GAAP Diluted Net Income of $0.87 per Unit
Adjusted Diluted Net Income of $0.90 per Unit
Cash Distribution of $0.90 per Unit
NASHVILLE, Tenn., April 29,
2022 /PRNewswire/ -- AllianceBernstein L.P. ("AB")
and AllianceBernstein Holding L.P. ("AB Holding") (NYSE: AB) today
reported financial and operating results for the quarter ended
March 31, 2022.
"Financial markets were volatile in the first quarter,
reflecting heightened uncertainty, as investors reset interest rate
expectations amid persistent inflation, amplified by geopolitical
conflict," said Seth P. Bernstein,
President and CEO of AllianceBernstein. "Against this backdrop,
which continues into the second quarter, we experienced net inflows
of $11.4 billion, or 6% annualized
organic growth, led by a large custom target-date mandate and
accelerating private wealth inflows. Active equities and municipals
grew by 6% and 7% annualized, respectively, offsetting taxable
fixed income outflows. Investment performance lagged as growth
equity valuations reset, with higher interest rates weighing on
both equity and fixed income markets. On a year-over-year basis,
our adjusted operating income of $285
million grew by 10%, and adjusted earnings per Unit and
distributions to Unitholders increased by 11%."
(US $ Thousands except
per Unit amounts)
|
1Q 2022
|
|
1Q 2021
|
|
% Change
|
|
4Q 2021
|
|
% Change
|
U.S. GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$ 1,105,687
|
|
$ 1,007,266
|
|
9.8%
|
|
$ 1,264,682
|
|
(12.6%)
|
Operating
income
|
$
248,403
|
|
$
260,584
|
|
(4.7)%
|
|
$
392,605
|
|
(36.7%)
|
Operating
margin
|
24.7%
|
|
25.9%
|
|
(120 bps)
|
|
30.8%
|
|
(610 bps)
|
AB Holding Diluted
EPU
|
$
0.87
|
|
$
0.81
|
|
7.4%
|
|
$
1.27
|
|
(31.5%)
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial Measures (1)
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$
903,744
|
|
$
819,978
|
|
10.2%
|
|
$ 1,024,326
|
|
(11.8%)
|
Operating
income
|
$
285,049
|
|
$
260,061
|
|
9.6%
|
|
$
394,363
|
|
(27.7%)
|
Operating
margin
|
31.5%
|
|
31.7%
|
|
(20 bps)
|
|
38.5%
|
|
(700 bps)
|
AB Holding Diluted
EPU
|
$
0.90
|
|
$
0.81
|
|
11.1%
|
|
$
1.29
|
|
(30.2%)
|
AB Holding cash
distribution per Unit
|
$
0.90
|
|
$
0.81
|
|
11.1%
|
|
$
1.29
|
|
(30.2%)
|
|
|
|
|
|
|
|
|
|
|
(US $
Billions)
|
|
|
|
|
|
|
|
|
|
Assets Under Management ("AUM")
|
|
|
|
|
|
|
|
|
|
Ending AUM
|
$
735.4
|
|
$
697.2
|
|
5.5%
|
|
$
778.6
|
|
(5.5%)
|
Average AUM
|
$
751.2
|
|
$
688.5
|
|
9.1%
|
|
$
761.1
|
|
(1.3%)
|
(1) The
adjusted financial measures represent non-GAAP financial
measures. See page 12 for reconciliations of GAAP
Financial Results to Adjusted Financial Results and pages 13-14 for
notes describing the adjustments.
|
Bernstein continued, "The retail channel drove over $20 billion of gross sales for the fifth quarter
in a row, with 13% active equity organic growth, positive for the
20th straight quarter, and 10% organic growth in
municipals. Active fixed income outflows resulted in channel net
outflows of $1 billion. Institutional
grew 12% annualized, including a previously disclosed $9.6 billion target-date mandate. Our
institutional pipeline of $9.8
billion reflected its second highest fee rate to-date, with
private alternatives comprising nearly two-thirds of the annualized
fee base. Private Wealth accelerated its organic growth to 7%
annualized, with net flows positive six of the last seven quarters.
Bernstein Research revenues declined 1% versus the prior year, as
increases in the U.S. and Europe
were offset by lower activity in Asia."
