NEW YORK, Feb. 11, 2021 /PRNewswire/ -- AllianceBernstein
L.P. ("AB") and AllianceBernstein Holding L.P. ("AB Holding")
(NYSE: AB) today reported financial and operating results for the
quarter and year ended December 31,
2020.
"Despite facing unprecedented global challenges in 2020, our
firm's diversified platform continued its growth trajectory," said
Seth P. Bernstein, President and CEO
of AllianceBernstein. "Our talented people remained fully invested
in helping our clients reach their financial goals. Strength in
active equities, including ESG, helped drive full year active net
inflows of $14.9 billion, or a 3%
active organic growth rate, excluding expected low-fee AXA
redemptions of $11.8 billion.
Supported by a robust recovery in financial markets from March
lows, our AUM grew to $686 billion,
up 10% from the prior year. We accelerated important strategic
investments to develop high quality differentiated services in
Asia, alternatives, and
multi-asset, as well as investments in technology, while managing
costs. While most Covid-19 related cost savings are unlikely to be
sustained, full year adjusted operating margin grew by 260 basis
points to 30.1%, exceeding our 2020 adjusted operating margin
target. Earnings and unitholder distributions grew by 15%
year-over-year."
(US $ Thousands
except per Unit amounts)
|
4Q
2020
|
|
4Q
2019
|
|
%
Change
|
|
2020
|
|
2019
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Financial
Measures
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
|
1,062,892
|
|
|
$
|
987,304
|
|
|
7.7
|
%
|
|
$
|
3,708,536
|
|
|
$
|
3,518,432
|
|
|
5.4
|
%
|
Operating
income
|
$
|
302,420
|
|
|
$
|
268,283
|
|
|
12.7
|
%
|
|
$
|
907,436
|
|
|
$
|
823,437
|
|
|
10.2
|
%
|
Operating
margin
|
28.4
|
%
|
|
26.4
|
%
|
|
200 bps
|
|
24.6
|
%
|
|
22.6
|
%
|
|
200 bps
|
AB Holding Diluted
EPU
|
$
|
0.97
|
|
|
$
|
0.84
|
|
|
15.5
|
%
|
|
$
|
2.88
|
|
|
$
|
2.49
|
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial
Measures (1)
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
|
879,801
|
|
|
$
|
817,457
|
|
|
7.6
|
%
|
|
$
|
3,049,326
|
|
|
$
|
2,916,615
|
|
|
4.6
|
%
|
Operating
income
|
$
|
301,170
|
|
|
$
|
263,974
|
|
|
14.1
|
%
|
|
$
|
917,998
|
|
|
$
|
802,444
|
|
|
14.4
|
%
|
Operating
margin
|
34.2
|
%
|
|
32.3
|
%
|
|
190 bps
|
|
30.1
|
%
|
|
27.5
|
%
|
|
260 bps
|
AB Holding Diluted
EPU
|
$
|
0.97
|
|
|
$
|
0.85
|
|
|
14.1
|
%
|
|
$
|
2.91
|
|
|
$
|
2.52
|
|
|
15.5
|
%
|
AB Holding cash
distribution per Unit
|
$
|
0.97
|
|
|
$
|
0.85
|
|
|
14.1
|
%
|
|
$
|
2.91
|
|
|
$
|
2.53
|
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Billions)
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under
Management ("AUM")
|
|
|
|
|
|
|
|
|
|
|
|
Ending AUM
|
$
|
685.9
|
|
|
$
|
622.9
|
|
|
10.1
|
%
|
|
$
|
685.9
|
|
|
$
|
622.9
|
|
|
10.1
|
%
|
Average
AUM
|
$
|
651.7
|
|
|
$
|
606.8
|
|
|
7.4
|
%
|
|
$
|
619.5
|
|
|
$
|
574.2
|
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
adjusted financial measures represent non-GAAP financial measures.
See page 16 for reconciliations of GAAP Financial Results to
Adjusted Financial Results and pages 17-18 for notes describing the
adjustments.
|
Bernstein continued: "Our investment teams delivered solid
long-term performance, with over 60% of both fixed income and
equity assets outperforming on a 3-year basis. Record full-year
Retail gross sales of $79 billion
were up 5%, driven by active equity which grew net inflows by 7%
organically. In Institutional, active equity gross sales of
$11.3 billion were our highest since
2008, and active equity net inflows of $7.2
billion grew 16% organically. Reflecting strong fourth
quarter fundings, our year-end institutional pipeline was
$12.2 billion, with alternatives and
equities comprising over 80% of our fee base. Private Wealth gross
sales were the highest since 2007 and Bernstein Research revenues
grew 13% year-over-year, as increased market volatility stemming
from the impact of Covid-19 drove higher client trading
volumes.
Bernstein concluded, "2020 challenged our firm to be its best
across all disciplines on behalf of our clients. Our global
investment, operations and corporate teams responded to the
Covid-19 pandemic in a coordinated manner, keeping client needs at
the forefront. We intensified our focus on – and commitment to –
multiple aspects of corporate responsibility, improving diversity
and inclusion on our Board and Operating Committee, and adopted key
commitments to ESG and racial equity. We also continued to invest
in the health and well-being of our communities. While cautiously
optimistic that 2021 will bring economic stability amid improved
global health conditions, we recognize that volatility may
continue. We remain focused, flexible and engaged as we deliver for
our clients."
The firm's cash distribution per Unit of $0.97 is payable on March 4, 2021, to
holders of record of AB Holding Units at the close of business on
February 22, 2021.
