ALLIANCEBERNSTEIN HOLDING L.P. 10-K

ab-20231231 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31 , 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09818 ALLIANCEBERNSTEIN HOLDING L.P. (Exact name of registrant as specified in its charter) Delaware 13-3434400 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 501 Commerce Street , Nashville , TN 37203 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: ( 615 ) 622-0000 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Units Rep. Assignments of Beneficial Ownership of LP Interests in AB Holding ("Units") AB New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ If securities are registered pursuant to Section 12 (b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b ). ☐ The aggregate market value of the units representing assignments of beneficial ownership of limited partnership interests held by non-affiliates computed by reference to the price at which such units were last sold on the New York Stock Exchange as of June 30, 2023 was approximately $ 3.1 billion. The number of units representing assignments of beneficial ownership of limited partnership interests outstanding as of December 31, 2023 was 114,436,091 . (This figure includes 100,000 general partnership units having economic interests equivalent to the economic interests of the units representing assignments of beneficial ownership of limited partnership interests.) DOCUMENTS INCORPORATED BY REFERENCE This Form 10-K does not incorporate any document by reference. Table of Contents Table of Contents Glossary of Certain Defined Terms ii Part I Item 1. Business 1 Item 1A. Risk Factors 17 Item 1B. Unresolved Staff Comments 27 Item 1 C . Cybersecurity 27 Item 2. Properties 28 Item 3. Legal Proceedings 29 Item 4. Mine Safety Disclosures 29 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. Reserved 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Executive Overview 32 Market Environment 32 AB Holding 34 AB 36 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 58 AB Holding 58 AB 58 Item 8. Financial Statements and Supplementary Data 60 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 125 Item 9A. Controls and Procedures 125 Item 9B. Other Information 126 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 126 Part III Item 10. Directors, Executive Officers and Corporate Governance 127 Item 11. Executive Compensation 142 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 173 Item 13. Certain Relationships and Related Transactions, and Director Independence 177 Item 14. Principal Accounting Fees and Services 178 Part IV Item 15. Exhibits, Financial Statement Schedules 179 Item 16. Form 10-K Summary 181 Signatures 182 2023 Annual Report i Table of Contents Glossary of Certain Defined Terms AB AllianceBernstein L.P. (Delaware limited partnership formerly known as Alliance Capital Management L.P., “ Alliance Capital ”), the operating partnership, and its subsidiaries and, where appropriate, its predecessors, AB Holding and ACMC, Inc. and their respective subsidiaries. AB Holding AllianceBernstein Holding L.P. (Delaware limited partnership). AB Holding Partnership Agreement the Amended and Restated Agreement of Limited Partnership of AB Holding, dated as of October 29, 1999 and as amended February 24, 2006. AB Holding Units units representing assignments of beneficial ownership of limited partnership interest in AB Holding. AB Partnership Agreement the Amended and Restated Agreement of Limited Partnership of AB, dated as of October 29, 1999 and as amended February 24, 2006. AB Units units of limited partnership interest in AB. AUM AB's assets under management. Bernstein Transaction AB's acquisition of the business and assets of SCB Inc., formerly known as Sanford C. Bernstein Inc., and the related assumption of the liabilities of that business, completed on October 2, 2000. Equitable America Equitable Financial Insurance Company of America (f/k/a MONY Life Insurance Company of America, an Arizona corporation), a subsidiary of Equitable Holdings. Equitable Financial Equitable Financial Life Insurance Company (New York stock life insurance company), a subsidiary of Equitable Holdings. Equitable Holdings or EQH Equitable Holdings, Inc. (Delaware corporation) and its subsidiaries other than AB and its subsidiaries. Exchange Act the Securities Exchange Act of 1934, as amended. ERISA the Employee Retirement Income Security Act of 1974, as amended. GAAP U.S. Generally Accepted Accounting Principles. General Partner AllianceBernstein Corporation (Delaware corporation), the general partner of AB and AB Holding and a subsidiary of Equitable Holdings, and, where appropriate, ACMC, LLC, its predecessor. Investment Advisers Act the Investment Advisers Act of 1940, as amended. Investment Company Act the Investment Company Act of 1940, as amended. NYSE the New York Stock Exchange, Inc. Partnerships AB and AB Holding together. SEC the United States Securities and Exchange Commission. Securities Act the Securities Act of 1933, as amended. ii AllianceBernstein Table of Contents Part I Item 1. Business The words “ we ” and “ our ” in this Form 10-K refer collectively to AB Holding and AB and its subsidiaries, or to their officers and employees. Similarly, the words “ company ” and “ firm ” refer to both AB Holding and AB. Where the context requires distinguishing between AB Holding and AB, we identify which company is being discussed. Cross-references are in italics. We use “ global ” in this Form 10-K to refer to all nations, including the United States; we use “ international ” or “ non-U.S. ” to refer to nations other than the United States. We use “ emerging markets ” in this Form 10-K to refer to countries included in the Morgan Stanley Capital International (“ MSCI ”) emerging markets index, which include, as of December 31, 2023: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. Clients We provide diversified investment management, research and related services globally to a broad range of clients through our three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and our sell-side business, Bernstein Research Services. S ee “Distribution Channels” in this Item 1 for additional information. As of December 31, 2023, 2022 and 2021, our AUM were approximately $725 billion, $646 billion and $779 billion, respectively, and our net revenues were approximately $4.2 billion, $4.1 billion and $4.4 billion, respectively. EQH ( our parent company ) and its subsidiaries, whose AUM consist primarily of fixed income investments, is our largest client. Our EQH affiliates represented approximately 16%, 16% and 17% of our AUM as of December 31, 2023, 2022 and 2021, and we earned approximately 5%, 4% and 4% of our net revenues from services we provided to them in each of 2023, 2022 and 2021, respectively. Assets Under Management (AUM) ($ billions) Net Revenues ($ billions) See “Distribution Channels” below and “Assets Under Management” and “Net Revenues” in Item 7 for additional information regarding our AUM and net revenues. Generally, we are compensated for our investment services on the basis of investment advisory and services fees calculated as a percentage of AUM. For additional information about our investment advisory and services fees, including performance-based fees, see “ Risk Factors ” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7 . Research Our high-quality, in-depth research is the foundation of our asset management and private wealth management businesses. We believe that our global team of research professionals, whose disciplines include economic, fundamental equity, fixed income and quantitative research, gives us a competitive advantage in achieving investment success for our clients. We also have experts focused on multi-asset strategies, wealth management, environmental, social and governance (“ ESG ”), and alternative investments. 2023 Annual Report 1 Table of Contents Part I Purpose, Values and Corporate Responsibility At AB, we pursue insight that unlocks opportunity. This is our firm's purpose. Together with our firm's mission and values, which we have described below , our purpose forms the foundation of corporate responsibility at AB. AB's mission is to help our clients define and achieve their investment goals, explicitly stating what we do to unlock opportunity for our clients. As an active manager, our differentiated insights drive our ability to deliver alpha and design innovative investment solutions. Our clients and their needs come first, always. Our values provide a framework for the behaviors and actions that create our strong culture and enable us to meet our clients' needs. Each value inspires us to be better: • We invest in one another, meaning that we have a strong organizational culture in which diversity is celebrated and mentorship is critical to our success. • We strive for distinctive knowledge, meaning that we collaboratively identify creative solutions to clients' investment challenges through our expertise in a wide range of investment disciplines. • We speak with courage and conviction, which informs how we engage with our AB colleagues, clients and others. • We act with integrity — always, which is the bedrock of our relationships and drives us to avoid activities that could create potential conflicts of interest or distract us from our singular focus to provide asset management and research to our clients. As noted above , we challenge ourselves to become a better version of AB. We are committed to being a responsible firm and striving to model the behavior that we expect from the companies in which we invest. This means, in part, giving back to the communities in which we work, and reducing our environmental footprint. Additionally, by promoting diversity, equity and inclusion, we are afforded different perspectives and ways of thinking, which can lead to better outcomes for our clients ( See Diversity, Equity and Inclusion below in this Item 1 ). Also, striving to be a good corporate citizen gives us a richer perspective for evaluating other companies. Our investors — research analysts and portfolio managers — understand the companies and industries they cover in-depth. And, we continue to invest in technology and innovation to further enable our investment teams to formalize their evaluations and share insights from our engagements with other companies. We provide additional information in this regard in the AB Responsibility Report, which can be found under “Responsibility - Overview” on www.alliancebernstein.com. And, we have described our firm's governance structure, including our Board and its committees, in Item 10 of this Form 10-K. 2 AllianceBernstein Table of Contents Part I Investment Philosophy We believe that by using differentiated research insights and a disciplined process to build high active share portfolios, we can achieve strong investment results for our clients over time. We are fully invested in delivering better outcomes for our clients. Key to this philosophy is developing and integrating research on material ESG issues, as well as our approach to engagement, when in the best interest of our clients. Our global research network, intellectual curiosity and collaborative culture allow us to advance clients' investment objectives, whether our clients are seeking idiosyncratic alpha, total return, downside mitigation, or sustainability and impact-focused outcomes. Our investment services include expertise in: • Actively managed equity strategies across global and regional universes, as well as capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities; • Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; • Actively managed alternative investments, including fundamental and systematically-driven hedge funds, fund of hedge funds and direct assets (e.g., direct lending, real estate debt and private equity); • Portfolios with Purpose, including Sustainable, Impact and Responsible+ (Climate-Conscious and ESG leaders) equity, fixed income and multi-asset strategies that address our clients' desire to invest their capital with a dedicated ESG focus, while pursuing strong investment returns; • Multi-asset services and solutions, including dynamic asset allocation, customized target-date funds and target-risk funds; and • Passively managed equity and fixed income strategies, including index, ESG index and enhanced index strategies. Our AUM by client domicile and investment service as of December 31, 2023, 2022 and 2021 are as follows: AUM by Client Domicile ($ in billions) AUM by Investment Service ($ in billions) 2023 Annual Report 3 Table of Contents Part I Distribution Channels Institutions We offer to our institutional clients, which include private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and EQH and its subsidiaries, separately managed accounts, sub- advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles (“ Institutional Services ”). We manage the assets of our institutional clients pursuant to written investment management agreements or other arrangements, which generally are terminable at any time or upon relatively short notice by either party. In general, our written investment management agreements may not be assigned without the client's consent. For information about our institutional investment advisory and services fees, including performance-based fees, see “ Risk Factors ” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7 . EQH and its subsidiaries constitute our largest institutional client. EQH and its subsidiaries combined AUM accounted for approximately 25%, 24% and 25% of our institutional AUM as of December 31, 2023, 2022 and 2021, respectively, and approximately 22%, 19% and 18% of our institutional revenues for 2023, 2022 and 2021, respectively. No single institutional client other than EQH and its respective subsidiaries accounted for more than approximately 1% of our net revenues for the year ended December 31, 2023. EQH and Subsidiaries as a % of our Institutional AUM EQH and Subsidiaries as a % of our Institutional Revenues 4 AllianceBernstein Table of Contents Part I As of December 31, 2023, 2022 and 2021, Institutional Services represented approximately 44%, 46% and 43%, respectively, of our AUM, and the fees we earned from providing these services represented approximately 16%, 16% and 13%, respectively, of our net revenues for each of those years. Our AUM and revenues are as follows: Institutional Services Assets Under Management (by Investment Service) Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in millions) Equity: Equity Actively Managed $ 59,423 $ 55,731 $ 73,726 6.6 % (24.4 %) Equity Passively Managed (1) 23,630 21,062 28,995 12.2 (27.4) Total Equity 83,053 76,793 102,721 8.2 (25.2) U.S. 40,930 35,428 47,409 15.5 (25.3) Global & Non-U.S. 42,123 41,365 55,312 1.8 (25.2) Total Equity 83,053 76,793 102,721 8.2 (25.2) Fixed Income: Fixed Income Taxable 126,350 121,871 155,940 3.7 (21.8) Fixed Income Tax-Exempt 1,317 849 1,108 55.1 (23.4) Fixed Income Passively Managed (1) 306 192 224 59.4 (14.3) Total Fixed Income 127,973 122,912 157,272 4.1 (21.8) U.S. 95,808 88,800 110,312 7.9 (19.5) Global & Non-U.S. 32,165 34,112 46,960 (5.7) (27.4) Total Fixed Income 127,973 122,912 157,272 4.1 (21.8) Alternatives/Multi-Asset Solutions (2) : U.S. 13,810 12,873 7,697 7.3 67.2 Global & Non-U.S. 92,288 84,703 69,390 9.0 22.1 Total Alternatives/Multi-Asset Solutions 106,098 97,576 77,087 8.7 26.6 Total: U.S. 150,548 137,101 165,418 9.8 (17.1) Global & Non-U.S. 166,576 160,180 171,662 4.0 (6.7) Total $ 317,124 $ 297,281 $ 337,080 6.7 (11.8) Affiliated - EQH 78,942 70,924 84,096 11.3 (15.7) Non-affiliated 238,182 226,357 252,984 5.2 (10.5) Total $ 317,124 $ 297,281 $ 337,080 6.7 (11.8) (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. 2023 Annual Report 5 Table of Contents Part I Revenues from Institutional Services (by Investment Service) Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands) Equity: Equity Actively Managed $ 197,822 $ 220,917 $ 240,049 (10.5 %) (8.0 %) Equity Passively Managed (1) 4,115 4,910 6,119 (16.2) (19.8) Total Equity 201,937 225,827 246,168 (10.6) (8.3) U.S. 75,861 80,908 97,522 (6.2) (17.0) Global & Non-U.S. 126,076 144,919 148,646 (13.0) (2.5) Total Equity 201,937 225,827 246,168 (10.6) (8.3) Fixed Income: Fixed Income Taxable 180,625 189,679 199,866 (4.8) (5.1) Fixed Income Tax-Exempt 1,300 1,182 1,356 10.0 (12.8) Fixed Income Passively Managed (1) 580 425 105 36.5 n/m Fixed Income Servicing (2) 20,149 15,991 14,738 26.0 8.5 Total Fixed Income 202,654 207,277 216,065 (2.2) (4.1) U.S. 135,560 128,392 124,004 5.6 3.5 Global & Non-U.S. 67,094 78,885 92,061 (14.9) (14.3) Total Fixed Income 202,654 207,277 216,065 (2.2) (4.1) Alternatives/Multi-Asset Solutions (3) : U.S. 94,488 114,982 64,646 (17.8) 77.9 Global & Non-U.S. 166,964 111,202 59,179 50.1 87.9 Total Alternatives/Multi-Asset Solutions 261,452 226,184 123,825 15.6 82.7 Total Investment Advisory and Services Fees: U.S. 305,909 324,282 286,172 (5.7) 13.3 Global & Non-U.S. 360,134 335,004 299,886 7.5 11.7 Total 666,043 659,286 586,058 1.0 12.5 Distribution Revenues 250 268 474 (6.7) (43.5) Shareholder Servicing Fees 377 429 485 (12.1) (11.5) Total $ 666,670 $ 659,983 $ 587,017 1.0 12.4 Affiliated - EQH 144,523 125,229 105,415 15.4 18.8 Non-affiliated 522,147 534,754 481,602 (2.4) 11.0 Total $ 666,670 $ 659,983 $ 587,017 1.0 12.4 (1) Includes index and enhanced index services. (2) Fixed Income Servicing includes advisory-related services fees that are not based on AUM, including derivative transaction fees, capital purchase program-related advisory services and other fixed income advisory services. (3) Includes certain multi-asset solutions and services not included in equity or fixed income services. 6 AllianceBernstein Table of Contents Part I Retail We provide investment management and related services to a wide variety of individual retail investors globally through retail mutual funds we sponsor, mutual fund sub-advisory relationships, separately-managed account programs ( see below ), and other investment vehicles (“ Retail Products and Services ”). We distribute our Retail Products and Services through financial intermediaries, including broker-dealers, insurance sales representatives, banks, registered investment advisers and financial planners. These products and services include open-end and closed-end funds that are either (i) registered as investment companies under the Investment Company Act (“ U.S. Funds ”), or (ii) not registered under the Investment Company Act and generally not offered to U.S. persons (“ Non-U.S. Funds ” and, collectively with the U.S. Funds, “ AB Funds ”). They also include separately-managed account programs, which are sponsored by financial intermediaries and generally charge an all-inclusive fee covering investment management, trade execution, asset allocation, and custodial and administrative services. In addition, we provide distribution, shareholder servicing, transfer agency services and administrative services for our Retail Products and Services. See “Net Revenues – Investment Advisory and Services Fees” in Item 7 for information about our retail investment advisory and services fees. See Note 2 to AB’s consolidated financial statements in Item 8 for a discussion of the commissions we pay to financial intermediaries in connection with the sale of open-end AB Funds. Fees paid by the U.S. Funds are reflected in the applicable investment management agreement, which generally must be approved annually by the board of directors or trustees of those funds, by a majority vote of the independent directors or trustees. Increases in these fees must be approved by fund shareholders; decreases need not be, including any decreases implemented by a fund’s directors or trustees. In general, each investment management agreement with the U.S. Funds provides for termination by either party, at any time, upon 60 days’ notice. Fees paid by Non-U.S. Funds are reflected in management agreements that continue until they are terminated. Increases in these fees generally must be approved by the relevant regulatory authority, depending on the domicile and structure of the fund, and Non-U.S. Fund shareholders must be given advance notice of any fee increases. The mutual funds we sub-advise for EQH and its subsidiaries constitute our largest retail client. EQH and its subsidiaries accounted for approximately 14% of our retail AUM as of December 31, 2023, 2022 and 2021 and approximately 1% of our retail net revenues for the years ended December 31, 2023, 2022 and 2021. Most open-end U.S. Funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay, out of assets of the fund, distribution and service fees for the distribution and sale of its shares. The open-end U.S. Funds have entered into such agreements with us, and we have entered into selling and distribution agreements pursuant to which we pay sales commissions to the financial intermediaries that distribute our open-end U.S. Funds. These agreements are terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares. As of December 31, 2023, retail U.S. Fund AUM were approximately $66 billion, or 23% of retail AUM, as compared to $54 billion, or 22%, as of December 31, 2022, and $73 billion, or 23%, as of December 31, 2021. Retail non-U.S. Fund AUM, as of December 31, 2023, totaled $107 billion, or 37% of retail AUM, as compared to $96 billion, or 39%, as of December 31, 2022, and $130 billion, or 41%, as of December 31, 2021. 2023 Annual Report 7 Table of Contents Part I Our Retail Services represented approximately 39%, 38% and 41% of our AUM as of December 31, 2023, 2022 and 2021, respectively, and the fees we earned from providing these services represented approximately 46%, 49% and 50% of our net revenues for the years ended December 31, 2023, 2022 and 2021, respectively. Our AUM and revenues are as follows: Retail Services Assets Under Management (by Investment Service) Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in millions) Equity: Equity Actively Managed $ 137,702 $ 116,235 $ 154,200 18.5 % (24.6 %) Equity Passively Managed (1) 34,582 30,445 40,821 13.6 (25.4) Total Equity 172,284 146,680 195,021 17.5 (24.8) U.S. 141,721 118,547 152,106 19.5 (22.1) Global & Non-U.S. 30,563 28,133 42,915 8.6 (34.4) Total Equity 172,284 146,680 195,021 17.5 (24.8) Fixed Income: Fixed Income Taxable 64,051 53,995 75,813 18.6 (28.8) Fixed Income Tax-Exempt 33,014 26,714 29,009 23.6 (7.9) Fixed Income Passively Managed (1) 11,066 9,206 12,762 20.2 (27.9) Total Fixed Income 108,131 89,915 117,584 20.3 (23.5) U.S. 52,683 41,151 46,361 28.0 (11.2) Global & Non-U.S. 55,448 48,764 71,223 13.7 (31.5) Total Fixed Income 108,131 89,915 117,584 20.3 (23.5) Alternatives/Multi-Asset Solutions (2) : U.S. 2,724 2,697 3,595 1.0 (25.0) Global & Non-U.S. 3,636 3,594 3,718 1.2 (3.3) Total Alternatives/Multi-Asset Solutions 6,360 6,291 7,313 1.1 (14.0) Total: U.S. 197,128 162,395 202,062 21.4 (19.6) Global & Non-U.S. 89,647 80,491 117,856 11.4 (31.7) Total $ 286,775 $ 242,886 $ 319,918 18.1 % (24.1 %) Affiliated - EQH 40,516 34,110 44,417 18.8 (23.2) Non-affiliated 246,259 208,776 275,501 18.0 (24.2) Total $ 286,775 $ 242,886 $ 319,918 18.1 % (24.1 %) (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services 8 AllianceBernstein Table of Contents Part I Revenues from Retail Services (by Investment Service) Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands) Equity: Equity Actively Managed $ 732,186 $ 746,889 $ 766,578 (2.0 %) (2.6 %) Equity Passively Managed (1) 11,283 12,870 14,773 (12.3) (12.9) Total Equity 743,469 759,759 781,351 (2.1) (2.8) U.S. 556,751 558,319 556,398 (0.3) 0.3 Global & Non-U.S. 186,718 201,440 224,953 (7.3) (10.5) Total Equity 743,469 759,759 781,351 (2.1) (2.8) Fixed Income: Fixed Income Taxable 373,659 390,708 517,327 (4.4) (24.5) Fixed Income Tax-Exempt 88,128 89,450 84,945 (1.5) 5.3 Fixed Income Passively Managed (1) 12,247 13,682 12,994 (10.5) 5.3 Total Fixed Income 474,034 493,840 615,266 (4.0) (19.7) U.S. 118,288 119,053 115,248 (0.6) 3.3 Global & Non-U.S. 355,746 374,787 500,018 (5.1) (25.0) Total Fixed Income 474,034 493,840 615,266 (4.0) (19.7) Alternatives/Multi-Asset Solutions (2) : U.S. 44,273 55,356 81,872 (20.0) (32.4) Global & Non-U.S. 13,499 13,484 13,117 0.1 2.8 Total Alternatives/Multi-Asset Solutions 57,772 68,840 94,989 (16.1) (27.5) Total Investment Advisory and Services Fees: U.S. 719,312 732,728 753,518 (1.8) (2.8) Global & Non-U.S. 555,963 589,711 738,086 (5.7) (20.1) Consolidated company-sponsored investment funds 836 770 1,243 8.6 (38.1) Total 1,276,111 1,323,209 1,492,847 (3.6) (11.4) Distribution Revenues 569,485 594,431 644,125 (4.2) (7.7) Shareholder Servicing Fees 80,424 83,268 86,857 (3.4) (4.1) Total $ 1,926,020 $ 2,000,908 $ 2,223,829 (3.7 %) (10.0 %) Affiliated - EQH 21,842 23,836 28,334 (8.4) (15.9) Non-affiliated 1,904,178 1,977,072 2,195,495 (3.7) (9.9) Total $ 1,926,020 $ 2,000,908 $ 2,223,829 (3.7 %) (10.0 %) (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. 2023 Annual Report 9 Table of Contents Part I Private Wealth Management We partner with our clients, embracing innovation and research to address increasingly complex challenges. Our clients include high-net-worth individuals and families who have created generational wealth as successful business owners, athletes, entertainers, corporate executives and private practice owners. We also provide investment and wealth advice to foundations and endowments, family offices and other entities. Our flexible and extensive investment platform offers a range of solutions, including separately-managed accounts, hedge funds, mutual funds and other investment vehicles, tailored to meet each distinct client's needs. Our investment platform is complimented with a wealth platform that includes complex tax and estate planning, pre-IPO and pre-transaction planning, multi-generational family engagement, and philanthropic advice in addition to tailored approaches to meeting the unique needs of emerging wealth and multi-cultural demographics (" Private Wealth Services "). We manage accounts pursuant to written investment advisory agreements, which generally are terminable at any time or upon relatively short notice by any authorized party, and may not be assigned without the client's consent. For information about our investment advisory and services fees, including performance-based fees, see “ Risk Factors ” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7 . Our Private Wealth Services represented approximately 17%, 16% and 16% of our AUM as of December 31, 2023, 2022 and 2021, respectively. The fees we earned from providing these services represented approximately 25% of our net revenues for 2023, 2022 and 2021. Our AUM and revenues are as follows: Private Wealth Services Assets Under Management (by Investment Service) Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in millions) Equity: Equity Actively Managed $ 50,351 $ 45,977 $ 59,709 9.5 % (23.0 %) Equity Passively Managed (1) 3,851 2,304 1,764 67.1 % 30.6 % Total Equity 54,202 48,281 61,473 12.3 (21.5) U.S. 33,639 28,014 35,014 20.1 (20.0) Global & Non-U.S. 20,563 20,267 26,459 1.5 (23.4) Total Equity 54,202 48,281 61,473 12.3 (21.5) Fixed Income: Fixed Income Taxable 18,201 14,391 14,567 26.5 (1.2) Fixed Income Tax-Exempt 26,760 24,953 26,929 7.2 (7.3) Fixed Income Passively Managed (1) 2 2 231 — (99.1) Total Fixed Income 44,963 39,346 41,727 14.3 (5.7) U.S. 40,166 34,764 36,166 15.5 (3.9) Global & Non-U.S. 4,797 4,582 5,561 4.7 (17.6) Total Fixed Income 44,963 39,346 41,727 14.3 (5.7) Alternatives/Multi-Asset Solutions (2) : U.S. 6,923 6,607 6,926 4.8 (4.6) Global & Non-U.S. 15,167 12,021 11,446 26.2 5.0 Total Alternatives/Multi-Asset Solutions 22,090 18,628 18,372 18.6 1.4 Total: U.S. 80,728 69,385 78,106 16.3 (11.2) Global & Non-U.S. 40,527 36,870 43,466 9.9 (15.2) Total $ 121,255 $ 106,255 $ 121,572 14.1 % (12.6 %) (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. 10 AllianceBernstein Table of Contents Part I Revenues from Private Wealth Services (by Investment Service) Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands) Equity: Equity Actively Managed $ 502,673 $ 521,155 $ 584,455 (3.5 %) (10.8 %) Equity Passively Managed (1) 14,711 8,700 4,780 69.1 82.0 Total Equity 517,384 529,855 589,235 (2.4) (10.1) U.S. 304,456 295,235 325,154 3.1 (9.2) Global & Non-U.S. 212,928 234,620 264,081 (9.2) (11.2) Total Equity 517,384 529,855 589,235 (2.4) (10.1) Fixed Income: Fixed Income Taxable 70,887 66,851 72,404 6.0 (7.7) Fixed Income Tax-Exempt 124,438 125,123 130,391 (0.5) (4.0) Fixed Income Passively Managed (1) 13 1,804 2,634 (99.3) (31.5) Total Fixed Income 195,338 193,778 205,429 0.8 (5.7) U.S. 164,601 159,411 167,402 3.3 (4.8) Global & Non-U.S. 30,737 34,367 38,027 (10.6) (9.6) Total Fixed Income 195,338 193,778 205,429 0.8 (5.7) Alternatives/Multi-Asset Solutions (2) : U.S. 223,518 195,666 249,432 14.2 (21.6) Global & Non-U.S. 97,074 69,245 71,524 40.2 (3.2) Total Alternatives/Multi-Asset Solutions 320,592 264,911 320,956 21.0 (17.5) Total Investment Advisory and Services Fees: U.S. 692,575 650,311 741,987 6.5 (12.4) Global & Non-U.S. 340,739 338,232 373,632 0.7 (9.5) Total 1,033,314 988,543 1,115,619 4.5 % (11.4 %) Distribution Revenues 16,528 12,496 7,641 32.3 63.5 Shareholder Servicing Fees 3,001 2,964 2,882 1.2 2.8 Total $ 1,052,843 $ 1,004,003 $ 1,126,142 4.9 % (10.8 %) (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. 2023 Annual Report 11 Table of Contents Part I Bernstein Research Services We offer high-quality fundamental and quantitative research and trade execution services in equities and listed options to institutional investors, such as mutual fund and hedge fund managers, pension funds and other institutional investors ( "Bernstein Research Services" or " BRS " ) . We serve our clients, which are based in major markets around the world, through our trading professionals, who are primarily based in New York, London and Hong Kong, and our research analysts, who provide fundamental company and industry research along with quantitative research into securities valuation and factors affecting stock-price movements. Additionally, we occasionally provide equity capital markets services to issuers of publicly traded securities, such as initial public offerings and follow-on offerings, generally acting as co-manager in such offerings. We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These clients compensate us principally by directing us to execute brokerage transactions on their behalf, for which we earn commissions, and to a lesser but increasing extent, by paying us directly for research through commission sharing agreements or cash payments. Bernstein Research Services accounted for approximately 9%, 10% and 10% of our net revenues for the years ended December 31, 2023, 2022 and 2021, respectively. For information regarding trends in fee rates charged for brokerage transactions, see “Risk Factors” in Item 1A . In the fourth quarter of 2022, AB and Société Générale (EURONEXT: GLE, “ SocGen ”), a leading European bank, announced plans to form a joint venture combining their respective cash equities and research businesses. As a result, the BRS business has been classified as held for sale on the consolidated statement of financial condition. For further discussion, s ee Note 24 Acquisitions and Divestitures to AB's consolidated financial statements in Item 8. Our Bernstein Research Services revenues are as follows: Revenues from Bernstein Research Services Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands) Bernstein Research Services $ 386,142 $ 416,273 $ 452,017 (7.2 %) (7.9 %) Custody Our U.S. based broker-dealer subsidiary acts as custodian for the majority of our Private Wealth Management AUM and some of our Institutional AUM. Other custodian arrangements, directed by clients, include banks, trust companies, brokerage firms and other financial institutions. People Management As a leading global investment management and research firm, we bring together a wide range of insights, expertise and innovations to advance the interests of our clients around the world. The intellectual capital and distinctive knowledge of our employees are collectively the most important assets of our firm, so the long-term sustainability and success of our firm is heavily dependent on our people. In 2022, our human capital and administrative services teams became our "People" team, a key acknowledgement of the central role they play in supporting our employees and advancing their work experience. We are keenly focused on: • fostering an inclusive culture by incorporating diversity, equity and inclusion in all levels of our business; • encouraging innovation; • developing, retaining and recruiting high quality talent; and • aligning employees’ incentives and risk taking with those of the firm. As a result, we have a strong firm culture that helps us maximize performance and drive excellence. Further, our firm’s role as a fiduciary is embedded in our culture. As a fiduciary, our firm’s primary objective is to act in our clients' best interests and help them reach their financial goals. Also, our Board of Directors (the " Board ") and committees of the Board, particularly our Compensation and Workplace Practices Committee, provide oversight into various matters affecting our people, including emerging people management risks and strategies to mitigate our exposure to those risks. These collaborative efforts contribute to the overall framework that guides how AB attracts, retains and develops a workforce that supports our values and strategic initiatives. 12 AllianceBernstein Table of Contents Part I Talent Acquisition and Development AB seeks to achieve excellence in business, including investment performance, client service, and being defined as an employer of choice. Across our global offices, we recruit and hire a workforce with diverse perspectives, backgrounds, and experiences. Our talent acquisition strategy helps us serve both our clients and our workforce, hand in hand, at an optimal level. We engage external organizations, including search firms and partnerships to assist in attracting and recruiting top talent at all levels. We also leverage technology tools to source and evaluate candidates against our needs and we continue to prioritize attracting diverse talent throughout our search activities. Outside of traditional recruiting, we believe investing in emerging talent is key to our future planning. Both our internship and associate programs serve as robust pipelines for future leadership. The talent acquisition process is our firm’s first impression to future employees, and we strive to provide all candidates with an excellent experience. We focus heavily on high candidate engagement, an efficient offer process and sound onboarding to support success. Investing in the continued development of our talent is ongoing through a blend of formal training, independent learning, mentoring, and progressing assignments of responsibility. Internal mobility is championed throughout the firm. We are highly committed to development and believe that top performers expect and deserve this ongoing investment. Employee Engagement and Culture We believe a workforce is most engaged when employees feel connected to our culture. We seek to create a workplace where our people recognize the high importance of the work they do and enjoy the environment where the work gets done. By creating a culture of excellence and accountability, we see employees thrive and contribute at their highest levels. It is important that our employees are not only connected to our business but also to the communities in which we operate. We offer many opportunities to volunteer, including our firm-wide philanthropic initiative, AB Gives Back. Coming out of the global pandemic, we continue to prioritize the well-being of our staff through our global wellness programming, employee wellness groups, and our hybrid work schedule. We believe that the flexibility to work remotely up to two days per week allows our employees to maintain the important benefits of in-person collaboration while providing greater work-life balance. Measuring engagement is key to understanding the views of the organization. We utilize AB Voice, a periodic engagement survey designed to measure employee sentiment, to identify and address gaps that could impact productivity and retention. Diversity, Equity and Inclusion The past year has been a robust year for Diversity, Equity and Inclusion (" DEI ") as we continued to focus on delivering equitable positive outcomes across the various segments of our business: colleagues, clients and communities. These elements included increasing education and support to address emerging topics, retaining and developing key diverse talent segments, improving data capture and reporting capabilities and scaling infrastructure for a more global, distributed DEI and philanthropy model. As DEI was again catapulted into the spotlight for a myriad of reasons, these elements have allowed for a more intentional, consistent approach and have acted to accelerate the overall success of the strategy. Furthermore, our Board and Board committees evaluate the overall effectiveness of our social responsibility policies, goals and programs and recommend changes to management as necessary. Over the past few years, we have seen an increase in social issues being brought to the forefront of national and global conversations including in the workplace. In an effort to appropriately respond to such issues, we formed the Social Response Committee (the " SRC "). The SRC has developed an approach to value-driven action that is rooted in broad evaluation of the various issues integrated with AB’s purpose and values to maintain consistency in decision making. The SRC’s remit is to surface, review and direct AB’s public or internal response to social issues that impact our business and our people. Data is at the heart of a strong and agile DEI strategy and serves as an incredibly effective tool to best uncover gaps and determine key focus areas. This year, we continued to closely monitor internal quantitative and qualitative metrics such as our AB Voice employee engagement survey to measure progress and determine which populations may require additional focus and development. We also leveraged external data sources such as the Investment Company Institute Asset Management D&I benchmarking survey, Disability Equality Index and Coqual’s Asian/Asian American and Pacific Islander focused research to maintain awareness of how we are performing relative to peers and competitors and ensure alignment with common practices. As global demographics change and employee needs and expectations evolve, providing platforms for education and productive discourse becomes even more critical. In 2023, we introduced several intentional engagement and retention initiatives including disability inclusion, expanded programs and focus groups. Our Employee Resource Groups which hosted over 50 events, remain essential to AB’s commitment to inclusivity as they not only encourage a positive work culture, but also contribute to business development and the professional development of employees worldwide. 2023 Annual Report 13 Table of Contents Part I Compensation and Benefits We recognize the role that a competitive total rewards offering plays in attracting and retaining top talent. Our pay practices include base salaries, annual cash bonuses, and, for employees with total compensation over $300,000 annually, a long-term incentive compensation award. These awards are generally denominated in restricted AB Holding Units. We utilize this structure with intentionality to foster a stronger sense of ownership by employees, aligning their interests directly with the interests of our Unitholders and indirectly with the interests of our clients. We are a meritocracy and pay for performance under the auspices of providing compensation that is competitive and consistent with employee positions, skill levels, performance, experience, knowledge, and geographic location. Annually, we engage a compensation consulting firm to independently evaluate the accuracy of our executive compensation and to provide benchmarking against our industry peers. We also use these insights to make pay decisions for the broader organization. Periodically, we engage outside counsel to conduct privileged pay equity reviews. Pay is evaluated on an annual basis, with the firm providing merit-based and cost of living annual base salary increases, as well as incentive compensation. This information is communicated to employees at year-end. On occasion, pay is adjusted off-cycle due to internal transfer and/or promotion. Based on unique geographies, the firm makes benefits available to all eligible employees, including health insurance, paid and unpaid leaves, a retirement plan, and life and disability/accident coverage. We also offer a variety of voluntary benefits, ranging from adoption and surrogacy assistance to tuition reimbursement, which allows employees to select the options that meet their individual needs. Employees As of December 31, 2023, our firm had 4,707 full-time employees, including 284 new hires onboarded during the first quarter of 2023, which were previously outsourced consultants in Pune, India. Net of these hires, headcount declined year-over-year, as compared with 4,436 employees as of December 31, 2022. As of December 31, 2023, our employees reflected the following characteristics and locations: Region: Female % Female Male % Male Grand Total % of Total Americas 1,133 25 % 2,037 45 % 3,170 70 % Asia ex Japan 298 7 % 378 8 % 676 15 % EMEA 224 5 % 350 8 % 574 13 % Japan 55 1 % 42 1 % 97 2 % Grand Total (1) 1,710 38 % 2,807 62 % 4,517 100 % (1) The table above reflects only those employees who have self-reported as male or female and as such does not reconcile to our total of 4,707 full-time employees as of December 31, 2023. Information about our Executive Officers Please refer to "Item 10. Directors, Executive Officers and Corporate Governance" below for information relating to our firm's executive officers. Service Marks We have registered a number of service marks with the U.S. Patent and Trademark Office and various foreign trademark offices, including the mark “AllianceBernstein.” The logo set forth below is a service mark of AB: In 2015, we established a new brand identity by prominently incorporating “AB” into our brand architecture, while maintaining the legal names of our corporate entities. With this and other related refinements, our company, and our Institutional and Retail businesses, are referred to as “AllianceBernstein (AB)” or simply “AB.” Private Wealth Management and Bernstein Research Services are referred to as “AB Bernstein.” Also, we adopted the logo service mark described above . In connection with the Bernstein Transaction, we acquired all of the rights in, and title to, the Bernstein service marks, including the mark “Bernstein.” 