Bernstein concluded, "Looking forward, financial markets may
remain volatile reflecting a period of heightened uncertainty. Our
investment teams are balancing tactical views while maintaining a
disciplined process and long-term perspective, to selectively
identify quality investments for our client base. Our time-tested
investment teams have the experience to navigate the complexities
ahead."
The firm's cash distribution per Unit of $0.90 is payable on May 26, 2022, to holders
of record of AB Holding Units at the close of business on
May 9, 2022.
Market
Performance
|
|
U.S. and global equity
and fixed income markets were down in the first quarter of
2022.
|
|
|
S&P 500 Total
Return
|
(4.6)%
|
MSCI EAFE Total
Return
|
(5.8)
|
Bloomberg Barclays US
Aggregate Return
|
(5.9)
|
Bloomberg Barclays
Global High Yield Index
|
(5.7)
|
Assets Under
Management
|
|
($
Billions)
|
|
Total assets under
management as of March 31, 2022 were $735.4 billion, down
$43.2 billion, or 6%, from December 31, 2021 and up $38.2
billion, or 5%, from March 31, 2021.
|
|
|
|
Institutional
|
|
Retail
|
|
Private
Wealth
|
|
Total
|
Assets Under Management
3/31/2022
|
|
$325.9
|
|
$292.6
|
|
$116.9
|
|
$735.4
|
Net Flows for Three
Months Ended 3/31/2022:
|
|
|
|
|
|
|
|
|
Active
|
|
$10.9
|
|
($0.1)
|
|
$1.4
|
|
$12.2
|
Passive
|
|
(0.7)
|
|
(0.9)
|
|
0.8
|
|
(0.8)
|
Total
|
|
$10.2
|
|
($1.0)
|
|
$2.2
|
|
$11.4
|
Total net inflows were $11.4
billion in the first quarter, compared to net inflows of
$7.4 billion in the fourth quarter of
2021, and net inflows of $5.2 billion
in the prior year first quarter.
Institutional channel first quarter net inflows of $10.2 billion compared to net inflows of
$0.4 billion in the fourth quarter of
2021. Institutional gross sales of $14.3
billion increased sequentially from $6.6 billion. The pipeline of awarded but
unfunded Institutional mandates decreased sequentially to
$9.8 billion at March 31, 2022
from $21.5 billion at
December 31, 2021, primarily reflecting the funding of a
$9.6 billion retirement solution
mandate in January 2022.
Retail channel first quarter net outflows of $1.0 billion compared to net inflows of
$6.3 billion in the fourth quarter of
2021. Retail gross sales of $20.6
billion decreased sequentially from a record $27.6 billion.
Private Wealth channel first quarter net inflows of $2.2 billion compared to net inflows of
$0.7 billion in the fourth quarter of
2021. Private Wealth gross sales of $6.0
billion increased sequentially from $5.2 billion.
We continue to expect approximately $5
billion of additional AXA-related redemptions of low-fee
retail AUM commencing in the second quarter and continuing into the
second half of 2022.
First Quarter Financial Results
We are presenting both earnings information derived in
accordance with accounting principles generally accepted in
the United States of America ("US
GAAP") and non-GAAP, adjusted earnings information in this release.
Management principally uses these non-GAAP financial measures in
evaluating performance because we believe they present a clearer
picture of our operating performance and allow management to see
long-term trends without the distortion caused by long-term
incentive compensation-related mark-to-market adjustments, real
estate charges/credits and other adjustment items. Similarly, we
believe that non-GAAP earnings information helps investors better
understand the underlying trends in our results and, accordingly,
provides a valuable perspective for investors. Please note,
however, that these non-GAAP measures are provided in addition to,
and not as a substitute for, any measures derived in accordance
with US GAAP and they may not be comparable to non-GAAP measures
presented by other companies. Management uses both 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.
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.
US GAAP Earnings
Revenues
First quarter net revenues of $1.1
billion increased 10% from $1.0
billion in the first quarter of 2021. Higher
performance-based fees, investment advisory base fees and
distribution revenues were partially offset by investment losses in
the current year compared to investment gains in the prior
year.