Market Performance
U.S. and global equity and fixed income markets were up in the
fourth quarter and for the full year of 2020, extending a
broad-based recovery from steep declines experienced during the
first quarter.
|
4Q
2020
|
2020
|
S&P 500 Total
Return
|
12.1
|
%
|
18.4
|
%
|
MSCI EAFE Total
Return
|
16.1
|
|
8.3
|
|
Bloomberg Barclays US
Aggregate Return
|
0.7
|
|
7.5
|
|
Bloomberg Barclays
Global Aggregate ex US Index Return
|
5.1
|
|
10.1
|
|
Bloomberg Barclays
Global High Yield Index
|
7.7
|
|
7.0
|
|
Bloomberg Barclays
U.S. Corporate High Yield Index
|
6.5
|
|
7.1
|
|
Assets Under Management ($ Billions)
Total assets under management as of December 31, 2020 were
$685.9 billion, up $55.1 billion, or 9%, from September 30, 2020, and up $63.0 billion, or 10%, from December 31,
2019.
|
Institutional
|
|
Retail
|
|
Private
Wealth
Management
|
|
Total
|
Assets Under
Management 12/31/20
|
$315.6
|
|
$265.3
|
|
$105.0
|
|
$685.9
|
Net Flows for Three
Months Ended 12/31/20:
|
|
|
|
|
|
|
|
Active
|
$5.6
|
|
$0.3
|
|
$(1.4)
|
|
$4.5
|
Passive
|
(0.6)
|
|
(1.0)
|
|
0.3
|
|
$(1.3)
|
Total
|
$5.0
|
|
$(0.7)
|
|
$(1.1)
|
|
$3.2
|
|
|
|
|
|
|
|
|
Net Flows for Twelve
Months Ended 12/31/20:
|
|
|
|
|
|
|
|
Active
|
$2.8
|
|
$3.1
|
|
$(2.8)
|
|
$3.1
|
Passive
|
(1.8)
|
|
(4.7)
|
|
0.8
|
|
$(5.7)
|
Total
|
$1.0
|
|
$(1.6)
|
|
$(2.0)
|
|
$(2.6)
|
Total net inflows were $3.2
billion in the fourth quarter, versus net inflows of
$3.1 billion in the third quarter,
and net inflows of $6.5 billion in
the prior year period. Excluding AXA redemptions of low-fee fixed
income mandates of $0.7 billion in
the fourth quarter and $2.2 billion
in the third quarter, the firm generated net inflows of
$3.9 billion in the fourth quarter
and net inflows of $5.3 billion in
the third quarter of 2020. Total net outflows were $2.6 billion for the full year of 2020, versus
net inflows of $25.2 billion in the
prior year. Excluding AXA redemptions of $11.8 billion, the firm generated net inflows of
$9.2 billion for the full year
2020.
Institutional channel fourth quarter net inflows of $5.0 billion compared to net inflows of
$2.1 billion in the third quarter.
Institutional gross sales of $9.9
billion increased sequentially from $8.3 billion. Full year 2020 net inflows of
$1.0 billion compared to net inflows
of $2.4 billion in the prior year.
Full year 2020 gross sales of $30.9
billion increased from $17.1
billion in the prior year. The pipeline of awarded but
unfunded Institutional mandates decreased sequentially to
$12.2 billion at December 31,
2020 from $16.9 billion at
September 30, 2020, reflecting strong
fourth quarter funding.
Retail channel fourth quarter net outflows of $0.7 billion compared to net inflows of
$0.7 billion in the third quarter.
Retail gross sales of $17.7 billion
increased sequentially from $17.5
billion. Full year 2020 net outflows of $1.6 billion compared to net inflows of
$23.8 billion in the prior year. Full
year 2020 gross sales of $78.9
billion increased from $75.3
billion in the prior year. Active net flows were positive
for both the fourth quarter and full year 2020.
Private Wealth channel fourth quarter net outflows of
$1.1 billion compared to net inflows
of $0.3 billion in the third quarter.
Private Wealth gross sales of $3.7
billion increased sequentially from $3.5 billion. Full year 2020 net outflows of
$2.0 billion compared to net outflows
of $1.0 billion in the prior year.
Full year 2020 gross sales of $14.3
billion increased from $11.3
billion in the prior year.
Our ending AUM at December 31, 2020 reflects $11.8 billion in 2020 outflows resulting from AXA
S.A.'s redemption of certain low-fee fixed income mandates, of
which $0.7 billion was redeemed
during the fourth quarter. We expect these redemptions to total
approximately $14 billion, with the
remaining redemptions expected to be completed during the first
half of 2021. The revenue we earn from the management of these
assets is not significant.
Fourth Quarter and Full Year 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
Fourth quarter 2020 net revenues of $1.1
billion increased 8% from the fourth quarter of 2019. Higher
performance-based fees, investment advisory base fees, distribution
revenues and Bernstein Research revenues were partially offset by
lower net dividend and interest income and investment gains.
Full year 2020 net revenues of $3.7
billion increased 5% from $3.5
billion in 2019. Higher investment advisory base fees,
distribution revenues, Bernstein Research revenues and
performance-based fees were partially offset by investment losses
compared to investment gains in the prior year period.
Fourth quarter 2020 Bernstein Research revenues increased 8%
from the prior year period and 13% for the full year due to higher
customer activity and trading volumes resulting from higher market
volatility attributed to the COVID-19 pandemic ("COVID-19") and
U.S. presidential election. We expect customer activity and trading
volumes to gradually decrease in 2021 and to normalize in 2022, as
the market volatility gradually subsides, which would be expected
to have a corresponding effect on Bernstein Research Services
revenue over the same time period. Furthermore, full year 2020
Bernstein Research revenues increased 10% excluding the revenues
from our acquisition of Autonomous (which closed on April 1, 2019).
Expenses
Fourth quarter 2020 operating expenses of $760 million increased 6% from the fourth quarter
of 2019. Higher total employee compensation and benefits and
promotion and servicing expenses were partially offset by lower
general and administrative ("G&A") expense, amortization of
intangible assets and real estate charges. Employee compensation
and benefit expense increased due primarily to higher incentive
compensation and base compensation. Within Promotion and servicing
expenses, higher distribution related payments and amortization of
deferred sales commissions were partially offset by lower travel
and entertainment. G&A decreased due to lower office-related
expenses and professional fees. In addition, during the fourth
quarter of 2020 and 2019, we recorded an intangible asset
impairment charge of $1.5 million and
$3.1 million, respectively, and a
change in our contingent payment liability of $1.4 million and $3.1
million, respectively, both relating to a previous
acquisition.