14 AllianceBernstein Table of Contents Part I Service marks are generally valid and may be renewed indefinitely, as long as they are in use and/or their registrations are properly maintained. Regulation Virtually all aspects of our business are subject to various federal and state laws and regulations, rules of various securities regulators and exchanges, and laws in the foreign countries in which our subsidiaries conduct business. These laws and regulations primarily are intended to protect clients and fund shareholders and generally grant supervisory agencies broad administrative powers, including the power to limit or restrict the carrying on of business for failure to comply with such laws and regulations. Possible sanctions that may be imposed on us include the suspension of individual employees, limitations on engaging in business for specific periods, the revocation of the registration as an investment adviser or broker-dealer, censures and fines. AB, AB Holding, the General Partner and six of our subsidiaries (Sanford C. Bernstein & Co., LLC (“ SCB LLC ”), AB Broadly Syndicated Loan Manager LLC, AB Custom Alternative Solutions LLC, AB Private Credit Investors LLC, AB CarVal Investors and W.P. Stewart Asset Management Ltd.) are registered with the SEC as investment advisers under the Investment Advisers Act. Additionally, AB Holding is an NYSE-listed company and, accordingly, is subject to applicable regulations promulgated by the NYSE. Also, AB, SCB LLC and AB Custom Alternative Solutions LLC are registered with the Commodity Futures Trading Commission (“ CFTC ”) as commodity pool operators and commodity trading advisers; SCB LLC also is registered with the CFTC as a commodities introducing broker. Each U.S. Fund is registered with the SEC under the Investment Company Act and each Non-U.S. Fund is subject to the laws in the jurisdiction in which the fund is registered. For example, our platform of Luxembourg-based funds operates pursuant to Luxembourg laws and regulations, including Undertakings for the Collective Investment in Transferable Securities Directives, and is authorized and supervised by the Commission de Surveillance du Secteur Financier (“ CSSF ”), the primary regulator in Luxembourg. AllianceBernstein Investor Services, Inc., one of our subsidiaries, is registered with the SEC as a transfer and servicing agent. SCB LLC and another of our subsidiaries, AllianceBernstein Investments, Inc., are registered with the SEC as broker-dealers, and both are members of the Financial Industry Regulatory Authority. In addition, SCB LLC is a member of the NYSE and other principal U.S. exchanges. Many of our subsidiaries are subject to the oversight of regulatory authorities in the jurisdictions outside the United States in which they operate, including the Ontario Securities Commission, the Investment Industry Regulatory Organization of Canada, the European Securities and Markets Authority, the Financial Conduct Authority in the U.K., the CSSF in Luxembourg, the Financial Services Agency in Japan, the Securities & Futures Commission in Hong Kong, the Monetary Authority of Singapore, the Financial Services Commission in South Korea, the Financial Supervisory Commission in Taiwan and The Securities and Exchange Board of India. While these regulatory requirements often may be comparable to the requirements of the SEC and other U.S. regulators, they are sometimes more restrictive and may cause us to incur substantial expenditures of time and money related to our compliance efforts. For additional information relating to the regulations that impact our business, please refer to "Risk Factors" in Item 1A . History and Structure We have been in the investment research and management business for more than 50 years. Bernstein was founded in 1967. Alliance Capital was founded in 1971 when the investment management department of Donaldson, Lufkin & Jenrette, Inc. (since November 2000, a part of Credit Suisse Group) merged with the investment advisory business of Moody’s Investors Service, Inc. In April 1988, AB Holding “went public” as a master limited partnership. AB Holding Units, which trade under the ticker symbol “AB,” have been listed on the NYSE since that time. In October 1999, AB Holding reorganized by transferring its business and assets to AB, a newly-formed operating partnership, in exchange for all of the AB Units (the “ Reorganization ”). Since the date of the Reorganization, AB has conducted the business formerly conducted by AB Holding and AB Holding’s activities have consisted of owning AB Units and engaging in related activities. Unlike AB Holding Units, AB Units do not trade publicly and are subject to significant restrictions on transfer. The General Partner is the general partner of both AB and AB Holding. In October 2000, our two legacy firms, Alliance Capital and Bernstein, combined, bringing together Alliance Capital’s expertise in growth equity and corporate fixed income investing and its family of retail mutual funds, with Bernstein’s expertise in value equity investing, tax-exempt fixed income management, and its Private Wealth Management and Bernstein Research Services businesses. 2023 Annual Report 15 Table of Contents Part I As of December 31, 2023, the condensed ownership structure of AB is as follows (for a more complete description of our ownership structure, see “Principal Security Holders” in Item 12 ): The General Partner owns 100,000 general partnership units in AB Holding and a 1.0% general partnership interest in AB. Including these general partnership interests, EQH, directly and through certain of its subsidiaries ( see “Principal Security Holders” in Item 12 ), had an approximate 61.2% economic interest in AB as of December 31, 2023. Competition We compete in all aspects of our business with numerous investment management firms, mutual fund sponsors, brokerage and investment banking firms, insurance companies, banks and other financial institutions that often provide investment products with similar features and objectives as those we offer. Our competitors offer a wide range of financial services to the same customers that we seek to serve. Some of our competitors are larger, have a broader range of product choices and investment capabilities, conduct business in more markets, and have substantially greater resources than we do. These factors may place us at a competitive disadvantage, and we can give no assurance that our strategies and efforts to maintain and enhance our current client relationships, and create new ones, will be successful. In addition, EQH and its subsidiaries provide financial services, some of which compete with those we offer. The AB Partnership Agreement specifically allows EQH and its subsidiaries (other than the General Partner) to compete with AB and to pursue opportunities that may be available to us. EQH and certain of its subsidiaries have substantially greater financial resources than we do and are not obligated to provide resources to us. To grow our business, we believe we must be able to compete effectively for AUM. Key competitive factors include: • our investment performance for clients; • our commitment to place the interests of our clients first; • the quality of our research; • our ability to attract, motivate and retain highly skilled, and often highly specialized, personnel; • the array of investment products we offer; • the fees we charge; • Morningstar/Lipper rankings for the AB Funds; • our ability to sell our actively-managed investment services despite the fact that many investors favor passive services; • our operational effectiveness; • our ability to further develop and market our brand; and • our global presence. Competition is an important risk that our business faces and should be considered along with the other factors we discuss in “Risk Factors” in Item 1A . 16 AllianceBernstein Table of Contents Part I Available Information AB and AB Holding file or furnish annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to such reports, and other reports (and amendments thereto) required to comply with federal securities laws, including Section 16 beneficial ownership reports on Forms 3, 4 and 5, registration statements and proxy statements. We maintain an Internet site ( http://www.alliancebernstein.com ) where the public can view these reports, free of charge, as soon as reasonably practicable after each report is filed with, or furnished to, the Securities and Exchange Commission (" SEC "). In addition, the SEC maintains an Internet site ( http://www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Item 1A. Risk Factors Please consider this section along with the description of our business in Item 1 , the competition section immediately above and AB’s financial information contained in Items 7 and 8 . The majority of the risk factors discussed below directly affect AB. These risk factors also affect AB Holding because AB Holding’s principal source of income and cash flow is attributable to its investment in AB. See also “Cautions Regarding Forward-Looking Statements” in Item 7 . Business-related Risks Our revenues and results of operations depend on the market value and composition of our AUM, which can fluctuate significantly based on various factors, including many factors outside of our control. We derive most of our revenues from investment advisory and services fees, which typically are calculated as a percentage of the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing period, and vary with the type of investment service, the size of the account and the total amount of assets we manage for a particular client. The value and composition of our AUM can be adversely affected by several factors, including: • Market Factors . Our AUM remain sensitive to the volatility associated with global financial market conditions. For example, the heightened global inflationary pressures that resulted in sizable interest rate increases and associated market volatility in 2022 and 2023. We recognize that, due to continued uncertainty associated with the global response to heightened global inflationary pressures, markets may remain volatile and, accordingly, there remains risk of a significant reduction in our revenues and net income in future periods. Global economies and financial markets are increasingly interconnected, which increases the probability that conditions in one country or region might adversely impact a different country or region. Conditions affecting the general economy, including political, social or economic instability at the local, regional or global level may also affect the market value of our AUM. War, such as the ongoing conflict in Ukraine and the middle east, or civil disturbance, acts of terrorism (whether foreign or domestic), health crises (such as the COVID-19 pandemic), as well as other incidents that interrupt the expected course of events, such as natural disasters, power outages and other unforeseeable and external events, and the public response to or fear of such diseases or events, have had and may in the future have a significant adverse effect on financial markets and our AUM, revenues and net income. Also, significant market volatility and uncertainty, and reductions in the availability of margin financing, can significantly limit the liquidity of certain asset backed and other securities, making it at times impossible to sell these securities at prices reflecting their true economic value. While liquidity conditions were relatively stable in 2023 despite market volatility, we recognize the possibility that conditions could deteriorate in the future. Lack of liquidity makes it more difficult for our funds to meet redemption requests. If liquidity were to worsen, this may have a significant adverse effect on our AUM, revenues and net income in the future. • Client Preferences . Generally, our clients may withdraw their assets at any time and on short notice. Also, changing market dynamics and investment trends, particularly with respect to sponsors of defined benefit plans choosing to invest in less risky investments and the ongoing shift to lower-fee passive services described below, may continue to reduce interest in some of the investment products we offer, and/or clients and prospects may continue to seek investment products that we may not currently offer. Loss of, or decreases in, AUM reduces our investment advisory and services fees and revenues. 2023 Annual Report 17 Table of Contents Part I • Our Investment Performance . Our ability to achieve investment returns for clients that meet or exceed investment returns for comparable asset classes and competing investment services is a key consideration when clients decide to keep their assets with us or invest additional assets, and when a prospective client is deciding whether to invest with us. Poor investment performance, both in absolute terms and/or relative to peers and stated benchmarks, may result in clients withdrawing assets and prospective clients choosing to invest with competitors. • Investing Trends . Our fee rates can vary significantly among the various investment products and services we offer to our clients ( see “Net Revenues” in Item 7 for additional information regarding our fee rates); our fee realization rate fluctuates as clients shift assets between accounts or products with different fee structures. • Service Changes . We may be required to reduce our fee levels, restructure the fees we charge and/or adjust the services we offer to our clients because of, among other things, regulatory initiatives (whether industry-wide or specifically targeted), changing technology in the asset management business (including algorithmic strategies and emerging financial technology), court decisions and competitive considerations. A reduction in fee levels would reduce our revenues. • Interest Rate Changes . Investor interest in and the valuation of our fixed income and multi-asset investment portfolios can be adversely affected by changes in interest rates, particularly if interest rates increase substantially and quickly. A decrease in the value of our AUM, a decrease in the amount of AUM we manage, an adverse mix shift in our AUM and/or a reduction in the level of fees we charge would adversely affect our investment advisory fees and revenues. A reduction in revenues, without a commensurate reduction in expenses, adversely affects our results of operations. The industry-wide shift from actively managed investment services to passive services has adversely affected our investment advisory and services fees, revenues and results of operations, and this trend may continue. Our competitive environment has become increasingly difficult, as active managers, which invest based on individual security selection, have, on average, consistently underperformed passive services, which invest based on market indices. In the most recent period this trend reversed, as active performance relative to benchmarks improved, with 57% of active managers outperforming their passive benchmarks for the 12 months ended June 30, 2023 (latest data available), compared to 43% for the prior 12-month period. 57% of active US stock funds outperformed, up from 48% the prior year, while 63% of active non-U.S. stock funds outperformed their benchmarks, up from just 33% the prior period. Performance of actively managed bond funds also improved in 2023, with 55% outperforming benchmarks, up from just 30% in the prior-year period. Flows into actively managed funds substantially improved industry-wide in 2023, with U.S. industry-wide active mutual fund inflows of $549 billion in 2023, compared with outflows of $931 billion in 2022. The improvement was led by $927 billion in inflows to Money Market funds, as investors responded to the higher interest rate environment. Active fixed income U.S. mutual funds also experienced improvement, with inflows of $16 billion in 2023, compared with outflows of $465 billion in 2022. Active equity U.S. mutual fund outflows were $246 billion in 2023, compared to outflows of $235 billion in 2022. Demand for passive strategies in the U.S. continued to grow, though at a reduced rate from the prior year, as industry-wide total passive mutual fund net inflows of $489 billion in 2023 compared to $540 billion in 2022. Organic growth through net inflows continues to be difficult to achieve for active managers, such as AB, and requires taking market share from other active managers. The significant shift from active services to passive services adversely affects Bernstein Research Services revenues as well. Institutional global market trading volumes continue to be pressured by persistent active equity outflows and passive equity inflows. As a result, portfolio turnover has declined and investors hold fewer shares that are actively traded by managers. Our reputation could suffer if we are unable to deliver consistent, competitive investment performance. Our business is based on the trust and confidence of our clients. Damage to our reputation, resulting from poor or inconsistent investment performance, among other factors, can reduce substantially our AUM and impair our ability to maintain or grow our business. EQH and its subsidiaries provide a significant amount of our AUM and fund a significant portion of our seed investments, and if our agreements with them terminate or they withdraw capital support it could have a material adverse effect on our business, results of operations and/or financial condition. EQH (our parent company) and its subsidiaries constitute our largest client. Our EQH affiliates represented approximately 16% of our AUM as of December 31, 2023, and we earned approximately 5% of our net revenues from services we provided to them. Our related investment management agreements are terminable at any time or on short notice by either party, and EQH is not under any obligation to maintain any level of AUM with us. A material adverse effect on our business, results of operations and/or financial condition could result if EQH were to terminate its investment management agreements with us. 18 AllianceBernstein Table of Contents Part I Our business is dependent on investment advisory agreements with clients, and selling and distribution agreements with various financial intermediaries and consultants, which generally are subject to termination or non-renewal on short notice. We derive most of our revenues pursuant to written investment management agreements (or other arrangements) with institutional investors, mutual funds and private wealth clients, and selling and distribution agreements with financial intermediaries that distribute AB Funds. Generally, the investment management agreements (and other arrangements), including our agreements with EQH and its subsidiaries, are terminable at any time or upon relatively short notice by either party. The investment management agreements pursuant to which we manage the U.S. Funds must be renewed and approved by the Funds’ boards of directors annually. A significant majority of the directors are independent. Consequently, there can be no assurance that the board of directors of each fund will approve the fund’s investment management agreement each year, or will not condition its approval on revised terms that may be adverse to us. In addition, investors in AB Funds can redeem their investments without notice. Any termination of, or failure to renew, a significant number of these agreements, or a significant increase in redemption rates, could have a material adverse effect on our results of operations and business prospects. Similarly, the selling and distribution agreements with securities firms, brokers, banks and other financial intermediaries are terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares. These intermediaries generally offer their clients investment products that compete with our products. In addition, certain institutional investors rely on consultants to advise them about choosing an investment adviser and some of our services may not be considered among the best choices by these consultants. As a result, investment consultants may advise their clients to move their assets invested with us to other investment advisers, which could result in significant net outflows. Lastly, our Private Wealth Services rely on referrals from financial planners, registered investment advisers and other professionals. We cannot be certain that we will continue to have access to, or receive referrals from, these third parties. Loss of such access or referrals could have a material adverse effect on our results of operations and business prospects. Performance-based fee arrangements with our clients may cause greater fluctuations in our net revenues. We sometimes charge our clients performance-based fees, whereby we charge a base advisory fee and are eligible to earn an additional performance-based fee or incentive allocation that 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. Some performance-based fees include a high-watermark provision, which generally provides that if a client account under-performs relative to its performance target (whether in absolute terms or relative to a specified benchmark), it must gain back such under-performance before we can collect future performance-based fees. Therefore, if we fail to achieve the performance target for a particular period, we will not earn a performance-based fee for that period and, for accounts with a high-watermark provision, our ability to earn future performance-based fees will be impaired. We are eligible to earn performance-based fees on 9.3%, 8.3% and 0.4% of the assets we manage for institutional clients, private wealth clients and retail clients, respectively (in total, 5.6% of our AUM). If the percentage of our AUM subject to performance-based fees increases, seasonality and volatility of revenue and earnings are likely to become more significant. Our performance-based fees were $144.9 million, $145.2 million and $245.1 million in 2023, 2022 and 2021, respectively. The revenues generated by Bernstein Research Services may be adversely affected by circumstances beyond our control, including declines in brokerage transaction rates, declines in global market volumes, failure to settle our trades by significant counterparties. Electronic, or “low-touch,” trading represents a significant percentage of buy-side trading activity and typically produces transaction fees that are significantly lower than traditional full-service fee rates. As a result, blended pricing throughout our industry is lower now than it was historically, and price declines may continue. In addition, fee rates we charge and charged by other brokers for brokerage services have historically experienced price pressure, and we expect these trends to continue. Also, while increases in transaction volume and market share often can offset decreases in rates, this may not continue. In addition, the failure or inability of any of our broker-dealer's significant counterparties to perform could expose us to substantial expenditures and adversely affect our revenues. For example, SCB LLC, as a member of clearing and settlement organizations, would be required to settle open trades of any non-performing counterparty. This exposes us to the mark-to-market adjustment on the trades between trade date and settlement date, which could be significant, especially during periods of severe market volatility. Also, our ability to access liquidity in such situations may be limited by what our funding relationships are able to offer us at such times. Lastly, extensive changes proposed by the SEC to the equity market structure, including Regulation Best Execution, the proposed Order Competition Rule, the proposed volume-based exchange transaction pricing rule and proposed changes to Regulation NMS establishing, among other things, minimum pricing increments and required disclosures by larger broker-dealers and specified trading platforms, if adopted as proposed, could substantially increase the cost of conducting our buy-side and broker-dealer operations and, possibly, adversely impact trade execution quality. 2023 Annual Report 19 Table of Contents Part I We may be unable to develop new products and services, and the development of new products and services may expose us to reputational harm, additional costs or operational risk. Our financial performance depends, in part, on our ability to react nimbly to changes in the asset management industry, respond to evolving client needs, and develop, market and manage new investment products and services. Conversely, the development and introduction of new products and services, including the creation of products with concentrations in industries or sectors specific to individual client criteria, or with a focus on ESG, requires continuous innovative effort on our part and may require significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are associated with the introduction of new products and services, including the implementation of new and appropriate operational controls and procedures, shifting client and market preferences, the introduction of competing products or services, and compliance with regulatory and disclosure requirements. We can make no assurance that we will be able to develop new products and services that successfully address the needs of clients within needed timeframes. Any failure to successfully develop new products and services, or effectively manage associated operational risks, could harm our reputation and expose us to additional costs, which could adversely affect our AUM, revenues and operating income. Fluctuations in the exchange rates between the U.S. dollar and various other currencies can adversely affect our AUM, revenues and results of operations. Although significant portions of our net revenues and expenses, as well as our AUM, presently are denominated in U.S. dollars, we have subsidiaries and clients outside of the United States with functional currencies other than the U.S. dollar. Weakening of these currencies relative to the U.S. dollar adversely affects the value in U.S. dollar terms of our revenues and our AUM denominated in these other currencies. Accordingly, fluctuations in U.S. dollar exchange rates affect our AUM, revenues and reported financial results from one period to the next. We may not be successful in our efforts to hedge our exposure to such fluctuations, which could negatively impact our revenues and reported financial results. Our seed capital investments are subject to market risk. While we enter into various futures, forwards, swap and option contracts to economically hedge many of these investments, we also may be exposed to market risk and credit-related losses in the event of non-performance by counterparties to these derivative instruments. We have a seed investment program for the purpose of building track records and assisting with the marketing initiatives pertaining to our firm's new products. These seed capital investments are subject to market risk. Our risk management team oversees a seed hedging program that attempts to minimize this risk, subject to practical and cost considerations. Also, not all seed investments are deemed appropriate to hedge, and in those cases we are exposed to market risk. In addition, we may be subject to basis risk in that we cannot always hedge with precision our market exposure and, as a result, we may be subject to relative spreads between market sectors. As a result, volatility in the capital markets may cause significant changes in our period-to-period financial and operating results. We use various derivative instruments, including futures, forwards, swaps and option contracts, in conjunction with our seed hedging program. While in most cases broad market risks are hedged, our hedges are imperfect and some market risk remains. In addition, our use of derivatives results in counterparty risk ( i.e., the risk that we may be exposed to credit-related losses in the event of non-performance by counterparties to these derivative instruments), regulatory risk ( e.g. , short selling restrictions) and cash/synthetic basis risk ( i.e., the risk that the underlying positions do not move identically to the related derivative instruments). We may engage in strategic transactions that could pose risks. As part of our business strategy, we consider potential strategic transactions, including acquisitions (such as our purchase of CarVal Investors in 2022), dispositions, mergers, consolidations, joint venture partnerships (such as our planned joint venture partnership with SocGen) and similar transactions, some of which may be material. These transactions, if undertaken, may involve various risks and present financial, managerial and operational challenges, including: • adverse effects on our earnings if acquired intangible assets or goodwill become impaired; • existence of unknown liabilities or contingencies that arise after closing; • potential disputes with counterparties; and • the possible need for us to increase our firm's leverage or, if we fund the purchase price of a transaction with AB Units or AB Holding Units, likely dilution to our existing unitholders. Acquisitions also pose the risk that any business we acquire may lose customers or employees or could under-perform relative to expectations. Additionally, the loss of investment personnel poses the risk that we may lose the AUM we expected to manage, which could adversely affect our results of operations. 20 AllianceBernstein Table of Contents Part I We may not accurately value the securities we hold on behalf of our clients or our company investments. In accordance with applicable regulatory requirements, contractual obligations or client direction, we employ procedures for the pricing and valuation of securities and other positions held in client accounts or for company investments. We have established a Valuation Committee and sub-committees, consisting of senior officers and employees, which oversee a consistent framework of pricing controls and valuation processes for the firm and each of its advisory affiliates. If market quotations for a security are not readily available, the Valuation Committee determines a fair value for the security. Extraordinary volatility in financial markets, significant liquidity constraints or our failure to adequately consider one or more factors when determining the fair value of a security based on information with limited market observability could result in our failing to properly value securities we hold for our clients or investments accounted for on our balance sheet. Improper valuation likely would result in our basing fee calculations on inaccurate AUM figures, our striking incorrect net asset values for company-sponsored mutual funds or hedge funds or, in the case of company investments, our inaccurately calculating and reporting our financial condition and operating results. Although the overall percentage of our AUM that we fair value based on information with limited market observability is not significant, inaccurate fair value determinations can harm our clients, create regulatory issues and damage our reputation. The quantitative and systematic models we use in certain of our investment services may contain errors, resulting in imprecise risk assessments and unintended output. We use quantitative and systematic models in a variety of our investment services, usually in combination with fundamental research. These models are developed by senior quantitative professionals and typically are implemented by IT professionals. Our Model Risk Oversight Committee oversees the model governance framework and associated model review activities, which are then executed by our Model Risk Team. However, due to the complexity and large data dependency of such models, it is possible that errors in the models could exist and our controls could fail to detect such errors. Failure to detect errors could result in client losses and reputational damage. The financial services industry is intensely competitive. We compete on the basis of a number of factors, including our investment performance for our clients, our array of investment services, innovation, reputation and price. By having a global presence, we often face competitors with more experience and more established relationships with clients, regulators and industry participants in the relevant market, which could adversely affect our ability to expand. Furthermore, if we are unable to maintain and/or continue to improve our investment performance, our client flows may be adversely affected, which may make it more difficult for us to compete effectively. Also, increased competition could reduce the demand for our products and services, which could have a material adverse effect on our financial condition, results of operations and business prospects. For additional information regarding competitive factors, see “Competition” in Item 1 . People-related Risks We may be unable to continue to attract, motivate and retain key personnel, and the cost to retain key personnel could put pressure on our adjusted operating margin. Our business depends on our ability to attract, motivate and retain highly skilled, and often highly specialized, technical, investment, managerial and executive personnel, and there is no assurance that we will be able to continue to do so. The market for these professionals is extremely competitive. Certain of these professionals often maintain strong, personal relationships with investors in our products and other members of the business community so their departure may cause us to lose client accounts or result in fewer opportunities to win new business, either of which factors could have a material adverse effect on our results of operations and business prospects. Additionally, a decline in revenues may limit our ability to pay our employees at competitive levels, and maintaining (or increasing) compensation without a revenue increase, in order to retain key personnel, may adversely affect our operating margin. For additional information regarding our compensation practices, see "Compensation Discussion and Analysis" in Item 11. Our process of relocating our headquarters may not be executed as we have envisioned. We have established our corporate headquarters in and have relocated a large number of the positions jobs previously located in the New York metropolitan area to Nashville, Tennessee (for additional information, see “Relocation Strategy” in Item 7 ). Although the ongoing impact on AB from this process is not yet known, the uncertainty created by these circumstances could adversely affect AB’s ability to motivate and retain current employees and hire qualified employees in our Nashville headquarters. Additionally, our estimates for both the transition costs and the corresponding expense savings relating to our headquarters relocation are based on our current assumptions of employee relocation costs, severance, and overlapping compensation and occupancy costs. If our assumptions turn out to be inaccurate, our expenses and operating income could be adversely affected. 2023 Annual Report 21 Table of Contents Part I Employee misconduct, which can be difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant regulatory scrutiny, legal liability and reputational harm. There have been several highly publicized cases involving fraud or other misconduct by employees in the financial services industry generally, and we are not immune. Misconduct by employees could involve the improper use or disclosure of confidential information, which could result in legal action, regulatory sanctions, and reputational or financial harm. Further, fraud, payment or solicitation of bribes and other deceptive practices or other misconduct by our employees could similarly subject us to regulatory scrutiny, legal liability and reputational damage. Operational, Technology and Cyber-related Risks Technology failures and disruptions, including failures to properly safeguard confidential information, can significantly constrain our operations and result in significant time and expense to remediate, which could result in a material adverse effect on our results of operations and business prospects. We are highly dependent on software and related technologies throughout our business, including both proprietary systems and those provided by third-party vendors. We use our technology to, among other things, obtain securities pricing information, process client transactions, store and maintain data, and provide reports and other services to our clients. Despite our protective measures, including measures designed to effectively secure information through system security technology and established and tested business continuity plans, we may still experience system delays and interruptions as a result of natural disasters, hardware failures, software defects, power outages, acts of war and third-party failures. We cannot predict with certainty all of the adverse effects that could result from our failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions. These adverse effects could include the inability to perform critical business functions or failure to comply with financial reporting and other regulatory requirements, which could lead to loss of client confidence, reputational damage, exposure to disciplinary action and liability to our clients. Many of the software applications that we use in our business are licensed from, and supported, upgraded and maintained by, third-party vendors. A suspension or termination of certain of these licenses or the related support, upgrades and maintenance could cause temporary system delays or interruption. Additionally, technology rapidly evolves and we cannot guarantee that our competitors may not implement more advanced technology platforms for their products and services, which may place us at a competitive disadvantage and adversely affect our results of operations and business prospects. Also, we could be subject to losses if we fail to properly safeguard sensitive and confidential information. As part of our normal operations, we maintain and transmit confidential information about our clients as well as proprietary information relating to our business operations. Although we take protective measures, our systems still could be vulnerable to cyber attack or other forms of unauthorized access (including computer viruses) that have a security impact, such as an authorized employee or vendor inadvertently or intentionally causing us to release confidential or proprietary information. Such disclosure could, among other things, allow competitors access to our proprietary business information and require significant time and expense to investigate and remediate the breach. Moreover, loss of confidential client information could harm our reputation and subject us to liability under laws that protect confidential personal data, resulting in increased costs or loss of revenues. Any significant security breach of our information and cyber security infrastructure, as well as our failure to properly escalate and respond to such an incident, may significantly harm our operations and reputation. It is critical that we ensure the continuity and effectiveness of our information and cyber security infrastructure, policies, procedures and capabilities to protect our computer and telecommunications systems and the data that reside on or are transmitted through them and contracted third-party systems. Although we take protective measures, including measures to effectively secure information through system security technology, our technology systems may still be vulnerable to unauthorized access, supply chain attacks, computer viruses or other events that have a security impact, such as an external attack by one or more cyber criminals (including phishing attacks attempting to obtain confidential information and ransomware attacks attempting to block access to a computer system until a sum of money is paid), which could materially harm our operations and reputation. Additionally, while we take precautions to password protect and encrypt our laptops and sensitive information on our other mobile electronic devices, if such devices are stolen, misplaced or left unattended, they may become vulnerable to hacking or other unauthorized use, creating a possible security risk and resulting in potentially costly actions by us. Furthermore, although we maintain a robust cyber security infrastructure and incident preparedness strategy, which we test frequently, we may be unable to respond, both internally and externally, to a cyber incident in a sufficiently expeditious manner. Any such failure could cause significant harm to our reputation and result in litigation, regulatory scrutiny and/or significant remediation costs, see "Cybersecurity" in Item 1C . 