Sequentially, net revenues of $1.1
billion decreased 13% from $1.3
billion. The decrease was due to lower performance-based
fees, higher investment losses, lower investment advisory base fees
and lower distribution revenues, partially offset by higher
Bernstein Research revenues.
First quarter Bernstein Research revenues of $118 million decreased 1% compared to the prior
year first quarter and increased 3% sequentially. The slight
decrease was driven by lower customer trading activity in
Asia partially offset by higher
market volatility and trading volumes in the US and UK.
Expenses
First quarter operating expenses of $857
million increased 15% from $747
million in the first quarter of 2021. The increase is due to
higher general and administrative ("G&A") expenses, total
employee compensation and benefits expense and promotion and
servicing expenses. Within G&A, the increase was driven by
higher portfolio servicing fees, professional fees, technology and
office-related expenses. Employee compensation and benefits expense
increased due to higher incentive compensation, base compensation,
commissions and fringes. Promotion and servicing expenses increased
due to higher distribution-related payments, travel and
entertainment and marketing expenses.
Sequentially, operating expenses decreased 2% from $872 million, primarily driven by lower promotion
and servicing expenses, partially offset by higher G&A expense.
Promotion and servicing expenses decreased due to lower
distribution-related payments and marketing expenses. Within
G&A, the increase was driven by higher portfolio servicing fees
and professional fees, partially offset by a favorable foreign
exchange translation impact and lower technology and office-related
expenses.
Operating Income, Margin and Net Income Per Unit
First quarter operating income of $248
million decreased 5% from $261
million in the first quarter of 2021 and the operating
margin of 24.7% in the first quarter of 2022 decreased 120 basis
points from 25.9% in the first quarter of 2021.
Sequentially, operating income decreased 37% from $393 million in the fourth quarter of 2021 and
the operating margin of 24.7% decreased 610 basis points from 30.8%
in the fourth quarter of 2021.
First quarter diluted net income per Unit was $0.87 compared to $0.81 in the first quarter of 2021 and
$1.27 in the fourth quarter of
2021.
Non-GAAP Earnings
This section discusses our first
quarter 2022 non-GAAP financial results, compared to the first
quarter of 2021 and the fourth quarter of 2021. The phrases
"adjusted net revenues", "adjusted operating expenses", "adjusted
operating income", "adjusted operating margin" and "adjusted
diluted net income per Unit" are used in the following earnings
discussion to identify non-GAAP information.
Revenues
First quarter adjusted net revenues of $904 million increased 10% from $820 million in the first quarter of 2021. Higher
investment advisory base fees and performance-based fees were
partially offset by investment losses compared to investment gains
in the current year.
Sequentially, adjusted net revenues decreased 12% from
$1.0 billion. Lower performance-based
fees, investment advisory base fees, higher investment
losses and lower net dividend and interest income were partially
offset by higher Bernstein Research revenues.
Expenses
First quarter adjusted operating expenses of $619 million increased 11% from $560 million in the first quarter of 2021. Total
employee compensation and benefits, G&A expense and promotion
and servicing expenses were all higher. Employee compensation and
benefits expense increased due to higher incentive compensation,
base compensation, commissions and fringes. Within G&A, the
increase was driven by higher technology expenses, portfolio
servicing fees, office-related expenses, errors and professional
fees. Promotion and servicing expenses increased due to higher
travel and entertainment, marketing expense and transfer fees.
Sequentially, adjusted operating expenses decreased 2% from
$630 million. Lower G&A expenses
and promotion and servicing expenses were partially offset by
higher total employee compensation and benefits expense. Within
G&A, the decrease is attributable to a favorable foreign
exchange translation impact, higher technology and office-related
expenses. Within promotion and servicing expenses, the decrease was
driven by lower marketing expenses and transfer fees, partially
offset by higher trade execution costs. Employee compensation and
benefits expense increased due to higher incentive compensation and
commissions, partially offset by lower base compensation.
Operating Income, Margin and Net Income Per Unit
First quarter adjusted operating income of $285 million increased 10% from $260 million in the first quarter of 2021, and
the adjusted operating margin of 31.5% decreased 20 basis points
from 31.7%.