Full year 2020 operating expenses of $2.8
billion increased 4% from $2.7
billion in 2019. Higher promotion and servicing expense,
total employee compensation and benefits and real estate charges
were partially offset by lower amortization of intangible assets
and interest on borrowings. Promotion and servicing expense
increased due to higher distribution related payments, amortization
of deferred sales commissions, trade execution costs and transfer
fees, partially offset by lower travel and entertainment and
marketing expenses. The decrease in travel and entertainment
expense is primarily a result of cost savings associated with the
COVID-19 pandemic and we expect these costs to increase in 2021 and
further normalize in 2022, as the pandemic recedes. Employee
compensation and benefits expense increased due to higher incentive
compensation and base compensation, partially offset by lower
fringes, commissions and other employment costs.
Operating Income and Net Income Per Unit
Fourth quarter 2020 operating income of $302 million increased 13% from $268 million in the fourth quarter of 2019 and
operating margin of 28.4% increased 200 basis points from 26.4% in
the fourth quarter of 2019. Full year 2020 operating income of
$907 million increased 10% from
$823 million in 2019, and operating
margin of 24.6% increased 200 basis points from 22.6% in 2019.
Fourth quarter 2020 diluted net income per Unit was $0.97 as compared to $0.84 in the fourth quarter of 2019. Full year
2020 diluted net income per Unit was $2.88 as compared to $2.49 in 2019.
Non-GAAP Earnings
This section discusses our fourth quarter and full year 2020
non-GAAP financial results, compared to the fourth quarter and full
year 2019 financial results. 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
Fourth quarter 2020 adjusted net revenues of $880 million increased 8% from the fourth quarter
of 2019. Higher performance-based fees, investment advisory base
fees and Bernstein Research revenues were partially offset by
investment losses versus investment gains in the prior year period
and lower net dividend and interest income.
Full year 2020 adjusted net revenues of $3.0 billion increased 5% from 2019. Higher
investment advisory base fees, Bernstein Research revenues and
performance-based fees were partially offset by investment losses
versus investment gains in the prior year period and lower net
dividend and interest income.
Expenses
Fourth quarter 2020 adjusted operating expenses of $579 million increased 5% from the fourth quarter
of 2019. Higher total employee compensation and benefits were
partially offset by lower promotion and servicing expense and
amortization of intangible assets. Employee compensation and
benefits expense increased due to higher incentive compensation,
base compensation and fringes, partially offset by lower
commissions. Promotion and servicing expense decreased due to lower
travel and entertainment, partially offset by higher trade
execution costs.
Full year 2020 adjusted operating expenses of $2.1 billion increased 1% from 2019. Higher total
employee compensation and benefits and G&A expenses were
partially offset by lower promotion and servicing expenses,
amortization of intangible assets and interest on borrowings.
Employee compensation and benefits expense increased due to higher
incentive compensation and base compensation, partially offset by
lower fringes and commissions. Within G&A, the increase was
driven by higher portfolio servicing fees, technology costs,
charitable contributions and other taxes, partially offset by lower
professional fees. Promotion and servicing expense decreased due to
lower travel and entertainment and marketing expenses, partially
offset by higher trade execution costs and transfer fees. The
decrease in travel and entertainment expense is primarily a result
of cost savings associated with the COVID-19 pandemic and we expect
these costs to increase in 2021 and further normalize in 2022, as
the pandemic recedes.
Operating Income, Margin and Net Income Per Unit
Fourth quarter 2020 adjusted operating income of $301 million increased 14% from $264 million in the fourth quarter of 2019.
Adjusted operating margin of 34.2% increased 190 basis points from
32.3%.
Full year 2020 adjusted operating income of $918 million increased 14% from $802 million in 2019. Adjusted operating margin
of 30.1% increased 260 basis points from 27.5%.
Fourth quarter 2020 adjusted diluted net income per Unit of
$0.97 was up from $0.85 in the fourth quarter of 2019. Full year
adjusted diluted net income per Unit of $2.91 was up from $2.52 in 2019.
Headcount
As of December 31, 2020, we had
3,929 employees, compared to 3,811 employees as of December 31, 2019 and 3,869 as of September 30, 2020.
Unit Repurchases
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
millions)
|
Total amount of AB
Holding Units Purchased(1)
|
2.9
|
|
|
3.1
|
|
|
5.4
|
|
|
6.0
|
|
Total Cash Paid for
AB Holding Units Purchased(1)
|
$
|
94.6
|
|
|
$
|
90.5
|
|
|
$
|
149.0
|
|
|
$
|
172.6
|
|
Open Market Purchases
of AB Holding Units Purchased(2)
|
0.7
|
|
|
0.5
|
|
|
3.1
|
|
|
2.9
|
|
Total Cash Paid for
Open Market Purchases of AB Holding Units(2)
|
$
|
22.2
|
|
|
$
|
13.8
|
|
|
$
|
74.0
|
|
|
$
|
82.7
|
|
|
(1)
Purchased on a trade date basis.
|
(2) The remainder related to
purchases of AB Holding Units from employees to fulfill statutory
tax withholding requirements at the time of delivery of long-term
incentive compensation awards.
|
Fourth Quarter 2020 Earnings Conference Call
Information
Management will review Fourth Quarter 2020 financial and
operating results during a conference call beginning at
8:00 a.m. (ET) on Thursday,
February 11, 2021. The conference call will be hosted by
Seth P. Bernstein, President and
Chief Executive Officer, Ali Dibadj,
Head of Finance and Strategy, and Kate
Burke, Chief Operating Officer.