22 AllianceBernstein Table of Contents Part I Climate change and other unpredictable events, including outbreak of infectious disease, natural disaster, dangerous weather conditions, technology failure, terrorist attack and political unrest, may adversely affect our ability to conduct business. War, terrorist attack, political unrest, power failure, climate change, natural disaster and rapid spread of infectious disease (such as the COVID-19 pandemic) could interrupt our operations by: • causing disruptions in global economic conditions, thereby decreasing investor confidence and making investment products generally less attractive; • inflicting loss of life; • triggering large-scale technology failures or delays; • breaching our information and cyber security infrastructure; and • requiring substantial capital expenditures and operating expenses to remediate damage and restore operations. Furthermore, climate change may increase the severity and frequency of catastrophes, or adversely affect our investment portfolio or investor sentiment. Climate change may also increase the frequency and severity of weather-related disasters and pandemics. And, climate change regulation may affect the prospects of companies and other entities whose securities in which we invest, or our willingness to continue to invest in such securities. Despite the contingency plans and facilities we have in place, including system security measures, information back-up and disaster recovery processes, our ability to conduct business, including in key business centers where we have significant operations, such as Nashville, Tennessee, New York City, San Antonio, Texas, London, England, Hong Kong, and India, may be adversely affected by a disruption in the infrastructure that supports our operations and the communities in which they are located. This may include a disruption involving electrical, communications, transportation or other services we may use or third parties with which we conduct business. If a disruption occurs in one location and our employees in that location are unable to occupy our offices or communicate with or travel to other locations, our ability to conduct business with and on behalf of our clients may suffer, and we may not be able to successfully implement contingency plans that depend on communication or travel. Furthermore, unauthorized access to our systems as a result of a security breach, the failure of our systems, or the loss of data could give rise to legal proceedings or regulatory penalties under laws protecting the privacy of personal information, disrupt operations, and damage our reputation. Our operations require experienced, professional staff. Loss of a substantial number of such persons or an inability to provide properly equipped places for them to work may, by disrupting our operations, adversely affect our financial condition, results of operations and business prospects. In addition, our property and business interruption insurance may not be adequate to compensate us for all losses, failures or breaches that may occur. Our own operational failures or those of third parties on which we rely, including failures arising out of human error, could disrupt our business, damage our reputation and reduce our revenues. Weaknesses or failures in our internal processes or systems could lead to disruption of our operations, liability to clients, exposure to disciplinary action or harm to our reputation. Our business is highly dependent on our ability to process, on a daily basis, large numbers of transactions, many of which are highly complex, across numerous and diverse markets. These transactions generally must comply with client investment guidelines, as well as stringent legal and regulatory standards. Our obligations to clients require us to exercise skill, care and prudence in performing our services. Despite our employees being highly trained and skilled, the large number of transactions we process makes it highly likely that errors will occasionally occur. If we make a mistake in performing our services that causes financial harm to a client, we have a duty to act promptly to put the client in the position the client would have been in had we not made the error. The occurrence of mistakes, particularly significant ones, can have a material adverse effect on our reputation, results of operations and business prospects. The individuals and third-party vendors on whom we rely to perform services for us or our clients may be unable or unwilling to honor their contractual obligations to us. We rely on various counterparties and other third-party vendors to augment our existing investment, operational, financial and technological capabilities, but the use of a third-party vendor does not diminish AB's responsibility to ensure that client and regulatory obligations are met. Default rates, credit downgrades and disputes with counterparties as to the valuation of collateral increase significantly in times of market stress. Disruptions in the financial markets and other economic challenges may cause our counterparties and other third-party vendors to experience significant cash flow problems or even render them insolvent, which may expose us to significant costs and impair our ability to conduct business. Weaknesses or failures within a third-party vendor's internal processes or systems, or inadequate business continuity plans, can materially disrupt our business operations. Also, third-party vendors may lack the necessary infrastructure or resources to effectively safeguard our confidential data. If we are unable to effectively manage the risks associated with such third-party relationships, we may suffer fines, disciplinary action and reputational damage. 2023 Annual Report 23 Table of Contents Part I We may not always successfully manage actual and potential conflicts of interest that arise in our business. Increasingly, we must manage actual and potential conflicts of interest, including situations where our services to a particular client conflict, or are perceived to conflict, with the interests of another client. Failure to adequately address potential conflicts of interest could adversely affect our reputation, results of operations and business prospects. We have procedures and controls that are designed to identify and mitigate conflicts of interest, including those designed to prevent the improper sharing of information. However, appropriately managing conflicts of interest is complex. Our reputation could be damaged and the willingness of clients to enter into transactions in which such a conflict might arise may be affected if we fail, or appear to fail, to deal appropriately with actual or perceived conflicts of interest. In addition, potential or perceived conflicts could give rise to litigation or regulatory enforcement actions. Maintaining adequate liquidity for our general business needs depends on certain factors, including operating cash flows and our access to credit on reasonable terms. Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability to maintain and grow AUM and other factors beyond our control. Our ability to issue public or private debt on reasonable terms may be limited by adverse market conditions, our profitability, our creditworthiness as perceived by lenders and changes in government regulations, including tax rates and interest rates. Furthermore, our access to credit on reasonable terms is partially dependent on our firm’s credit ratings. Both Moody’s Investors Service, Inc. and Standard & Poor's Rating Service affirmed AB’s long-term and short-term credit ratings and indicated a stable outlook in 2023. Future changes in our credit ratings are possible and any downgrade to our ratings is likely to increase our borrowing costs and limit our access to the capital markets. If this occurs, we may be forced to incur unanticipated costs or revise our strategic plans, which could have a material adverse effect on our financial condition, results of operations and business prospects. An impairment of goodwill may occur. Determining whether an impairment of the goodwill asset exists requires management to exercise a substantial amount of judgment. In addition, to the extent that securities valuations are depressed for prolonged periods of time and/or market conditions deteriorate, or if we experience significant net redemptions, our AUM, revenues, profitability and unit price will be adversely affected. Although the price of an AB Holding Unit is just one factor in the calculation of fair value, if AB Holding Unit price levels decline significantly, reaching the conclusion that fair value exceeds carrying value will, over time, become more difficult. In addition, control premiums, industry earnings multiples and discount rates are impacted by economic conditions. As a result, subsequent impairment tests may occur more frequently and be based on more negative assumptions and future cash flow projections, and may result in an impairment of goodwill. An impairment may result in a material charge to our earnings. For additional information about our impairment testing, see Item 7 . The insurance that we purchase may not fully cover all potential exposures. We maintain professional liability, errors & omissions, fidelity, cyber, property, casualty, business interruption and other types of insurance, but such insurance may not cover all risks associated with the operation of our business. Our coverage is subject to exclusions and limitations, including high self-insured retentions or deductibles and maximum limits and liabilities covered. In addition, from time to time, various types of insurance may not be available on commercially acceptable terms or, in some cases, at all. We can make no assurance that a claim or claims will be covered by our insurance policies or, if covered, will not exceed our available insurance coverage, or that our insurers will remain solvent and meet their obligations. In the future, we may not be able to obtain coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain. Also, we currently are party to certain joint insurance arrangements with subsidiaries of EQH. If our affiliates choose not to include us as insured parties under any such policies, we may need to obtain stand-alone insurance coverage, which could have coverage terms that are less beneficial to us and/or cost more. Legal and Regulatory-related Risks Our business is subject to pervasive, complex and continuously evolving global regulation, compliance with which involves substantial expenditures of time and money, and violation of which may result in material adverse consequences. Virtually all aspects of our business are subject to federal and state laws and regulations, rules of securities regulators and exchanges, and laws and regulations in the foreign jurisdictions in which our subsidiaries conduct business. If we violate these laws or regulations, we could be subject to civil liability, criminal liability or sanction, including restriction or revocation of our and our subsidiaries’ professional licenses or registrations, revocation of the licenses of our employees, censures, fines, or temporary suspension or permanent bar from conducting business. Any such liability or sanction could have a material adverse effect on our financial condition, results of operations and business prospects. A regulatory proceeding, even if it does not result in a finding of wrongdoing or sanction, could require substantial expenditures of time and money and could potentially damage our reputation. 24 AllianceBernstein Table of Contents Part I In recent years, global regulators have substantially increased their oversight of financial services. Some of the newly-adopted and proposed regulations are focused on investment management services. Others, while more broadly focused, nonetheless impact our business. Moreover, the adoption of new laws, regulations or standards and changes in the interpretation or enforcement of existing laws, regulations or standards have directly affected, and will continue to affect, our business, including making our efforts to comply more expensive and time-consuming. For example, there has been increasing regulatory focus on ESG-related practices by investment managers. In 2023, the State of California passed two climate disclosure laws that will impose significant reporting obligations on companies doing business in California. Additionally, the SEC is poised in 2024 to issue a rule enhancing and standardizing climate disclosures by U.S. public companies, including investment managers. The SEC also has focused on the labeling by investment funds of their activities or investments as "sustainable" and has examined the methodology used by funds for determining ESG investments, with a keen focus on whether such labeling may be misleading. Outside the U.S., the European Commission has adopted an action plan on financing sustainable growth, as well as initiatives at the European Union (the " EU ") level, such as the EU Sustainable Finance Disclosure Regulation (the " SFDR "). Compliance with the SFDR and other ESG-related regulations may subject us to increased restrictions, disclosure obligations, and compliance and other associated costs, as well as potential reputational harm. Also, in 2015 the Financial Supervisory Commission in Taiwan (the “ FSC ”) implemented new limits on the degree to which local investors can own an offshore investment product. While certain exemptions have been available to us, should we not continue to qualify, the FSC’s rules could force some of our local resident investors to redeem their investments in our funds sold in Taiwan (and/or prevent further sales of those funds in Taiwan), some of which funds have local ownership levels substantially above the FSC limits. This could lead to significant declines in our investment advisory and services fees and revenues earned from these funds. We are involved in various legal proceedings and regulatory matters and may be involved in such proceedings in the future, any one or combination of which could have a material adverse effect on our reputation, financial condition, results of operations and business prospects. We are involved in various matters, including regulatory inquiries, administrative proceedings and litigation, some of which allege significant damages, and we may be involved in additional matters in the future. Litigation is subject to significant uncertainties, particularly when plaintiffs allege substantial or indeterminate damages, the litigation is in its early stages, or when the litigation is highly complex or broad in scope. Structure-related Risks The partnership structure of AB Holding and AB limits Unitholders’ abilities to influence the management and operation of AB’s business and is highly likely to prevent a change in control of AB Holding and AB. The General Partner, as general partner of both AB Holding and AB, generally has the exclusive right and full authority and responsibility to manage, conduct, control and operate their respective businesses, except as otherwise expressly stated in their respective Amended and Restated Agreements of Limited Partnership. AB Holding and AB Unitholders have more limited voting rights on matters affecting AB than do holders of common stock in a corporation. Both Amended and Restated Agreements of Limited Partnership provide that Unitholders do not have any right to vote for directors of the General Partner and that Unitholders only can vote on certain extraordinary matters (including removal of the General Partner under certain extraordinary circumstances). Additionally, the AB Partnership Agreement includes significant restrictions on the transfer of AB Units and provisions that have the practical effect of preventing the removal of the General Partner, which provisions are highly likely to prevent a change in control of AB’s management. AB Units are illiquid and subject to significant transfer restrictions. There is no public trading market for AB Units and we do not anticipate that a public trading market will develop. The AB Partnership Agreement restricts our ability to participate in a public trading market or anything substantially equivalent to one by providing that any transfer that may cause AB to be classified as a “publicly traded partnership” (“ PTP ”) as defined in Section 7704 of the Internal Revenue Code of 1986, as amended (the “ Code ”), shall be deemed void and shall not be recognized by AB. In addition, AB Units are subject to significant restrictions on transfer, such as obtaining the written consent of EQH and the General Partner pursuant to the AB Partnership Agreement. Generally, neither EQH nor the General Partner will permit any transfer that it believes would create a risk that AB would be treated as a corporation for tax purposes. EQH and the General Partner have implemented a transfer program that requires a seller to locate a purchaser and imposes annual volume restrictions on transfers. You may request a copy of the transfer program from our Corporate Secretary (corporate_secretary@alliancebernstein.com) . Also, we have filed the transfer program as Exhibit 10.07 to this Form 10-K. Changes in the treatment of AB Holding and AB as partnerships for tax purposes would have significant tax ramifications. Having elected under Section 7704(g) of the Code to be subject to a 3.5% federal tax on partnership gross income from the active conduct of a trade or business, AB Holding is a PTP that is taxable as a partnership for federal income tax purposes. To preserve AB Holding's status as a PTP that is taxed as a partnership for federal income tax purposes, AB Holding must not directly or indirectly (through AB) enter into a substantial new line of business. A “new line of business” includes any business 2023 Annual Report 25 Table of Contents Part I that is not closely related to AB’s historical business of providing research and diversified investment management and related services to its clients. A new line of business is “substantial” when a partnership derives more than 15% of its gross income from, or uses more than 15% (by value) of its total assets in, the new line of business. To preserve AB’s status as a private partnership for federal income tax purposes, AB Units must not be considered publicly traded. If either or both AB Holding and AB were taxable as a corporation, the return on investment to Unitholders generally would be reduced because distributions to Unitholders generally would be subject to two layers of taxation: first, amounts available for distribution would be subject to federal (and applicable state and local) taxes at the corporate entity level; and second, Unitholders generally would be subject to federal (and applicable state and local) taxes upon receipt of dividends. AB Holding and AB are subject to the 4.0% New York City unincorporated business tax (“UBT”). AB Holding may net credits for UBT paid by AB. Changes in tax law governing us or an increase in business activities outside the U.S. could have a material impact on us. Legislative proposals have been or may be introduced that, if enacted, could have a material adverse effect on us. We cannot predict the outcome of such legislative proposals. AB management continues to monitor and assess how any new legislation could affect AB. Each of AB's non-U.S. corporate subsidiaries generally is subject to taxes in the foreign jurisdiction where it is located. If our business increasingly operates in countries other than the U.S., or if there are changes in tax law or rates of taxation in foreign jurisdictions where our corporate subsidiaries operate, AB's effective tax rate could increase. If any audit by the Internal Revenue Service ("IRS") of our income tax returns for any of our taxable years beginning after December 31, 2017 results in any adjustments, the IRS may collect any resulting taxes, including any applicable penalties and interest, directly from us, in which case our net income and the cash available for quarterly Unitholder distributions may be substantially reduced. For taxable years beginning after December 31, 2017, a "partnership representative" that we designate (a “ Partnership Representative ”) will have the sole authority to act on our behalf for purposes of, among other things, IRS audits and related proceedings (and any similar state or local audits and proceedings). Any actions taken by us or by the Partnership Representative on our behalf in connection with such audits or proceedings will be binding on us and our Unitholders. For an audit of a partnership's taxable years beginning after December 31, 2017, the IRS, absent an election by the partnership to the contrary ( see discussion below ), generally determines adjustments at the partnership level in the year in which the audit is resolved. Generally, we will have the ability to collect any resulting tax liability (and any related interest and penalties) from our Unitholders in accordance with their percentage interests during the year under audit, but there can be no assurance that we will elect to do so or be able to do so under all circumstances. If we do not collect such tax liability from our Unitholders in accordance with their percentage interests in the tax year under audit, our net income and the available cash for quarterly distributions to current Unitholders may be substantially reduced. Accordingly, our current Unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if such Unitholders did not own Units during the tax year under audit. In particular, with respect to AB Holding, our Partnership Representative may, in certain instances, request that any “imputed under-payment” resulting from an audit be adjusted by amounts of certain of our passive losses. If we successfully make such a request, we would have to reduce suspended passive loss carryovers in a manner which is binding on the partners. In addition, for taxable years beginning after December 31, 2017, we may, but are not required to, make an election to require our Unitholders to take into account on their income tax returns an audit adjustment made to our income tax items, also known as a “push-out” election. This may also require Unitholders to provide certain information to us (possibly including information about the beneficial owners of our Unitholders). Also, a partnership that is a partner of another partnership (such as AB Holding with respect to AB) may elect to have its unitholders take an audit adjustment of the lower-tier partnership into account (i.e., the upper-tier partnership may push adjustments received from the lower-tier partnership through to the partners of the upper-tier partnership). There are several requirements to make a “push-out” election and we may be unable or unwilling to comply with such requirements. If we do not make a “push-out” election, we would be required to pay any tax resulting from the adjustments to our income tax items, and the cash available for distribution to unitholders would be substantially reduced. Non-U.S. unitholders may be subject to withholding tax on the sale of their AB Units or AB Holding Units, as well as on distributions, and we may be liable for any under-withholding. Gain or loss from the sale or exchange of a partnership unit by a non-U.S. unitholder is treated as effectively connected with a U.S. trade or business and is subject to U.S. federal income tax to the extent that the non-U.S. unitholder would have had effectively connected gain or loss on a hypothetical sale by the partnership of all of its assets at fair market value as of the date of the sale or exchange of the partnership units. In furtherance of the foregoing, a transferee of a partnership unit is required to withhold a tax equal to 10% of the amount realized on any transfer of such a partnership unit unless an exception applies. 26 AllianceBernstein Table of Contents Part I Distributions by a PTP to a non-U.S. unitholder also are subject to U.S. withholding tax if the PTP has effectively connected gross income, gain or loss. A transferee is not required to withhold tax if it relies on a certification issued by the transferor or the underlying partnership establishing that an exception to withholding applies. If a transferee of AB Units is required to withhold and failed to properly do so, AB would be required to withhold on distributions to the transferee to satisfy that liability. A broker is not required to withhold on the transfer of an interest in a PTP or on a distribution by a PTP if the PTP certifies that the "10% exception" applies. This exception applies if, either (1) the PTP was not engaged in a U.S. trade or business during a specified time period, or (2) upon a hypothetical sale of the PTP's assets at fair market value, (i) the amount of net gain that would have been effectively connected with the conduct of a trade or business within the U.S. would be less than 10% of the total net gain, or (ii) no gain would have been effectively connected with the conduct of a trade or business in the U.S. To make this certification, the PTP must issue a "qualified notice" indicating that it qualifies for this exception, which we have done and intend to continue to do. The qualified notice must state the amount of a distribution that is attributable to each type of income group specified in the Treasury Regulations. The PTP must post each qualified notice on its primary public website (and keep it accessible for 10 years) and deliver it to any registered holder that is a nominee. A broker may not rely on such a certification if it has actual knowledge that the certification is incorrect or unreliable. As a PTP, AB Holding may be liable for any under-withholding by a broker that relies on a qualified notice for which we failed to make a reasonable estimate of the amounts required for determining the applicability of the 10% exception. Item 1B. Unresolved Staff Comments Neither AB nor AB Holding has unresolved comments from the staff of the SEC to report. Item 1C. Cybersecurity Cyber Risk Management and Strategy We rely on digital technology to conduct our business operations and engage with our clients, business partners and employees. The technology that we, our clients, business partners and employees rely upon becomes more complex over time as do threats to our business operations from cyber intrusions, denial of service attacks, manipulation and other cyber misconduct. Information Security is an ongoing process of exercising the due care necessary to protect corporate, client and employee information and systems from unauthorized access, destruction, disclosure, disruption and modification of use. Through a combination of security, risk and compliance resources, AB implements Information Security through a dedicated Information Security Program (" ISP ") that is intended to identify, assess and manage material risks from cybersecurity threats and which includes a focus on safeguarding information and assets from cyber threats, engaging in cyber threat monitoring and responding to actual or potential cyber incidents. Our ISP is led by our Chief Information Security Officer (" CISO ") who actively partners with our Chief Compliance Officer (" CCO ") and Chief Risk Officer "(" CRO "). Ultimately, our ISP is part of our full enterprise risk framework, which includes information technology, business continuity and resiliency, in addition to cybersecurity risk. Our ISP is coordinated with our broader risk management team, including our Chief Security Officer. Enterprise risk, including cybersecurity risk, is overseen by the Audit and Risk Committee on behalf of the Board. Our CISO, with assistance from internal and external resources, is responsible for implementing and providing oversight of our ISP. The ISP employs a defense-in-depth strategy: an information assurance concept in which multiple layers of security controls are distributed throughout an operating environment. The concept manages risk with diverse defensive strategies, so that if one layer of defense fails, another later of defense will attempt to compensate. Our ISP features cybersecurity policies, standards and guidelines, committee governance, training, access controls and data controls. We periodically execute table top exercises as a part of our ISP program. 2023 Annual Report 27 Table of Contents Part I Our ISP, together with our risk and compliance resources, proactively manage the risk of threat from cybersecurity incidents through (i) implementing protocols to take cybersecurity considerations into account in adopting and onboarding our technology resources, (ii) monitoring IT controls to better ensure compliance with cybersecurity and other related legal and regulatory requirements, (iii) assessing adherence by critical and material third parties we partner with to ensure that the appropriate risk management standards are met, (iv) ensuring essential business functions remain available during a business disruption, and (v) regularly developing and updating response plans to address potential IT or cyber incidents should they occur. Our security, risk and compliance resources are designed to prioritize IT and cybersecurity risk areas, identify solutions that minimize such risks, pursue optimal outcomes and maintain compliance standards. We also maintain an operational security function that has a real time response capability that triages potential incidents and triggers impact mitigation protocols. Additionally, we utilize third parties to conduct periodic cybersecurity assessments and our internal audit function includes certain cyber risk audits as part of its overall risk audit. We review the recommendations and findings from those assessments and audits and implement corrective and other measures as appropriate. Our cybersecurity processes rely predominantly on internal resources, but also include important third party resources for certain matters, including the aforementioned assessments as well as our continuous cybersecurity threat monitoring and initial incident reporting system. As part of our ISP, we also perform cyber risk assessments on our critical and material third party vendors during onboarding, then periodically thereafter. We have not had a cybersecurity incident that has materially affected, or was reasonably likely to, materially affect our business strategy, results of operations or financial condition. There are risks from cybersecurity threats that if they were to occur could materially affect our business strategy, results of operations or financial condition, including those discussed in Item 1A Risk Factors - Operations, Technology and Cyber-Related Risks although we do not currently believe that such a result is reasonably likely. Cyber Risk Governance The Audit and Risk Committee is responsible for assisting the Board with oversight of our enterprise risk framework, including cybersecurity, information security, information technology and business continuity and resiliency. Our CISO and other members of senior management including our General Counsel, CCO and CRO report quarterly to the Audit and Risk Committee at its regular meetings on the status of the Company's cybersecurity risk, risk management policies and risk assessment initiatives. the full Board is updated on an as needed basis. In the event of an immediate cyber threat to our business operations, our ISP would involve our General Counsel, who would promptly notify the Chairperson of the Audit and Risk Committee, as to the nature, timing and extent of the threat and our applicable contingency plans would go into effect. Our CRO, in collaboration with our CISO, is responsible for notifying the Audit and Risk Committee of world events or of other significant external events that may pose cybersecurity threats or material risks to our business continuity. While our Board provides oversight of our cybersecurity risk environment, the ultimate responsibility for our processes for identifying, assessing and managing cybersecurity risks resides with management. Our CISO, with assistance from internal and external resources, is responsible for the implementation and providing oversight to our ISP within the organization and maintaining the appropriate level of expertise to manage and implement cybersecurity policies, programs and strategies. Our CISO has years of applied experience in actively managing cybersecurity and information security programs for large global publicly traded companies with complex and evolving information systems. Management oversight of our ISP is provided by various governance committees including the Operational Risk Oversight Committee, the Information Security Risk Oversight Subcommittee and the Financial Crimes Control Oversight Subcommittee. Item 2. Properties Our headquarters is located at 501 Commerce Street, Nashville, Tennessee. We occupy 218,976 square feet of space at this location under a 15-year lease agreement that commenced in the fourth quarter of 2020. We lease space at our other principal location, 1345 Avenue of the Americas, New York, New York pursuant to a lease expiring in 2024. At this location, we currently lease 999,963 square feet of space, within which we currently occupy approximately 512,284 square feet of space and have sub-let approximately 487,679 square feet of space. Also, we entered into a 20-year lease agreement in New York, New York, at 66 Hudson Boulevard, for 166,015 square feet that commenced in January 2024. We also lease 50,792 square feet of space in San Antonio, Texas under a lease expiring in 2029. Additionally, we lease 100,000 square feet of space in Pune, India under a lease expiring in 2033. We lease more modest amounts of space in 27 other cities in the United States. 28 AllianceBernstein Table of Contents Part I Our subsidiaries lease space in 32 cities outside the United States, the most significant of which is a lease in London, England, expiring in 2031, and in Hong Kong, China, under a lease expiring in 2027. In London we currently lease 60,732 square feet of space. In Hong Kong, we currently lease and occupy 35,878 square feet of space. Item 3. Legal Proceedings With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and disclose an estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss. As a result of these types of factors, we are unable, at this time, to estimate the losses that are reasonably possible to be incurred or ranges of such losses with respect to our significant litigation matters. On December 14, 2022, four individual participants in the Profit Sharing Plan for Employees of AB (the " AB Profit Sharing Plan" ) filed a class action complaint (the " Complaint ") in the U.S. District Court for the Southern District of New York against AB, current and former members of the Compensation and Workplace Practices Committee of the Board of Directors, and the Investment and Administrative Committees under the AB Profit Sharing Plan. Plaintiffs, who seek to represent a class of all participants in the AB Profit Sharing Plan from December 14, 2016 to the present, allege that defendants violated their fiduciary duties and engaged in prohibited transactions under ERISA by including proprietary collective investment trusts as investment options offered in the AB Profit Sharing Plan. The Complaint seeks unspecified damages, disgorgement and other equitable relief. AB is prepared to defend itself vigorously against these claims and filed a motion to dismiss on February 24, 2023. While the outcome of this matter currently is not determinable given the matter remains in its early stages, we do not believe this litigation will have a material adverse effect on our results of operations, financial condition or liquidity. AB may be involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of which may allege significant damages. It is reasonably possible that we could incur losses pertaining to these matters, but we cannot currently estimate any such losses. Management, after consultation with legal counsel, currently believes that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a material adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or litigation has an element of uncertainty; 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. Item 4. Mine Safety Disclosures Not applicable. 2023 Annual Report 29 Table of Contents Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for AB Holding Units and AB Units; Cash Distributions AB Holding Units are listed on the NYSE and trade publicly under the ticker symbol “AB". There is no established public trading market for AB Units, which are subject to significant restrictions on transfer. For information about these transfer restrictions, see “Structure-related Risks” in Item 1A . AB Holding’s principal source of income and cash flow is attributable to its limited partnership interests in AB. Each of AB Holding and AB distributes on a quarterly basis all of its Available Cash Flow, as defined in the AB Holding Partnership Agreement and the AB Partnership Agreement, respectively, to its Unitholders and the General Partner. For additional information concerning distribution of Available Cash Flow by AB Holding, see Note 2 to AB Holding’s financial statements in Item 8 . For additional information concerning distribution of Available Cash Flow by AB, see Note 2 to AB’s consolidated financial statements in Item 8. On December 29, 2023 (the last trading day of the year), the closing price of an AB Holding Unit on the NYSE was $31.03 per Unit. On December 31, 2023, there were (i) 871 AB Holding Unitholders of record for approximately 112,000 beneficial owners, and (ii) 359 AB Unitholders of record (we do not believe there are substantial additional beneficial owners). Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities We did not engage in any unregistered sales of our securities during the years ended December 31, 2023, 2022 and 2021, except as previously disclosed in a Current Report on Form 8-K dated July 1, 2022 in connection with the acquisition of CarVal Investors L.P. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Each quarter, AB considers whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Exchange Act. We did not adopt a plan during the fourth quarter of 2023. AB may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under the firm’s incentive compensation award program and for other corporate purposes. For additional information about Rule 10b5-1 plans, see “Units Outstanding” in Item 7 . 30 AllianceBernstein Table of Contents Part II AB Holding Units bought by us or one of our affiliates during the fourth quarter of 2023 are as follows: Issuer Purchases of Equity Securities Period Total Number of AB Holding Units Purchased Average Price Paid Per AB Holding Unit, net of Commissions Total Number of AB Holding Units Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of AB Holding Units that May Yet Be Purchased Under the Plans or Programs 10/1/23-10/31/23 (1)(2) 191,411 $ 30.47 — — 11/1/23-11/30/23 (1) 3,309 30.38 — — 12/1/23-12/31/23 (1) 2,157,787 29.09 — — Total 2,352,507 $ 29.20 — — (1) During the fourth quarter of 2023, AB retained from employees 2,166,396 AB Holding Units to allow them to fulfill statutory withholding tax requirements at the time of distribution of long-term incentive compensation awards. (2) During the fourth quarter of 2023, AB purchased 186,111 AB Holding Units on the open market pursuant to a Rule 10b5-1 plan to help fund anticipated obligations under our incentive compensation award program. 2023 Annual Report 31 Table of Contents Part II Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Overview (1) Our total Assets Under Management (" AUM ") as of December 31, 2023 were $725.2 billion, up $78.8 billion, or 12.2%, during 2023. The increase was driven by market appreciation of $85.8 billion, offset by net outflows of $7.0 billion (reflecting Institutional net outflows of $11.8 billion, offset by Retail net inflows of $3.7 billion and Private Wealth Management net inflows of $1.1 billion). Institutional AUM increased $19.8 billion, or 6.7%, to $317.1 billion during 2023, primarily due to market appreciation of $31.5 billion, partially offset by net outflows of $11.8 billion. Gross sales decreased $20.4 billion, from $32.2 billion in 2022 to $11.8 billion in 2023. Redemptions and terminations decreased $0.7 billion, from $13.3 billion in 2022 to $12.6 billion in 2023. Retail AUM increased $43.9 billion, or 18.1%, to $286.8 billion during 2023, primarily due to market appreciation of $40.3 billion and net inflows of $3.7 billion. Gross sales increased $5.2 billion, from $65.9 billion in 2022 to $71.1 billion in 2023. Redemptions and terminations decreased $8.2 billion, from $66.3 billion in 2022 to $58.1 billion in 2023. Private Wealth Management AUM increased $15.1 billion, or 14.1%, to $121.3 billion during 2023, due to market appreciation of $14.0 billion and net inflows of $1.1 billion. Gross sales increased $1.1 billion, from $17.5 billion in 2022 to $18.6 billion in 2023. Redemptions and terminations increased $1.7 billion, from $15.8 billion in 2022 to $17.5 billion in 2023. Bernstein Research Services (" BRS ") revenue decreased $30.1 million, or 7.2%, in 2023. The decrease was primarily driven by significantly lower global customer trading activity due to the prevailing macro-economic environment. In the fourth quarter of 2022, AB and Société Générale (EURONEXT: GLE, “ SocGen ”), a leading European bank, announced plans to form a joint venture combining their respective cash equities and research businesses. As a result, the BRS business has been classified as held for sale. For further discussion, see Note 24 Acquisitions and Divestitures to our consolidated financial statements in Item 8 . Our 2023 net revenues of $4.2 billion increased $101.0 million, or 2.5%, compared to net revenues of $4.1 billion in the prior year. The increase was primarily driven by investment gains in the current year compared to investment losses in the prior year (impact of $116.6 million), higher net dividend and interest income of $35.2 million and higher base advisory fees of $4.8 million, partially offset by lower Bernstein Research Services revenue of $30.1 million and lower distribution revenues of $20.9 million. Our operating expenses of $3.3 billion increased $98.5 million, or 3.0%, compared to the prior year. The increase was primarily driven by higher employee compensation and benefits expenses of $102.5 million, higher interest on borrowings of $36.5 million, higher amortization of intangibles of $20.3 million and higher contingent payment arrangements of $16.3 million, partially offset by lower general and administrative expenses of $60.1 million and lower promotion and servicing expenses of $17.1 million. Our operating income increased $2.6 million, or 0.3%, to $817.7 million from $815.1 million in 2022 and our operating margin decreased to 19.1% in 2023 from 21.5% in 2022. Market Environment U.S. Equities U.S. Equity markets registered strong gains in the final quarter of 2023, buoyed by slowing inflation data and expectations that the U.S. Federal Reserve (the "Fed") has finished its rate hiking cycle and will move towards cuts in 2024. Market breadth improved in the fourth quarter, with share price appreciation moving beyond mega-cap technology stocks. Both the cap-weighted S&P 500 and the equal-weighted S&P 500 returned positive 12% in the fourth quarter (including dividends). Previously lagging segments of the market rebounded, with Small-Caps (market capitalization ranges between $250 million to $2 billion) and Mid-Caps (market capitalization ranges between $2 billion to $10 billion) outperforming Large-Caps (market capitalization above $10 billion) with the Russell 2000 index posting a positive 14% return in the fourth quarter and Value stocks outperforming Growth stocks in the fourth quarter. 