Sequentially, adjusted operating income of $285 million decreased 28% from $394 million and the adjusted operating margin of
31.5% decreased 700 basis points from 38.5%.
First quarter adjusted diluted net income per Unit was
$0.90 compared to $0.81 in the first quarter of 2021 and
$1.29 in the fourth quarter of
2021.
Headcount
As of March 31, 2022, we had 4,161 employees, compared to
3,920 employees as of March 31, 2021 and 4,118 as of
December 31, 2021.
Unit
Repurchases
|
|
|
|
Three Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
|
(in
millions)
|
Total amount of AB
Holding Units Purchased/Retained (1)
|
|
0.3
|
|
1.0
|
Total Cash Paid for AB
Holding Units Purchased/Retained (1)
|
|
$
14.0
|
|
$
37.4
|
Open Market Purchases
of AB Holding Units Purchased (1)
|
|
—
|
|
0.6
|
Total Cash Paid for
Open Market Purchases of AB Holding Units (1)
|
|
$
—
|
|
$
24.2
|
(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.
|
First Quarter 2022 Earnings Conference Call
Information
Management will review First Quarter 2022 financial and
operating results during a conference call beginning at
8:00 a.m. (CST) on Friday,
April 29, 2022. The conference call will be hosted by
Seth P. Bernstein, President and
Chief Executive Officer; Bill
Siemers, Interim Chief Financial Officer; Controller and
Chief Accounting Officer; and Catherine
Burke, Chief Operating Officer and Head of Private
Wealth.
Parties may access the conference call by either webcast or
telephone:
- To listen by webcast, please visit AB's Investor Relations
website at http://alliancebernstein.com/investorrelations at least
15 minutes prior to the call to download and install any necessary
audio software.
- To listen by telephone, please dial (833) 495-0952 in the U.S.
or (409) 216-0498 outside the U.S. 10 minutes before the scheduled
start time. The conference ID# is 1693987.
The presentation management will review during the conference
call will be available on AB's Investor Relations website shortly
after the release of First Quarter 2022 financial and
operating results on April 29, 2022.
A replay of the webcast will be made available beginning
approximately one hour after the conclusion of the conference call
and will be available on AB's website for one week. An audio replay
of the conference call will also be available for one week. To
access the audio replay, please call (855) 859-2056 in the US,
or (404) 537-3406 outside the US, and provide the conference
ID #: 1693987.
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this news release
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. AB cautions
readers to carefully consider such factors. Further, such
forward-looking statements speak only as of the date on which such
statements are made; AB undertakes 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" and "Cautions
Regarding Forward-Looking Statements" in AB's Form 10-K for the
year ended December 31, 2021 and subsequent Forms 10-Q. Any or
all of the forward-looking statements made in this news release,
Form 10-K, Forms 10-Q, other documents AB files with or furnishes
to the SEC, and any other public statements issued by AB, may turn
out to be wrong. It is important to remember that other factors
besides those listed in "Risk Factors" and "Cautions Regarding
Forward-Looking Statements", and those listed below, could also
adversely affect AB's revenues, financial condition, results of
operations and business prospects.
The forward-looking statements referred to in the preceding
paragraph include statements regarding:
- The pipeline of new institutional mandates not yet
funded: Before they are funded, institutional mandates do
not represent legally binding commitments to fund and, accordingly,
the possibility exists that not all mandates will be funded in the
amounts and at the times currently anticipated, or that mandates
ultimately will not be funded.
- The possibility that AB 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.
Qualified Tax Notice
This announcement is intended to be a qualified notice under
Treasury Regulation §1.1446-4(b)(4). Please note that 100% of AB
Holding's distributions to foreign investors is attributable to
income that is effectively connected with a United States trade or business. Accordingly,
AB Holding's distributions to foreign investors are subject to
federal income tax withholding at the highest applicable tax rate,
37% effective January 1, 2018.
About AllianceBernstein
AllianceBernstein is a leading global investment management firm
that offers high-quality research and diversified investment
services to institutional investors, individuals and private wealth
clients in major world markets.
As of March 31, 2022, including both the general
partnership and limited partnership interests in AllianceBernstein,
AllianceBernstein Holding owned approximately 36.3% of
AllianceBernstein and Equitable Holdings ("EQH"), directly and
through various subsidiaries, owned an approximate 64.5% economic
interest in AllianceBernstein.
