What changed in this filing

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Item 1. Financial Statements

2022-07-29 compared with 2022-04-29 · 51 added, 38 removed, 224 unchanged (28% of the section changed)

24 unchanged sentences

(in thousands, except per unit amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Equity in net income attributable to AB Unitholders $ 75,358 $ 97,407 $ 169,711 $ 186,314

8 unchanged sentences

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Net income $ 68,141 $ 90,917 $ 154,069 $ 172,004

Other comprehensive (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustments, before tax ( 11,984 ) 809 ( 16,301 ) ( 1,923 )

7 unchanged sentences

Employee benefit (expense) related items, net of tax 359 215 442 ( 59 )

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

Other comprehensive (loss) income ( 11,395 ) 1,045 ( 15,599 ) ( 1,991 )

Comprehensive income $ 56,746 $ 91,962 $ 138,470 $ 170,013

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

General Partner’s Capital

25 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

5 unchanged sentences

Decrease in other assets — 76

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

(Decrease) in other liabilities ( 1,412 ) ( 1,111 )

Net cash provided by operating activities 218,021 178,900

1 unchanged sentence

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

( 178 ) ( 3,402 )

Net cash used in investing activities ( 178 ) ( 3,402 )

1 unchanged sentence

Cash distributions to Unitholders ( 217,648 ) ( 179,308 )

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

Capital contributions (to) from AB ( 373 ) 408

Proceeds from exercise of compensatory options to buy AB Holding Units 178 3,402

6 unchanged sentences

Notes to Condensed Financial Statements

March 31, 2022

June 30, 2022

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

25 unchanged sentences

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

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”).

As of June 30, 2022, 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”).

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

As of June 30, 2022, the ownership structure of AB, expressed as a percentage of general and limited partnership interests, was as follows:

EQH and its subsidiaries 63.5 %

1 unchanged sentence

Unaffiliated holders 0.8

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.

Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an approximate 65.0 % economic interest in AB as of June 30, 2022.

Basis of Presentation

10 unchanged sentences

Subsequent Events

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.

We have evaluated subsequent events through the date that these financial statements were filed with the SEC.

See Note 9 Subsequent Event for additional details related to the closing of our acquisition of CarVal Investors, L.P.

We previously announced our intention to acquire CarVal in our Form 10-Q for the quarter ended March 31, 2022.

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 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.

On July 29, 2022, the General Partner declared a distribution of $ 0.71 per unit, representing a distribution of Available Cash Flow for the three months ended June 30, 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.

The distribution is payable on August 18, 2022 to holders of record at the close of business on August 8, 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 months ended March 31, 2022 and 2021 consisted of the following:

Three Months Ended March 31,

Repurchases of AB Holding Units for the three and six months ended June 30, 2022 and 2021 consisted of the following:

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

(in millions)

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

2.3 0.9 2.6 1.9

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

1 unchanged sentence

Open Market Purchases of AB Holding Units Purchased (1)

2.3 0.8 2.3 1.4

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

$ 92.7 $ 34.6 $ 92.7 $ 58.8

(1) Purchased on a trade date basis.

4 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.

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

The plan adopted during the second quarter of 2022 expired at the close of business on July 26, 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 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.

During the first six months of 2022 and 2021, AB awarded to employees and Eligible Directors 0.8 million and 3.5 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 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.

During the first six months of 2022 and 2021, AB Holding issued 5,774 and 0.1 million AB Holding Units, respectively.

AB Holding used the proceeds of $ 0.1 million and $ 3.4 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

Three Months Ended June 30, Six Months Ended

2022 2021 2022 2021

(in thousands, except per unit amounts)

7 unchanged sentences

Diluted net income per unit $ 0.69 $ 0.91 $ 1.56 $ 1.72

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

There were no anti-dilutive options excluded from diluted net income in the three and six moths ended June 30, 2022 or 2021.

Investment in AB

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

Changes in AB Holding’s investment in AB during the six-month period ended June 30, 2022 are as follows (in thousands):

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

2 unchanged sentences

Cash distributions received from AB ( 235,075 )

Capital contributions from AB ( 529 )

Additional investments with proceeds from exercise of compensatory options to buy AB Holding Units 178

Capital contributions to AB 373

AB Holding Units retired ( 112,307 )

1 unchanged sentence

Change in AB Holding Units held by AB for long-term incentive compensation plans ( 237 )

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

Investment in AB as of June 30, 2022 $ 1,462,265

Units Outstanding

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

Changes in AB Holding Units outstanding during the six-month period ended June 30, 2022 are as follows:

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

Options exercised 5,774

Units issued 707,334

Units retired ( 2,717,996 )

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

Outstanding as of June 30, 2022 97,266,839

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

2 unchanged sentences

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

2022 2021 % Change

Three Months Ended June 30, Six Months Ended

2022 2021 % Change 2022 2021 % Change

(in thousands)

28 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.

Subsequent Event

On July 1, 2022, AB Holding acquired 100 % of the equity interests of CarVal in exchange for (i) AB Holding Units to be delivered in 2022, some of which were delivered on July 1 and the rest of which will be delivered during the fourth quarter (“Upfront Payment”), and (ii) the issuance of additional AB Holding Units in future years that are contingent upon achievement of performance hurdles by CarVal during the six-year period that began on January 1, 2022 and ends on December 31, 2027.

The Upfront Payment was approximately $ 750 million and consisted 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 contributed all of the equity interests of CarVal to AB in exchange for AB Units.

The acquisition will be accounted for as a business combination, and accordingly, the total purchase price will be allocated to the tangible and intangible assets acquired and the liabilities assumed based on their respective fair market values on the acquisition date.

The preliminary purchase price allocation is expected to be completed in the third quarter of 2022.

We have evaluated subsequent events and determined no events have occurred, other than the CarVal-related information disclosed herein , which would require an adjustment to or additional disclosure in the consolidated financial statements.

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