1 Percentage change figures are calculated using assets under management rounded to the nearest million, while financial statement amounts are rounded to the nearest hundred thousand. 32 AllianceBernstein Table of Contents Part II Despite the broadening rally in late 2023, annual index returns were largely concentrated within the "Magnificent-7" companies: a term coined for Apple, Amazon, Alphabet, Meta Platforms, Microsoft, NVIDIA and Tesla which were perceived as the main beneficiaries of the Artificial Intelligence revolution. These seven companies boast the largest market capitalization values in the S&P 500 and account for more than a quarter of the index, disproportionally driving the capitalization-weighted S&P 500's 2023 total return of positive 26% versus positive 14% for the equal-weighted version. Global and Non-U.S. Equities Moderating inflation data and peaking interest rates drove nearly unilateral gains beyond U.S. equity markets (MSCI World Index was positive 11.4% in the fourth quarter). Within the Eurozone, annual inflation fell to 2.4% (as of November 2023) from 10.1% a year ago, sending the MSCI European Economic and Monetary Union index 7.8% higher in the fourth quarter. In the U.K., gains were led by Small-Cap and Mid-Cap indices while Large-Cap lagged on account of a strengthening GBP (sterling). Japan's TOPIX trading index posted a positive 2.0% total return despite a volatile quarter and overall Emerging Market equities were strong in the fourth quarter, albeit lagging Developed Markets. All markets in the MSCI Asia (ex Japan) index ended the quarter positively, apart from China, where lackluster growth continues to be a drag on asset prices. Global Bonds Fixed income markets experienced their strongest quarterly performance in over 20 years, as indicated by the Bloomberg Global Aggregate indices. This was primarily driven by a perceived shift in monetary policy direction, with expectations of rate cuts replacing the previous "higher-for-longer" narrative. As a result, government bond yields fell significantly, and credit markets outperformed government bonds. The Fed maintained its rates throughout the quarter, but a more dovish tone in December accelerated the market rally. The revised dot plot, which plots the Federal Open Market Committee's (" FOMC ") projections for the federal funds rate, now anticipates three rate cuts in 2024, up from the previous expectation of two. The FOMC appears more comfortable with the progress made in bringing inflation back towards the target, as indicated by positive news on the Personal Consumption Expenditures Price Index, which is the Fed's most closely watched measure. Relationship with EQH and its Subsidiaries EQH (our parent company) and its subsidiaries are our largest client. EQH is collaborating with AB in order to improve the risk-adjusted yield for the General Accounts of EQH's insurance subsidiaries by investing additional assets at AB, including the utilization of AB's higher-fee, longer-duration alternative offerings. In mid-2021, Equitable Financial Life Insurance Company, a subsidiary of EQH (" Equitable Financial "), agreed to provide an initial $10 billion in permanent capital to build out AB's private illiquid offerings, including private alternatives and private placements. Deployment of this capital commitment is approximately 90% completed and is expected to continue over the next year. In addition, during the second quarter of 2023, EQH committed to provide an additional $10 billion in permanent capital, which will begin following the completion of the initial $10 billion commitment. We expect this anticipated capital from Equitable Financial will continue to accelerate both organic and inorganic growth in our private alternatives business, allowing us to continue to deliver for our clients, employees, unitholders and other stakeholders. For example, included in the initial $10 billion commitment by EQH is $750 million in capital to be deployed through AB CarVal. Permanent capital means investment capital of indefinite duration, for which commitments may be withdrawn under certain conditions. Such conditions primarily include potential regulatory restrictions, lacking sufficient liquidity to fund the capital commitments to AB and AB's inability to identify attractive investment opportunities which align with the investment strategy. Although EQH’s insurance subsidiaries have indicated their intention over time to provide this investment capital to AB, they have no binding commitment to do so. While the withdrawal of their commitment could potentially slow down our introduction of certain products, the impact to our overall operations would not be material. Relocation Strategy As previously announced, we have established our corporate headquarters in Nashville, TN, at 501 Commerce Street. Our Nashville headquarters houses Finance, IT, Operations, Legal, Compliance, Internal Audit, Human Capital, and Sales and Marketing, and at year-end 2023 we had 1,048 employees in Nashville. We will continue to maintain a principal location in New York City, which houses our Portfolio Management, Sell-Side Research and Trading, and New York-based Private Wealth Management businesses. We believe relocating our corporate headquarters to Nashville affords us the opportunity to provide an improved quality of life alternative for our employees and enables us to attract and recruit new talented employees to a highly desirable location while improving the long-term cost structure of the firm. During the transition period, which began in 2018 and is expected to continue through 2024, we currently estimate that we will incur transition costs of between $145 million to $155 million. These costs include employee relocation, severance, recruitment, and overlapping compensation and occupancy costs. Over this same period, we expect to realize total expense savings of between $205 million to $215 million. However, we did incur some transition costs before we began to realize 2023 Annual Report 33 Table of Contents Part II expense savings. For the period beginning in 2018 and ending in the fourth quarter of 2023, we incurred $140 million of cumulative transition costs compared to $175 million of cumulative savings. We incurred $20 million of transition costs for the twelve months ended December 31, 2023, compared to $43 million of expense savings, resulting in an overall net savings of $23 million for the period. In 2023, our net income per unit (" EPU ") increased $0.08 as a result of our relocation strategy, which compares to the $0.07 EPU increase that occurred in 2022. We also expect to achieve EPU accretion in each future year. Beginning in 2025, once the transition period has been completed, we estimate ongoing annual expense savings of approximately $75 million, which will result from a combination of occupancy and compensation-related savings. Our estimates for both the transition costs and the corresponding expense savings are based on our current assumptions of employee relocation costs, severance, and overlapping compensation and occupancy costs. In addition, our estimates for both the timing of when we incur transition costs and realize the related expense savings are based on our current relocation implementation plan and the timing for execution of each phase. The actual total charges we eventually record, the related expense savings we realize, and the timing of EPU impact may differ from our current estimates as we implement each phase of our headquarters relocation. 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 new Nashville headquarters. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 15-year initial lease term is $134 million. Although we have presented many of our transition costs and annual expense savings with numerical specificity, and we believe these targets to be reasonable as of the date of this report, the uncertainties surrounding the assumptions we discuss above create a significant risk that these targets may not be achieved. Accordingly, the expenses we actually incur and the savings we actually realize may differ from our targets, particularly if actual events adversely differ from one or more of our key assumptions. The transition costs and expense savings, together with their underlying assumptions, are Forward-Looking Statements and can be affected by any of the factors discussed in “Risk Factors” and “Cautions Regarding Forward-Looking Statements” in this 2023 10-K. We strongly caution investors not to place undue reliance on any of these assumptions or our cost and expense targets. Except as may be required by applicable securities laws, we are not under any obligation, and we expressly disclaim any obligation, to update or alter any assumptions, estimates, financial goals, targets, projections or other related statements that we may make. AB Holding AB Holding’s principal source of income and cash flow is attributable to its investment in AB Units. The AB Holding financial statements, notes to the financial statements and management’s discussion and analysis of financial condition and results of operations (“ MD&A ”) should be read in conjunction with those of AB. Results of Operations Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands, except per unit amounts) Net income attributable to AB Unitholders $ 764,610 $ 831,813 $ 1,148,623 (8.1 %) (27.6 %) Weighted average equity ownership interest 39.2 % 36.7 % 36.2 % Equity in net income attributable to AB Unitholders $ 299,781 $ 305,504 $ 416,326 (1.9) (26.6) Income taxes 35,597 31,339 30,483 13.6 2.8 Net income of AB Holding $ 264,184 $ 274,165 $ 385,843 (3.6) (28.9) Diluted net income per AB Holding Unit $ 2.34 $ 2.69 $ 3.88 (13.0) (30.7) Distributions per AB Holding Unit (1) $ 2.69 $ 2.95 $ 3.90 (8.8) (24.4) (1) Distributions reflect the impact of AB’s non-GAAP adjustments. AB Holding had net income of $264.2 million in 2023 compared to $274.2 million in 2022, reflecting lower net income attributable to AB Unitholders, partially offset by higher weighted average equity ownership interest. AB Holding had net income of $274.2 million in 2022 compared to $385.8 million in 2021, reflecting lower net income attributable to AB Unitholders, partially offset by higher weighted average equity ownership interest. AB Holding's partnership gross income is derived from its interest in AB. AB Holding’s income taxes, which reflect a 3.5% federal tax on its partnership gross income from the active conduct of a trade or business, are computed by multiplying certain AB qualifying revenues by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate. Certain AB qualifying revenues are primarily U.S. investment advisory fees, research payments and brokerage commissions. AB Holding’s effective tax rate was 11.9% in 2023, 10.3% in 2022 and 7.3% in 2021. The increase in AB Holdings effective tax rate is primarily due to the 34 AllianceBernstein Table of Contents Part II increase in the weighted average equity ownership interest. See Note 6 to AB Holding’s financial statements in Item 8 for a further description. 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. 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 ”). 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. Management uses both GAAP and non-GAAP measures in evaluating the company’s financial performance. The non-GAAP measures alone may pose limitations because they do not include all of AB’s revenues and expenses. 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. See “Management Operating Metrics” in this Item 7 . The impact of these adjustments on AB Holding’s net income and diluted net income per AB Holding Unit are as follows: Years Ended December 31 2023 2022 2021 (in thousands, except per unit amounts) AB non-GAAP adjustments 2 $ 103,164 $ 75,745 $ 2,959 AB Income tax (expense) benefit on non-GAAP adjustments (2,786) (6,395) 71 AB non-GAAP adjustments, after taxes 100,378 69,350 3,030 AB Holding’s weighted average equity ownership interest in AB 39.2 % 36.7 % 36.2 % Impact on AB Holding’s net income of AB non-GAAP adjustments $ 39,355 $ 25,468 $ 1,098 Net income - diluted, GAAP basis $ 264,184 $ 274,167 $ 385,873 Impact on AB Holding’s net income of AB non-GAAP adjustments 39,355 25,468 1,098 Adjusted net income - diluted $ 303,539 $ 299,635 $ 386,971 Diluted net income per AB Holding Unit, GAAP basis $ 2.34 $ 2.69 $ 3.88 Impact of AB non-GAAP adjustments 0.35 0.25 0.01 Adjusted diluted net income per AB Holding Unit $ 2.69 $ 2.94 $ 3.89 The degree to which AB’s non-GAAP adjustments impact AB Holding’s net income fluctuates based on AB Holding's ownership percentage in AB. Tax Legislation For a discussion of tax legislation, see “Risk Factors - Structure-related Risks” in Item 1A . Capital Resources and Liquidity During the year ended December 31, 2023, net cash provided by operating activities was $294.0 million, compared to $362.6 million during the corresponding 2022 period. The decrease primarily resulted from lower cash distributions received from AB of $64.6 million. During the year ended December 31, 2022, net cash provided by operating activities was $362.6 million, compared to $355.1 million during the corresponding 2021 period. The increase primarily resulted from higher cash distributions received from AB of $9.3 million. During the years ended December 31, 2023, 2022 and 2021, net cash used in investing activities was zero, $1.8 million and $3.4 million, respectively, reflecting investments in AB with proceeds from exercises of compensatory options to buy AB Holding Units and capital contributions to AB. 2 Includes all AB non-GAAP adjustments to pre-tax income. 2023 Annual Report 35 Table of Contents Part II During the year ended December 31, 2023, net cash used in financing activities was $294.0 million, compared to $360.8 million during the corresponding 2022 period. The decrease was primarily due to lower cash distributions to Unitholders of $64.9 million and higher capital contributions from AB of $2.2 million. During the year ended December 31, 2022, net cash used in financing activities was $360.8 million, compared to $351.7 million during the corresponding 2021 period. The increase was due to cash distributions to Unitholders of $3.5 million and proceeds from exercise of compensatory options to buy AB Holding Units of $3.2 million, offset by lower capital contributions from AB of $2.3 million. 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. AB Holding’s cash inflow is comprised entirely of distributions from AB. These distributions are subsequently distributed (net of taxes paid) in their entirety to AB Holding’s Unitholders. As a result, AB Holding has no liquidity risk as it only pays distributions to AB Holding’s Unitholders to the extent of distributions received from AB (net of taxes paid). Cash Distributions AB Holding is required to distribute all of its Available Cash Flow, as defined in the AB Holding Partnership Agreement, to its Unitholders (including the General Partner). Available Cash Flow typically is the adjusted diluted net income per unit for the quarter multiplied by the number of units outstanding at the end of the quarter. Management anticipates that Available Cash Flow will continue to be based on adjusted diluted net income per unit, unless management determines, with concurrence of the Board of Directors, that one or more adjustments made to adjusted net income should not be made with respect to the Available Cash Flow calculation. See Note 2 to AB Holding’s financial statements in Item 8 for a description of Available Cash Flow. Commitments and Contingencies For a discussion of commitments and contingencies, see Note 7 to AB Holding’s financial statements in Item 8 . AB Assets Under Management Assets under management by distribution channel are as follows: As of December 31 % Change 2023 2022 2021 2023-22 2022-21 (in billions) Institutions $ 317.1 $ 297.3 $ 337.1 6.7 % (11.8 %) Retail 286.8 242.9 319.9 18.1 (24.1) Private Wealth Management 121.3 106.2 121.6 14.1 (12.6) Total $ 725.2 $ 646.4 $ 778.6 12.2 % (17.0) % 36 AllianceBernstein Table of Contents Part II Assets under management by investment service are as follows: As of December 31 % Change 2023 2022 2021 2023-22 2022-21 (in billions) Equity Actively Managed $ 247.5 $ 217.9 $ 287.6 13.6 % (24.2 %) Passively Managed (1) 62.1 53.8 71.6 15.3 (24.8) Total Equity 309.6 271.7 359.2 13.9 (24.3) Fixed Income Actively Managed Taxable 208.6 190.3 246.3 9.6 (22.8) Tax–exempt 61.1 52.5 57.1 16.3 (7.9) Total 269.7 242.8 303.4 11.1 (20.0) Passively Managed (1) 11.4 9.4 13.2 21.0 (28.9) Total Fixed Income 281.1 252.2 316.6 11.5 (20.3) Alternatives/Multi-Asset Solutions (2) Actively Managed 125.9 115.8 97.3 8.7 19.1 Passively Managed (1) 8.6 6.7 5.5 29.7 21.5 Total Alternatives/Multi-Asset Solutions 134.5 122.5 102.8 9.8 19.2 Total $ 725.2 $ 646.4 $ 778.6 12.2 % (17.0 %) (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. 2023 Annual Report 37 Table of Contents Part II Changes in assets under management during 2023 and 2022 are as follows: Distribution Channel Institutions Retail Private Wealth Management Total (in billions) Balance as of December 31, 2022 $ 297.3 $ 242.9 $ 106.2 $ 646.4 Long-term flows: Sales/new accounts 11.8 71.1 18.6 101.5 Redemptions/terminations (12.6) (58.1) (17.5) (88.2) Cash flow/unreinvested dividends (11.0) (9.3) — (20.3) Net long-term (outflows) inflows (11.8) 3.7 1.1 (7.0) Transfers 0.1 (0.1) — — Market appreciation 31.5 40.3 14.0 85.8 Net change 19.8 43.9 15.1 78.8 Balance as of December 31, 2023 $ 317.1 $ 286.8 $ 121.3 $ 725.2 Balance as of December 31, 2021 $ 337.1 $ 319.9 $ 121.6 $ 778.6 Long-term flows: Sales/new accounts 32.2 65.9 17.5 115.6 Redemptions/terminations (13.3) (66.3) (15.8) (95.4) Cash flow/unreinvested dividends (12.6) (11.2) — (23.8) Net long-term inflows (outflows) (1) 6.3 (11.6) 1.7 (3.6) Adjustments (2) (0.4) — — (0.4) Acquisitions (3) 12.2 — — 12.2 Transfers (0.1) 0.1 — — Market (depreciation) (57.8) (65.5) (17.1) (140.4) Net change (39.8) (77.0) (15.4) (132.2) Balance as of December 31, 2022 $ 297.3 $ 242.9 $ 106.2 $ 646.4 (1) Net flows include $4.5 billion of AXA redemptions for 2022. (2) Approximately $0.4 billion of Institutional AUM was removed from our total assets under management during the second quarter of 2022 due to a change in the fee structure. (3) The CarVal acquisition added approximately $12.2 billion of Institutional AUM in the third quarter of 2022. 38 AllianceBernstein Table of Contents Part II Investment Service Equity Actively Managed Equity Passively Managed (1) Fixed Income Actively Managed- Taxable Fixed Income Actively Managed-Tax- Exempt Fixed Income Passively Managed (1) Alternatives/ Multi-Asset Solutions (2) Total (in billions) Balance as of December 31, 2022 $ 217.9 $ 53.8 $ 190.3 $ 52.5 $ 9.4 $ 122.5 $ 646.4 Long-term flows: Sales/new accounts 37.3 1.3 36.4 16.5 1.7 8.3 101.5 Redemptions/terminations (43.8) (0.3) (27.3) (11.1) (0.3) (5.4) (88.2) Cash flow/unreinvested dividends (9.0) (5.0) (2.5) 0.3 0.1 (4.2) (20.3) Net long-term (outflows) inflows (15.5) (4.0) 6.6 5.7 1.5 (1.3) (7.0) Market appreciation 45.1 12.3 11.7 2.9 0.5 13.3 85.8 Net change 29.6 8.3 18.3 8.6 2.0 12.0 78.8 Balance as of December 31, 2023 $ 247.5 $ 62.1 $ 208.6 $ 61.1 $ 11.4 $ 134.5 $ 725.2 Balance as of December 31, 2021 $ 287.6 $ 71.6 $ 246.3 $ 57.1 $ 13.2 $ 102.8 $ 778.6 Long-term flows: Sales/new accounts 46.0 1.8 25.5 16.0 (0.1) 26.4 115.6 Redemptions/terminations (39.0) (3.1) (32.6) (15.0) (1.5) (4.2) (95.4) Cash flow/unreinvested dividends (9.7) (4.0) (10.8) (0.4) 0.3 0.8 (23.8) Net long-term (outflows) inflows (3) (2.7) (5.3) (17.9) 0.6 (1.3) 23.0 (3.6) Adjustments (4) — — — — — (0.4) (0.4) Acquisitions (5) — — — — — 12.2 12.2 Market (depreciation) (67.0) (12.5) (38.1) (5.2) (2.5) (15.1) (140.4) Net change (69.7) (17.8) (56.0) (4.6) (3.8) 19.7 (132.2) Balance as of December 31, 2022 $ 217.9 $ 53.8 $ 190.3 $ 52.5 $ 9.4 $ 122.5 $ 646.4 (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. (3) Net flows include $4.5 billion of AXA redemptions for 2022. (4) Approximately $0.4 billion of Institutional AUM was removed from our total assets under management during the second quarter of 2022 due to a change in the fee structure. (5) The CarVal acquisition added approximately $12.2 billion of Institutional AUM in the third quarter of 2022. 2023 Annual Report 39 Table of Contents Part II Net long-term (outflows) inflows for actively managed investment services as compared to passively managed investment services during 2023 and 2022 are as follows: Years Ended December 31 2023 2022 (in billions) Actively Managed Equity $ (15.5) $ (2.7) Fixed Income 12.3 (17.3) Alternatives/Multi- Asset Solutions (2.0) 20.9 Total (5.2) 0.9 Passively Managed Equity (4.0) (5.3) Fixed Income 1.5 (1.3) Alternatives/Multi- Asset Solutions 0.7 2.1 Total (1.8) (4.5) Total net long-term (outflows) $ (7.0) $ (3.6) Average assets under management by distribution channel and investment service are as follows: Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in billions) Distribution Channel: Institutions $ 304.6 $ 308.4 $ 325.7 (1.2 %) (5.3 %) Retail 262.0 267.8 291.0 (2.1) (8.0) Private Wealth Management 113.7 110.3 114.1 3.0 (3.3) Total $ 680.3 $ 686.5 $ 730.8 (0.9) % (6.1) % Investment Service: Equity Actively Managed $ 231.5 $ 239.7 $ 252.2 (3.4) (4.9) Equity Passively Managed (1) 57.7 60.4 68.7 (4.5) (12.1) Fixed Income Actively Managed – Taxable 198.3 210.0 253.1 (5.6) (17.1) Fixed Income Actively Managed – Tax-exempt 56.0 54.1 53.8 3.4 0.6 Fixed Income Passively Managed (1) 9.7 11.5 9.6 (15.2) 20.2 Alternatives/Multi-Asset Solutions (2) 127.1 110.8 93.4 14.8 18.6 Total $ 680.3 $ 686.5 $ 730.8 (0.9) % (6.1) % (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. 40 AllianceBernstein Table of Contents Part II During 2023, our Institutional channel average AUM of $304.6 billion decreased $3.8 billion, or 1.2%, compared to 2022, while ending AUM increased $19.8 billion, or 6.7%, to $317.1 billion from December 31, 2022. The $19.8 billion increase in AUM resulted primarily from market appreciation of $31.5 billion (with $22.7 billion of market appreciation occurring in the fourth quarter of 2023), partially offset by net outflows of $11.8 billion. During 2022, our Institutional channel average AUM of $308.4 billion decreased $17.3 billion, or 5.3%, compared to 2021, primarily due to this AUM decreasing $39.8 billion, or 11.8%, to $297.3 billion from December 31, 2021. The $39.8 billion decrease in AUM resulted primarily from market depreciation of $57.8 billion, partially offset by an addition of $12.2 billion due to the acquisition of CarVal and net inflows of $6.3 billion. During 2023, our Retail channel average AUM of $262.0 billion decreased $5.8 billion, or 2.1%, compared to 2022, while ending AUM increased $43.9 billion, or 18.1%, to $286.8 billion from December 31, 2022. The $43.9 billion increase in AUM resulted primarily from market appreciation of $40.3 billion (with $26.3 billion of market appreciation occurring in the fourth quarter of 2023) and net inflows of $3.7 billion. During 2022, our Retail channel average AUM of $267.8 billion decreased $23.2 billion, or 8.0%, compared to 2021, primarily due to this AUM decreasing $77.0 billion, or 24.1%, to $242.9 billion from December 31, 2021. The $77.0 billion decrease in AUM resulted primarily from market depreciation of $65.5 billion and net outflows of $11.6 billion. During 2023, our Private Wealth Management channel average AUM of $113.7 billion increased $3.4 billion, or 3.0%, compared to 2022, primarily due to this AUM increasing $15.1 billion, or 14.1%, to $121.3 billion from December 31, 2022. The $15.1 billion increase in AUM resulted from market appreciation of $14.0 billion (with $9.0 billion of market appreciation occurring in the fourth quarter of 2023) and net inflows of $1.1 billion. During 2022, our Private Wealth Management channel average AUM of $110.3 billion decreased $3.8 billion, or 3.3%, compared to 2021, primarily due to this AUM decreasing $15.4 billion, or 12.6%, to $106.2 billion from December 31, 2021. The $15.4 billion decrease in AUM resulted from market depreciation of $17.1 billion, offset by net inflows of $1.7 billion. Absolute investment composite returns, gross of fees, and relative performance as of December 31, 2023 compared to benchmarks for certain representative Institutional equity and fixed income services are as follows: 1-Year 3-Year (1) 5-Year (1) Income - Hedged (fixed income) Absolute return 9.7% (0.8%) 3.3% Relative return (vs. Bloomberg Barclays Global High Yield Index - Hedged) 4.2 2.5 2.0 High Income (fixed income) Absolute return 15.1 2.3 5.1 Relative return (vs. Bloomberg Barclays U.S. Aggregate Index) 1.4 1.1 0.6 Global Plus - Hedged (fixed income) Absolute return 7.7 (1.8) 1.8 Relative return (vs. Bloomberg Barclays Global Aggregate Index - Hedged) 0.6 0.3 0.4 Intermediate Municipal Bonds (fixed income) Absolute return 5.6 0.6 2.4 Relative return (vs. Lipper Short/Int. Blended Muni Fund Avg) 0.9 0.7 0.8 U.S. Strategic Core Plus (fixed income) Absolute return 6.2 (2.9) 1.6 Relative return (vs. Bloomberg Barclays U.S. Aggregate Index) 0.6 0.4 0.5 Emerging Market Debt (fixed income) Absolute return 12.6 (3.5) 2.3 Relative return (vs. JPM EMBI Global/JPM EMBI) 2.2 (0.3) 0.3 2023 Annual Report 41 Table of Contents Part II 1-Year 3-Year (1) 5-Year (1) Sustainable Global Thematic Absolute return 17.0 2.1 14.5 Relative return (vs. MSCI ACWI Index) (5.2) (3.6) 2.7 International Strategic Core Equity Absolute return 16.6 3.6 7.3 Relative return (vs. MSCI EAFE Index) (1.6) (0.4) (0.9) U.S. Small & Mid Cap Value Absolute return 18.0 11.1 11.7 Relative return (vs. Russell 2500 Value Index) 2.0 2.3 0.9 U.S. Strategic Value Absolute return 19.7 13.0 12.2 Relative return (vs. Russell 1000 Value Index) 8.2 4.1 1.2 U.S. Small Cap Growth Absolute return 19.1 (6.7) 11.6 Relative return (vs. Russell 2000 Growth Index) 0.5 (3.2) 2.4 U.S. Large Cap Growth Absolute return 35.8 8.0 18.2 Relative return (vs. Russell 1000 Growth Index) (6.8) (0.9) (1.3) U.S. Small & Mid Cap Growth Absolute return 19.7 (4.8) 11.9 Relative return (vs. Russell 2500 Growth Index) 0.8 (2.1) (0.5) Concentrated U.S. Growth Absolute return 19.4 6.6 15.7 Relative return (vs. S&P 500 Index) (6.9) (3.4) — Select U.S. Equity Absolute return 20.1 11.1 15.8 Relative return (vs. S&P 500 Index) (6.2) 1.1 0.1 Strategic Equities Absolute return 25.8 9.5 15.0 Relative return (vs. Russell 3000 Index) (0.2) 0.9 (0.2) Global Core Equity Absolute return 21.0 5.1 10.7 Relative return (vs. MSCI ACWI Index) (1.2) (0.6) (1.0) U.S. Strategic Core Equity Absolute return 21.1 11.2 14.5 Relative return (vs. S&P 500 Index) (5.2) 1.2 (1.2) Select U.S. Equity Long/Short Absolute return 12.6 7.1 10.3 Relative return (vs. S&P 500 Index) (13.6) (2.9) (5.4) Global Strategic Core Equity Absolute return 20.3 11.1 13.0 Relative return (vs. S&P 500 Index) (4.0) 1.7 (0.9) (1) Reflects annualized returns. 42 AllianceBernstein Table of Contents Part II Consolidated Results of Operations Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands, except per unit amounts) Net revenues $ 4,155,323 $ 4,054,290 $ 4,441,602 2.5 % (8.7 %) Expenses 3,337,653 3,239,194 3,225,140 3.0 0.4 Operating income 817,670 815,096 1,216,462 0.3 (33.0) Income taxes 29,051 39,639 62,728 (26.7) (36.8) Net income 788,619 775,457 1,153,734 1.7 (32.8) Net income (loss) of consolidated entities attributable to non-controlling interests 24,009 (56,356) 5,111 n/m n/m Net income attributable to AB Unitholders $ 764,610 $ 831,813 $ 1,148,623 (8.1) (27.6) Diluted net income per AB Unit $ 2.65 $ 3.01 $ 4.18 (12.0) (28.0) Distributions per AB Unit $ 3.00 $ 3.26 $ 4.19 (8.0) (22.2) Operating margin (1) 19.1 % 21.5 % 27.3 % (1) Operating income excluding net income (loss) attributable to non-controlling interests as a percentage of net revenues. Net income attributable to AB Unitholders for the year ended December 31, 2023 decreased $67.2 million from the year ended December 31, 2022. The decrease primarily is due to (in millions): Higher employee compensation and benefits $ (102.5) Higher net gains of consolidated entities attributable to non-controlling interest (80.4) Higher interest on borrowings (36.5) Lower Bernstein Research Services revenue (30.1) Lower distribution revenues (20.9) Higher amortization of intangible assets (20.3) Higher contingent payment arrangements (16.3) Higher investment gains 116.6 Lower general and administrative expenses 60.1 Higher net dividend and interest income 35.2 Lower promotion and servicing expenses 17.1 Lower income taxes 10.6 Other 0.2 $ (67.2) 2023 Annual Report 43 Table of Contents Part II Net income attributable to AB Unitholders for the year ended December 31, 2022 decreased $316.8 million from the year ended December 31, 2021. The decrease primarily was due to (in millions): Lower base advisory fees $ (123.6) Higher investment losses (101.8) Lower performance-based fees (99.9) Higher general and administrative expenses (86.0) Lower distribution revenues (45.0) Lower Bernstein Research Services revenue (35.7) Lower promotion and servicing expenses 60.1 Higher net loss of consolidated entities attributable to non-controlling interest 61.5 Lower employee compensation and benefits 49.4 Other 4.2 $ (316.8) Units Outstanding 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 ”). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker we select has the authority to repurchase AB Holding Units on our behalf in accordance with the terms and limitations specified in the plan. Repurchases are subject to regulations promulgated by the SEC, as well as certain price, market volume and timing constraints specified in the plan. There was no plan adopted during the fourth quarter of 2023. We may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under our incentive compensation award program and for other corporate purposes. Cash Distributions We are required to distribute all of our Available Cash Flow, as defined in the AB Partnership Agreement, to our Unitholders and the General Partner. Available Cash Flow typically is the adjusted diluted net income per unit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, management anticipates that Available Cash Flow will continue to be based on adjusted diluted net income per unit, unless management determines, with concurrence of the Board of Directors, that one or more adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation. See Note 2 to our consolidated financial statements contained in Item 8 for a description of Available Cash Flow. Management Operating Metrics We are providing the non-GAAP measures “adjusted net revenues,” “adjusted operating income” and “adjusted operating margin” because they are the principal operating metrics management uses in evaluating and comparing period-to-period operating performance. Management principally uses these metrics in evaluating performance because they present a clearer picture of our 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, we believe that these management operating metrics help investors better understand the underlying trends in our results and, accordingly, provide a valuable perspective for investors. 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. Management uses both accounting principles generally accepted in the United States of America (" US GAAP ") and non-GAAP measures in evaluating our financial performance. The non-GAAP measures alone may pose limitations because they do not include all of our revenues and expenses. 44 AllianceBernstein Table of Contents Part II Years Ended December 31 2023 2022 2021 (in thousands) Net revenues, US GAAP basis $ 4,155,323 $ 4,054,290 $ 4,441,602 Adjustments: Distribution-related adjustments: Distribution revenues (586,263) (607,195) (652,240) Investment advisory services fees (60,919) (57,139) (90,242) Pass-through adjustments: Investment advisory services fees (62,538) (65,116) (40,628) Other revenues (34,910) (38,959) (37,209) Impact of consolidated company-sponsored funds (25,123) 57,436 (6,933) Incentive compensation-related items (13,621) (7,083) (6,694) Write-down of investment — — 1,880 Adjusted net revenues $ 3,371,949 $ 3,336,234 $ 3,609,536 Operating income, US GAAP basis $ 817,670 $ 815,096 $ 1,216,462 Adjustments: Real estate (825) (825) (3,162) Incentive compensation-related items 5,192 3,461 687 EQH award compensation 727 606 940 Write-down of investment — — 1,880 Acquisition-related expenses 98,070 72,503 2,614 Sub-total of non-GAAP adjustments before interest on borrowings 103,164 75,745 2,959 Interest on borrowings 1 54,394 17,906 5,145 Subtotal of non-GAAP adjustments 157,558 93,651 8,104 Less: Net income (loss) of consolidated entities attributable to non-controlling interests 24,009 (56,356) 5,111 Adjusted operating income 1 951,219 965,103 1,219,455 Less: Interest on borrowings 54,394 17,906 5,145 Adjusted pre-tax income 896,825 947,197 1,214,310 Less: Adjusted income taxes 31,837 46,034 62,658 Adjusted net income $ 864,988 $ 901,163 $ 1,151,652 Diluted net income per AB Unit, GAAP basis $ 2.65 $ 3.01 $ 4.18 Impact of non-GAAP adjustments 0.35 0.25 0.02 Adjusted diluted net income per AB Unit $ 3.00 $ 3.26 $ 4.20 Operating margin, GAAP basis 19.1% 21.5% 27.3% Impact of non-GAAP adjustments 9.1 7.4 6.5 Adjusted operating margin 28.2% 28.9% 33.8% 1. During the second quarter of 2023, we revised adjusted operating income to exclude interest on borrowings in order to align with our industry peer group. We have recast prior periods presentation to align with the current period presentation. Adjusted operating income for the year ended December 31, 2023 decreased $13.9 million, or 1.4%, from the year ended December 31, 2022, primarily due to higher employee compensation and benefits expense of $39.3 million, lower Bernstein Research Services revenue of $30.1 million, lower investment advisory base fees of $25.1 million and higher general and administrative expenses of $6.2 million, partially offset by higher net dividend and interest income of $51.6 million and higher performance-based fees of $35.5 million. Adjusted operating income for the year ended December 31, 2022 decreased $254.4 million, or 20.9%, from the year ended December 31, 2021, primarily due to lower performance-based fees of $130.9 million, lower investment advisory base fees of 2023 Annual Report 45 Table of Contents Part II $99.1 million, lower Bernstein Research Services revenue of $35.7 million and higher general and administrative expenses of $32.3 million, partially offset by lower employee compensation and benefits expense of $58.4 million. Adjusted Net Revenues Net Revenue, as adjusted, is reduced to exclude all of the company's distribution revenues, which are recorded as a separate line item on the consolidated statement of income, as well as a portion of investment advisory services fees received that is used to pay distribution and servicing costs. For certain products, based on the distinct arrangements, certain distribution fees are collected by us and passed through to third-party client intermediaries, while for certain other products, we collect investment advisory services fees and a portion is passed through to third-party client intermediaries. In both arrangements, the third-party client intermediary owns the relationship with the client and is responsible for performing services and distributing the product to the client on our behalf. We believe offsetting distribution revenues and certain investment advisory services fees is useful for our investors and other users of our financial statements because such presentation appropriately reflects the nature of these costs as pass-through payments to third parties that perform functions on behalf of our sponsored mutual funds and/or shareholders of these funds. Distribution-related adjustments fluctuate each period based on the type of investment products sold, as well as the average AUM over the period. Also, we adjust distribution revenues for the amortization of deferred sales commissions as these costs, over time, will offset such revenues. We adjust investment advisory and services fees and other revenues for pass through costs, primarily related to our transfer agent and shareholder servicing fees. Also, we adjust for certain performance-based fees passed through to our investment advisors. These fees do not affect operating income, as such, we exclude these fees from adjusted net revenues. We adjust for the revenue impact of consolidating company-sponsored investment funds by eliminating the consolidated company-sponsored investment funds' revenues and including AB's fees from such consolidated company-sponsored investment funds and AB's investment gains and losses on its investments in such consolidated company-sponsored investment funds that were eliminated in consolidation. Adjusted net revenues exclude investment gains and losses and dividends and interest on employee long-term incentive compensation-related investments. Also, we adjust for certain acquisition-related pass-through performance-based fees and performance related compensation. During the fourth quarter of 2021, we wrote down an equity method investment; this write-down brought the investment balance to zero. Adjusted Operating Income Adjusted operating income represents operating income on a US GAAP basis excluding (1) real estate charges (credits), (2) the impact on net revenues and compensation expense of the investment gains and losses (as well as the dividends and interest) associated with employee long-term incentive compensation-related investments, (3) the equity compensation paid by EQH to certain AB executives, as discussed below , (4) the write-down of investments ( discussed immediately above ), (5) acquisition-related expenses, (6) interest on borrowings and (7) the impact of consolidated company-sponsored investment funds. Real estate charges (credits) incurred during the fourth quarter of 2019 through the fourth quarter of 2020, while excluded in the period in which the charges (credits) were recorded, are included ratably over the remaining applicable lease term. Prior to 2009, a significant portion of employee compensation was in the form of long-term incentive compensation awards that were notionally invested in AB investment services and generally vested over a period of four years. AB economically hedged the exposure to market movements by purchasing and holding these investments on its balance sheet. All such investments had vested as of year-end 2012 and the investments have been delivered to the participants, except for those investments with respect to which the participant elected a long-term deferral. Fluctuation in the value of these investments, which also impacts compensation expense, is recorded within investment gains and losses on the income statement. Management believes it is useful to reflect the offset achieved from economically hedging the market exposure of these investments in the calculation of adjusted operating income and adjusted operating margin. The non-GAAP measures exclude gains and losses and dividends and interest on employee long-term incentive compensation-related investments included in revenues and compensation expense. The board of directors of EQH granted to Seth Bernstein, our CEO, equity awards in connection with EQH's IPO. Additionally, equity awards were granted to Mr. Bernstein and other AB executives for their membership on the EQH Management Committee. These individuals may receive additional equity or cash compensation from EQH in the future related to their service on the Management Committee. Any awards granted to these individuals by EQH are recorded as compensation expense in AB’s consolidated statement of income. The compensation expense associated with these awards has been excluded from our non-GAAP measures because they are non-cash and are based upon EQH's, and not AB's, financial performance. 