Additional information about AllianceBernstein may be found on
our website, www.alliancebernstein.com.
AB (The Operating Partnership)
|
|
|
|
|
|
|
|
|
|
US GAAP Consolidated Statement of Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
1Q 2022
|
|
1Q 2021
|
|
% Change
|
|
4Q 2021
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
GAAP revenues:
|
|
|
|
|
|
|
|
|
|
Base fees
|
$ 747,813
|
|
$ 687,691
|
|
8.7%
|
|
$ 779,473
|
|
(4.1)%
|
Performance
fees
|
75,969
|
|
15,775
|
|
n/m
|
|
157,164
|
|
(51.7)
|
Bernstein research
services
|
117,807
|
|
119,021
|
|
(1.0)
|
|
114,001
|
|
3.3
|
Distribution
revenues
|
168,341
|
|
147,600
|
|
14.1
|
|
178,490
|
|
(5.7)
|
Dividends and
interest
|
11,475
|
|
8,684
|
|
32.1
|
|
12,598
|
|
(8.9)
|
Investments (losses)
gains
|
(39,024)
|
|
1,928
|
|
n/m
|
|
(4,021)
|
|
n/m
|
Other
revenues
|
26,155
|
|
27,711
|
|
(5.6)
|
|
27,825
|
|
(6.0)
|
Total revenues
|
1,108,536
|
|
1,008,410
|
|
9.9
|
|
1,265,530
|
|
(12.4)
|
Less: interest
expense
|
2,849
|
|
1,144
|
|
149.0
|
|
848
|
|
n/m
|
Total net revenues
|
1,105,687
|
|
1,007,266
|
|
9.8
|
|
1,264,682
|
|
(12.6)
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses:
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
439,420
|
|
406,059
|
|
8.2
|
|
440,319
|
|
(0.2)
|
Promotion and
servicing
|
|
|
|
|
|
|
|
|
|
Distribution-related payments
|
176,244
|
|
162,254
|
|
8.6
|
|
190,691
|
|
(7.6)
|
Amortization of deferred sales commissions
|
9,383
|
|
7,899
|
|
18.8
|
|
9,498
|
|
(1.2)
|
Trade execution, marketing, T&E and other
|
51,227
|
|
46,678
|
|
9.7
|
|
56,809
|
|
(9.8)
|
General and
administrative
|
177,625
|
|
120,223
|
|
47.7
|
|
171,997
|
|
3.3
|
Contingent payment
arrangements
|
838
|
|
796
|
|
5.3
|
|
238
|
|
n/m
|
Interest on
borrowings
|
1,411
|
|
1,294
|
|
9.0
|
|
1,330
|
|
6.1
|
Amortization of
intangible assets
|
1,136
|
|
1,479
|
|
(23.2)
|
|
1,195
|
|
(4.9)
|
Total operating expenses
|
857,284
|
|
746,682
|
|
14.8
|
|
872,077
|
|
(1.7)
|
Operating
income
|
248,403
|
|
260,584
|
|
(4.7)
|
|
392,605
|
|
(36.7)
|
Income taxes
|
12,721
|
|
16,745
|
|
(24.0)
|
|
17,474
|
|
(27.2)
|
Net income
|
235,682
|
|
243,839
|
|
(3.3)
|
|
375,131
|
|
(37.2)
|
Net (loss) income of
consolidated entities attributable to
non-controlling interests
|
(25,045)
|
|
(292)
|
|
n/m
|
|
2,904
|
|
n/m
|
Net income attributable
to AB Unitholders
|
$ 260,727
|
|
$ 244,131
|
|
6.8
|
|
$ 372,227
|
|
(30.0)
|
AB Holding L.P. (The Publicly-Traded
Partnership)
|
|
|
|
|
|
|
|
|
|
SUMMARY STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
1Q 2022
|
|
1Q 2021
|
|
% Change
|
|
4Q 2021
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
Equity in Net Income
Attributable to AB Unitholders
|
$
94,353
|
|
$
88,907
|
|
6.1%
|
|
$ 134,091
|
|
(29.6)%
|
Income Taxes
|
8,425
|
|
7,820
|
|
7.7
|
|
8,929
|
|
(5.6)
|
Net Income
|
85,928
|
|
81,087
|
|
6.0
|
|
125,162
|
|
(31.3)
|
Additional Equity in
Earnings of Operating Partnership (1)
|
2
|
|
18
|
|
(88.9%)
|
|
3
|
|
(33.3%)
|
Net Income -
Diluted
|
$
85,930
|
|
$
81,105
|
|
5.9
|
|
$ 125,165
|
|
(31.3)
|
Diluted Net Income per Unit
|
$
0.87
|
|
$
0.81
|
|
7.4
|
|
$
1.27
|
|
(31.5)
|
Distribution per Unit
|
$
0.90
|
|
$
0.81
|
|
11.1
|
|
$
1.29
|
|
(30.2)
|
|
|
|
|
|
|
|
|
|
|
(1) To reflect higher ownership in the
Operating Partnership resulting from application of the treasury
stock method to outstanding options.