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 2674397.
The presentation management will review during the conference
call will be available on AB's Investor Relations website shortly
after the release of Fourth Quarter 2020 financial and
operating results on February 11, 2021.
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 #: 2674397.
Availability of 2020 Form 10-K
Unitholders may obtain a copy of our Form 10-K for the year
ended December 31, 2020 in either
electronic format or hard copy on www.alliancebernstein.com:
- Download Electronic Copy: Unitholders can download an
electronic version of the report by visiting the "Investor &
Media Relations" page of our website at
www.alliancebernstein.com/investorrelations and clicking on the
"Reports & SEC Filings" section.
- Order Hard Copy Electronically or by Phone: Unitholders may
also order a hard copy of the report, which is expected to be
available for mailing in approximately eight weeks, free of charge.
Unitholders with internet access can follow the above instructions
to order a hard copy electronically. Unitholders without internet
access, or who would prefer to order by phone, can call
212-969-2416.
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, 2020. Any or
all of the forward-looking statements made in this news release,
Form 10-K, 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 December 31, 2020, including
both the general partnership and limited partnership interests in
AllianceBernstein, AllianceBernstein Holding owned approximately
36.0% of AllianceBernstein and Equitable Holdings ("EQH"), directly
and through various subsidiaries, owned an approximate 64.8%
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)
|
4Q
2020
|
|
4Q
2019
|
|
%
Change
|
|
|
|
|
|
|
|
|
GAAP
revenues:
|
|
|
|
|
|
|
Base fees
|
$
|
656,334
|
|
|
$
|
626,357
|
|
|
4.8
|
%
|
|
Performance
fees
|
108,635
|
|
|
76,344
|
|
|
42.3
|
%
|
|
Bernstein research
services
|
118,398
|
|
|
109,671
|
|
|
8.0
|
%
|
|
Distribution
revenues
|
143,131
|
|
|
127,553
|
|
|
12.2
|
%
|
|
Dividends and
interest
|
8,696
|
|
|
24,539
|
|
|
(64.6)
|
%
|
|
Investments
gains
|
2,610
|
|
|
7,541
|
|
|
(65.4)
|
%
|
|
Other
revenues
|
26,517
|
|
|
26,061
|
|
|
1.7
|
%
|
|
Total
revenues
|
1,064,321
|
|
|
998,066
|
|
|
6.6
|
%
|
|
Less: interest
expense
|
1,429
|
|
|
10,762
|
|
|
(86.7)
|
%
|
|
Total net
revenues
|
1,062,892
|
|
|
987,304
|
|
|
7.7
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
|
|
|
|
|
Employee compensation
and benefits
|
424,468
|
|
|
377,951
|
|
|
12.3
|
%
|
|
Promotion and
servicing
|
|
|
|
|
|
|
Distribution-related payments
|
155,080
|
|
|
137,992
|
|
|
12.4
|
%
|
|
Amortization of
deferred sales commissions
|
7,773
|
|
|
4,681
|
|
|
66.1
|
%
|
|
Trade execution,
marketing, T&E and other
|
48,669
|
|
|
58,848
|
|
|
(17.3)
|
%
|
|
General and
administrative
|
|
|
|
|
|
|
General
& administrative
|
122,533
|
|
|
129,666
|
|
|
(5.5)
|
%
|
|
Real
estate charges
|
—
|
|
|
2,623
|
|
|
(100.0)
|
%
|
|
Contingent payment
arrangements
|
(558)
|
|
|
(2,222)
|
|
|
(74.9)
|
%
|
|
Interest on
borrowings
|
1,177
|
|
|
2,259
|
|
|
(47.9)
|
%
|
|
Amortization of
intangible assets
|
1,330
|
|
|
7,223
|
|
|
(81.6)
|
%
|
|
Total operating
expenses
|
760,472
|
|
|
719,021
|
|
|
5.8
|
%
|
|
Operating
income
|
302,420
|
|
|
268,283
|
|
|
12.7
|
%
|
|
Income
taxes
|
15,704
|
|
|
11,795
|
|
|
33.1
|
%
|
|
Net income
|
286,716
|
|
|
256,488
|
|
|
11.8
|
%
|
|
Net income of
consolidated entities attributable to
non-controlling interests
|
381
|
|
|
7,623
|
|
|
(95.0)
|
%
|
|
Net income
attributable to AB Unitholders
|
$
|
286,335
|
|
|
$
|
248,865
|
|
|
15.1
|
%
|
|
AB Holding L.P.
(The Publicly-Traded Partnership)
|
|
|
|
|
|
SUMMARY STATEMENTS
OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
4Q
2020
|
|
4Q
2019
|
|
%
Change
|
|
|
|
|
|
|
|
|
Equity in Net Income
Attributable to AB Unitholders
|
$
|
101,415
|
|
|
$
|
87,909
|
|
|
15.4
|
%
|
|
Income
Taxes
|
8,219
|
|
|
7,887
|
|
|
4.2
|
%
|
|
Net
Income
|
93,196
|
|
|
80,022
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
Additional Equity in
Earnings of Operating Partnership (1)
|
25
|
|
|
19
|
|
|
31.6
|
%
|
|
Net Income -
Diluted
|
$
|
93,221
|
|
|
$
|
80,041
|
|
|
16.5
|
%
|
|
Diluted Net Income
per Unit
|
$
|
0.97
|
|
|
$
|
0.84
|
|
|
15.5
|
%
|
|
Distribution per
Unit
|
$
|
0.97
|
|
|
$
|
0.85
|
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
(1) To reflect higher ownership in
the Operating Partnership resulting from application of the
treasury stock method to outstanding options.
|
|
Units
Outstanding
|
4Q
2020
|
|
4Q
2019
|
|
%
Change
|
|
AB L.P.