46 AllianceBernstein Table of Contents Part II The write-down of investments discussed above in Adjusted Net Revenues have been excluded due to their non-recurring nature and because they are not part of our core operating results. Acquisition-related expenses have been excluded because they are not considered part of our core operating results when comparing financial results from period to period and to industry peers. Acquisition-related expenses include professional fees and the recording of changes in estimates to contingent payment arrangements associated with our acquisitions. Beginning in the first quarter of 2022, acquisition-related expenses also include certain compensation-related expenses, amortization of intangible assets for contracts acquired and accretion expense with respect to contingent payment arrangements. During 2023, 2022 and 2021, acquisition related expenses included an intangible asset impairment charge of zero, $5.6 million and $1.0 million, respectively, related to various historical acquisitions. The recording of changes in estimates of contingent consideration payable with respect to contingent payment arrangements associated with our acquisitions are not considered part of our core operating results and, accordingly, have been excluded. During 2023, we recorded an expense of $28.4 million due to a change in estimate related to the contingent consideration associated with the acquisition of Autonomous LLC in 2019. The change in estimate was based upon better than expected revenues during the 2023 performance evaluation period. We recorded $14.1 million as contingent payment arrangement expense and $14.3 million as compensation and benefits expense in the condensed consolidated statement of income. The charges to compensation and benefits expense are due to certain service conditions and special awards included in the acquisition agreement. We adjust operating income to exclude interest on borrowings in order to align with our industry peer group. We adjusted for the operating income impact of consolidating certain company-sponsored investment funds by eliminating the consolidated company-sponsored funds' revenues and expenses and including AB's revenues and expenses that were eliminated in consolidation. We also excluded the limited partner interests we do not own. Adjusted Net Income and Adjusted Diluted Net Income per AB Unit As previously discussed , our quarterly distribution is typically our adjusted diluted net income per unit (which is derived from adjusted net income) for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. Adjusted income taxes, used in calculating adjusted net income, are calculated using the GAAP effective tax rate adjusted for non-GAAP income tax adjustments. Adjusted Operating Margin Adjusted operating margin allows us to monitor our financial performance and efficiency from period to period without the volatility noted above in our discussion of adjusted operating income and to compare our performance to industry peers on a basis that better reflects our performance in our core business. Adjusted operating margin is derived by dividing adjusted operating income by adjusted net revenues. 2023 Annual Report 47 Table of Contents Part II Net Revenues The components of net revenues are as follows: Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands) Investment advisory and services fees: Institutions: Base fees $ 612,341 $ 581,987 $ 540,478 5.2 % 7.7 % Performance-based fees 53,702 77,299 45,580 (30.5) 69.6 666,043 659,286 586,058 1.0 12.5 Retail: Base fees 1,275,914 1,321,645 1,442,178 (3.5) (8.4) Performance-based fees 197 1,564 50,669 (87.4) (96.9) 1,276,111 1,323,209 1,492,847 (3.6) (11.4) Private Wealth Management: Base fees 942,302 922,159 966,749 2.2 (4.6) Performance-based fees 91,012 66,384 148,870 37.1 (55.4) 1,033,314 988,543 1,115,619 4.5 (11.4) Total: Base fees 2,830,557 2,825,791 2,949,405 0.2 (4.2) Performance-based fees 144,911 145,247 245,119 (0.2) (40.7) 2,975,468 2,971,038 3,194,524 0.1 (7.0) Bernstein Research Services 386,142 416,273 452,017 (7.2) (7.9) Distribution revenues 586,263 607,195 652,240 (3.4) (6.9) Dividend and interest income 199,443 123,091 38,734 62.0 n/m Investment gains (losses) 14,206 (102,413) (636) n/m n/m Other revenues 101,342 105,544 108,409 (4.0) (2.6) Total revenues 4,262,864 4,120,728 4,445,288 3.4 (7.3) Less: broker-dealer related interest expense 107,541 66,438 3,686 61.9 n/m Net revenues $ 4,155,323 $ 4,054,290 $ 4,441,602 2.5 % (8.7) % Investment Advisory and Services Fees Investment advisory and services fees are the largest component of our revenues. These fees generally are calculated as a percentage of the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing period, and vary with the type of investment service, the size of account and the total amount of assets we manage for a particular client. Accordingly, fee income generally increases or decreases as AUM increase or decrease and is affected by market appreciation or depreciation, the addition of new client accounts or client contributions of additional assets to existing accounts, withdrawals of assets from and termination of client accounts, purchases and redemptions of mutual fund shares, shifts of assets between accounts or products with different fee structures, and acquisitions. Our average basis points realized (investment advisory and services fees divided by average AUM) generally approximate 30 to 105 basis points for actively managed equity services, 10 to 65 basis points for actively-managed fixed income services and 1 to 50 basis points for passively managed services. Average basis points realized for other services could range from 3 basis points for certain Institutional third party managed services to over 190 basis points for certain Retail and Private Wealth Management alternative services. These ranges include all-inclusive fee arrangements (covering investment management, trade execution and other services) for our Private Wealth Management clients. We calculate AUM using established market-based valuation methods and fair valuation (non-observable market) methods. Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing 48 AllianceBernstein Table of Contents Part II vendors and brokers for other derivative products. Fair valuation methods include: discounted cash flow models or any other methodology that is validated and approved by our Valuation Committee and sub-committee (the " Valuation Committee" ) ( see paragraph immediately below for more information regarding our Valuation Committee). Fair valuation 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 Valuation Committee, consists of senior officers and employees, which oversees a consistent framework of pricing and valuation of all investments held in client and AB portfolios. The Valuation Committee has adopted a Statement of Pricing Policies describing principles and policies that apply to pricing and valuing investments held in these portfolios. We also have a Pricing Group, which is overseen by the Valuation Committee and is responsible for managing the pricing process for all investments. We sometimes charge our clients performance-based fees. In these situations, we charge a base advisory fee and are eligible to earn an additional performance-based fee or incentive allocation that 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. Some performance-based fees include a high-watermark provision, which generally provides that if a client account underperforms relative to its performance target (whether absolute or relative to a specified benchmark), it must gain back such underperformance before we can collect future performance-based fees. Therefore, if we fail to achieve our performance target for a particular period, we will not earn a performance-based fee for that period and, for accounts with a high-watermark provision, our ability to earn future performance-based fees will be impaired. We are eligible to earn performance-based fees on 9.3%, 8.3% and 0.4% of the assets we manage for institutional clients, private wealth clients and retail clients, respectively (in total, 5.6% of our AUM). Our investment advisory and services fees increased by $4.4 million, or 0.1%, in 2023, due to a $4.8 million, or 0.2%, increase in base fees, offset by a $0.3 million decrease in performance-based fees. The increase in base fees is primarily due to slight shift in product mix to alternatives, which generally earn higher fees, partially offset by a 0.9% decrease in average AUM. Our investment advisory and services fees decreased by $223.5 million, or 7.0%, in 2022, due to a $123.6 million, or 4.2%, decrease in base fees and a $99.9 million decrease in performance-based fees. The decrease in base fees was primarily due to a 6.1% decrease in average AUM, partially offset by a slight increase in our portfolio fee rate. Performance-based fees decreased $0.3 million, or 0.2%, in 2023, primarily due to lower performance-based fees earned on U.S. Real Estate fund and Emerging Markets Opportunistic Credit fund, partially offset by higher performance-based fees earned on Private Credit fund, Global Opportunistic Credit fund, Global Multi-Strategy fund and Securitized Assets fund. Performance-based fees decreased $99.9 million, or 40.7%, in 2022, primarily due to lower performance-based fees earned on Financial Services Opportunities fund, U.S. Select Equity fund, Arya Partners fund and Private Credit Services fund, partially offset by higher U.S. Real Estate fund fees. Institutional base fees increased $30.4 million, or 5.2%, in 2023, primarily due to a higher portfolio fee rate, partially offset by a 1.2% decrease in average AUM. Retail base fees decreased $45.7 million, or 3.5%, in 2023, primarily due to a 2.1% decrease in average AUM. Private Wealth base fees increased $20.1 million, or 2.2%, in 2023, primarily due to a 3.0% increase in average AUM. Institutional base fees increased $41.5 million, or 7.7%, in 2022, primarily due to a higher portfolio fee rate, partially offset by a 5.3% decrease in average AUM. Retail base fees decreased $120.5 million, or 8.4%, in 2022, primarily due to an 8.0% decrease in average AUM. Private Wealth base fees decreased $44.6 million, or 4.6%, in 2022, primarily due to a 3.3% decrease in average AUM. Bernstein Research Services We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These clients compensate us principally by directing us to execute brokerage transactions on their behalf, for which we earn commissions, and to a lesser extent, but increasingly, by paying us directly for research through commission sharing agreements or cash payments. In the fourth quarter of 2022, AB and SocGen, a leading European bank, announced plans to form a joint venture combining their respective cash equities and research businesses. As a result, the BRS business has been classified as held for sale. For further discussion, see Note 24 Acquisitions and Divestitures to our consolidated financial statements in Item 8 . Revenues from Bernstein Research Services decreased $30.1 million, or 7.2%, in 2023. The decrease was primarily driven by significantly lower global customer trading activity due to the prevailing macro-economic environment. Revenues from Bernstein Research Services decreased $35.7 million, or 7.9%, in 2022. The decrease was driven by significantly lower customer trading activity in Europe and Asia due to local market conditions. Distribution Revenues Two of our subsidiaries act as distributors and/or placement agents of company-sponsored mutual funds and receive distribution services fees from certain of those funds as full or partial reimbursement of the distribution expenses they incur. Period-over-period fluctuations of distribution revenues typically are in line with fluctuations of the corresponding average AUM of these mutual funds. 2023 Annual Report 49 Table of Contents Part II Distribution revenues decreased $20.9 million, or 3.4%, in 2023, primarily due to a shift in product mix from mutual funds with higher distribution rates to mutual funds with lower distribution rates, as well as a 1.4% decrease in the corresponding average AUM of these mutual funds. Distribution revenues decreased $45.0 million, or 6.9%, in 2022, primarily due to the corresponding average AUM of these mutual funds decreasing 12.4%, partially offset by a shift in product mix from mutual funds with lower distribution rates to mutual funds with higher distribution rates. Dividend and Interest Income and Interest Expense Dividend and interest income consists primarily of investment income and interest earned on customer margin balances and U.S. Treasury Bills as well as dividend and interest income in our consolidated company-sponsored investment funds. Interest expense principally reflects interest accrued on cash balances in customers’ brokerage accounts. Dividend and interest income increased $76.4 million, or 62.0%, in 2023, primarily due to higher interest earned on customer margin balances and higher interest earned on U.S. Treasury Bills. Interest expense increased $41.1 million in 2023, due to higher interest paid on cash balances in customers' brokerage accounts. Dividend and interest income increased $84.4 million in 2022, primarily due to higher interest earned on customer margin balances, higher interest earned on U.S. Treasury Bills as well as higher dividend and interest income in our consolidated company-sponsored investment funds. Interest expense increased $62.8 million, in 2022, due to higher interest paid on cash balances in customers' brokerage accounts. 50 AllianceBernstein Table of Contents Part II Investment Gains (Losses) Investment gains (losses) consist primarily of realized and unrealized investment gains or losses on: (i) employee long-term incentive compensation-related investments, (ii) U.S. Treasury Bills, (iii) market-making in exchange-traded options and equities, (iv) seed capital investments, (v) derivatives and (vi) investments in our consolidated company-sponsored investment funds. Investment gains (losses) also include equity in earnings of proprietary investments in limited partnership hedge funds that we sponsor and manage. Investment gains (losses) are as follows: Years Ended December 31 2023 2022 2021 (in thousands) Long-term incentive compensation-related investments: Realized gains $ 6,573 $ 1,345 $ 2,213 Unrealized (losses) gains (1,707) (10,626) 2,446 Investments held by consolidated company-sponsored investment funds: Realized (losses) (32,125) (46,293) (2,341) Unrealized gains (losses) 48,350 (73,194) (1,882) Seed capital investments: Realized (losses) gains Seed capital and other (34) 17,272 20,263 Derivatives (7,588) 41,236 (22,313) Unrealized gains (losses) Seed capital and other 10,099 (31,261) (6,907) Derivatives (8,717) (177) 8,992 Brokerage-related investments: Realized (losses) (203) (1,384) (829) Unrealized (losses) gains (442) 669 (278) $ 14,206 $ (102,413) $ (636) Other Revenues Other revenues consist of fees earned for transfer agency services provided to company-sponsored mutual funds, fees earned for administration and recordkeeping services provided to company-sponsored mutual funds and the General Accounts of EQH and its subsidiaries, and other miscellaneous revenues. Other revenues decreased $4.2 million, or 4.0%, in 2023, primarily due to lower shareholder servicing fees and lower brokerage income, partially offset by higher mutual fund reimbursements. Other revenues decreased $2.9 million, or 2.6%, in 2022, primarily due to lower shareholder servicing fees. 2023 Annual Report 51 Table of Contents Part II Expenses The components of expenses are as follows: Years Ended December 31 % Change 2023 2022 2021 2023-22 2022-21 (in thousands) Employee compensation and benefits 1,769,153 $ 1,666,636 $ 1,716,013 6.2 % (2.9 %) Promotion and servicing: Distribution-related payments 610,368 629,572 708,117 (3.1) (11.1) Amortization of deferred sales commissions 36,817 34,762 34,364 5.9 1.2 Trade execution, marketing, T&E and other 215,643 215,556 197,486 — 9.2 862,828 879,890 939,967 (1.9) (6.4) General and administrative 581,571 641,635 555,608 (9.4) 15.5 Contingent payment arrangements 22,853 6,563 2,710 n/m 142.2 Interest on borrowings 54,394 17,906 5,145 n/m n/m Amortization of intangible assets 46,854 26,564 5,697 76.4 n/m Total $ 3,337,653 $ 3,239,194 $ 3,225,140 3.0 % 0.4 % Employee Compensation and Benefits Employee compensation and benefits consist of base compensation (including salaries and severance), annual short-term incentive compensation awards (cash bonuses), annual long-term incentive compensation awards, commissions, fringe benefits and other employment costs (including recruitment, training, temporary help and meals). Compensation expense as a percentage of net revenues was 42.6%, 41.1% and 38.6% for the years ended December 31, 2023, 2022 and 2021, respectively. Compensation expense generally is determined on a discretionary basis and is primarily a function of our firm’s current-year financial performance. The amounts of incentive compensation we award are designed to motivate, reward and retain top talent while aligning our executives' interests with the interests of our Unitholders. Senior management, together with the Compensation and Workplace Practices Committee of the Board of Directors of AllianceBernstein Corporation (“ Compensation Committee ”), continue to believe that the appropriate metric to consider in determining the amount of incentive compensation is the ratio of adjusted employee compensation and benefits expense to adjusted net revenues. Adjusted net revenues used in the adjusted compensation ratio are the same as the adjusted net revenues presented as a non-GAAP measure ( discussed earlier in this Item 7 ). Adjusted employee compensation and benefits expense is total employee compensation and benefits expense minus other employment costs such as recruitment, training, temporary help and meals (which were 1.1%, 1.1% and 0.9% of adjusted net revenues for 2023, 2022 and 2021, respectively), and excludes the impact of mark-to-market vesting expense, as well as dividends and interest expense, associated with employee long-term incentive compensation-related investments and the amortization expense associated with the awards issued by EQH to some of our firm's executives relating to their roles as members of the EQH Management Committee. Senior management, with the approval of the Compensation Committee, has established as an objective that adjusted employee compensation and benefits expense, excluding the impact of performance-based fees, generally should not exceed 50% of our adjusted net revenues in any year, except in unexpected or unusual circumstances. Our ratios of adjusted compensation expense as a percentage of adjusted net revenues were 49.0%, 48.4% and 46.5%, respectively, for the years ended December 31, 2023, 2022 and 2021. In 2023, employee compensation and benefits expense increased $102.5 million, or 6.2%, primarily due to higher base compensation of $72.2 million, higher incentive compensation of $51.7 million and higher fringes of $7.8 million, partially offset by lower commissions of $29.0 million. In 2022, employee compensation and benefits expense decreased $49.4 million, or 2.9%, primarily due to lower incentive compensation of $107.7 million, partially offset by higher base compensation of $39.8 million, higher commissions of $12.7 million and higher other employment costs of $5.3 million. Promotion and Servicing Promotion and servicing expenses include distribution-related payments to financial intermediaries for distribution of AB mutual funds and amortization of deferred sales commissions paid to financial intermediaries for the sale of back-end load shares of AB mutual funds. Also included in this expense category are costs related to trade execution and clearance, travel and entertainment, advertising and promotional materials. 52 AllianceBernstein Table of Contents Part II Promotion and servicing expenses decreased $17.1 million, or 1.9%, in 2023. The decrease was due to lower distribution-related payments of $19.2 million, lower trade execution and clearance expenses of $9.0 million and lower transfer fees of $3.0 million, offset by higher travel and entertainment expenses of $8.5 million, higher marketing and communication expenses of $3.5 million and higher amortization of deferred sales commissions of $2.1 million. Promotion and servicing expenses decreased $60.1 million, or 6.4%, in 2022. The decrease was primarily due to lower distribution-related payments of $78.5 million, lower transfer fees of $4.9 million and lower trade execution and clearance expenses of $3.1 million, partially offset by higher travel and entertainment expenses of $15.4 million and higher firm meeting expenses of $8.8 million. General and Administrative General and administrative expenses include portfolio services fees, technology fees, professional fees and office-related expenses (occupancy, communications and similar expenses). General and administrative expenses as a percentage of net revenues were 14.0%, 15.8% and 12.5% for the years ended December 31, 2023, 2022 and 2021, respectively. General and administrative expenses decreased $60.1 million, or 9.4%, in 2023. The decrease was primarily due to lower portfolio services fees of $43.7 million, lower professional fees of $18.0 million, lower valuation adjustments related to the classification of Bernstein Research Services as held for sale of $6.0 million and a favorable foreign exchange translation impact of $5.7 million, partially offset by higher office-related expenses of $7.4 million. General and administrative expenses increased $86.0 million, or 15.5%, in 2022. The increase was primarily due to higher professional fees of $27.3 million, higher portfolio services fees of $21.3 million, higher technology fees of $19.1 million, a valuation adjustment of $7.4 million associated with the classification of BRS as held for sale, higher office-related expenses of $6.9 million and a $5.6 million impairment of certain acquisition related intangible assets. Contingent Payment Arrangements Contingent payment arrangements reflect changes in estimates of contingent payment liabilities associated with acquisitions in current and previous periods, as well as accretion expense of these liabilities. For the years ended December 31, 2023, 2022 and 2021, we recognized $8.8 million, $6.6 million and $3.3 million, respectively, in accretion expense related to our contingent considerations payable. During 2023, we recorded a change in estimate related to the contingent consideration liability associated with the acquisition of Autonomous LLC in 2019 of $14.1 million. The change in estimate was based upon better than expected revenues during the 2023 performance evaluation period. There were no changes in our estimates during the year ended December 31, 2022. During 2021, we recorded a change in estimate related to the contingent consideration liability associated with the acquisition of Ramius Alternative Solutions LLC of $0.6 million. Due to the loss of acquired investment management contracts, the carrying value of the finite-lived intangible assets exceeded the fair value of the contracts. These expenses 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. Interest on Borrowings Interest expense increased $36.5 million in 2023, reflecting higher interest rates on borrowings and higher weighted average borrowings. Average daily borrowings for the EQH facilities and commercial paper were $1,014 million at a weighted average interest rate of 5.1% during 2023 compared to $845.5 million and 1.7% during 2022. Interest expense increased $12.8 million in 2022, reflecting higher interest rates on borrowings and higher weighted average borrowings. Average daily borrowings for the EQH facilities and commercial paper were $845.5 million at a weighted average interest rate of 1.7% during 2022 compared to $561.6 million and 0.2% during 2021. Amortization of Intangible Assets Amortization of intangible assets reflects our amortization of costs assigned to acquired investment management contracts with a finite life. These assets are recognized at fair value and generally are amortized on a straight-line basis over their estimated useful life. On July 1, 2022, AB acquired CarVal Investors L.P. ("CarVal"), which resulted in recording of $303.0 million of finite-lived intangible assets primarily relating to investment management contracts and investor relationships with useful lives ranging from 5 to 10 years ( see Note 24 Acquisitions and Divestitures to our consolidated financial statements in Item 8 ). Amortization of intangible assets increased $20.3 million in 2023. The increase was primarily due to the acquired intangible assets associated with the CarVal acquisition. Amortization of intangible assets increased $20.9 million in 2022. The increase was primarily due to the acquired intangible assets associated with the CarVal acquisition. Income Taxes AB, a private limited partnership, is not subject to federal or state corporate income taxes. However, AB is subject to a 4.0% New York City unincorporated business tax ( “UBT” ). Our domestic corporate subsidiaries are subject to federal, state and local income taxes, and generally are included in the filing of a consolidated federal income tax return. Separate state and local 2023 Annual Report 53 Table of Contents Part II income tax returns also are filed. Foreign corporate subsidiaries generally are subject to taxes in the jurisdictions where they are located. Income tax expense decreased $10.6 million, or 26.7%, in 2023 compared to 2022. This decrease is primarily driven by a one time tax benefit of $22.4 million resulting from the release of a valuation allowance on a capital loss tax asset due to a tax planning action identified in the fourth quarter of 2023, due to a future restructuring of certain foreign subsidiaries that would not have a material impact on AB operations. This resulted in a lower effective tax rate in 2023 of 3.6% compared to 4.9% in 2022. Income tax expense decreased $23.1 million, or 36.8%, in 2022 compared to 2021. This decrease is due to lower pre-tax book income and one-time discrete items which resulted in a lower effective tax rate in 2022 of 4.9% compared to 5.2% in 2021. Net Income (Loss) of Consolidated Entities Attributable to Non-Controlling Interests Net income (loss) of consolidated entities attributable to non-controlling interests primarily consists of limited partner interests owned by other investors in our consolidated company-sponsored investment funds. In 2023, we had $24.0 million of net income of consolidated entities attributable to non-controlling interests, primarily due to gains on investments held by our consolidated company-sponsored investment funds. In 2022, we had $56.4 million of net loss of consolidated entities attributable to non-controlling interests, primarily due to losses on investments held by our consolidated company-sponsored investment funds. In 2021 we had $5.1 million of net income of consolidated entities attributable to non-controlling interests, primarily due to gains on investments held by our consolidated company-sponsored investment funds. Capital Resources and Liquidity Cash flows from operating activities primarily include the receipt of investment advisory and services fees and other revenues offset by the payment of operating expenses incurred in the normal course of business. Our cash flows from operating activities have historically been positive and sufficient to support our operations. We do not anticipate this to change in the foreseeable future. Cash flows from investing activities generally consist of small capital expenditures and, when applicable, business acquisitions. Cash flows from financing activities primarily consist of issuance and repayment of debt and the repurchase of AB Holding units to fund our long-term deferred compensation plans. We are required to distribute all of our Available Cash Flow to our Unitholders and the General Partner. During 2023, net cash provided by operating activities was $0.9 billion, compared to $1.1 billion during 2022. The change primarily was due to an increase in fees receivable of $161.1 million, lower earnings of $159.9 million (after non-cash reconciling items), a decrease in broker-dealer related payables (net of receivable and segregated U.S. Treasury Bills activity) of $133.3 million and an increase in deferred sales commissions of $59.8 million, partially offset by net activity of our consolidated company-sponsored investment funds of $166.0 million and an increase in accrued compensation of $127.4 million. During 2022, net cash provided by operating activities was $1.1 billion, compared to $1.3 billion during 2021. The change primarily was due to lower earnings of $265.1 million (after non-cash reconciling items), a decrease in accrued compensation of $200.8 million and a decrease in broker-dealer related payables (net of receivable and segregated U.S. Treasury Bills activity) of $169.2 million, partially offset by net activity of our consolidated company-sponsored investment funds of $252.0 million and an increase in fees receivable of $193.3 million. During 2023, net cash used in investing activities was $33.6 million, compared to $22.0 million during 2022. The change is due to the acquisition of CarVal, net cash acquired of $40.3 million in 2022, partially offset by lower purchases of furniture, equipment and leasehold improvements of $28.7 million. During 2022, net cash used in investing activities was $22.0 million, compared to $65.7 million during 2021. The change is primarily due to the acquisition of CarVal, net cash acquired of $40.3 million in 2022. During 2023, net cash used in financing activities was $1.0 billion, compared to $1.1 billion during 2022. The change reflects lower cash distributions to Unitholders of $230.6 million, a decrease in the net purchases of AB Holding Units to fund long-term incentive compensation plans of $66.5 million and the repayment of CarVal debt of $42.7 million, partially offset by higher net purchases of non-controlling interests of consolidated company-sponsored investment funds of $187.1 million and lower net borrowings of debt of $70.7 million. During 2022, net cash used in financing activities was $1.1 billion, compared to $0.9 billion during 2021. The change reflects lower net purchases of non-controlling interests of consolidated company-sponsored investment funds in 2022 of $309.9 million, repayment of CarVal debt of $42.7 million and a decrease in overdrafts payable of $41.6 million, partially offset by higher net borrowings of debt of $155.0 million and a decrease in the net purchases of AB Holding Units to fund long-term incentive compensation plans of $51.3 million. As of December 31, 2023, AB had $1.0 billion of cash and cash equivalents (excluding cash and cash equivalents of consolidated company-sponsored investment funds and cash held-for-sale), all of which is available for liquidity but consist primarily of cash on deposit for our broker-dealers related to various customer clearing activities and cash held by foreign subsidiaries of $585.8 million. 54 AllianceBernstein Table of Contents Part II See Note 12 to our consolidated financial statements in Item 8 for disclosures relating to our debt and credit facilities. We use our debt and credit facilities to seed certain new investment products which may expose us to market risk, credit risk and material gains and losses. To reduce our exposure, we enter into various futures, forwards, options and swaps primarily to economically hedge certain of our seed money investments. While in most cases broad market risks are hedged and are effective in reducing our exposure, our hedgers are imperfect and we may remain exposed to some market risk and credit-related losses in the event of non-performance by counterparties on these derivative instruments. Our financial condition and access to public and private debt markets should provide adequate liquidity for our general business needs. Management believes that cash flow from operations and the issuance of debt and AB Units or AB Holding Units will provide us with the resources we need to meet our financial obligations. See “Risk Factors” in Item 1A and “Cautions Regarding Forward-Looking Statements” in this Item 7 for a discussion of credit markets and our ability to renew our credit facilities at expiration. Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Guarantees Under various circumstances, AB guarantees the obligations of its consolidated subsidiaries. AB maintains a guarantee in connection with an $800 million committed, unsecured senior revolving credit facility (the " Credit Facility "). If SCB LLC is unable to meet its obligations, AB will pay the obligations when due or on demand. SCB LLC currently has five uncommitted lines of credit with five financial institutions. Four of these lines of credit permit us to borrow up to an aggregate of approximately $315.0 million, with AB named as an additional borrower, while the other line has no stated limit. AB has guaranteed the obligations of SCB LLC under these lines of credit. AB maintains guarantees totaling $415.0 million for SCB LLC’s five uncommitted lines of credit. AB maintains a guarantee with a commercial bank, under which we guarantee the obligations in the ordinary course of business of each of SCB LLC, our U.K.-based broker-dealer and our Cayman subsidiary. We also maintain three additional guarantees with other commercial banks under which we guarantee approximately $270.9 million of obligations for our U.K.-based broker-dealer and $99.0 million of obligations for our India-based broker-dealer. In the event that any of these three entities is unable to meet its obligations, AB will pay the obligations when due or on demand. We also have two smaller guarantees with a commercial bank totaling approximately $1.9 million, under which we guarantee certain obligations in the ordinary course of business of one of our foreign subsidiaries. We have not been required to perform under any of the above agreements and currently have no liability in connection with these agreements. Aggregate Contractual Obligations We have various compensation and benefit obligations, including accrued salaries and fringes, commissions, payroll taxes, incentive payments and deferred compensation arrangements. The majority of our compensation and benefits obligations are paid out in less than one year, while the deferred compensation obligations are payable over various periods, with the majority payable over periods of up to three years. Accrued compensation and benefits as of December 31, 2023 totaled $354.5 million. This amount excludes our accrued pension obligation. Offsetting our accrued compensation obligations are long-term incentive compensation-related investments and money market investments we funded totaling $41.1 million, which are included in our consolidated statement of financial condition. Any amounts reflected on the consolidated statement of financial condition as payables (to broker-dealers, brokerage clients and company-sponsored mutual funds) and accounts payable and accrued expenses are excluded from the aforementioned accrued compensation and benefits obligation amount. We expect to make contributions to our qualified profit sharing plan of approximately $19.0 million in each of the next four years. We do not currently anticipate that we will contribute to the Retirement Plan during 2024. The 2017 Tax Act (enacted in the U.S. on December 22, 2017) imposed a federal transition tax on mandatory deemed repatriation of certain deferred foreign earnings. Management elected to pay the transition tax in installments over an eight-year period from 2018 to 2025. The federal transition tax obligation as of December 31, 2023 totaled $8.7 million and is recorded to income tax payable on our consolidated statement of financial condition. See Note 21 to our consolidated financial statements in Item 8 for further discussion of our taxes. See Note 13 to our consolidated financial statements in Item 8 for discussion of our leases. See Note 12 to our consolidated financial statements in Item 8 for a discussion of our debt. 2023 Annual Report 55 Table of Contents Part II Contingencies See Note 14 to our consolidated financial statements in Item 8 for a discussion of our commitments and contingencies. Critical Accounting Estimates The preparation of the consolidated financial statements and notes to consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management believes that the critical accounting policies and estimates discussed below involve significant management judgment due to the sensitivity of the methods and assumptions used. Goodwill Our acquisitions are accounted for under the acquisition method of accounting, where the cost of the acquisition is allocated on the basis of the estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price over the fair value of identifiable assets acquired, net of liabilities assumed, results in the recognition of goodwill. As of December 31, 2023, we had goodwill of $3.6 billion on the consolidated statement of financial condition, which included $666.1 million as a result of the CarVal Investors L.P. (" CarVal ") acquisition in the third quarter of 2022, $2.8 billion as a result of the Sanford C. Bernstein Inc. (“ Bernstein ”) acquisition in 2000 and $291.9 million in regard to various smaller acquisitions. Approximately $159.8 million of goodwill has been classified as assets held for sale on the consolidated statement of financial condition. For further discussion, see Note 24 Acquisitions and Divestitures in Item 8 to these consolidated financial statements . We have determined that AB has only one reporting segment and reporting unit. We test our goodwill annually, as of September 30, for impairment or if certain events or changes in circumstances occur and trigger an interim impairment test. The carrying value of goodwill is also reviewed if facts and circumstances occur that suggest possible impairment, such as, but not limited to significant transactions including acquisitions or divestitures and significant declines in AUM, revenues, earnings or the price of an AB Holding 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. For our annual impairment test, we utilize 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 earnings multiples. A goodwill impairment would be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The goodwill impairment test does not include a determination by management of whether a decline in fair value is temporary and it is important that management's determination of fair value reflect the impact of changing market conditions, including the severity and anticipated duration of any such changes. 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. Our market approach analysis also includes comparable industry earnings multiples applied to our earnings forecast and assumes a control premium (when applicable). Contingent Payment Arrangements We periodically enter into contingent payment arrangements in connection with our business combinations. In these arrangements, we agree to pay additional consideration to the sellers to the extent that certain performance targets are achieved. We estimate the fair value of these potential future obligations at the time a business combination is consummated and record a liability on a discounted basis on our consolidated statement of financial condition. We then accrete the obligation to its expected payment amount over the measurement period. 