

During the first three months of 2022 and 2021, AB awarded to employees and Eligible Directors 0.7 million and 3.4 million restricted AB Holding Unit awards, respectively.

AB used AB Holding Units repurchased during the applicable period and newly-issued AB Holding Units to fund these restricted AB Holding Unit awards.

During the first nine months of 2021 and 2020, AB Holding issued 0.1 million and 5,182 AB Holding Units, respectively, upon exercise of options to buy AB Holding Units.

AB Holding used the proceeds of $ 3.4 million and $ 0.1 million, respectively, received from award recipients as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.

During the first three months of 2022 and 2021, AB Holding had no issuances and 0.1 million issuances of AB Holding Units, respectively, upon exercise of options to buy AB Holding Units.

AB Holding used the proceeds of zero and $ 1.9 million, respectively, received from award recipients as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.

Net Income per Unit

1 unchanged sentence

Diluted net income per unit is derived by adjusting net income for the assumed dilutive effect of compensatory options (“Net income – diluted”) and dividing by the diluted weighted average number of units outstanding for each period.

Three Months Ended September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Three Months Ended

(in thousands, except per unit amounts)

7 unchanged sentences

Diluted net income per unit $ 0.87 $ 0.81

Three Months Ended September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(amounts as shown)

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

There were no anti-dilutive options excluded from diluted net income in the three months ended March 31, 2022 or 2021 .

Investment in AB

Changes in AB Holding’s investment in AB during the nine-month period ended September 30, 2021 are as follows (in thousands):

Changes in AB Holding’s investment in AB during the three-month period ended March 31, 2022 are as follows (in thousands):

Investment in AB as of December 31, 2021 $ 1,623,764

Equity in net income attributable to AB Unitholders 94,353

Changes in accumulated other comprehensive income ( 5,005 )

Changes in accumulated other comprehensive (loss) ( 4,204 )

Cash distributions received from AB ( 136,714 )

Additional investments with proceeds from exercise of compensatory options to buy AB Holding Units 3,402

Capital contributions from AB ( 529 )

2 unchanged sentences

Change in AB Holding Units held by AB for long-term incentive compensation plans ( 4,093 )

Investment in AB as of September 30, 2021 $ 1,550,187

Investment in AB as of March 31, 2022 $ 1,588,232

Units Outstanding

Changes in AB Holding Units outstanding during the nine-month period ended September 30, 2021 are as follows:

Changes in AB Holding Units outstanding during the three-month period ended March 31, 2022 are as follows:

Outstanding as of December 31, 2021 99,271,727

Options exercised 143,211

Units issued 582,992

Units retired ( 260,245 )

Outstanding as of September 30, 2021 98,754,148

AB Holding is a “grandfathered” publicly-traded partnership (“PTP”) for federal tax purposes and, accordingly, is not subject to federal or state corporate income taxes.

Outstanding as of March 31, 2022 99,594,474

AB Holding is a publicly-traded partnership (“PTP”) for federal tax purposes and, accordingly, is not subject to federal or state corporate income taxes.

However, AB Holding is subject to the 4.0 % New York City unincorporated business tax (“UBT”), net of credits for UBT paid by AB, and to a 3.5 % federal tax on partnership gross income from the active conduct of a trade or business.

1 unchanged sentence

AB Holding’s federal income tax is computed by multiplying certain AB qualifying revenues (primarily U.S.

investment advisory fees, research payments and brokerage commissions) by AB Holding’s ownership interest in AB, multiplied by the 3.5 % tax rate.

investment advisory fees, research payments and brokerage commissions) by AB Holding’s ownership interest in AB, multiplied by

the 3.5 % tax rate.

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

Three Months Ended September 30, Nine Months Ended

September 30,

2021 2020 % Change 2021 2020 % Change

Three Months Ended

2022 2021 % Change

(in thousands)

13 unchanged sentences

Effective tax rate 8.9 % 8.8 %

In order to preserve AB Holding’s status as a “grandfathered” PTP for federal income tax purposes, management ensures that AB Holding does not directly or indirectly (through AB) engage in a substantial new line of business.

If AB Holding were to lose its status as a “grandfathered” PTP, it would be subject to corporate income tax, which would reduce materially AB Holding’s net income and its quarterly distributions to AB Holding Unitholders.

In order to preserve AB Holding’s status as a PTP for federal income tax purposes, management ensures that AB Holding does not directly or indirectly (through AB) engage in a substantial new line of business.

If AB Holding were to lose its status as a PTP, it would be subject to corporate income tax, which would reduce materially AB Holding’s net income and its quarterly distributions to AB Holding Unitholders.

Commitments and Contingencies

11 unchanged sentences

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 operations, financial condition or liquidity in any future reporting period.

On March 17, 2022, AB Holding and AB entered into a transaction agreement to acquire 100 % of the equity interests of CarVal Investors, L.P.

(“CarVal”) in exchange for (i) AB Holding Units to be delivered in 2022 (“Upfront Payment”), and (ii) the issuance of additional AB Holding Units at future dates that are contingent upon achievement of performance hurdles by CarVal during the six-year period beginning January 1, 2022 and ending on December 31, 2027.

The Upfront Payment will total approximately $ 750,000,000 and consist of the AB Holding Units discussed above as well as cash to fund certain CarVal business expenses and other obligations.

Immediately following the acquisition of CarVal by AB Holding, AB Holding will contribute all of the equity interests of CarVal to AB in exchange for AB Units.

The transaction is expected to close in the third quarter of 2022.

The transaction agreement has been filed as Exhibit 10.1 to this Form 10-Q.

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-Q

Item 1. Financial Statements