|
|
|
|
|
|
|
Period-end
|
270,509,658
|
|
|
270,380,314
|
|
|
—
|
%
|
|
Weighted average -
basic
|
268,131,726
|
|
|
267,909,846
|
|
|
0.1
|
%
|
|
Weighted average -
diluted
|
268,169,320
|
|
|
267,943,122
|
|
|
0.1
|
%
|
|
AB Holding
L.P.
|
|
|
|
|
|
|
Period-end
|
98,322,942
|
|
|
98,192,098
|
|
|
0.1
|
%
|
|
Weighted average -
basic
|
95,944,280
|
|
|
95,719,226
|
|
|
0.2
|
%
|
|
Weighted average -
diluted
|
95,981,874
|
|
|
95,752,502
|
|
|
0.2
|
%
|
|
AB (The Operating
Partnership)
|
|
|
|
|
|
|
US GAAP
Consolidated Statement of Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
|
2020
|
|
2019
|
|
%
Change
|
GAAP
revenues:
|
|
|
|
|
|
|
Base fees
|
|
$
|
2,462,810
|
|
|
2,372,429
|
|
|
3.8
|
%
|
Performance
fees
|
|
132,626
|
|
|
99,615
|
|
|
33.1
|
%
|
Bernstein research
services
|
|
459,744
|
|
|
407,911
|
|
|
12.7
|
%
|
Distribution
revenues
|
|
529,781
|
|
|
455,043
|
|
|
16.4
|
%
|
Dividends and
interest
|
|
50,923
|
|
|
104,421
|
|
|
(51.2)
|
%
|
Investments (losses)
gains
|
|
(16,401)
|
|
|
38,659
|
|
|
n/m
|
|
Other
revenues
|
|
104,703
|
|
|
97,559
|
|
|
7.3
|
%
|
Total
revenues
|
|
3,724,186
|
|
|
3,575,637
|
|
|
4.2
|
%
|
Less: interest
expense
|
|
15,650
|
|
|
57,205
|
|
|
(72.6)
|
%
|
Total net
revenues
|
|
3,708,536
|
|
|
3,518,432
|
|
|
5.4
|
%
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
1,494,198
|
|
|
1,442,783
|
|
|
3.6
|
%
|
Promotion and
servicing
|
|
|
|
|
|
|
Distribution-related payments
|
|
569,283
|
|
|
487,965
|
|
|
16.7
|
%
|
Amortization of deferred sales commissions
|
|
27,355
|
|
|
15,029
|
|
|
82.0
|
%
|
Trade
execution, marketing, T&E and other
|
|
189,787
|
|
|
219,860
|
|
|
(13.7)
|
%
|
General and
administrative
|
|
|
|
|
|
|
General
& administrative
|
|
485,544
|
|
|
484,750
|
|
|
0.2
|
%
|
Real
estate charges
|
|
5,526
|
|
|
3,324
|
|
|
66.2
|
%
|
Contingent payment
arrangements
|
|
1,855
|
|
|
(510)
|
|
|
n/m
|
|
Interest on
borrowings
|
|
6,180
|
|
|
13,035
|
|
|
(52.6)
|
%
|
Amortization of
intangible assets
|
|
21,372
|
|
|
28,759
|
|
|
(25.7)
|
%
|
Total operating
expenses
|
|
2,801,100
|
|
|
2,694,995
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
Operating
income
|
|
907,436
|
|
|
823,437
|
|
|
10.2
|
%
|
|
|
|
|
|
|
|
Income
taxes
|
|
45,653
|
|
|
41,754
|
|
|
9.3
|
%
|
|
|
|
|
|
|
|
Net income
|
|
861,783
|
|
|
781,683
|
|
|
10.2
|
%
|
|
|
|
|
|
|
|
Net (loss) income of
consolidated entities
attributable to non-controlling interests
|
|
(4,169)
|
|
|
29,641
|
|
|
n/m
|
|
|
|
|
|
|
|
|
Net income
attributable to AB Unitholders
|
|
$
|
865,952
|
|
|
$
|
752,042
|
|
|
15.1
|
%
|
AB Holding L.P.
(The Publicly-Traded
Partnership)
|
|
|
|
|
SUMMARY STATEMENTS
OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
%
Change
|
Equity in Net Income
Attributable to AB Unitholders
|
|
$
|
308,404
|
|
|
$
|
266,292
|
|
|
15.8
|
%
|
Income
Taxes
|
|
29,024
|
|
|
27,729
|
|
|
4.7
|
%
|
Net
Income
|
|
279,380
|
|
|
238,563
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
Additional Equity in
Earnings of Operating Partnership (1)
|
|
56
|
|
|
79
|
|
|
(29.1)
|
%
|
Net Income -
Diluted
|
|
$
|
279,436
|
|
|
$
|
238,642
|
|
|
17.1
|
%
|
Diluted Net Income
per Unit
|
|
$2.88
|
|
|
$2.49
|
|
|
15.7
|
%
|
Distribution per
Unit
|
|
$2.91
|
|
|
$2.53
|
|
|
15.0
|
%
|
|
|
|
|
|
|
|
(1) To
reflect higher ownership in the Operating Partnership resulting
from application of the treasury stock method to
outstanding options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
Outstanding
|
|
2020
|
|
2019
|
|
%
Change
|
AB L.P.
|
|
|
|
|
|
|
Period-end
|
|
270,509,658
|
|
|
270,380,314
|
|
|
—
|
%
|
Weighted average -
basic
|
|
269,058,018
|
|
|
268,074,947
|
|
|
0.4
|
%
|
Weighted average -
diluted
|
|
269,085,407
|
|
|
268,119,213
|
|
|
0.4
|
%
|
AB Holding
L.P.
|
|
|
|
|
|
|
Period-end
|
|
98,322,942
|
|
|
98,192,098
|
|
|
0.1
|
%
|
Weighted average -
basic
|
|
96,870,007
|
|
|
95,883,604
|
|
|
1.0
|
%
|
Weighted average -
diluted
|
|
96,897,396
|
|
|
95,927,870
|
|
|
1.0
|
%
|
AllianceBernstein
L.P.