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. For contingent liabilities, we typically use a valuation method that is a form of the income approach, whereby a forecast of future cash flows attributable to the asset are discounted to present value using a risk-adjusted discount rate. We develop a forecast of future cash flows attributable to the performance objectives that are then discounted to present value using a risk-adjusted discount rate. Some of the more significant estimates and assumptions inherent in the income approach include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows. 56 AllianceBernstein Table of Contents Part II Loss Contingencies Management continuously reviews with legal counsel the status of regulatory matters and pending or threatened litigation. We evaluate the likelihood that a loss contingency exists and record a loss contingency if it is both probable and reasonably estimable as of the date of the financial statements. See Note 14 to our consolidated financial statements in Item 8 . Accounting Pronouncements See Note 2 to our consolidated financial statements in Item 8. Cautions Regarding Forward-Looking Statements Certain statements provided by management in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment performance of sponsored investment products and separately managed accounts, general economic conditions, industry trends, future acquisitions, integration of acquired companies, competitive conditions and government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly-traded partnerships are taxed. We caution readers to carefully consider such factors. Further, these forward-looking statements speak only as of the date on which such statements are made; we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see “Risk Factors” in Item 1A . Any or all of the forward-looking statements that we make in this Form 10-K, other documents we file with or furnish to the SEC, and any other public statements we issue, may turn out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors” and those listed below could also adversely impact our revenues, financial condition, results of operations and business prospects. The forward-looking statements referred to in the preceding paragraph, most of which directly affect AB but also affect AB Holding because AB Holding’s principal source of income and cash flow is attributable to its investment in AB, include statements regarding: • Our belief that the cash flow AB Holding realizes from its investment in AB will provide AB Holding with the resources it needs to meet its financial obligations: AB Holding’s cash flow is dependent on the quarterly cash distributions it receives from AB. Accordingly, AB Holding’s ability to meet its financial obligations is dependent on AB’s cash flow from its operations, which is subject to the performance of the capital markets and other factors beyond our control. • Our financial condition and ability to access the public and private capital markets providing adequate liquidity for our general business needs: Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability to maintain and grow client assets under management and other factors beyond our control. Our ability to access public and private capital markets on reasonable terms may be limited by adverse market conditions, our firm’s credit ratings, our profitability and changes in government regulations, including tax rates and interest rates. • The outcome of litigation: Litigation is inherently unpredictable, and excessive damage awards do occur. Though we have stated that we do not expect any pending legal proceedings to have a material adverse effect on our results of operations, financial condition or liquidity, any settlement or judgment with respect to a legal proceeding could be significant, and could have such an effect. • The possibility that we will engage in open market purchases of AB Holding Units to help fund anticipated obligations under our incentive compensation award program: The number of AB Holding Units AB may decide to buy in future periods, if any, to help fund incentive compensation awards depends on various factors, some of which are beyond our control, including the fluctuation in the price of an AB Holding Unit (NYSE: AB) and the availability of cash to make these purchases. • Our determination that adjusted employee compensation expense, excluding the impact of performance-based fees, generally should not exceed 50% of our adjusted net revenues on an annual basis: Aggregate employee compensation reflects employee performance and competitive compensation levels. Fluctuations in our revenues and/or changes in competitive compensation levels could result in adjusted employee compensation expense exceeding 50% of our adjusted net revenues. • Our Relocation Strategy: While many of the expenses, expense savings and EPU impact we expect will result from our Relocation Strategy are presented with numerical specificity, and we believe these figures to be reasonable as of the date of this report, the uncertainties surrounding the assumptions on which our estimates are based create a significant risk that our current estimates may not be realized. These assumptions include: 2023 Annual Report 57 Table of Contents Part II • the amount and timing of employee relocation costs, severance, and overlapping compensation and occupancy costs we experience; and • the timing for execution of each phase of our relocation implementation plan. Item 7A. Quantitative and Qualitative Disclosures About Market Risk AB Holding Market Risk, Risk Management and Derivative Financial Instruments AB Holding’s sole investment is AB Units. AB Holding did not own, nor was it a party to, any derivative financial instruments during the years ended December 31, 2023, 2022 and 2021. AB Market Risk, Risk Management and Derivative Financial Instruments Our investments consist of trading and other investments. Trading investments include U.S. Treasury Bills, mutual funds, exchange-traded options and various separately-managed portfolios consisting of equity securities. Trading investments are purchased for short-term investment, principally to fund liabilities related to long-term incentive compensation plans and to seed new investment services. Other investments include investments in hedge funds we sponsor and other investment vehicles. We enter into various futures, forwards, swaps and options primarily to economically hedge our seed capital investments. We do not hold any derivatives designated in a formal hedge relationship under ASC 815-10, Derivatives and Hedging. See Note 7 Derivative Instruments to AB's consolidated financial statements included in this Form 10-K for additional details. Trading and Non-Trading Market Risk Sensitive Instruments Investments with Interest Rate Risk—Fair Value The table below provides our potential exposure with respect to our fixed income investments, measured in terms of fair value, to an immediate 100 basis point increase in interest rates at all maturities from the levels prevailing as of December 31, 2023 and 2022. Such a fluctuation in interest rates is a hypothetical rate scenario used to calibrate potential risk and does not represent our view of future market movements. While these fair value measurements provide a representation of interest rate sensitivity of our investments in fixed income mutual funds and fixed income hedge funds, they are based on our exposures at a particular point in time and may not be representative of future market results. These exposures will change as a result of ongoing changes in investments in response to our assessment of changing market conditions and available investment opportunities: As of December 31 2023 2022 Fair Value Effect of +100 Basis Point Change Fair Value Effect of +100 Basis Point Change (in thousands) Fixed Income Investments: Trading $ 70,750 $ (4,394) $ 93,221 $ (5,789) 58 AllianceBernstein Table of Contents Part II Investments with Equity Price Risk—Fair Value Our investments also include investments in equity securities, mutual funds and hedge funds. The following table provides our potential exposure with respect to our equity investments, measured in terms of fair value, to an immediate 10% decrease in equity prices from those prevailing as of December 31, 2023 and 2022. A 10% decrease in equity prices is a hypothetical scenario used to calibrate potential risk and does not represent our view of future market movements. While these fair value measurements provide a representation of equity price sensitivity of our investments in equity securities, mutual funds and hedge funds, they are based on our exposures at a particular point in time and may not be representative of future market results. These exposures will change as a result of ongoing portfolio activities in response to our assessment of changing market conditions and available investment opportunities: As of December 31 2023 2022 Fair Value Effect of -10% Equity Price Change Fair Value Effect of -10% Equity Price Change (in thousands) Equity Investments: Trading $ 117,434 $ (11,743) $ 65,846 $ (6,585) Other investments $ 55,371 $ (5,537) $ 58,451 $ (5,845) 2023 Annual Report 59 Table of Contents Part II Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the General Partner and Unitholders of AllianceBernstein Holding L.P. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying statements of financial condition of AllianceBernstein Holding L.P. (the “Company”) as of December 31, 2023 and 2022, and the related 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, 2023 including the related notes (collectively referred to as the “financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. 60 AllianceBernstein Table of Contents Part II Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the 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 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 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. Measurement of Equity in Net Income Attributable to AB Unitholders - Performance Based Fees As described in Notes 1 and 2 to the financial statements, the Company’s principal source of income and cash flow is attributable to its investment in AllianceBernstein L.P. (AB) limited partnership interests. The equity in net income attributable to AB unitholders was $299.8 million for the year ended December 31, 2023, of which a portion relates to performance-based fees which are earned based on the value of the investors’ assets under management (AUM). The Company records its investment in AB using the equity method of accounting. The Company’s investment is increased to reflect its proportionate share of income of AB and decreased to reflect its proportionate share of losses of AB and cash distributions made by AB to its unitholders. In addition, the Company’s investment is adjusted to reflect its proportionate share of certain capital transactions of AB. As disclosed by management, 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 investment advisory contracts, including those associated with hedge funds and alternative investments, 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. 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 AUM market value, and the level at which the AUM value exceeds the contractual threshold required to earn such a fee. Management calculates AUM using established market-based valuation methods and fair valuation (non-observable market) methods. Fair valuation methods, which include 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 measurement of equity in net income attributable to AB unitholders – performance-based fees is a critical audit matter are (i) a high degree of auditor effort in performing procedures and evaluating audit evidence related to these fees, including evaluating audit evidence related to the assessment of the constraining factors impacting the amount of variable consideration and the calculation of AUM and (ii) the audit effort involved the use of professionals with specialized skill and knowledge. 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 management’s revenue recognition process for performance-based fees, including controls over the assessment of the constraining factors and the calculation of AUM. These procedures also included, among others (i) testing management’s process for determining performance-based fees, including evaluating the appropriateness of the fair valuation methods used to calculate AUM; (ii) evaluating, on a sample basis, the reasonableness of the constraining factors related to (a) contractual claw-back provisions to which variable consideration is subject, (b) the length of time to which the uncertainty of the consideration is subject, (c) the number and range of possible consideration amounts, (d) the probability of significant fluctuations in the AUM market value, and (e) the level at which the AUM value exceeded the contractual threshold required to earn such fees, as applicable. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the AUM by (i) developing an independent range of prices for a sample of securities in the underlying products where fair valuation methods were used and (ii) comparing the independent range of prices to management’s estimate. Developing the independent range of prices involved testing the completeness and accuracy of data provided by management and independently developing the inputs for the sampled securities. /s/ PricewaterhouseCoopers LLP Nashville, Tennessee February 9, 2024 We have served as the Company’s auditor since 2006. 2023 Annual Report 61 Table of Contents Part II AllianceBernstein Holding L.P. Statements of Financial Condition Years Ended December 31 2023 2022 (in thousands, except unit amounts) ASSETS Investment in AB $ 2,077,540 $ 2,074,626 Total assets $ 2,077,540 $ 2,074,626 LIABILITIES AND PARTNERS’ CAPITAL Liabilities: Other liabilities $ 1,295 $ 1,623 Total liabilities 1,295 1,623 Commitments and contingencies ( See Note 7 ) Partners’ capital: General Partner: 100,000 general partnership units issued and outstanding 1,327 1,355 Limited partners: 114,336,091 and 113,701,097 limited partnership units issued and outstanding 2,147,147 2,160,207 AB Holding Units held by AB to fund long-term incentive compensation plans ( 30,185 ) ( 37,551 ) Accumulated other comprehensive loss ( 42,044 ) ( 51,008 ) Total partners’ capital 2,076,245 2,073,003 Total liabilities and partners’ capital $ 2,077,540 $ 2,074,626 See Accompanying Notes to Financial Statements. 62 AllianceBernstein Table of Contents Part II AllianceBernstein Holding L.P. Statements of Income Years Ended December 31 2023 2022 2021 (in thousands, except per unit amounts) Equity in net income attributable to AB Unitholders $ 299,781 $ 305,504 $ 416,326 Income taxes 35,597 31,339 30,483 Net income $ 264,184 $ 274,165 $ 385,843 Net income per unit: Basic $ 2.34 $ 2.69 $ 3.88 Diluted $ 2.34 $ 2.69 $ 3.88 See Accompanying Notes to Financial Statements. 2023 Annual Report 63 Table of Contents Part II AllianceBernstein Holding L.P. Statements of Comprehensive Income Years Ended December 31 2023 2022 2021 (in thousands) Net income $ 264,184 $ 274,165 $ 385,843 Other comprehensive income (loss): Foreign currency translation adjustments, before reclassification and tax 5,678 ( 19,805 ) ( 2,894 ) Less: reclassification adjustment for gains included in net income upon liquidation — — 1,613 Foreign currency translation adjustments, before tax 5,678 ( 19,805 ) ( 4,507 ) Income tax (expense) benefit ( 252 ) 249 147 Foreign currency translation adjustments, net of tax 5,426 ( 19,556 ) ( 4,360 ) Changes in employee benefit related items: Amortization of prior service cost 9 ( 12 ) 7 Recognized actuarial gain 3,560 1,293 5,566 Changes in employee benefit related items 3,569 1,281 5,573 Income tax (expense) ( 31 ) ( 28 ) ( 20 ) Employee benefit related items, net of tax 3,538 1,253 5,553 Other comprehensive income (loss) 8,964 ( 18,303 ) 1,193 Comprehensive income $ 273,148 $ 255,862 $ 387,036 See Accompanying Notes to Financial Statements. 64 AllianceBernstein Table of Contents Part II AllianceBernstein Holding L.P. Statements of Changes in Partners’ Capital Years Ended December 31 2023 2022 2021 (in thousands) General Partner’s Capital Balance, beginning of year $ 1,355 $ 1,439 $ 1,410 Net income 234 270 387 Cash distributions to Unitholders ( 262 ) ( 354 ) ( 358 ) Balance, end of year 1,327 1,355 1,439 Limited Partners’ Capital Balance, beginning of year 2,160,207 1,696,199 1,656,816 Net income 263,950 273,895 385,456 Cash distributions to Unitholders ( 295,877 ) ( 360,670 ) ( 357,097 ) Retirement of AB Holding Units ( 85,300 ) ( 114,794 ) ( 143,460 ) Issuance of AB Holding Units to fund long-term incentive compensation plan awards 104,167 76,230 151,082 Issuance of AB Holding Units to fund CarVal acquisition — 589,169 — Exercise of compensatory options to buy AB Holding Units — 178 3,402 Balance, end of year 2,147,147 2,160,207 1,696,199 AB Holding Units held by AB to fund long-term incentive compensation plans Balance, beginning of year ( 37,551 ) ( 43,309 ) ( 20,171 ) Change in AB Holding Units held by AB to fund long-term incentive compensation plans 7,366 5,758 ( 23,138 ) Balance, end of year ( 30,185 ) ( 37,551 ) ( 43,309 ) Accumulated Other Comprehensive (Loss) Balance, beginning of year ( 51,008 ) ( 32,705 ) ( 33,898 ) Foreign currency translation adjustment, net of tax 5,426 ( 19,556 ) ( 4,360 ) Changes in employee benefit related items, net of tax 3,538 1,253 5,553 Balance, end of year ( 42,044 ) ( 51,008 ) ( 32,705 ) Total Partners’ Capital $ 2,076,245 $ 2,073,003 $ 1,621,624 See Accompanying Notes to Financial Statements. 2023 Annual Report 65 Table of Contents Part II AllianceBernstein Holding L.P. Statements of Cash Flows Years Ended December 31 2023 2022 2021 (in thousands) Cash flows from operating activities: Net income $ 264,184 $ 274,165 $ 385,843 Adjustments to reconcile net income to net cash provided by operating activities: Equity in net income attributable to AB Unitholders ( 299,781 ) ( 305,504 ) ( 416,326 ) Cash distributions received from AB 329,900 394,470 385,236 Changes in assets and liabilities: Decrease in other assets — — 92 (Decrease) increase in other liabilities ( 328 ) ( 517 ) 264 Net cash provided by operating activities 293,975 362,614 355,109 Cash flows from investing activities: Acquisition of business, net cash acquired — 40,777 — Contribution of CarVal to AB — ( 40,777 ) — Capital contribution to AB — ( 1,590 ) — Investments in AB with proceeds from exercise of compensatory options to buy AB Holding Units — ( 178 ) ( 3,402 ) Net cash used in investing activities — ( 1,768 ) ( 3,402 ) Cash flows from financing activities: Cash distributions to Unitholders ( 296,139 ) ( 361,024 ) ( 357,455 ) Capital contributions from AB 2,164 — 2,346 Proceeds from exercise of compensatory options to buy AB Holding Units — 178 3,402 Net cash used in financing activities ( 293,975 ) ( 360,846 ) ( 351,707 ) Change in cash and cash equivalents — — — Cash and cash equivalents as of beginning of the year — — — Cash and cash equivalents as of end of the year $ — $ — $ — Cash paid: Income taxes 35,928 31,862 30,127 Non-cash investing activities: Fair value of assets acquired (less cash acquired of zero , $ 40.8 million and zero in 2023, 2022 and 2021, respectively) $ — $ 1,087,218 $ — Fair value of liabilities assumed — 296,750 — Fair value of non-redeemable non-controlling interest assumed — 13,191 — Fair value of assets contributed to AB (less cash acquired of zero , $ 40.8 million and zero in 2023, 2022 and 2021, respectively) — ( 1,087,218 ) — Fair value of liabilities contributed to AB — ( 296,750 ) — Fair value of non-redeemable non-controlling interest contributed to AB — ( 13,191 ) — Issuance of AB Holding Units to fund long-term incentive compensation plan awards 104,167 76,230 151,082 Retirement of AB Holding Units ( 85,300 ) ( 114,794 ) ( 143,460 ) 66 AllianceBernstein Table of Contents Part II Years Ended December 31 2023 2022 2021 (in thousands) Non-cash financing activities: Payables recorded under contingent payment arrangements — 228,885 — Equity consideration issued in connection with acquisition — 589,169 — Payables contributed to and assumed by AB under contingent payment arrangements — ( 228,885 ) — Equity consideration received from AB in connection with acquisition — ( 589,169 ) — See Accompanying Notes to Financial Statements. 2023 Annual Report 67 Table of Contents Part II AllianceBernstein Holding L.P. Notes to Financial Statements The words “ we ” and “ our ” refer collectively to AllianceBernstein Holding L.P. (“ AB Holding ”) and AllianceBernstein L.P. and its subsidiaries (“ AB ”), or to their officers and employees. Similarly, the word “ company ” refers to both AB Holding and AB. Where the context requires distinguishing between AB Holding and AB, we identify which of them is being discussed. Cross-references are in italics. 1. Business Description and Organization AB Holding’s principal source of income and cash flow is attributable to its investment in AB limited partnership interests. AB provides diversified investment management, research and related services globally to a broad range of clients. Its principal services include: • Institutional Services —servicing its institutional clients, including private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and affiliates such as Equitable Holdings, Inc. (" EQH ") and its subsidiaries, by means of separately managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles. • 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. • 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. AB also provides distribution, shareholder servicing, transfer agency services and administrative services to the mutual funds it sponsors. AB’s high-quality, in-depth research is the foundation of its asset management and private wealth management businesses. AB’s research disciplines include economic, fundamental equity, fixed income and quantitative research. 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: • Actively managed equity strategies across global and regional universes, as well as capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities; • Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; • Actively managed alternative investments, including fundamental and systematically-driven hedge funds, fund of hedge funds and direct assets (e.g., direct lending, real estate debt and private equity); • Portfolios with Purpose, including Sustainable, Impact and Responsible+ (Climate-Conscious and ESG leaders) equity, fixed income and multi-asset strategies that address our clients' desire to invest their capital with a dedicated ESG focus, while pursuing strong investment returns; • Multi-asset services and solutions, including dynamic asset allocation, customized target-date funds and target-risk funds; and • Passively managed equity and fixed income strategies, including index, ESG index and enhanced index strategies. 68 AllianceBernstein Table of Contents Part II Organization As of December 31, 2023, EQH owns approximately 3.5 % 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 December 31, 2023, the ownership structure of AB, expressed as a percentage of general and limited partnership interests, was as follows: EQH and its subsidiaries 59.8 % AB Holding 39.5 Unaffiliated holders 0.7 100.0 % Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an approximate 61.2 % economic interest in AB as of December 31, 2023. 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. AB Holding’s financial statements and notes should be read in conjunction with the consolidated financial statements and notes of AB, which are included in this Form 10-K. Investment in AB AB Holding records its investment in AB using the equity method of accounting. AB Holding’s investment is increased to reflect its proportionate share of income of AB and decreased to reflect its proportionate share of losses of AB and cash distributions made by AB to its Unitholders. In addition, AB Holding's investment is adjusted to reflect its proportionate share of certain capital transactions of AB. Cash Distributions AB Holding is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Agreement of Limited Partnership of AB Holding (“ AB Holding Partnership Agreement ”), to its Unitholders pro rata in accordance with their percentage interests in AB Holding. 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 February 6, 2024, the General Partner declared a distribution of $ 0.77 per unit, representing a distribution of Available Cash Flow for the three months ended December 31, 2023. 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 March 14, 2024 to holders of record at the close of business on February 20, 2024. Total cash distributions per Unit paid to Unitholders during 2023, 2022 and 2021 were $ 2.62 , $ 3.54 and $ 3.58 , respectively. Long-term Incentive Compensation Plans AB maintains several unfunded, non-qualified long-term incentive compensation plans, under which the company grants awards of restricted AB Holding Units to its employees and members of the Board of Directors, who are not employed by AB or by any of AB’s affiliates (“ Eligible Directors ”). 2023 Annual Report 69 Table of Contents Part II AB funds its restricted AB Holding Unit awards either by purchasing AB Holding Units on the open market or purchasing newly-issued AB Holding Units from AB Holding, and then keeping these AB Holding Units in a consolidated rabbi trust until delivering them or retiring them. In accordance with the AB Holding Partnership Agreement, when AB purchases newly-issued AB Holding Units from AB Holding, AB Holding is required to use the proceeds it receives from AB to purchase the equivalent number of newly-issued AB Units, thus increasing its percentage ownership interest in AB. 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 years ended December 31, 2023 and 2022 consisted of the following: Years Ended December 31 2023 2022 (in millions) Total amount of AB Holding Units Purchased (1) 4.7 5.2 Total Cash Paid for AB Holding Units Purchased (1) $ 144.4 $ 211.8 Open Market Purchases of AB Holding Units Purchased (1) 2.0 2.3 Total Cash Paid for Open Market Purchases of AB Holding Units (1) $ 62.6 $ 92.7 (1) Purchased on a trade-date basis. The difference between open-market purchases and units retained reflects the retention of AB Holding Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards. 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 ”). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker selected by AB has the authority to repurchase AB Holding Units on AB’s behalf in accordance with the terms and limitations specified in the plan. Repurchases are subject to regulations promulgated by the U.S. Securities and Exchange Commission (“ SEC ”) as well as certain price, market volume and timing constraints specified in the plan. We did not adopt a plan during the fourth quarter of 2023. 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 2023, AB granted to employees and Eligible Directors 5.6 million restricted AB Holding Units (including 5.0 million granted in December for 2023 year-end awards). During 2022, AB granted to employees and Eligible Directors 4.7 million restricted AB Holding Units (including 3.8 million granted in December for 2022 year-end awards). AB used AB Holding Units repurchased during the periods and newly-issued AB Holding Units to fund these awards. During 2023 and 2022, AB Holding issued zero and 5,774 AB Holding Units, respectively, upon exercise of options to buy AB Holding Units. AB Holding used the proceeds of zero and $ 0.2 million, respectively, received from award recipients as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units. Subsequent Events We have evaluated subsequent events through the date that these financial statements were filed with the SEC. See Note 2 Summary of Significant Accounting Policies to AB's consolidated financial statements included in this Form 10-K for additional details. 70 AllianceBernstein Table of Contents Part II 3. Net Income Per Unit Basic net income per unit is derived by dividing net income by the basic weighted average number of units outstanding for each year. 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 year. Years Ended December 31 2023 2022 2021 (in thousands, except per unit amounts) Net income - basic $ 264,184 $ 274,165 $ 385,843 Additional allocation of equity in net income attributable to AB resulting from assumed dilutive effect of compensatory options — 2 30 Net income - diluted $ 264,184 $ 274,167 $ 385,873 Weighted average units outstanding - basic 112,948 101,763 99,545 Dilutive effect of compensatory options — 1 11 Weighted average units outstanding - diluted 112,948 101,764 99,556 Basic net income per unit $ 2.34 $ 2.69 $ 3.88 Diluted net income per unit $ 2.34 $ 2.69 $ 3.88 There were no anti-dilutive options excluded from diluted net income in the years ended December 31, 2023, 2022 or 2021. 4. Investment in AB Changes in AB Holding’s investment in AB for the years ended December 31, 2023 and 2022 are as follows: 2023 2022 (in thousands) Investment in AB as of January 1, $ 2,074,626 $ 1,623,764 Equity in net income attributable to AB Unitholders 299,781 305,504 Changes in accumulated other comprehensive income 8,964 ( 18,303 ) Cash distributions received from AB ( 329,900 ) ( 394,470 ) Additional investments with proceeds from exercises of compensatory options to buy AB Holding Units — 178 Capital contributions to AB — 1,590 Capital contributions from AB ( 2,164 ) — AB Holding Units retired ( 85,300 ) ( 114,794 ) AB Holding Units issued to fund long-term incentive compensation plans 104,167 76,230 AB Holding Units issued to fund CarVal acquisition — 589,169 Change in AB Holding Units held by AB for long-term incentive compensation plans 7,366 5,758 Investment in AB as of December 31, $ 2,077,540 $ 2,074,626 2023 Annual Report 71 Table of Contents Part II 5. Units Outstanding Changes in AB Holding Units outstanding for the years ended December 31, 2023 and 2022 are as follows: 2023 2022 Outstanding as of January 1, 113,801,097 99,271,727 Options exercised — 5,774 Units issued (1) 3,283,594 17,326,222 Units retired ( 2,648,600 ) ( 2,802,626 ) Outstanding as of December 31, 114,436,091 113,801,097 (1) Includes 15,321,535 Units issued in 2022 as a result of the CarVal acquisition. 6. Income Taxes 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. AB Holding’s partnership gross income is derived from its ownership interest in AB. The principal reasons for the difference between AB Holding’s effective tax rates and the UBT statutory tax rate of 4.0 % are as follows: Years Ended December 31 2023 2022 2021 (in thousands) UBT statutory rate $ 11,991 4.0 % $ 12,220 4.0 % $ 16,653 4.0 % Federal tax on partnership gross business income 34,765 11.6 30,676 10.0 29,643 7.1 State income taxes 832 0.3 663 0.2 840 0.2 Credit for UBT paid by AB ( 11,991 ) ( 4.0 ) ( 12,220 ) ( 4.0 ) ( 16,653 ) ( 4.0 ) Income tax expense and effective tax rate $ 35,597 11.9 % $ 31,339 10.3 % $ 30,483 7.3 % AB Holding’s federal income tax is computed by multiplying certain AB qualifying revenues by AB Holding’s ownership interest in AB, multiplied by the 3.5 % tax rate. Certain AB qualifying revenues are primarily U.S. investment advisory fees, research payments and brokerage commissions. 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 % Change 2023 2022 2021 2023-22 2022-21 (in thousands) Net income attributable to AB Unitholders $ 764,610 $ 831,813 $ 1,148,623 ( 8.1 %) ( 27.6 %) Multiplied by: weighted average equity ownership interest 39.2 % 36.7 % 36.2 % Equity in net income attributable to AB Unitholders $ 299,781 $ 305,504 $ 416,326 ( 1.9 %) ( 26.6 %) AB qualifying revenues $ 2,790,628 $ 2,775,693 $ 2,779,281 0.5 ( 0.1 ) Multiplied by: weighted average equity ownership interest for calculating tax 35.6 % 31.6 % 30.5 % Multiplied by: federal tax 3.5 % 3.5 % 3.5 % Federal income taxes 34,765 30,676 29,643 State income taxes 832 663 840 Total income taxes $ 35,597 $ 31,339 $ 30,483 13.6 % 2.8 % 72 AllianceBernstein Table of Contents Part II 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) enter into 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. We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not” to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. In making this assessment, we assume that the taxing authority will examine the tax position and have full knowledge of all relevant information. Accordingly, we have no liability for unrecognized tax benefits as of December 31, 2023 and 2022. A liability for unrecognized tax benefits, if required, would be recorded in income tax expense and affect the company’s effective tax rate. As of December 31, 2023, AB Holding is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2019. 7. Commitments and Contingencies Legal and regulatory matters described below pertain to AB and are included here due to their potential significance to AB Holding’s investment in AB. With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and we disclose an estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss. As a result of these types of factors, we are unable, at this time, to estimate the losses that are reasonably possible to be incurred or ranges of such losses with respect to our significant litigation matters. On December 14th, 2022, four individual participants in the Profit Sharing Plan for Employees of AllianceBernstein L.P., (the "Plan" ) filed a class action complaint (the “Complaint” ) in the U.S. District Court for the Southern District of New York against AB, current and former members of the Compensation Committee of the Board of Directors, and the Investment and Administrative Committees under the Plan. Plaintiffs, who seek to represent a class of all participants in the Plan from December 14, 2016 to the present, allege that defendants violated their fiduciary duties and engaged in prohibited transactions under the Employee Retirement Income Security Act of 1974, as amended (" ERISA ") by including proprietary collective investment trusts as investment options offered under the Plan. The Complaint seeks unspecified damages, disgorgement and other equitable relief. AB is prepared to defend itself vigorously against these claims and filed a motion to dismiss on February 24, 2023. While the ultimate outcome of this matter is currently not determinable given the matter remains in its early stages, we do not believe this litigation will have a material adverse effect on our results of operations, financial condition or liquidity. AB may be involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of which may allege significant damages. It is reasonably possible that AB could incur losses pertaining to these matters, but management cannot currently estimate any such losses. Management, after consultation with legal counsel, currently believes that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a material adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or litigation has the element of uncertainty; 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. 8. Acquisition On July 1, 2022, AB Holding acquired a 100 % ownership interest in CarVal Investors L.P. (“ CarVa l”), a global private alternatives investment manager primarily focused on opportunistic and distressed credit, renewable energy, infrastructure, specialty finance and transportation investments that, as of the acquisition date, constituted approximately $ 12.2 billion in AUM. Also on July 1, immediately following the acquisition of CarVal, AB Holding contributed 100 % of its equity interests in CarVal to AB in exchange for AB Units. Post-acquisition, CarVal was rebranded AB CarVal Investors (“ AB CarVal ”). On the acquisition date, AB Holding issued approximately 3.2 million AB Holding Units (with a fair value of $ 132.8 million), with the remaining 12.1 million Units (with a fair value of $ 456.4 million) issued on November 1, 2022. The fair value of the units issued on November 1, 2022 reflects final adjustments to the estimated unit issuance recorded as of acquisition close on July 1, 2022 and as disclosed in the third quarter 2022 Form 10-Q. 2023 Annual Report 73 Table of Contents Part II AB received 100 % equity interest in CarVal from AB Holding and issued approximately 15.3 million AB Units (with a fair value of $ 589.2 million). AB also recorded a contingent consideration payable of $ 228.9 million (to be paid predominantly in AB Units) based on CarVal achieving certain performance objectives over a six-year period ending December 31, 2027. The AB Units, as discussed above , were issued to AB Holding; AB Holding then issued the equal amount of AB Holding Units to CarVal. The excess of the purchase price over the current fair value of identifiable net liabilities acquired of $ 156.1 million (net of cash acquired of $ 40.8 million), resulted in the recognition of $ 671.2 million of goodwill and the recording of $ 303.0 million of finite-lived intangible assets primarily relating to investment management contracts and investor relationships with useful lives ranging from 5 to 10 years. As a result of the transfer of equity to AB, AB recorded a net deferred tax asset of $ 5.1 million, resulting in the recognition of $ 666.1 million of goodwill. The goodwill recorded is not deductible for tax purposes as the CarVal acquisition was an investment in a partnership. The following table summarizes the amounts of identified assets acquired and liabilities assumed at the acquisition date (reflecting acquisition adjustments recorded in the fourth quarter of 2022), as well as the consideration transferred to acquire CarVal (in thousands): Summary of purchase consideration: Fair value of AB Holding units issued $ 589,169 Fair value of contingent consideration 228,885 Total purchase consideration 818,054 Purchase price allocation: Assets acquired: Cash and cash equivalents $ 40,777 Receivables, net 82,523 Investments - other 947 Furniture, equipment, and leasehold improvements, net 2,464 Right-of-use assets 16,482 Other assets 10,600 Intangible assets 303,000 Goodwill 671,203 Total assets acquired 1,127,996 Liabilities assumed: Accounts payable and accrued expenses ( 17,793 ) Accrued compensation and benefits ( 219,726 ) Debt ( 42,661 ) Lease liabilities ( 16,571 ) Non-redeemable non-controlling interests in consolidated entities ( 13,191 ) Total liabilities assumed ( 309,942 ) Net assets acquired $ 818,054 The CarVal acquisition did not have a significant impact on our 2022 revenues and earnings. As a result, we have not provided supplemental pro forma financial information. 74 AllianceBernstein Table of Contents Part II Report of Independent Registered Public Accounting Firm To the General Partner and Unitholders of AllianceBernstein L.P. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated statements of financial condition of AllianceBernstein L.P. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, 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, 2023, 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, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. 2023 Annual Report 75 Table of Contents Part II 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, the Company’s performance-based fees earned were $144.9 million for the year ended December 31, 2023, which are earned based on the value of the investors’ assets under management (AUM). The transaction price for the asset management performance obligation for certain investment advisory contracts, including those associated with hedge funds and alternative investments, 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. 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 AUM market value, and the level at which the AUM value exceeds the contractual threshold required to earn such a fee. Management calculates AUM using established market-based valuation methods and fair valuation (non-observable market) methods. Fair valuation methods, which include 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 performance-based fees is a critical audit matter are (i) a high degree of auditor effort in performing procedures and evaluating audit evidence related to these fees, including evaluating audit evidence related to the assessment of the constraining factors impacting the amount of variable consideration and the calculation of AUM and (ii) the audit effort involved the use of professionals with specialized skill and knowledge. 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 management’s revenue recognition process for performance-based fees, including controls over the assessment of the constraining factors and the calculation of AUM. These procedures also included, among others (i) testing management’s process for determining performance-based fees, including evaluating the appropriateness of the fair valuation methods used to calculate AUM; (ii) evaluating, on a sample basis, the reasonableness of the constraining factors related to (a) contractual claw-back provisions to which variable consideration is subject, (b) the length of time to which the uncertainty of the consideration is subject, (c) the number and range of possible consideration amounts, (d) the probability of significant fluctuations in the AUM market value, and (e) the level at which the AUM value exceeded the contractual threshold required to earn such fees, as applicable. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the AUM by (i) developing an independent range of prices for a sample of securities in the underlying products where fair valuation methods were used and (ii) comparing the independent range of prices to management’s estimate. Developing the independent range of prices involved testing the completeness and accuracy of data provided by management and independently developing the inputs for the sampled securities. /s/PricewaterhouseCoopers LLP Nashville, Tennessee February 9, 2024 We have served as the Company’s auditor since 2006. 76 AllianceBernstein Table of Contents Part II AllianceBernstein L.P. and Subsidiaries Consolidated Statements of Financial Condition Years Ended December 31 2023 2022 (in thousands, except unit amounts) ASSETS Cash and cash equivalents $ 1,000,103 $ 1,130,143 Cash and securities segregated, at fair value (cost $859,448 and $1,511,916) 867,680 1,522,431 Receivables, net: Brokers and dealers 53,144 112,226 Brokerage clients 1,314,656 1,881,496 AB funds fees 343,334 314,247 Other fees 125,500 127,040 Investments: Long-term incentive compensation-related 40,033 47,870 Other 203,521 169,648 Assets of consolidated company-sponsored investment funds: Cash and cash equivalents 7,739 19,751 Investments 397,174 516,536 Other assets 25,299 44,424 Furniture, equipment and leasehold improvements, net 176,348 189,258 Goodwill 3,598,591 3,598,591 Intangible assets, net 264,555 310,203 Deferred sales commissions, net 87,374 52,250 Right-of-use assets 323,766 371,898 Assets held for sale 564,776 551,351 Other assets 216,213 179,568 Total assets $ 9,609,806 $ 11,138,931 2023 Annual Report 77 Table of Contents Part II Years Ended December 31 2023 2022 (in thousands, except unit amounts) LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND CAPITAL Liabilities: Payables: Brokers and dealers $ 259,175 $ 389,828 Brokerage clients 2,200,835 3,322,903 AB mutual funds 644 162,291 Contingent consideration liability 252,690 247,309 Accounts payable and accrued expenses 172,163 173,466 Lease liabilities 369,017 427,479 Liabilities of consolidated company-sponsored investment funds 12,537 55,529 Accrued compensation and benefits 372,305 415,878 Debt 1,154,316 990,000 Liabilities held for sale 153,342 107,952 Total liabilities 4,947,024 6,292,635 Commitments and contingencies (See Note 14) Redeemable non-controlling interest of consolidated entities 209,420 368,656 Capital: General Partner 45,388 45,985 Limited partners: 286,609,212 and 285,979,913 units issued and outstanding 4,590,619 4,648,113 Receivables from affiliates (4,490) (4,270) AB Holding Units held for long-term incentive compensation plans (76,363) (95,318) Accumulated other comprehensive loss (106,364) (129,477) Partners’ capital attributable to AB Unitholders 4,448,790 4,465,033 Non-redeemable non-controlling interests in consolidated entities 4,572 12,607 Total capital 4,453,362 4,477,640 Total liabilities, non-controlling interest and capital $ 9,609,806 $ 11,138,931 See Accompanying Notes to Consolidated Financial Statements. 