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Results of Operations
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(in thousands, except per unit amounts)
9 unchanged sentences
(1) Distributions reflect the impact of AB’s non-GAAP adjustments.
−Removed: AB Holding's net income for the three months ended March 31, 2023 decreased $18.5 million, as compared to the corresponding period in 2022 primarily due to lower net income attributable to AB Unitholders, partially offset by a higher weighted average equity ownership interest.
+Added: AB Holding's net income for the three and six months ended June 30, 2023 decreased $7.6 million and $26.1 million, respectively, as compared to the corresponding periods in 2022 primarily due to lower net income attributable to AB Unitholders, partially offset by a higher weighted average equity ownership interest.
AB Holding’s partnership gross income is derived from its interest in AB.
1 unchanged sentence
investment advisory fees, research payments and brokerage commissions) by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate.
−Removed: AB Holding's effective tax rate was 11.7% during the three months ended March 31, 2023, compared to 8.9% during the three months ended March 31, 2022.
+Added: AB Holding's effective tax rate was 12.4% during the three months ended June 30, 2023, compared to 9.6% during the three months ended June 30, 2022.
+Added: AB Holding's effective tax rate was 12.0% during the six months ended June 30, 2023, compared to 9.2% during the six months ended June 30, 2022.
See Note 7 to the condensed financial statements in Item 1 for the calculation of income tax expense.
1 unchanged sentence
As supplemental information, AB provides the performance measures “adjusted net revenues,” “adjusted operating income” and “adjusted operating margin,” which are the principal metrics management uses in evaluating and comparing the period-to-period operating performance of AB.
−Removed: Management principally uses these metrics in evaluating performance because they present a clearer picture of AB's operating performance and allow management to see long-term trends without the distortion primarily caused by long-term incentive compensation-related mark-to-market adjustments, real estate charges and other adjustment items.
+Added: Management principally uses these metrics in evaluating performance because they present a clearer picture of AB's operating performance and allow management to see long-term trends without the distortion primarily caused by long-term incentive compensation-related mark-to-market adjustments, acquisition-related expenses, interest expense and other adjustment items.
Similarly, management believes that these management operating metrics help investors better understand the underlying trends in AB's results and, accordingly, provide a valuable perspective for investors.
Such measures are not based on generally accepted accounting principles (“non-GAAP measures”).
+Added: We provide the non-GAAP measures "adjusted net income" and "adjusted diluted net income per unit" because our quarterly distribution per unit is typically our adjusted diluted net income per unit (which is derived from adjusted net income).
These non-GAAP measures are provided in addition to, and not as substitutes for, net revenues, operating income and operating margin, and they may not be comparable to non-GAAP measures presented by other companies.
1 unchanged sentence
The non-GAAP measures alone may pose limitations because they do not include all of AB’s revenues and expenses.
−Removed: Further, adjusted diluted net income per AB Holding Unit is not a liquidity measure and should not be used in place of cash flow measures.
+Added: Further, adjusted diluted net income per AB
+Added: Holding Unit is not a liquidity measure and should not be used in place of cash flow measures.
See AB’s MD&A contained in Exhibit 99.1 .
The impact of these adjustments on AB Holding’s net income and diluted net income per AB Holding Unit is as follows:
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
(in thousands, except per Unit amounts)
−Removed: AB non-GAAP adjustments, before taxes $ 19,318 $ 11,601
+Added: AB non-GAAP adjustments 1 $ 21,637 $ 6,350 $ 40,954 $ 17,951
AB income tax (expense) on non-GAAP adjustments (982) (1,835) (1,485) (3,702)
15 unchanged sentences
Capital Resources and Liquidity
−Removed: During the three months ended March 31, 2023, net cash provided by operating activities was $78.0 million, compared to $127.1 million during the corresponding 2022 period.
+Added: During the six months ended June 30, 2023, net cash provided by operating activities was $152.3 million, compared to $218.0 million during the corresponding 2022 period.
The decrease primarily resulted from lower cash distributions received from AB of $63.8 million.
−Removed: During the three months ended March 31, 2023, net cash used in financing activities was $78.0 million, compared to $127.1 million during the corresponding 2022 period.
+Added: During the six months ended June 30, 2023, net cash used in investing activities was zero compared to $178 thousand during the corresponding 2022 period.
+Added: The activity in the prior year period reflects the investments in AB with proceeds from exercises of compensatory options to buy AB Holding Units.
+Added: During the six months ended June 30, 2023, net cash used in financing activities was $152.3 million, compared to $217.8 million during the corresponding 2022 period.
The decrease was primarily due to lower cash distributions to Unitholders of $63.3 million.
+Added: 1 Includes all AB non-GAAP adjustments to pre-tax income.
Management believes that AB Holding will have the resources it needs to meet its financial obligations as a result of the cash flow AB Holding realizes from its investment in AB.
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Certain statements provided by management in this report and in the portion of AB’s Form 10-Q attached hereto as Exhibit 99.1 are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
−Removed: Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from
−Removed: future results expressed or implied by such forward-looking statements.
+Added: Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.
The most significant of these factors include, but are not limited to, the following:
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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.