|
|
|
ASSETS UNDER
MANAGEMENT | December 31, 2020
|
|
|
($
Billions)
|
|
|
Ending and
Average
|
Three Months
Ended
|
|
|
|
|
|
12/31/20
|
|
|
|
9/30/20
|
|
|
Ending Assets Under
Management
|
$685.9
|
|
|
|
$630.8
|
|
|
Average Assets Under
Management
|
$651.7
|
|
|
|
$624.3
|
|
|
|
|
|
|
|
|
|
Three-Month
Changes by Distribution Channel
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
Management
|
|
Total
|
|
Beginning of
Period
|
$
|
289.5
|
|
|
$
|
242.9
|
|
|
$
|
98.4
|
|
|
$
|
630.8
|
|
|
Sales/New
accounts
|
9.9
|
|
|
17.7
|
|
|
3.7
|
|
|
31.3
|
|
|
Redemption/Terminations
|
(2.0)
|
|
|
(15.2)
|
|
|
(4.8)
|
|
|
(22.0)
|
|
|
Net Cash
Flows
|
(2.9)
|
|
|
(3.2)
|
|
|
—
|
|
|
(6.1)
|
|
|
Net
Flows(2)
|
5.0
|
|
|
(0.7)
|
|
|
(1.1)
|
|
|
3.2
|
|
|
Transfers
|
0.7
|
|
|
(0.7)
|
|
|
—
|
|
|
—
|
|
|
Investment
Performance
|
20.4
|
|
|
23.8
|
|
|
7.7
|
|
|
51.9
|
|
|
End of
Period
|
$
|
315.6
|
|
|
$
|
265.3
|
|
|
$
|
105.0
|
|
|
$
|
685.9
|
|
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 (3)
|
|
Total
|
|
Beginning of
Period
|
$
|
188.8
|
|
|
$
|
57.5
|
|
|
$
|
253.3
|
|
|
$
|
48.7
|
|
|
$
|
9.0
|
|
|
$
|
73.5
|
|
|
$
|
630.8
|
|
|
Sales/New
accounts
|
13.5
|
|
|
0.1
|
|
|
13.6
|
|
|
2.8
|
|
|
—
|
|
|
1.3
|
|
|
31.3
|
|
|
Redemption/Terminations
|
(9.5)
|
|
|
(0.1)
|
|
|
(9.3)
|
|
|
(2.4)
|
|
|
(0.1)
|
|
|
(0.6)
|
|
|
(22.0)
|
|
|
Net Cash
Flows
|
(3.0)
|
|
|
(0.9)
|
|
|
(2.3)
|
|
|
0.1
|
|
|
(0.5)
|
|
|
0.5
|
|
|
(6.1)
|
|
|
Net
Flows(2)
|
1.0
|
|
|
(0.9)
|
|
|
2.0
|
|
|
0.5
|
|
|
(0.6)
|
|
|
1.2
|
|
|
3.2
|
|
|
Transfers
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Investment
Performance
|
28.0
|
|
|
7.9
|
|
|
7.9
|
|
|
1.1
|
|
|
0.1
|
|
|
6.9
|
|
|
51.9
|
|
|
End of
Period
|
$
|
217.8
|
|
|
$
|
64.5
|
|
|
$
|
263.2
|
|
|
$
|
50.3
|
|
|
$
|
8.5
|
|
|
$
|
81.6
|
|
|
$
|
685.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Net
Flows by Investment Service (Active versus Passive)
|
|
|
Actively
Managed
|
|
Passively
Managed (1)
|
|
Total
|
|
|
Equity
|
$
|
1.0
|
|
|
$
|
(0.9)
|
|
|
$
|
0.1
|
|
|
|
Fixed
Income
|
2.5
|
|
|
(0.6)
|
|
|
1.9
|
|
|
|
Alternatives/Multi-Asset Solutions
(3)
|
1.0
|
|
|
0.2
|
|
|
1.2
|
|
|
|
Total
|
$
|
4.5
|
|
|
$
|
(1.3)
|
|
|
$
|
3.2
|
|
|
|
(1) Includes index and enhanced index
services.
|
(2) Net flows for our Institutions
channel and fixed income-taxable investment services include $0.7
billion of AXA redemptions of low-fee fixed income mandates in the
fourth quarter of 2020.
|
(3)
Includes certain multi-asset solutions and services not included in
equity or fixed income services.
|
AllianceBernstein
L.P.