78 AllianceBernstein Table of Contents Part II AllianceBernstein L.P. and Subsidiaries Consolidated Statements of Income Years Ended December 31 2023 2022 2021 (in thousands, except per unit amounts) Revenues: Investment advisory and services fees $ 2,975,468 $ 2,971,038 $ 3,194,524 Bernstein research services 386,142 416,273 452,017 Distribution revenues 586,263 607,195 652,240 Dividend and interest income 199,443 123,091 38,734 Investment gains (losses) 14,206 (102,413) (636) Other revenues 101,342 105,544 108,409 Total revenues 4,262,864 4,120,728 4,445,288 Less: Broker-dealer related interest expense 107,541 66,438 3,686 Net revenues 4,155,323 4,054,290 4,441,602 Expenses: Employee compensation and benefits 1,769,153 1,666,636 1,716,013 Promotion and servicing: Distribution-related payments 610,368 629,572 708,117 Amortization of deferred sales commissions 36,817 34,762 34,364 Trade execution, marketing, T&E and other 215,643 215,556 197,486 General and administrative 581,571 641,635 555,608 Contingent payment arrangements 22,853 6,563 2,710 Interest on borrowings 54,394 17,906 5,145 Amortization of intangible assets 46,854 26,564 5,697 Total expenses 3,337,653 3,239,194 3,225,140 Operating income 817,670 815,096 1,216,462 Income tax 29,051 39,639 62,728 Net income 788,619 775,457 1,153,734 Net income (loss) income of consolidated entities attributable to non-controlling interests 24,009 (56,356) 5,111 Net income attributable to AB Unitholders $ 764,610 $ 831,813 $ 1,148,623 Net income per AB Unit: Basic $ 2.65 $ 3.01 $ 4.18 Diluted $ 2.65 $ 3.01 $ 4.18 See Accompanying Notes to Consolidated Financial Statements. 2023 Annual Report 79 Table of Contents Part II AllianceBernstein L.P. and Subsidiaries Consolidated Statements of Comprehensive Income Years Ended December 31 2023 2022 2021 (in thousands) Net income $ 788,619 $ 775,457 $ 1,153,734 Other comprehensive income: Foreign currency translation adjustments, before reclassification and tax: 14,262 (47,208) (7,839) Less: reclassification adjustment for (losses) gains included in net income upon liquidation (389) — 4,458 Foreign currency translation adjustments, before tax 14,651 (47,208) (12,297) Income tax (expense) benefit (618) 1,215 457 Foreign currency translation adjustments, net of tax 14,033 (45,993) (11,840) Changes in employee benefit related items: Amortization of prior service cost 24 24 24 Recognized actuarial gain 9,135 6,922 15,743 Changes in employee benefit related items 9,159 6,946 15,767 Income tax (expense) (79) (95) (59) Employee benefit related items, net of tax 9,080 6,851 15,708 Other comprehensive gain (loss) 23,113 (39,142) 3,868 Less: Comprehensive income (loss) in consolidated entities attributable to non-controlling interests 24,009 (56,356) 5,111 Comprehensive income attributable to AB Unitholders $ 787,723 $ 792,671 $ 1,152,491 See Accompanying Notes to Consolidated Financial Statements. 80 AllianceBernstein Table of Contents Part II AllianceBernstein L.P. and Subsidiaries Consolidated Statements of Changes in Partners’ Capital Years Ended December 31 2023 2022 2021 (in thousands) General Partner’s Capital Balance, beginning of year $ 45,985 $ 42,850 $ 41,776 Net income 7,646 8,318 11,486 Cash distributions to General Partner (8,411) (10,715) (10,605) Long-term incentive compensation plans activity (21) 25 117 Issuance (retirement) of AB Units, net 189 (385) 76 Issuance of AB Units for CarVal acquisition — 5,892 — Balance, end of year 45,388 45,985 42,850 Limited Partners' Capital Balance, beginning of year 4,648,113 4,336,211 4,229,485 Net income 756,964 823,495 1,137,137 Cash distributions to Unitholders (830,860) (1,059,105) (1,049,287) Long-term incentive compensation plans activity (2,080) 2,521 11,586 Issuance (retirement) of AB Units, net 18,482 (38,286) 7,290 Issuance of AB Units for CarVal acquisition — 583,277 — Balance, end of year 4,590,619 4,648,113 4,336,211 Receivables from Affiliates Balance, beginning of year (4,270) (8,333) (8,316) Long-term incentive compensation awards expense 727 607 941 Capital contributions (to) from AB Holding (947) 3,456 (958) Balance, end of year (4,490) (4,270) (8,333) AB Holding Units held for Long-term Incentive Compensation Plans Balance, beginning of year (95,318) (119,470) (57,219) Purchases of AB Holding Units to fund long-term compensation plans, net (144,086) (210,568) (261,825) (Issuance) retirement of AB Units, net (17,562) 40,346 (7,348) Long-term incentive compensation awards expense 179,724 198,783 215,484 Re-valuation of AB Holding Units held in rabbi trust 879 (4,240) (9,690) Other — (169) 1,128 Balance, end of year (76,363) (95,318) (119,470) Accumulated Other Comprehensive (Loss) Balance, beginning of year (129,477) (90,335) (94,203) Foreign currency translation adjustment, net of tax 14,033 (45,993) (11,840) Changes in employee benefit related items, net of tax 9,080 6,851 15,708 Balance, end of year (106,364) (129,477) (90,335) Total Partners' Capital attributable to AB Unitholders 4,448,790 4,465,033 4,160,923 Non-redeemable Non-controlling Interests in Consolidated Entities Balance, beginning of year 12,607 — — CarVal acquisition — 12,607 — Net income 743 — — Distributions to non-controlling interests, net (8,514) — — Adjustment (264) — — Balance, end of year 4,572 12,607 — Total Capital $ 4,453,362 $ 4,477,640 $ 4,160,923 See Accompanying Notes to Consolidated Financial Statements. 81 AllianceBernstein Table of Contents Part II AllianceBernstein L.P. and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31 2023 2022 2021 (in thousands) Cash flows from operating activities: Net income $ 788,619 $ 775,457 $ 1,153,734 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of deferred sales commissions 36,817 34,762 34,364 Non-cash long-term incentive compensation expense 180,451 199,390 216,425 Depreciation and other amortization 92,113 66,617 44,985 Unrealized (gains) losses on investments (7,810) 40,857 4,454 Unrealized (gains) losses on investments of consolidated company-sponsored investment funds (48,350) 73,194 1,882 Non-cash lease expense 101,761 99,861 98,773 (Gain) loss on assets held for sale (800) 7,400 — Change is estimate of contingent payment arrangements 14,050 — — Other, net (4,641) 14,604 22,580 Changes in assets and liabilities: Decrease (increase) in securities, segregated 654,751 (18,474) 249,521 Decrease (increase) in receivables 629,204 35,410 (360,789) (Increase) in investments (10,656) (10,331) (27,000) Decrease (increase) in investments of consolidated company-sponsored investment funds 167,712 23,295 (312,325) (Increase) in deferred sales commissions (71,941) (12,113) (45,197) (Increase) in other assets (36,263) (5,487) (6,578) (Increase) decrease in other assets and liabilities of consolidated company-sponsored investment funds, net (23,867) (45,432) 38,161 (Decrease) increase in payables (1,451,280) 110,112 214,139 (Decrease) increase in accounts payable and accrued expenses (6,992) (8,424) 35,877 (Decrease) increase in accrued compensation and benefits (22,848) (150,285) 50,545 Cash payments to relieve operating lease liabilities (107,738) (109,182) (114,769) Net cash provided by operating activities 872,292 1,121,231 1,298,782 Cash flows from investing activities: Purchases of furniture, equipment and leasehold improvements (33,627) (62,308) (61,931) Acquisition of businesses, net of cash acquired — 40,282 (3,793) Net cash used in investing activities (33,627) (22,026) (65,724) Cash flows from financing activities: Proceeds from debt, net 164,316 235,000 80,000 (Decrease) increase in overdrafts payable — (25,411) 16,192 Distributions to General Partner and Unitholders (839,271) (1,069,820) (1,059,892) (Redemptions) subscriptions of non-controlling interests of consolidated company-sponsored investment funds, net (183,245) 3,843 313,699 Capital contributions (to) from affiliates (2,164) 1,590 (2,346) Additional investments by AB Holding with proceeds from exercise of compensatory options to buy AB Holding Units — 178 3,402 Purchases of AB Holding Units to fund long-term incentive compensation plan awards, net (144,086) (210,568) (261,825) Payment of acquisition-related debt obligation — (42,661) — Other, net (4,870) (2,131) (2,186) Net cash used in financing activities (1,009,320) (1,109,980) (912,956) Effect of exchange rate changes on cash and cash equivalents 22,527 (56,234) (17,982) Net (decrease) increase in cash and cash equivalents (148,128) (67,009) 302,120 Cash and cash equivalents as of beginning of the period 1,309,017 1,376,026 1,073,906 Cash and cash equivalents as of end of the period $ 1,160,889 $ 1,309,017 $ 1,376,026 Cash paid: Interest paid $ 155,335 $ 78,434 $ 5,263 Income taxes paid 57,261 55,473 55,656 Non-cash investing activities: Fair value of assets acquired (excluding cash acquired of zero, $40.8 million and $2.8 million, for 2023, 2022 and 2021, respectively) — 1,085,141 13,235 Fair value of deferred tax asset recorded — 5,072 — Fair value of liabilities assumed — 296,750 1,642 Fair value of non-redeemable non-controlling interest recorded — 13,191 — Non-cash financing activities: Payables recorded under contingent payment arrangements — 231,385 7,800 Equity consideration issued in connection with acquisition — 589,169 — See Accompanying Notes to Consolidated Financial Statements. 82 AllianceBernstein Table of Contents Part II AllianceBernstein L.P. and Subsidiaries Notes to Consolidated Financial Statements The words “ we ” and “ our ” refer collectively to AllianceBernstein L.P. and its subsidiaries (“ AB ”), or to their officers and employees. Similarly, the word “ company ” refers to AB. Cross-references are in italics. 1. Business Description and Organization We provide diversified investment management, research and related services globally to a broad range of clients. Our principal services include: • Institutional Services —servicing our institutional clients, including private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and affiliates such as Equitable Holdings, Inc. (" EQH ") and its subsidiaries, by means of separately managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles. • Retail Services —servicing our 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 our 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. We also provide distribution, shareholder servicing, transfer agency services and administrative services to the mutual funds we sponsor. Our high-quality, in-depth research is the foundation of our asset management and private wealth management businesses. Our research disciplines include economic, fundamental equity, fixed income and quantitative research. 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: • Actively managed equity strategies across global and regional universes, as well as capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities; • Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; • Actively managed alternative investments, including fundamental and systematically-driven hedge funds, fund of hedge funds and direct assets (e.g., direct lending, real estate debt and private equity); • Portfolios with Purpose, including Sustainable, Impact and Responsible+ (Climate-Conscious and ESG leaders) equity, fixed income and multi-asset strategies that address our clients' desire to invest their capital with a dedicated ESG focus, while pursuing strong investment returns; • Multi-asset services and solutions, including dynamic asset allocation, customized target-date funds and target-risk funds; and • Passively managed equity and fixed income strategies, including index, ESG index and enhanced index strategies. Organization As of December 31, 2023, EQH owned approximately 3.5% of the issued and outstanding units representing assignments of beneficial ownership of limited partnership interests in AllianceBernstein Holding L.P. (“ AB Holding Units ”). AllianceBernstein Corporation (an indirect wholly-owned subsidiary of EQH, “ General Partner ”) is the general partner of both AllianceBernstein Holding L.P. (“ AB Holding ”) and AB. AllianceBernstein Corporation owns 100,000 general partnership units in AB Holding and a 1.0% general partnership interest in AB. 2023 Annual Report 83 Table of Contents Part II As of December 31, 2023, the ownership structure of AB, including limited partnership units outstanding as well as the general partner's 1.0% interest, was as follows: EQH and its subsidiaries 59.8 % AB Holding 39.5 Unaffiliated holders 0.7 100.0 % Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an approximate 61.2% economic interest in AB as of December 31, 2023. 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ( "US GAAP" ). The preparation of the consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include AB and its majority-owned and/or controlled subsidiaries, and the consolidated entities that are considered to be variable interest entities ( "VIEs" ) and voting interest entities ( "VOEs" ) in which AB has a controlling financial interest. Non-controlling interests on the consolidated statements of financial condition include the portion of consolidated company-sponsored investment funds in which we do not have direct equity ownership. All significant inter-company transactions and balances among the consolidated entities have been eliminated. Recently Adopted Accounting Pronouncements or Accounting Pronouncements Not Yet Adopted Recently Adopted Accounting Pronouncements During 2023, there have been no recently adopted accounting pronouncements that have or are expected to have a material impact on our consolidated results of operations. Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“ FASB ”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This amendment is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold and certain information about income taxes paid. This revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2024. The revised guidance will not have a material impact on our financial condition or results of operations. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. We are currently evaluating the impacts of the new standard. 84 AllianceBernstein Table of Contents Part II Revenue Recognition Investment Advisory and Services Fees AB provides asset management services by managing customer assets and seeking to deliver investment returns to investors. Each investment management contract between AB and a customer creates a distinct, separately identifiable performance obligation for each day the customer’s assets are managed as the customer can benefit from each day of service. In accordance with ASC 606, a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer are treated as a single performance obligation. Accordingly, we have determined that our investment and advisory services are performed over time and entitle us to variable consideration earned based on the value of the investors’ assets under management (“ AUM ”). We calculate AUM using established market-based valuation methods and fair valuation (non-observable market) methods. Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing vendors and brokers for other derivative products. Fair valuation methods include: discounted cash flow models or any other methodology that is validated and approved by our Valuation Committee ( see paragraph immediately below for additional information about our Valuation Committee). Fair valuation 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 Valuation Committee, which consists of senior officers and employees, is responsible for overseeing the pricing and valuation of all investments held in client and AB portfolios. The Valuation Committee has adopted a Statement of Pricing Policies describing principles and policies that apply to pricing and valuing investments held in these portfolios. We also have a Pricing Group, which reports to the Valuation Committee and is responsible for overseeing the pricing process for all investments. We record as revenue investment advisory and services base fees, which we generally calculate as a percentage of AUM. At month-end, all the components of the transaction price ( i.e., the base fee calculation) are no longer variable and the value of the consideration is determined. These fees are not subject to claw back and there is minimal probability that a significant reversal of the revenue recorded will occur. The transaction price for the asset management performance obligation for certain investment advisory contracts, including those associated with hedge funds and 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. 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 AUM market value and the level at which the AUM value exceeds the contractual threshold required to earn such a fee. Bernstein Research Services Bernstein Research Services revenue consists principally of commissions received, and to a lesser but increasing extent, direct payments for trade execution services and equity research services provided 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. Generally, the transaction price is agreed upon at the time of each trade and is based upon the number of shares traded or the value of the consideration traded. The transaction price for research revenues is not fixed and is at the customer's discretion. In many cases there is no contract between AB and the customer for research services, so there is no performance obligation present that requires AB to provide the research or for the customer to compensate AB for the research consumed. The customer has the unilateral right to determine the amount it will pay and whether it will continue to receive research. Research revenues are recognized when the transaction price is quantified, collectability is assured and significant reversal of such revenue is not probable. In the fourth quarter of 2022, AB and Société Générale (EURONEXT: GLE, “ SocGen ”), a leading European bank, announced plans to form a joint venture combining their respective cash equities and research businesses. As a result, the Bernstein Research 2023 Annual Report 85 Table of Contents Part II Services (" BRS ") business has been classified as held for sale. For further discussion, see Note 24 Acquisitions and Divestitures. Distribution Revenues Two of our subsidiaries act as distributors and/or placement agents of company-sponsored mutual funds and receive distribution services fees from certain of those funds as full or partial reimbursement of the distribution expenses they incur. The variable consideration can be determined in different ways, as discussed below , as we satisfy the performance obligation depending on the contractual arrangements with the customer and the specific product sold. Most open-end U.S. funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay, out of assets of the fund, distribution and service fees for the distribution and sale of its shares (“ 12b-1 fees ”). The open-end U.S. funds have such agreements with us, and we have selling and distribution agreements pursuant to which we pay sales commissions to the financial intermediaries that distribute our open-end U.S. funds. These agreements are terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares. We record 12b-1 fees monthly based upon a percentage of the net asset value (“ NAV ”) of the funds. At month-end, the variable consideration of the transaction price is no longer constrained as the NAV can be calculated and the value of consideration is determined. These services are separate and distinct from other asset management services as the customer can benefit from these services independently of other services. We accrue the corresponding 12b-1 fees paid to sub-distributors monthly as the expenses are incurred. We are acting in a principal capacity in these transactions; as such, these revenues and expenses are recorded on a gross basis. We offer back-end load shares in limited instances and charge the investor a contingent deferred sales charge (“ CDSC ”) if the investment is redeemed within a certain period. The variable consideration for these contracts is contingent on the timing of the redemption by the investor and the value of the sale proceeds. Due to these constraining factors, we exclude the CDSC fee from the transaction price until the investor redeems the investment. Upon redemption, the cash consideration received for these contractual arrangements are recorded as reductions of unamortized deferred sales commissions. Our Luxembourg subsidiary, the management company for most of our non-U.S. funds, earns a management fee that is accrued daily and paid monthly, at an annual rate, based on the average daily net assets of the fund. With respect to certain share classes, the management fee may also contain a component that is paid to distributors and other financial intermediaries and service providers to cover shareholder servicing and other administrative expenses (also referred to as an All-in-Fee). As we have concluded that asset management is distinct from distribution, we allocate a portion of the investment and advisory fee to distribution revenues for the servicing component based on standalone selling prices. Other Revenues Revenues from contracts with customers include a portion of other revenues, which consists primarily of shareholder servicing fees, as well as mutual fund reimbursements and other brokerage income. We provide shareholder services, which include transfer agency, administrative and recordkeeping services provided to company-sponsored mutual funds. The consideration for these services is based on a percentage of the NAV of the fund or a fixed fee based on the number of shareholder accounts being serviced. The revenues are recorded at month-end when the constraining factors involved with determining NAV or the number of shareholders’ accounts are resolved. Non-Contractual Revenues Dividend and interest income is accrued as earned. Investment gains and losses on the consolidated statements of income include unrealized gains and losses of trading and private equity investments stated at fair value, equity in earnings of our limited partnership hedge fund investments, and realized gains and losses on investments sold. Contract Assets and Liabilities We use the practical expedient for contracts that have an original duration of one year or less. Accordingly, we do not consider the time value of money and, instead, accrue the incremental costs of obtaining the contract when incurred. As of December 31, 86 AllianceBernstein Table of Contents Part II 2023, the balances of contract assets and contract liabilities are not considered material and, accordingly, no further disclosures are necessary. Consolidation of Company-Sponsored Investment Funds For legal entities (company-sponsored investment funds) evaluated for consolidation, we first determine whether the fees we receive and the interests we hold qualify as a variable interest in the entity, including an evaluation of fees paid to us as a decision maker or service provider to the entity being evaluated. Fees received by us are not variable interests if (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services, (ii) the service arrangement includes only terms, conditions or amounts that are customarily present in arrangements for similar services negotiated at arm’s length, and (iii) our other economic interests in the entity held directly and indirectly through our related parties, as well as economic interests held by related parties under common control, would not absorb more than an insignificant amount of the entity’s losses or receive more than an insignificant amount of the entity’s benefits. For purposes of determining whether AB has an equity interest in an entity, the related parties referred to above are those entities under common control that AB has a direct variable interest in and considered a consolidated entity. Our parent company, EQH, regularly invests in our seed program. In this circumstance, EQH is not considered a related party for our consolidation analysis because AB does not have a direct variable interest in EQH. For those entities in which we have a variable interest, we perform an analysis to determine whether the entity is a VIE by considering whether the entity’s equity investment at risk is insufficient, whether the investors lack decision making rights proportional to their ownership percentage of the entity, and whether the investors lack the obligation to absorb an entity’s expected losses or the right to receive an entity’s expected income. A VIE must be consolidated by its primary beneficiary, which generally is defined as the party that has a controlling financial interest in the VIE. We are deemed to have a controlling financial interest in a VIE if we have (i) the power to direct the activities of the VIE that most significantly affect the VIE's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive income from the VIE that could potentially be significant to the VIE. For purposes of evaluating (ii) above, fees paid to us as a decision maker or service provider are excluded if the amount of fees is commensurate with the level of effort required to be performed and the arrangement includes only customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length. The primary beneficiary evaluation generally is performed qualitatively based on all facts and circumstances, as well as quantitatively, as appropriate. 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 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. The analysis performed regarding the determination of variable interests held, whether entities are VIEs or VOEs, and whether we have a controlling financial interest in such entities, requires the exercise of judgment. The analysis is updated continuously as circumstances change or new entities are formed. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits, money market accounts, overnight commercial paper and highly liquid investments with original maturities of three months or less. Due to the short-term nature of these instruments, the recorded value has been determined to approximate fair value (and considered Level 1 securities in the fair value hierarchy). Fees Receivable, Net Fees receivable are shown net of allowances. An allowance for doubtful accounts related to investment advisory and services fees is determined through an analysis of the aging of receivables, assessments of collectability based on historical trends and other qualitative and quantitative factors, including our relationship with the client, the financial health (or ability to pay) of the client, current economic conditions and whether the account is active or closed. The allowance for doubtful accounts is not material to fees receivable. Brokerage Transactions Customers’ securities transactions are recorded on a settlement date basis, with related commission income and expenses reported on a trade date basis. Receivables from and payables to clients include amounts due on cash and margin transactions. Securities owned by customers are held as collateral for receivables; such collateral is not reflected in the consolidated financial statements. We have the ability by contract or custom to sell or re-pledge this collateral and have done 2023 Annual Report 87 Table of Contents Part II so at various times. As of December 31, 2023 and 2022, we had $122.4 million and $267.1 million of re-pledged securities, respectively. Principal securities transactions and related expenses are recorded on a trade date basis. Securities borrowed and securities loaned by our broker-dealer subsidiaries are recorded at the amount of cash collateral advanced or received in connection with the transaction and are included in receivables from and payables to brokers and dealers in the consolidated statements of financial condition. Securities borrowed transactions require us to deposit cash collateral with the lender. With respect to securities loaned, we receive cash collateral from the borrower. See Note 8 Offsetting Assets and Liabilities for securities borrowed and loaned amounts recorded in our consolidated statements of financial condition as of December 31, 2023 and 2022. The initial collateral advanced or received approximates or is greater than the fair value of securities borrowed or loaned. We monitor the fair value of the securities borrowed and loaned on a daily basis and request additional collateral or return excess collateral, as appropriate. As of December 31, 2023 and 2022, there is no allowance provision required for the collateral advanced. Income or expense is recognized over the life of the transaction. Cash on deposit with clearing organizations for trade purposes is reported in assets held for sale on the consolidated statement of financial condition as of December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023 and 2022, we held no U.S. Treasury bills pledged as 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 primarily consists 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 as of December 31, 2023 and 2022. We consider these financing receivables to be of good credit quality because 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 basis 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 accounts 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 Furniture, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation is recognized on a straight-line basis over the estimated useful lives of eight years for furniture and three to six years for equipment and software. Leasehold improvements are amortized on a straight-line basis over the lesser of their estimated useful lives or the terms of the related leases. Goodwill Our acquisitions are accounted for under the acquisition method of accounting, where the cost of the acquisition is allocated on the basis of the estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price over the fair value of identifiable assets acquired, net of liabilities assumed, results in the recognition of goodwill. As of December 31, 2023, we had goodwill of $3.6 billion on the consolidated statement of financial condition which included $666.1 million as a result of the CarVal L.P. Investors (" CarVal") acquisition in the third quarter of 2022 (" CarVal acquisition" ), 88 AllianceBernstein Table of Contents Part II $2.8 billion as a result of the Sanford C. Bernstein Inc. (“ Bernstein ”) acquisition in 2000 and $291.9 million in regard to various smaller acquisitions. Approximately, $159.8 million of goodwill has been classified as assets held for sale on the consolidated statement of financial condition. 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). A goodwill impairment would be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The goodwill impairment test does not include a determination by management of whether a decline in fair value is temporary and it is important that management's determination of fair value reflect the impact of changing market conditions, including the severity and anticipated duration of any such changes. As a part of our goodwill impairment evaluation, management uses the price of a publicly traded AB Holding Unit 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, significant transactions including acquisitions or divestitures; 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, 2023, the impairment test indicated that goodwill was not impaired. Business Combinations We account for business combinations using the acquisition method of accounting whereby the identifiable assets and liabilities of the acquired business, as well as any non-controlling interest in the acquired business, are recorded at their estimated fair values as of the date that we obtain control of the acquired business. Any purchase consideration in excess of the estimated fair values of the net assets acquired is recorded as goodwill. Acquisition-related expenses are expensed as incurred. Often, as part of the business combination, intangible assets are recorded based on their estimated fair value at the time of acquisition and primarily relate to acquired investment management contracts. 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 2023, 2022 and 2021, these expenses included an intangible asset impairment charge of zero, $5.6 million and $1.0 million, respectively, related to various historical acquisitions. We periodically enter into contingent payment arrangements in connection with our business combinations. In these arrangements, we agree to pay additional consideration to the sellers to the extent that certain performance targets are achieved. We estimate the fair value of these potential future obligations at the time a business combination is consummated and record a liability on a discounted basis on our consolidated statement of financial condition. We then accrete the obligation to its expected payment amount over the measurement period. 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. The CarVal acquisition resulted in the recording of a contingent consideration payable of $228.9 million if certain performance targets are achieved over a six-year period (see Note 9 Fair Value and Note 24 Acquisitions and Divestitures) . As of December 31, 2023 and December 31, 2022, the contingent consideration payable associated with the CarVal acquisition was $238.5 million and $232.1 million, respectively. During 2023, we recorded an expense of $28.4 million due to a change in estimate related to the contingent consideration associated with the acquisition of Autonomous LLC in 2019. The change in estimate was based upon better than expected revenues during the 2023 performance evaluation period. We recorded $14.1 million as contingent payment arrangement expense and $14.3 million as compensation and benefits expense in the condensed consolidated statement of income. The charges to compensation and benefits expense are due to certain service conditions and special awards included in the acquisition agreement. During 2023 and 2022, there were no impairments of contingent consideration payable recorded in the consolidated statements of income. During the fourth quarter of 2021, we recorded an impairment of the contingent consideration payable related to our 2016 acquisition of Ramius Alternative Solutions LLC. of of $0.6 million. Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, we typically use a method that is a form of the income approach, whereby a forecast of future cash flows attributable to the asset are discounted to present value using a risk-adjusted discount rate. Similarly for contingent liabilities, we develop a forecast of future cash flows attributable to the performance objectives that are then discounted to present value using a risk- 2023 Annual Report 89 Table of Contents Part II adjusted discount rate. Some of the more significant estimates and assumptions inherent in the income approach include the amount and timing of projected future cash flows and the discount rate selected to measure the risks inherent in the future cash flows. Intangible Assets, Net 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 5 to 20 years. The CarVal acquisition in the third quarter of 2022 resulted in recording of $303.0 million of finite-lived intangible assets primarily relating to investment management contracts and investor relationships with useful lives ranging from 5 to 10 years (see Note 24 Acquisitions and Divestitures ). As of December 31, 2023, intangible assets, net of accumulated amortization, of $264.6 million on the consolidated statement of financial condition consists of $249.4 million of finite-lived intangible assets subject to amortization and $15.2 million of indefinite-lived intangible assets not subject to amortization. As of December 31, 2022, intangible assets, net of accumulated amortization, of $310.2 million on the consolidated statement of financial condition consisted of $295.0 million of finite-lived intangible assets subject to amortization and $15.2 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 $328.4 million as of December 31, 2023 and $327.9 million as of December 31, 2022, and accumulated amortization was $79.0 million as of December 31, 2023 and $32.9 million as of December 31, 2022. Amortization expense was $46.9 million for 2023, $26.6 million for 2022 and $5.7 million for 2021. Estimated future annual amortization expense is approximately $46 million annually in years one through three and $25 million in year four and five. We review indefinite-lived intangible assets for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. This test is performed at least annually or as triggering events occur. If the carrying value exceeds fair value, we perform an impairment assessment to measure the amount of the impairment loss, if any. During the fourth quarter of 2023 we performed an impairment assessment of our intangible assets. The impairment assessment indicated that our intangible assets were not impaired. During the fourth quarters of 2022 and 2021, we recorded impairments of $5.6 million and $1.0 million, related to our 2014 acquisition of CPH Capital and our 2016 acquisition of Ramius Alternative Solutions LLC, respectively. Due to the loss of acquired investment management contracts during each respective year, the carrying value of the finite-lived intangible assets exceeded the fair value of the contracts. We determined the fair value of the contracts using a discounted cash flow model. The impairment charge was recorded in general and administrative expenses in the consolidated statements of income. Deferred Sales Commissions, Net 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 one year for U.S. fund shares and four years for Non-U.S. Fund shares, the periods of time during which deferred sales commissions generally are recovered. We recover these commissions from distribution services fees received from those funds and from CDSC received from shareholders of those funds upon the redemption of their shares. CDSC cash recoveries are recorded as reductions of unamortized deferred sales commissions when received. Since January 31, 2009, our U.S. mutual funds have not offered back-end load shares to new investors. We periodically review the deferred sales commission asset for impairment as events or changes in circumstances indicate that the carrying value may not be recoverable. If these factors indicate impairment in value, we compare the carrying value to the undiscounted cash flows expected to be generated by the asset over its remaining life. If we determine the deferred sales commission asset is not fully recoverable, the asset will be deemed impaired and a loss will be recorded in the amount by which the recorded amount of the asset exceeds its estimated fair value. There were no impairment charges recorded during 2023 or 2022. Leases We determine if an arrangement is a lease at inception. Both operating and finance leases are included in the right-of-use ( “ROU” ) assets and lease liabilities in our consolidated statement of financial condition. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use our consolidated 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 90 AllianceBernstein Table of Contents Part II 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. When calculating the measurement of ROU assets and lease liabilities, we utilize the fixed payments associated with the lease and do not include other variable contractual obligations, such as operating expenses, real estate taxes, cleaning and utilities. These costs are accounted for as period costs and expensed as incurred. Additionally, we exclude any intangible assets such as software licensing agreements as stated in ASC 842-10-15-1. These arrangements will continue to follow the guidance of ASC 350, Intangibles - Goodwill and Other . Loss Contingencies With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and we disclose an estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss. 2023 Annual Report 91 Table of Contents Part II Assets and Liabilities Held for Sale The Company classifies assets and liabilities to be sold (disposal group) as held for sale in the period when all of the applicable criteria are met, including: (i) management commits to a plan to sell, (ii) the disposal group is available to sell in its present condition, (iii) there is an active program to locate a buyer, (iv) the disposal group is being actively marketed at a reasonable price in relation to its fair value, (v) significant changes to the plan to sell are unlikely, and (vi) the sale of the disposal group is generally probable of being completed within one year. Management performs an assessment of held for sale at least quarterly or when events or changes in business circumstances indicate that a change in classification may be necessary. Assets and liabilities held for sale are presented separately within the consolidated statements of financial condition with any adjustments necessary to measure the disposal group at the lower of its carrying value or fair value less costs to sell. Depreciation of property, plant and equipment and amortization of intangible and right-of-use assets are not recorded while these assets are classified as held for sale. For each reporting period the disposal group remains classified as held for sale, the carrying value of the disposal group is adjusted for subsequent changes in fair value less costs to sell. A loss is recognized for any subsequent decrease in fair value less costs to sell, while a gain is recognized in any subsequent period for any subsequent increase in fair value less cost to sell, but not in excess of the cumulative loss previously recognized. If, in any period, the carrying value of the disposal group exceeds the estimated fair value less costs to sell, a loss is recognized on sale rather than an impairment loss. Assets and liabilities classified as held for sale on the consolidated statement of financial condition as of December 31, 2023 were $564.8 million and $153.3 million, respectively. Assets and liabilities classified as held for sale as of December 31, 2022 were $551.4 million and $108.0 million, respectively. Mutual Fund Underwriting Activities Purchases and sales of shares of company-sponsored mutual funds in connection with the underwriting activities of our subsidiaries, including related commission income, are recorded on the trade date. Receivables from brokers and dealers for sale of shares of company-sponsored mutual funds generally are realized within three business days from the trade date, in conjunction with the settlement of the related payables to company-sponsored mutual funds for share purchases. Distribution plan and other promotion and servicing payments are recognized as expense when incurred. Long-term Incentive Compensation Plans We maintain several unfunded, non-qualified long-term incentive compensation plans, under which we grant annual awards to employees, generally in the fourth quarter, and to members of the Board of Directors of the General Partner, who are not employed by our company or by any of our affiliates (" Eligible Directors "). Awards granted in December 2023, 2022 and 2021 allowed employees to allocate their awards between restricted AB Holding Units and deferred cash. Participants (except certain members of senior management) generally could allocate up to 50% of their awards to deferred cash, not to exceed a total of $250,000 per award. Each of our employees based outside of the United States (other than expatriates), who received an award of $100,000 or less, could have allocated 100% of their award to deferred cash. The number of AB Holding Units awarded was based on the closing price of an AB Holding Unit on the date as of which the awards were approved by the Compensation and Workplace Practices Committee (the " Compensation Committee ") of the Board of Directors (the " Board "). For awards granted in 2023, 2022 and 2021: • We engaged in open-market purchases of AB Holding Units or purchase newly issued AB Holding Units from AB Holding that are awarded to participants and keep them in a consolidated rabbi trust. • Quarterly distributions on vested and unvested AB Holding Units were paid to participants, regardless of whether or not a long-term deferral election had been made. • Interest on deferred cash was accrued monthly based on our monthly weighted average cost of funds. We recognize compensation expense related to equity compensation grants in the financial statements using the fair value method. Fair value of restricted AB Holding Unit awards is the closing price of an AB Holding Unit on the grant date; fair value of options is determined using the Black-Scholes option valuation model. Under the fair value method, compensatory expense is measured at the grant date based on the estimated fair value of the award and is recognized over the required service period. For year-end long-term incentive compensation awards, employees who resign or are terminated without cause may retain their awards, provided the employee remains in compliance with certain agreements and covenants set forth in the applicable award agreement, including the imposition of forfeiture as a result of post-employment competition, prohibitions on employee and client solicitation, and a potential claw-back for failing to follow existing risk management policies. Because there is no service requirement, we fully expense these awards on the grant date. Most equity replacement, sign-on or similar deferred compensation awards included in separate employment agreements or arrangements include a required service period. Regardless of whether the award agreement includes employee service requirements, AB Holding Units are typically delivered to employees ratably over three years to four years, unless the employee has made a long-term deferral election. 