|
|
Units Outstanding
|
1Q 2022
|
|
1Q 2021
|
|
% Change
|
|
4Q 2021
|
|
% Change
|
AB L.P.
|
|
|
|
|
|
|
|
|
|
Period-end
|
271,775,790
|
|
272,675,165
|
|
(0.3%)
|
|
271,453,043
|
|
0.1%
|
Weighted average -
basic
|
271,382,946
|
|
272,332,476
|
|
(0.3%)
|
|
270,664,117
|
|
0.3
|
Weighted average -
diluted
|
271,386,203
|
|
272,364,281
|
|
(0.4%)
|
|
270,667,648
|
|
0.3
|
AB Holding L.P.
|
|
|
|
|
|
|
|
|
|
Period-end
|
99,594,474
|
|
100,489,849
|
|
(0.9%)
|
|
99,271,727
|
|
0.3%
|
Weighted average -
basic
|
99,201,630
|
|
100,145,962
|
|
(0.9%)
|
|
98,482,801
|
|
0.7
|
Weighted average -
diluted
|
99,204,887
|
|
100,177,767
|
|
(1.0%)
|
|
98,486,332
|
|
0.7
|
AllianceBernstein L.P.
|
|
|
|
ASSETS UNDER MANAGEMENT | March 31,
2022
|
|
|
|
($ Billions)
|
|
|
|
Ending and Average
|
Three Months Ended
|
|
|
3/31/22
|
|
3/31/21
|
|
Ending Assets Under
Management
|
$735.4
|
|
$697.2
|
|
Average Assets Under
Management
|
$751.2
|
|
$688.5
|
Three-Month Changes By Distribution
Channel
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
|
|
Total
|
|
Beginning of Period
|
$
337.1
|
|
$
319.9
|
|
$
121.6
|
|
$
778.6
|
|
Sales/New
accounts
|
14.3
|
|
20.6
|
|
6.0
|
|
40.9
|
|
Redemption/Terminations
|
(2.1)
|
|
(18.7)
|
|
(3.8)
|
|
(24.6)
|
|
Net Cash
Flows
|
(2.0)
|
|
(2.9)
|
|
—
|
|
(4.9)
|
|
Net Flows
|
10.2
|
|
(1.0)
|
|
2.2
|
|
11.4
|
|
Investment
Performance
|
(21.4)
|
|
(26.3)
|
|
(6.9)
|
|
(54.6)
|
|
End of Period
|
$
325.9
|
|
$
292.6
|
|
$
116.9
|
|
$
735.4
|
Three-Month Changes By Investment
Service
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Active
|
|
Equity
Passive(1)
|
|
Fixed
Income
Taxable
|
|
Fixed
Income
Tax-
Exempt
|
|
Fixed
Income
Passive(1)
|
|
Alternatives/
Multi-
Asset
Solutions(2)
|
|
Total
|
|
Beginning of Period
|
$
287.6
|
|
$
71.6
|
|
$
246.3
|
|
$
57.1
|
|
$
13.2
|
|
$
102.8
|
|
$
778.6
|
|
Sales/New
accounts
|
17.3
|
|
0.2
|
|
7.1
|
|
4.0
|
|
(0.1)
|
|
12.4
|
|
40.9
|
|
Redemption/Terminations
|
(10.3)
|
|
(0.1)
|
|
(10.4)
|
|
(2.8)
|
|
(0.1)
|
|
(0.9)
|
|
(24.6)
|
|
Net Cash
Flows
|
(2.4)
|
|
(1.9)
|
|
(1.4)
|
|
(0.2)
|
|
0.6
|
|
0.4
|
|
(4.9)
|
|
Net Flows
|
4.6
|
|
(1.8)
|
|
(4.7)
|
|
1.0
|
|
0.4
|
|
11.9
|
|
11.4
|
|
Investment
Performance
|
(27.0)
|
|
(3.6)
|
|
(15.7)
|
|
(3.2)
|
|
(0.9)
|
|
(4.2)
|
|
(54.6)
|
|
End of Period
|
$
265.2
|
|
$
66.2
|
|
$
225.9
|
|
$
54.9
|
|
$
12.7
|
|
$
110.5
|
|
$
735.4
|
Three-Month Net Flows By Investment Service (Active
versus Passive)
|
|
|
Actively
Managed
|
|
Passively
Managed (1)
|
|
Total
|
|
Equity
|
$
4.6
|
|
(1.8)
|
|
$
2.8
|
|
Fixed Income
|
(3.7)
|
|
0.4
|
|
(3.3)
|
|
Alternatives/Multi-Asset
Solutions (2)
|
11.3
|
|
0.6
|
|
11.9
|
|
Total
|
$
12.2
|
|
$
(0.8)
|
|
$
11.4
|
|
|
(1) Includes index and enhanced index
services.
|
(2) Includes certain multi-asset
solutions and services not included in equity or fixed income
services.
|
By Client Domicile
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