|
|
|
ASSETS UNDER
MANAGEMENT | December 31, 2020
|
|
|
($
Billions)
|
|
|
Ending and
Average
|
Twelve Months
Ended
|
|
|
|
|
12/31/20
|
|
|
|
|
12/31/19
|
|
|
Ending Assets Under
Management
|
$685.9
|
|
|
|
|
$622.9
|
|
|
Average Assets Under
Management
|
$619.5
|
|
|
|
|
$574.2
|
|
|
|
|
|
|
|
|
|
|
Twelve-Month
Changes by Distribution Channel
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
Management
|
|
Total
|
|
Beginning of
Period
|
$
|
282.7
|
|
|
$
|
239.2
|
|
|
$
|
101.0
|
|
|
$
|
622.9
|
|
|
Sales/New
accounts
|
30.9
|
|
|
78.9
|
|
|
14.3
|
|
|
124.1
|
|
|
Redemption/Terminations
|
(23.3)
|
|
|
(69.5)
|
|
|
(16.5)
|
|
|
(109.3)
|
|
|
Net Cash
Flows
|
(6.6)
|
|
|
(11.0)
|
|
|
0.2
|
|
|
(17.4)
|
|
|
Net
Flows(2)
|
1.0
|
|
|
(1.6)
|
|
|
(2.0)
|
|
|
(2.6)
|
|
|
Acquisition
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
Transfers
|
1.4
|
|
|
(0.6)
|
|
|
(0.8)
|
|
|
—
|
|
|
Investment
Performance
|
30.5
|
|
|
28.1
|
|
|
6.8
|
|
|
65.4
|
|
|
End of
Period
|
$
|
315.6
|
|
|
$
|
265.3
|
|
|
$
|
105.0
|
|
|
$
|
685.9
|
|
Twelve-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 (3)
|
|
Total
|
|
Beginning of
Period
|
$
|
177.2
|
|
|
$
|
60.1
|
|
|
$
|
258.3
|
|
|
$
|
47.1
|
|
|
$
|
9.3
|
|
|
$
|
70.9
|
|
|
$
|
622.9
|
|
|
Sales/New
accounts
|
51.4
|
|
|
1.7
|
|
|
54.3
|
|
|
10.3
|
|
|
—
|
|
|
6.4
|
|
|
124.1
|
|
|
Redemption/Terminations
|
(36.7)
|
|
|
(1.9)
|
|
|
(58.3)
|
|
|
(9.5)
|
|
|
(0.3)
|
|
|
(2.6)
|
|
|
(109.3)
|
|
|
Net Cash
Flows
|
(7.3)
|
|
|
(4.4)
|
|
|
(5.8)
|
|
|
0.2
|
|
|
(1.3)
|
|
|
1.2
|
|
|
(17.4)
|
|
|
Net
Flows(2)
|
7.4
|
|
|
(4.6)
|
|
|
(9.8)
|
|
|
1.0
|
|
|
(1.6)
|
|
|
5.0
|
|
|
(2.6)
|
|
|
Acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
Investment
Performance
|
33.2
|
|
|
9.0
|
|
|
14.7
|
|
|
2.2
|
|
|
0.8
|
|
|
5.5
|
|
|
65.4
|
|
|
End of
Period
|
$
|
217.8
|
|
|
$
|
64.5
|
|
|
$
|
263.2
|
|
|
$
|
50.3
|
|
|
$
|
8.5
|
|
|
$
|
81.6
|
|
|
$
|
685.9
|
|
Twelve-Month Net
Flows by Investment Service (Active versus Passive)
|
|
|
Actively
Managed
|
|
Passively
Managed (1)
|
|
Total
|
|
|
Equity
|
$
|
7.4
|
|
|
$
|
(4.6)
|
|
|
$
|
2.8
|
|
|
|
Fixed
Income
|
(8.8)
|
|
|
(1.6)
|
|
|
$
|
(10.4)
|
|
|
|
Alternatives/Multi-Asset Solutions
(3)
|
4.5
|
|
|
0.5
|
|
|
$
|
5.0
|
|
|
|
Total
|
$
|
3.1
|
|
|
$
|
(5.7)
|
|
|
$
|
(2.6)
|
|
|
|
(1) Includes index and enhanced index
services.
|
(2) Net flows for our Institutions
channel and fixed income-taxable investment services include $11.8
billion of AXA redemptions of low-fee fixed income
mandates.
|
(3)
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
|
$
|
212.0
|
|
|
$
|
145.5
|
|
|
$
|
102.7
|
|
|
$
|
460.2
|
|
|
Non-U.S.
Clients
|
103.6
|
|
|
119.8
|
|
|
2.3
|
|
|
225.7
|
|
|
Total
|
$
|
315.6
|
|
|
$
|
265.3
|
|
|
$
|
105.0
|
|
|
$
|
685.9
|
|
AB
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION
OF GAAP FINANCIAL
RESULTS TO ADJUSTED
FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
(US $ Thousands,
unaudited)
|
|
12/31/2020
|
|
9/30/2020
|
|
6/30/2020
|
|
3/31/2020
|
|
12/31/2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues,
GAAP basis
|
|
$
|
1,062,892
|
|
$
|
900,038
|
|
$
|
871,449
|
|
$
|
874,156
|
|
$
|
987,304
|
|
$
|
3,708,536
|
|
|
$
|
3,518,432
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution-related
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
(143,131)
|
|
|
(135,693)
|
|
|
(120,099)
|
|
|
(130,857)
|
|
|
(127,553)
|
|
|
(529,781)
|
|
|
(455,043)
|
|
|
|
Investment advisory
services fees
|
(19,722)
|
|
|
(20,120)
|
|
|
(12,202)
|
|
|
(14,814)
|
|
|
(15,120)
|
|
|
(66,858)
|
|
|
(47,951)
|
|
|
|
Pass through
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory
services fees
|
(3,999)
|
|
|
(3,888)
|
|
|
(3,331)
|
|
|
(7,062)
|
|
|
(6,717)
|
|
|
(18,279)
|
|
|
(20,914)
|
|
|
|
Other
revenues
|
(10,187)
|
|
|
(9,344)
|
|
|
(10,195)
|
|
|
(9,607)
|
|
|
(9,436)
|
|
|
(39,333)
|
|
|
(35,926)
|
|
|
|
Impact of consolidated
company-sponsored investment funds
|
(864)
|
|
|
(765)
|
|
|
(21,552)
|
|
|
24,135
|
|
|
(8,567)
|
|
|
954
|
|
|
(33,044)
|
|
|
|
Long-term incentive
compensation-related investment (gains) losses
|
(4,270)
|
|
|
(3,140)
|
|
|
(5,257)
|
|
|
7,099
|
|
|
(1,457)
|
|
|
(5,568)
|
|
|
(7,531)
|
|
|
|
Long-term incentive
compensation-related dividends and interest
|
(918)
|
|
|
(91)
|
|
|
(88)
|
|
|
(106)
|
|
|
(997)
|
|
|
(1,204)
|
|
|
(1,408)
|
|
|
|
Write-down of
investment
|
—
|
|
|
—
|
|
|
—
|
|
|
859
|
|
|
—
|
|
|
859
|
|
|
—
|
|
|
Adjusted Net
Revenues
|
|
$
|
879,801