92 AllianceBernstein Table of Contents Part II Grants of restricted AB Holding Units can be awarded to Eligible Directors. Generally, these restricted AB Holding Units vest ratably over three years. These restricted AB Holding Units are not forfeitable (except if the Eligible Director is terminated for “Cause,” as that term is defined in the applicable award agreement). We fully expense these awards on grant date, as there is no service requirement. We fund our restricted AB Holding Unit awards either by purchasing AB Holding Units on the open market or purchasing newly-issued AB Holding Units from AB Holding, and then keeping these AB Holding Units in a consolidated rabbi trust until delivering them or retiring them. In accordance with the Amended and Restated Agreement of Limited Partnership of AB (“ AB ”), when AB purchases newly-issued AB Holding Units from AB Holding, AB Holding is required to use the proceeds it receives from AB to purchase the equivalent number of newly issued AB Units, thus increasing its percentage ownership interest in AB. 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 years ended December 31, 2023 and 2022 consisted of the following: Years Ended December 31 2023 2022 (in millions) Total amount of AB Holding Units Purchased (1) 4.7 5.2 Total Cash Paid for AB Holding Units Purchased (1) $ 144.4 $ 211.8 Open Market Purchases of AB Holding Units Purchased (1) 2.0 2.3 Total Cash Paid for Open Market Purchases of AB Holding Units (1) $ 62.6 $ 92.7 (1) Purchased on a trade date basis. The difference between open-market purchases and units retained reflects the retention of AB Holding Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards. 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 ”). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker we select has the authority to repurchase AB Holding Units on our behalf in accordance with the terms and limitations specified in the plan. Repurchases are subject to regulations promulgated by the SEC as well as certain price, market volume and timing constraints specified in the plan. There was no plan adopted during the fourth quarter of 2023. We may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under our incentive compensation award program and for other corporate purposes. During 2023, we granted to employees and Eligible Directors 5.6 million restricted AB Holding Units (including 5.0 million granted in December for 2023 year-end awards to employees). During 2022, we granted to employees and Eligible Directors 4.7 million restricted AB Holding Units (including 3.8 million granted in December for 2022 year-end awards to employees). We used AB Holding Units repurchased during the periods and newly-issued AB Holding Units to fund these awards. During 2023 and 2022, AB Holding issued zero and 5,774 AB Holding Units, respectively, upon exercise of options to buy AB Holding Units. AB Holding used the proceeds of zero and $0.2 million, respectively, received from award recipients as payment in cash for the exercise price to purchase the equivalent number of newly issued AB Units. Foreign Currency Translation and Transactions Assets and liabilities of foreign subsidiaries are translated from functional currencies into United States dollars (“ US$ ”) at exchange rates in effect at the balance sheet dates, and related revenues and expenses are translated into US$ at average exchange rates in effect during each period. Net foreign currency gains and losses resulting from the translation of assets and liabilities of foreign operations into US$ are reported as a separate component of other comprehensive income in the consolidated statements of comprehensive income. Net foreign currency transaction losses were $4.5 million, $10.2 million and $8.5 million for 2023, 2022 and 2021, respectively, and are reported in general and administrative expenses on the consolidated statements of income. Cash Distributions AB is required to distribute all of its Available Cash Flow, as defined in the AB Partnership Agreement, to its Unitholders and to the General Partner. Available Cash Flow can be summarized as the cash flow received by AB from operations minus such amounts as the General Partner determines, in its sole discretion, should be retained by AB for use in its business, or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow. 2023 Annual Report 93 Table of Contents Part II Typically, Available Cash Flow has been the adjusted diluted net income per unit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, management anticipates that Available Cash Flow will be based on adjusted diluted net income per unit, unless management determines, with the concurrence of the Board, that one or more adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation. On February 6, 2024, the General Partner declared a distribution of $0.85 per AB Unit, representing a distribution of Available Cash Flow for the three months ended December 31, 2023. The General Partner, as a result of its 1.0% general partnership interest, is entitled to receive 1.0% of each distribution. The distribution is payable on March 14, 2024 to holders of record on February 20, 2024. Total cash distributions per Unit paid to the General Partner and Unitholders during 2023, 2022 and 2021 were $2.92, $3.87 and $3.86, respectively. Comprehensive Income We report all changes in comprehensive income in the consolidated statements of comprehensive income. 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. Subsequent Events We evaluate subsequent events through the date that these financial statements are filed with the SEC. We entered into a lease that commenced in January 2024, relating to approximately 166,000 square feet of space in New York City. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20-year lease term is approximately $393.0 million. No other subsequent events were identified through the date these financials statements were filed with the SEC. 94 AllianceBernstein Table of Contents Part II 3. Revenue Recognition Revenues for the years ended December 31, 2023, 2022 and 2021 consisted of the following: Years Ended December 31 2023 2022 2021 (in thousands) Subject to contracts with customers: Investment advisory and services fees Base fees $ 2,830,557 $ 2,825,791 $ 2,949,405 Performance-based fees 144,911 145,247 245,119 Bernstein research services 386,142 416,273 452,017 Distribution revenues All-in-management fees 284,057 290,740 350,674 12b-1 fees 63,127 69,041 83,920 Other distribution fees 239,079 247,414 217,646 Other revenues Shareholder servicing fees 83,802 86,661 90,225 Other 17,061 18,120 16,034 4,048,736 4,099,287 4,405,040 Not subject to contracts with customers: Dividend and interest income, net of interest expense 91,902 56,653 35,048 Investment gains (losses) 14,206 (102,413) (636) Other revenues 479 763 2,150 106,587 (44,997) 36,562 Total net revenues $ 4,155,323 $ 4,054,290 $ 4,441,602 4. Net Income Per Unit Basic net income per unit is derived by reducing net income for the 1.0% general partnership interest and dividing the remaining 99.0% by the basic weighted average number of limited partnership units outstanding for each year. Diluted net income per unit is derived by reducing net income for the 1.0% general partnership interest and dividing the remaining 99.0% by the total of the diluted weighted average number of limited partnership units outstanding for each year. Years Ended December 31 2023 2022 2021 (in thousands, except per unit amounts) Net income attributable to AB Unitholders $ 764,610 $ 831,813 $ 1,148,623 Weighted average units outstanding—basic 285,125 273,943 271,729 Dilutive effect of compensatory options to buy AB Holding Units — 1 11 Weighted average units outstanding—diluted 285,125 273,944 271,740 Basic net income per AB Unit $ 2.65 $ 3.01 $ 4.18 Diluted net income per AB Unit $ 2.65 $ 3.01 $ 4.18 There were no anti-dilutive options excluded from diluted net income in 2023, 2022 and 2021. 2023 Annual Report 95 Table of Contents Part II 5. Cash and Securities Segregated Under Federal Regulations and Other Requirements As of December 31, 2023 and 2022, $0.9 billion and $1.5 billion, respectively, of U.S. Treasury Bills were segregated in a special reserve bank custody account for the exclusive benefit of our brokerage customers under Rule 15c3-3 of the Exchange Act. 6. Investments Investments consist of: Years Ended December 31 2023 2022 (in thousands) Equity securities: Long-term incentive compensation-related $ 18,882 $ 21,055 Seed capital 128,771 138,012 Investments in limited partnership hedge funds: Long-term incentive compensation-related 21,151 26,815 Seed capital 57,624 15,711 Time deposits 6,517 7,750 Other 10,609 8,175 Total investments $ 243,554 $ 217,518 Total investments related to long-term incentive compensation obligations of $40.0 million and $47.9 million as of December 31, 2023 and 2022, 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. 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. The investments held in the rabbi trust and custodial account remain available to the general creditors of AB. The underlying investments of hedge funds in which we invest include long and short positions in equity securities, fixed income securities (including various agency and non-agency asset-based securities), currencies, commodities and derivatives (including various swaps and forward contracts). These investments are valued at quoted market prices or, where quoted market prices are not available, are fair valued based on the pricing policies and procedures of the underlying funds. We allocate seed capital to our investment teams to help develop new products and services for our clients. A portion of our seed capital trading investments are equity and fixed income products, primarily in the form of separately managed account portfolios, U.S. mutual funds, Luxembourg funds, Japanese investment trust management funds or Delaware business trusts. We also may allocate seed capital to investments in private equity funds. Regarding our seed capital investments, the amounts above reflect those funds in which we are not the primary beneficiary of a VIE or hold a controlling financial interest in a VOE. See Note 15, Consolidated Company-Sponsored Investment Funds , for a description of the seed capital investments that we consolidated. As of December 31, 2023 and 2022, our total seed capital investments were $394.2 million and $309.6 million, respectively. Seed capital investments in unconsolidated company-sponsored investment funds are valued using published net asset values or non-published net asset values if they are not listed on an active exchange but have net asset values that are comparable to funds with published net asset values and have no redemption restrictions. In addition, we also have long positions in corporate equities and long exchange-traded options traded through our options desk. The portion of unrealized gains (losses) related to equity securities, as defined by ASC 321-10, held as of December 31, 2023 and 2022 were as follows: Years Ended December 31 2023 2022 (in thousands) Net gains (losses) recognized during the period $ 14,372 $ (23,855) Less: net gains recognized during the period on equity securities sold during the period 6,132 17,960 Unrealized gains (losses) recognized during the period on equity securities held $ 8,240 $ (41,815) 96 AllianceBernstein Table of Contents Part II 7. Derivative Instruments See Note 15 Consolidated Company-Sponsored Investment Funds for disclosure of derivative instruments held by our consolidated company-sponsored investment funds. We enter into various futures, forwards, options and swaps to economically hedge certain seed capital investments. Also, we have currency forwards that help us to economically hedge certain balance sheet exposures. In addition, our options desk trades long and short exchange-traded equity options. We do not hold any derivatives designated in a formal hedge relationship under ASC 815-10, Derivatives and Hedging . The notional value, fair value and gains and losses recognized in investment gains (losses) as of December 31, 2023 and 2022 for derivative instruments (excluding derivative instruments relating to our options desk trading activities discussed below ) not designated as hedging instruments were as follows: Notional Value Derivative Assets Derivative Liabilities Gains (Losses) (in thousands) December 31, 2023 Exchange-traded futures $ 116,344 $ 1 $ 3,511 $ (2,038) Currency forwards 34,440 4,951 5,597 (82) Interest rate swaps 11,345 294 349 110 Credit default swaps 139,607 9,265 4,197 (6,850) Total return swaps 95,021 6 4,391 (5,443) Option swaps 50,232 1 135 (2,107) Total derivatives $ 446,989 $ 14,518 $ 18,180 $ (16,410) December 31, 2022 Exchange-traded futures $ 154,687 $ 1,768 $ 162 $ 19,994 Currency forwards 34,597 4,446 5,047 1,965 Interest rate swaps 16,847 386 262 70 Credit default swaps 225,671 17,507 7,302 (1,000) Total return swaps 28,742 605 933 14,828 Option swaps 50,000 — 6 5,211 Total derivatives $ 510,544 $ 24,712 $ 13,712 $ 41,068 As of December 31, 2023 and 2022, the derivative assets and liabilities are included in both receivables and payables to brokers and dealers on our consolidated statements of financial condition. 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 non-performance by counterparties to derivative financial instruments. We minimize our counterparty exposure through a credit review and approval process. In addition, we have executed various collateral arrangements with counterparties to the over-the-counter derivative transactions that require both pledging and accepting collateral in the form of cash and U.S. Treasuries. As of December 31, 2023 and 2022, we held $5.7 million and $8.4 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in payables to brokers and dealers in our consolidated statements of financial condition. Although notional amount is the typical measure of volume in the derivatives market, it is not used as a measure of credit risk. Generally, the current credit exposure of our derivative contracts is limited to the net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received. A derivative with positive value (a derivative asset) indicates existence of credit risk because the counterparty would owe us if the contract were closed. Alternatively, a derivative contract with negative value (a derivative liability) indicates we would owe money to the counterparty if the contract were closed. Generally, if there is more than one derivative transaction with a single counterparty, a master netting arrangement exists with respect to derivative transactions with that counterparty to provide for aggregate net settlement. Our standardized contracts for over-the-counter derivative transactions, known as ISDA master agreements, provide for collateralization. As of December 31, 2023 and 2022, we delivered $7.8 million and $4.2 million, respectively, of cash collateral into brokerage accounts. We report this cash collateral in cash and cash equivalents in our consolidated statements of financial condition. 2023 Annual Report 97 Table of Contents Part II As of December 31, 2023 and 2022, long and short exchange-traded equity options were classified as held for sale on our consolidated statement of financial position. For further discussion, see Note 24 Acquisitions and Divestitures. Our options desk provides our clients with equity derivative strategies and execution for exchange-traded options on single stocks, exchange-traded funds and indices. While predominately agency-based, the options desk may commit capital to facilitate a client's transaction. Our options desk hedges the risk associated with this activity by taking offsetting positions in equities. For the year ended December 31, 2023 and 2022, we recognized $4.9 million and $22.1 million of losses on equity options activity, respectively. These losses are recognized in investment gains (losses) in the consolidated statements of income. 8. Offsetting Assets and Liabilities See Note 15, Consolidated Company-Sponsored Investment Funds , for disclosure of offsetting assets and liabilities of our consolidated company-sponsored investment funds. Offsetting of assets as of December 31, 2023 and 2022 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 Financial Instruments Collateral Cash Collateral Received Net Amount (in thousands) December 31, 2023 Securities borrowed $ 23,229 $ — $ 23,229 $ (23,229) $ — $ — Derivatives 14,518 — 14,518 — (5,691) 8,827 December 31, 2022 Securities borrowed $ 62,063 $ — $ 62,063 $ (62,058) $ — $ 5 Derivatives 24,712 — 24,712 — (8,361) 16,351 Offsetting of liabilities as of December 31, 2023 and 2022 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 Financial Instruments Collateral Cash Collateral Pledged Net Amount (in thousands) December 31, 2023 Securities loaned $ 125,101 $ — $ 125,101 $ (122,369) $ — $ 2,732 Derivatives 18,180 — 18,180 — (7,795) 10,385 December 31, 2022 Securities loaned $ 272,580 $ — $ 272,580 $ (267,053) $ — $ 5,527 Derivatives 13,712 — 13,712 — (4,158) 9,554 Cash collateral, whether pledged or received on derivative instruments, is not considered material and, accordingly, is not disclosed by counterparty. 98 AllianceBernstein Table of Contents Part II 9. Fair Value See Note 15, Consolidated Company-Sponsored Investment Funds , for disclosure of fair value of our consolidated company-sponsored investment funds. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability ( i.e. , the “exit price” ) in an orderly transaction between market participants at the measurement date. The three broad levels of fair value hierarchy are as follows: • Level 1—Quoted prices in active markets are available for identical assets or liabilities as of the reported date. • Level 2—Quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date. • Level 3—Prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. Assets and Liabilities Measured at Fair Value on a Recurring Basis Valuation of our financial instruments by pricing observability levels as of December 31, 2023 and 2022 was as follows (in thousands): Level 1 Level 2 Level 3 NAV Expedient (1) Other Total December 31, 2023 Money markets $ 146,906 $ — $ — $ — $ — $ 146,906 Securities segregated (U.S. Treasury Bills) — 867,679 — — — 867,679 Derivatives 1 14,517 — — — 14,518 Investments: Equity securities 113,833 32,104 118 1,598 — 147,653 Limited partnership hedge funds (2) — — — — 78,775 78,775 Time deposits (3) — — — — 6,517 6,517 Other investments 7,870 — — — 2,739 10,609 Total investments 121,703 32,104 118 1,598 88,031 243,554 Total assets measured at fair value $ 268,610 $ 914,300 $ 118 $ 1,598 $ 88,031 $ 1,272,657 Derivatives 3,511 14,669 — — — 18,180 Contingent payment arrangements — — 252,690 — — 252,690 Total liabilities measured at fair value $ 3,511 $ 14,669 $ 252,690 $ — $ — $ 270,870 December 31, 2022: Money markets $ 95,521 $ — $ — $ — $ — $ 95,521 Securities segregated (U.S. Treasury Bills) — 1,521,705 — — — 1,521,705 Derivatives 1,768 22,944 — — — 24,712 Investments: Equity securities 129,655 27,799 129 1,484 — 159,067 Limited partnership hedge funds (2) — — — — 42,526 42,526 Time deposits (3) — — — — 7,750 7,750 Other investments 6,689 — — — 1,486 8,175 Total investments 136,344 27,799 129 1,484 51,762 217,518 Total assets measured at fair value $ 233,633 $ 1,572,448 $ 129 $ 1,484 $ 51,762 $ 1,859,456 Derivatives 162 13,550 — — — 13,712 Contingent payment arrangements — — 247,309 — — 247,309 Total liabilities measured at fair value $ 162 $ 13,550 $ 247,309 $ — $ — $ 261,021 (1) Investments measured at fair value using NAV (or its equivalent) as a practical expedient. (2) Investments in equity method investees that are not measured at fair value in accordance with GAAP. (3) Investments carried at amortized cost that are not measured at fair value in accordance with GAAP. 2023 Annual Report 99 Table of Contents Part II Other investments included in Level 1 of the fair value hierarchy include our investment in a mutual fund measured at fair value ($7.9 million and $6.7 million as of December 31, 2023 and 2022, respectively). Other investments not measured at fair value include (i) investment in start-up company that does not have a readily available fair value (this investment was $0.3 million as of December 31, 2023 and 2022) and (ii) broker-dealer exchange memberships that are not measured at fair value in accordance with GAAP ($2.4 million and $1.2 million as of December 31, 2023 and 2022, 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: • Money markets: We invest excess cash in various money market funds that are valued based on quoted prices in active markets; these are included in Level 1 of the valuation hierarchy. • Treasury Bills: We hold U.S. Treasury Bills, which are primarily segregated in a special reserve bank custody account as required by Rule 15c3-3 of the Exchange Act. These securities are valued based on quoted yields in secondary markets and are included in Level 2 of the valuation hierarchy. • Equity securities: Our equity securities consist principally of company-sponsored mutual funds with NAVs and various separately managed portfolios consisting primarily of equity and fixed income mutual funds with quoted prices in active markets, which are included in Level 1 of the valuation hierarchy. 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. • Contingent payment arrangements: Contingent payment arrangements relate to contingent payment liabilities associated with various acquisitions. 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 years ended December 31, 2023 and 2022, 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 2023 2022 (in thousands) Balance as of beginning of period $ 129 $ 126 Purchases — — Sales — — Realized gains (losses), net — — Unrealized (losses) gains, net (11) 3 Balance as of end of period $ 118 $ 129 Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the consolidated statements of income. 100 AllianceBernstein Table of Contents Part II Our acquisitions may include 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 2023 2022 (in thousands) Balance as of beginning of period $ 247,309 $ 38,260 Addition — 231,385 Accretion 8,803 6,563 Changes in estimates (1) 14,050 — Payments (1,291) — Held for sale reclassification (1) (16,181) (28,899) Balance as of end of period $ 252,690 $ 247,309 (1) During 2023, we recorded a $14.1 million change in estimate associated with the acquisition of Autonomous LLC which is included in held for sale liabilities on the condensed consolidated statement of financial condition. As of December 31, 2023, the expected revenue growth rates range from 2.0% to 83.9%, with a weighted average of 10.3%, calculated using cumulative revenues and range of revenue growth rates. The discount rates ranged from 1.9% to 10.4%, with a weighted average of 4.6%, calculated using total contingent liabilities and range of discount rates. In the third quarter of 2022, we acquired CarVal and recorded a contingent consideration liability of $228.9 million (see Note 24 Acquisitions and Divestiture s). The liability, ranging from zero to $650.0 million, is based on CarVal achieving certain performance objectives over a six-year period ending December 31, 2027. The liability was valued using a forecast of future cash flows attributable to the performance objectives that are discounted to present value using a risk-adjusted discount rate. The expected revenue growth rates range from 3.9% to 31.5%, with a weighted average of 14.1%, calculated using cumulative revenues and range of revenue growth rates. The discount rates range from 4.1% to 4.6%, with a weighted average of 4.2%, calculated using total contingent liabilities and range of discount rates. As of December 31, 2022, including the CarVal acquisition, the expected revenue growth rates range from 2.0% to 83.9%, with a weighted average of 11.5%, calculated using cumulative revenues and range of revenue growth rates (excluding revenue growth from additional AUM contributed in year of acquisition). The discount rates ranged from 1.9% to 10.4%, with a weighted average of 4.5%, calculated using total contingent liabilities and range of discount rates. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We did not have any material assets or liabilities that were measured at fair value for impairment on a nonrecurring basis during the years ended December 31, 2023 or 2022. 10. Furniture, Equipment and Leasehold Improvements, Net Furniture, equipment and leasehold improvements, net consist of: Years Ended December 31 2023 2022 (in thousands) Furniture and equipment (1) $ 168,415 $ 605,567 Leasehold improvements (1) 326,131 323,982 Total (1) 494,546 929,549 Less: Accumulated depreciation and amortization (1) (318,198) (740,291) Furniture, equipment and leasehold improvements, net (1) $ 176,348 $ 189,258 (1) During the fourth quarter of 2023 we wrote off approximately $461.7 million in fully depreciated assets. Depreciation and amortization expense on furniture, equipment and leasehold improvements were $44.9 million, $39.7 million and $38.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. 2023 Annual Report 101 Table of Contents Part II 11. Deferred Sales Commissions, Net The components of deferred sales commissions, net, for the years ended December 31, 2023 and 2022 were as follows (excluding amounts related to fully amortized deferred sales commissions): Years Ended December 31 2023 2022 (in thousands) Carrying amount of deferred sales commissions $ 187,870 $ 172,181 Less: Accumulated amortization (66,899) (66,184) Cumulative CDSC received (33,597) (53,747) Deferred sales commissions, net $ 87,374 $ 52,250 Amortization expense associated with deferred sales commissions was $36.8 million, $34.8 million and $34.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. Estimated future amortization expense related to the December 31, 2023 net asset balance, assuming no additional CDSC is received in future periods, is as follows (in thousands): 2024 $ 39,894 2025 28,979 2026 16,997 2027 1,504 Total $ 87,374 12. Debt Credit Facility 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 October 13, 2026. The Credit Facility was amended and restated on February 9, 2023, to reflect the transition from US LIBOR, which was retired June 30, 2023, to the term Secured Overnight Financial Rate (" SOFR "). Other than this immaterial change, there were no other significant changes included in the amendment. The Credit Facility provides for possible increases in the principal amount by up to an aggregate incremental amount of $200.0 million; any such increase is subject to the consent of the affected lenders. The Credit Facility is available for AB and Sanford C. Bernstein & Co., LLC (" SCB LLC ") business purposes, including the support of AB’s commercial paper program. Both AB and SCB LLC can draw directly under the Credit Facility and management may draw on the Credit Facility from time to time. AB has agreed to guarantee the obligations of SCB LLC under the Credit Facility. The Credit Facility contains affirmative, negative and financial covenants, which are customary for facilities of this type, including restrictions on dispositions of assets, restrictions on liens, a minimum interest coverage ratio and a maximum leverage ratio. As of December 31, 2023, we were in compliance with these covenants. 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. Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. Voluntary prepayments and commitment reductions requested by us are permitted at any time without a fee (other than customary breakage costs relating to the prepayment of any drawn loans) upon proper notice and subject to a minimum dollar requirement. Borrowings under the Credit Facility 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: SOFR; a Prime rate; or the Federal Funds rate. As of December 31, 2023 and 2022, we had no amounts outstanding under the Credit Facility. During 2023 and 2022, we did not draw upon the Credit Facility. 102 AllianceBernstein Table of Contents Part II EQH Facility 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. Borrowings under the EQH Facility generally bear interest at a rate per annum based on prevailing overnight commercial paper rates. The EQH Facility contains affirmative, negative and financial covenants which are substantially similar to those in AB’s committed bank facilities. As of December 31, 2023, we were in compliance with these covenants. The EQH Facility also includes customary events of default substantially similar to those in AB’s committed bank facilities, including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lender’s commitment may be terminated. Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. AB or EQH may reduce or terminate the commitment at any time without penalty upon proper notice. EQH also may terminate the facility immediately upon a change of control of our general partner. As of both December 31, 2023 and 2022, AB had $900.0 million outstanding under the EQH Facility with interest rates of approximately 5.3% and 4.3%, respectively. Average daily borrowings on the EQH Facility during 2023 and 2022 were $743.1 million and $655.2 million, respectively, with weighted average interest rates of approximately 4.9% and 1.7%, respectively. EQH Uncommitted Facility In addition to the EQH Facility, AB has a $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, 2023, we were in compliance with these covenants. As of December 31, 2023, we had no amounts outstanding under the EQH Uncommitted Facility. As of December 31, 2022, we had $90.0 million outstanding under the EQH Uncommitted Facility with an interest rate of approximately 4.3%. Average daily borrowings on the EQH Facility during 2023 and 2022 were $3.6 million and $0.7 million, respectively, with weighted average interest rates of approximately 4.6% and 4.3%, respectively. Commercial Paper As of December 31, 2023, we had $254.3 million of commercial paper outstanding with an interest rate of 5.4%. As of December 31, 2022, 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 during 2023 and 2022 were $267.6 million and $189.9 million, respectively, with weighted average interest rates of approximately 5.2% and 1.5%, respectively. SCB Lines of Credit SCB LLC currently has five uncommitted lines of credit with five financial institutions. Four of these lines of credit permit us to borrow up to an aggregate of approximately $315.0 million, with AB named as an additional borrower, while the other line has no stated limit. AB has agreed to guarantee the obligations on SCB LLC under these lines of credit. As of December 31, 2023 and 2022, SCB LLC had no outstanding balance on these lines of credit. Average daily borrowings on the lines of credit during 2023 and 2022 were $1.1 million and $1.4 million, respectively, with weighted average interest rates of approximately 7.8% and 3.7%, respectively. 13. Leases We lease office space, office equipment and technology under various operating and financing leases. Our current leases have initial lease terms of one year to 15 years, some of which include options to extend the leases for up to seven years, and some of which include options to terminate the leases within one year. 2023 Annual Report 103 Table of Contents Part II Leases included in the consolidated statements of financial condition as of December 31, 2023 and 2022 were as follows: Classification December 31, 2023 December 31, 2022 (in thousands) Operating Leases Operating lease right-of-use assets Right-of-use assets $ 312,588 $ 360,092 Operating lease liabilities Lease liabilities 357,623 415,539 Finance Leases Property and equipment, gross Right-of-use assets 18,975 18,116 Amortization of right-of-use assets Right-of-use assets (7,797) (6,310) Property and equipment, net 11,178 11,806 Finance lease liabilities Lease liabilities 11,394 11,940 The components of lease expense included in the consolidated statements of income for the years ended December 31, 2023 and 2022 were as follows: Years Ended December 31 Classification 2023 2022 (in thousands) Operating lease cost General and administrative $ 94,784 $ 97,198 Financing lease cost: Amortization of right-of-use assets General and administrative 4,779 3,860 Interest on lease liabilities Interest expense 348 200 Total finance lease cost 5,127 4,060 Variable lease cost (1) General and administrative 35,525 40,552 Sublease income General and administrative (33,577) (34,420) Net lease cost $ 101,859 $ 107,390 (1) Variable lease expense includes operating expenses, real estate taxes and employee parking. The sublease income represents all revenues received from sub-tenants. It is primarily fixed base rental payments combined with variable reimbursements such as operating expenses, real estate taxes and employee parking. The vast majority of sub-tenant income is derived from our New York metro sub-tenant agreements. Sub-tenant income related to base rent is recorded on a straight-line basis. Maturities of lease liabilities are as follows: Operating Leases Financing Leases Total Year ending December 31, (in thousands) 2024 $ 108,380 $ 4,415 $ 112,795 2025 42,695 3,985 46,680 2026 40,568 2,554 43,122 2027 37,973 881 38,854 2028 31,698 137 31,835 Thereafter 132,647 — 132,647 Total lease payments 393,961 11,972 $ 405,933 Less interest (36,338) (578) Present value of lease liabilities $ 357,623 $ 11,394 104 AllianceBernstein Table of Contents Part II We have signed a lease that commenced in 2024, relating to approximately 166,000 square feet of space in New York City. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20-year lease term is approximately $393.0 million. Lease term and discount rate: Weighted average remaining lease term (years): Operating leases 7.34 Finance leases 2.97 Weighted average discount rate: Operating leases 2.89 % Finance leases 3.22 % Supplemental non-cash activity related to leases are as follows: Years Ended December 31 2023 2022 (in thousands) Right-of-use assets obtained in exchange for lease obligations (1) : Operating leases $ 32,407 $ 38,875 Finance leases 4,106 7,791 (1) Represents non-cash activity and, accordingly, is not reflected in the consolidated statements of cash flows. 14. Commitments and Contingencies Leases As indicated in Note 13 Leases , we lease office space, office equipment and technology under various leasing arrangements. 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, 2023, are as follows: Payments Sublease Receipts Net Payments (in millions) 2024 $ 104.4 $ (31.0) $ 73.4 2025 64.6 0.3 64.9 2026 60.9 (0.2) 60.7 2027 56.6 — 56.6 2028 49.6 — 49.6 2029 and thereafter 458.9 — 458.9 Total future minimum payments $ 795.0 $ (30.9) $ 764.1 See Note 13 Leases for material lease commitments. Legal Proceedings With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and we disclose an estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss. As a result of these types of factors, we are unable, at this time, to estimate the losses that are reasonably possible to be incurred or ranges of such losses with respect to our significant litigation matters. 2023 Annual Report 105 Table of Contents Part II On December 14, 2022, four individual participants in the Profit Sharing Plan for Employees of AllianceBernstein L.P., (the " Plan ") filed a class action complaint (the “ Complaint ”) in the U.S. District Court for the Southern District of New York against AB, current and former members of the Compensation and Workplace Practices Committee of the Board, and the Investment and Administrative Committees under the Plan. Plaintiffs, who seek to represent a class of all participants in the Plan from December 14, 2016 to the present, allege that defendants violated their fiduciary duties and engaged in prohibited transactions under the Employee Retirement Income Security Act of 1974, as amended (" ERISA ") by including proprietary collective investment trusts as investment options offered under the Plan. The Complaint seeks unspecified damages, disgorgement and other equitable relief. AB is prepared to defend itself vigorously against these claims and filed a motion to dismiss on February 24, 2023. While the ultimate outcome of this matter is currently not determinable given the matter remains in its early stages, we do not believe this litigation will have a material adverse effect on our results of operations, financial condition or liquidity. AB may be involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of which may allege significant damages. It is reasonably possible that AB could incur losses pertaining to these other matters, but management cannot currently estimate any such losses. Management, after consultation with legal counsel, currently believes that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a material adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or litigation has the element of uncertainty; 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. 15. Consolidated Company-Sponsored Investment Funds We regularly provide seed capital to new company-sponsored investment funds. As such, we may consolidate or de-consolidate a variety of company-sponsored investment funds each quarter. Due to the similarity of risks related to our involvement with each company-sponsored investment fund, disclosures required under the VIE model are aggregated, such as disclosures regarding the carrying amount and classification of assets. We are not required to provide financial support to company-sponsored investment funds and only the assets of such funds are available to settle each fund's own liabilities. Our exposure to loss regarding consolidated company-sponsored investment funds is limited to our investment in, and our management fee earned from, such funds. Equity and debt holders of such funds have no recourse to AB’s assets or to the general credit of AB. The balances of consolidated VIEs and VOEs included in our consolidated statements of financial condition were as follows: December 31, 2023 December 31, 2022 (in thousands) VIEs VOEs Total VIEs VOEs Total Cash and cash equivalents $ 7,572 $ 167 $ 7,739 $ 19,751 $ — $ 19,751 Investments 286,619 110,555 397,174 516,536 — 516,536 Other assets 15,010 10,289 25,299 44,424 — 44,424 Total assets $ 309,201 $ 121,011 $ 430,212 $ 580,711 $ — $ 580,711 Liabilities $ 9,699 $ 2,838 $ 12,537 $ 55,529 $ — $ 55,529 Redeemable non-controlling interest 202,882 6,538 209,420 368,656 — 368,656 Partners' capital attributable to AB Unitholders 96,620 111,635 208,255 156,526 — 156,526 Total liabilities, redeemable non-controlling interest and partners' capital $ 309,201 $ 121,011 $ 430,212 $ 580,711 $ — $ 580,711 During 2023, we deconsolidated five funds in which we had seed investments totaling approximately $77.3 million as of December 31, 2022 due to no longer having a controlling financial interest. Changes in the redeemable non-controlling interest balance during the twelve-month period ended December 31, 2023 are as follows (in thousands): Redeemable n