|
|
Total
|
|
U.S. Clients
|
$
228.2
|
|
$
164.0
|
|
$
114.4
|
|
$
506.6
|
|
Non-U.S.
Clients
|
97.7
|
|
128.6
|
|
2.5
|
|
228.8
|
|
Total
|
$
325.9
|
|
$
292.6
|
|
$
116.9
|
|
$
735.4
|
AB L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP
FINANCIAL RESULTS TO
ADJUSTED FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
(US $ Thousands,
unaudited)
|
|
3/31/2022
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues, GAAP
basis
|
|
$
1,105,687
|
|
$
1,264,682
|
|
$
1,092,832
|
|
$
1,076,822
|
|
$
1,007,266
|
|
$
1,062,892
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution-related
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution revenues
|
(168,341)
|
|
(178,490)
|
|
(170,612)
|
|
(155,538)
|
|
(147,600)
|
|
(143,131)
|
|
|
|
Investment advisory services fees
|
(17,285)
|
|
(21,699)
|
|
(25,530)
|
|
(20,459)
|
|
(22,553)
|
|
(19,722)
|
|
|
|
Pass through
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory services fees
|
(35,976)
|
|
(28,012)
|
|
(4,017)
|
|
(4,403)
|
|
(4,196)
|
|
(3,999)
|
|
|
|
Other revenues
|
(8,963)
|
|
(9,091)
|
|
(9,359)
|
|
(8,229)
|
|
(10,531)
|
|
(10,187)
|
|
|
|
Impact of consolidated
company-
sponsored investment funds
|
24,538
|
|
(3,304)
|
|
968
|
|
(4,286)
|
|
(311)
|
|
(864)
|
|
|
|
Long-term incentive
compensation-
related investment losses (gains)
|
4,150
|
|
173
|
|
(619)
|
|
(2,201)
|
|
(2,012)
|
|
(4,270)
|
|
|
|
Long-term incentive
compensation-
related dividends and interest
|
(66)
|
|
(1,813)
|
|
(65)
|
|
(71)
|
|
(85)
|
|
(918)
|
|
|
|
Write-down of
investment
|
—
|
|
1,880
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Adjusted Net Revenues
|
|
$
903,744
|
|
$
1,024,326
|
|
$
883,598
|
|
$
881,635
|
|
$
819,978
|
|
$
879,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income, GAAP
basis
|
|
$
248,403
|
|
$
392,605
|
|
$
279,650
|
|
$
283,623
|
|
$
260,584
|
|
$
302,420
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
(206)
|
|
(206)
|
|
(985)
|
|
(985)
|
|
(985)
|
|
(985)
|
|
|
|
Long-term
incentive compensation-related
items
|
945
|
|
552
|
|
220
|
|
(91)
|
|
6
|
|
(337)
|
|
|
|
EQH award
compensation
|
175
|
|
241
|
|
540
|
|
17
|
|
142
|
|
205
|
|
|
|
Write-down of
investment
|
—
|
|
1,880
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
Acquisition-related
expenses
|
10,687
|
|
2,195
|
|
217
|
|
180
|
|
22
|
|
248
|
|
|
|
|
Sub-total of
non-GAAP
adjustments
|
11,601
|
|
4,662
|
|
(8)
|
|
(879)
|
|
(815)
|
|
(869)
|
|
|
|
Less: Net (loss) income
of consolidated
entities attributable to non-controlling
interests
|
(25,045)
|
|
2,904
|
|
(1,074)
|
|
3,573
|
|
(292)
|
|
381
|
|
|
Adjusted Operating Income
|
$
285,049
|
|
$
394,363
|
|
$
280,716
|
|
$
279,171
|
|
$
260,061
|
|
$
301,170
|
|
|
Operating Margin, GAAP basis excl.
non-controlling interests
|
24.7%
|
|
30.8%
|
|
25.7%
|
|
26.0%
|
|
25.9%
|
|
28.4%
|
|
|
Adjusted Operating Margin
|
31.5%
|
|