|
|
|
$
|
726,997
|
|
|
$
|
698,725
|
|
|
$
|
743,803
|
|
|
$
|
817,457
|
|
|
$
|
3,049,326
|
|
|
$
|
2,916,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income,
GAAP basis
|
|
$
|
302,420
|
|
|
$
|
217,146
|
|
|
$
|
209,647
|
|
|
$
|
178,223
|
|
|
$
|
268,283
|
|
|
$
|
907,436
|
|
|
$
|
823,437
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate
|
(985)
|
|
|
(985)
|
|
|
5,188
|
|
|
(339)
|
|
|
2,623
|
|
|
2,880
|
|
|
2,623
|
|
|
|
Long-term incentive
compensation-related items
|
(337)
|
|
|
(416)
|
|
|
104
|
|
|
566
|
|
|
66
|
|
|
(83)
|
|
|
1,217
|
|
|
|
CEO's EQH award
compensation
|
205
|
|
|
205
|
|
|
209
|
|
|
184
|
|
|
217
|
|
|
802
|
|
|
1,125
|
|
|
|
Write-down of
investment
|
—
|
|
|
—
|
|
|
—
|
|
|
859
|
|
|
—
|
|
|
859
|
|
|
—
|
|
|
|
Acquisition-related
expenses
|
1,614
|
|
|
356
|
|
|
805
|
|
|
526
|
|
|
3,459
|
|
|
3,301
|
|
|
6,734
|
|
|
|
Contingent payment
arrangements
|
(1,366)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,051)
|
|
|
(1,366)
|
|
|
(3,051)
|
|
|
|
Sub-total of non-GAAP
adjustments
|
(869)
|
|
|
(840)
|
|
|
6,306
|
|
|
1,796
|
|
|
3,314
|
|
|
6,393
|
|
|
8,648
|
|
|
|
Less: Net income
(loss) of consolidated
entities attributable to non-controlling interests
|
381
|
|
|
81
|
|
|
20,940
|
|
|
(25,571)
|
|
|
7,623
|
|
|
(4,169)
|
|
|
29,641
|
|
|
Adjusted Operating
Income
|
|
$
|
301,170
|
|
|
$
|
216,225
|
|
|
$
|
195,013
|
|
|
$
|
205,590
|
|
|
$
|
263,974
|
|
|
$
|
917,998
|
|
|
$
|
802,444
|
|
|
Operating Margin,
GAAP basis excl. non-controlling interests
|
28.4
|
%
|
|
24.1
|
%
|
|
21.7
|
%
|
|
23.3
|
%
|
|
26.4
|
%
|
|
24.6
|
%
|
|
22.6
|
%
|
|
Adjusted Operating
Margin
|
34.2
|
%
|
|
29.7
|
%
|
|
27.9
|
%
|
|
27.6
|
%
|
|
32.3
|
%
|
|
30.1
|
%
|
|
27.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION
OF
GAAP EPU TO ADJUSTED EPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
($ Thousands except
per Unit amounts, unaudited)
|
12/31/2020
|
|
9/30/2020
|
|
6/30/2020
|
|
3/31/2020
|
|
12/31/2019
|
|
2020
|
|
2019
|
|
Net Income -
Diluted, GAAP basis
|
$
|
93,221
|
|
|
$
|
67,013
|
|
|
$
|
56,929
|
|
|
$
|
62,274
|
|
|
$
|
80,041
|
|
|
$
|
279,436
|
|
|
$
|
238,642
|
|
|
Impact on net income
of AB non-GAAP adjustments
|
(282)
|
|
|
(289)
|
|
|
2,533
|
|
|
326
|
|
|
1,234
|
|
|
2,090
|
|
|
3,441
|
|
|
Adjusted Net
Income - Diluted
|
$
|
92,939
|
|
|
$
|
66,724
|
|
|
$
|
59,462
|
|
|
$
|
62,600
|
|
|
$
|
81,275
|
|
|
$
|
281,526
|
|
|
$
|
242,083
|
|
|
Diluted Net Income
per Holding Unit, GAAP basis
|
$
|
0.97
|
|
|
$
|
0.70
|
|
|
$
|
0.59
|
|
|
$
|
0.63
|
|
|
$
|
0.84
|
|
|
$
|
2.88
|
|
|
$
|
2.49
|
|
|
Impact of AB non-GAAP
adjustments
|
—
|
|
|
(0.01)
|
|
|
0.02
|
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.03
|
|
|
Adjusted Diluted
Net Income per Holding Unit
|
$
|
0.97
|
|
|
$
|
0.69
|
|
|
$
|
0.61
|
|
|
$
|
0.64
|
|
|
$
|
0.85
|
|
|
$
|
2.91
|
|
|
$
|
2.52
|
|
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 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.
Also, adjusted net revenues exclude investment gains and losses
and dividends and interest on employee long-term incentive
compensation-related investments.
Lastly, during the first quarter of 2020, we wrote-down an
investment that had been received in exchange for the sale of
software technology; the write-down brought the investment balance
to zero. Previously, we had been excluding the value of this
investment from adjusted net revenues.
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 CEO's EQH award compensation, as discussed below, (4) the
write-down of an investment, (5) acquisition-related expenses, (6)
adjustments to contingent payment arrangements, and (7) 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 ("CEO") equity awards in
connection with EQH's IPO and Mr. Bernstein's membership on the EQH
Management Committee. Mr. Bernstein may receive additional equity
or cash compensation from EQH in the future related to his service
on the Management Committee. Any awards granted to Mr. Bernstein 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 in the first quarter of 2020
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.
During 2020 and 2019, these expenses included an intangible asset
impairment charge of $1.5 million and
$3.1 million, respectively, relating
to our 2016 acquisition.
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.
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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SOURCE AllianceBernstein