38.5%
|
|
31.8%
|
|
31.7%
|
|
31.7%
|
|
34.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP EPU TO
ADJUSTED EPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
($ Thousands except per
Unit amounts,
unaudited)
|
3/31/2022
|
|
12/31/2021
|
|
9/30/2021
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
|
Net Income - Diluted, GAAP
basis
|
$ 85,930
|
|
$
125,165
|
|
$ 88,678
|
|
$ 90,925
|
|
$ 81,105
|
|
$ 93,221
|
|
|
Impact on net income of
AB non-GAAP
adjustments
|
3,520
|
|
1,653
|
|
(23)
|
|
(248)
|
|
(289)
|
|
(282)
|
|
|
Adjusted Net Income - Diluted
|
$ 89,450
|
|
$
126,818
|
|
$ 88,655
|
|
$ 90,677
|
|
$ 80,816
|
|
$ 92,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Net Income per Holding Unit,
GAAP basis
|
$
0.87
|
|
$
1.27
|
|
$
0.89
|
|
$
0.91
|
|
$
0.81
|
|
$
0.97
|
|
|
Impact of AB non-GAAP
adjustments
|
0.03
|
|
0.02
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Adjusted Diluted Net Income per
Holding Unit
|
$
0.90
|
|
$
1.29
|
|
$
0.89
|
|
$
0.91
|
|
$
0.81
|
|
$
0.97
|
|
AB
Notes to Consolidated Statements of
Income and Supplemental Information
(Unaudited)
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. These fees do not affect
operating income, but they do affect our operating margin. As such,
we exclude these fees from adjusted net revenues.
We also 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.
Lastly, adjusted net revenues exclude investment gains and
losses and dividends and interest on employee long-term incentive
compensation-related investments.
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) our senior management's EQH award compensation, as discussed
below, (4) the write-down of an investment, (5)
acquisition-related expenses and (6) the impact of consolidated
company-sponsored investment funds.
Real estate charges (credits) incurred 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. However, beginning in the fourth quarter of 2019,
real estate charges (credits), while excluded in the period in
which the charges (credits) are 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 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 P. Bernstein, our CEO, equity awards in
connection with EQH's IPO. Additionally, equity awards were granted
to Mr. Bernstein and other members of AB's senior management 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 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.
The write-down of the investment during the fourth quarter of
2021 has been excluded due to its non-recurring nature and because
it is 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.
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 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.
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content:https://www.prnewswire.com/news-releases/alliancebernstein-holding-lp-announces-first-quarter-results-301535727.html
SOURCE AllianceBernstein