AllianceBernstein L.P.(AB) - 2025 Q2 - Quarterly Report

Part I - Financial Information Financial Statements (Unaudited) This section presents AllianceBernstein Holding L.P.'s unaudited condensed financial statements for the period ended June 30, 2025, showing decreases in total assets and net income compared to prior periods Condensed Statements of Financial Condition Total assets decreased to $1.98 billion as of June 30, 2025, from $2.03 billion at December 31, 2024, primarily due to a reduction in the AB investment Condensed Statement of Financial Condition (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $1,982,072 | $2,034,632 | | Total liabilities | $449 | $2,770 | | Total partners' capital | $1,981,623 | $2,031,862 | | Total liabilities and partners' capital | $1,982,072 | $2,034,632 | Condensed Statements of Income Net income significantly decreased for both the three and six months ended June 30, 2025, reaching $70.2 million and $144.3 million respectively Condensed Statements of Income (in thousands, except per unit amounts) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Equity in net income attributable to AB Unitholders | $78,830 | $122,705 | $161,583 | $208,986 | | Net income | $70,248 | $113,523 | $144,282 | $190,745 | | Net income per Unit | $0.64 | $0.99 | $1.31 | $1.66 | Condensed Statements of Comprehensive Income Comprehensive income for the three and six months ended June 30, 2025, was $80.0 million and $166.8 million respectively, showing a decrease from prior-year periods Condensed Statements of Comprehensive Income (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Net income | $70,248 | $113,523 | $144,282 | $190,745 | | Other comprehensive income (loss) | $9,779 | $3,692 | $22,550 | $(467) | | Comprehensive income | $80,027 | $117,215 | $166,832 | $190,278 | Condensed Statements of Changes in Partners' Capital Total partners' capital decreased from $2.09 billion to $1.98 billion over six months, primarily due to cash distributions and unit retirements Changes in Total Partners' Capital - Six Months Ended June 30, 2025 (in thousands) | Description | Amount | | :--- | :--- | | Balance, beginning of period | $2,031,862 | | Net income | $144,282 | | Other comprehensive income | $22,550 | | Cash distributions to Unitholders | $(205,229) | | Retirement of AB Holding Units | $(39,388) | | Issuance of AB Holding Units | $39,565 | | Other changes | $(12,019) | | Balance, end of period | $1,981,623 | Condensed Statements of Cash Flows Net cash provided by operating activities increased to $203.9 million for the six months ended June 30, 2025, matching cash used in financing activities Condensed Statements of Cash Flows - Six Months Ended June 30 (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $203,922 | $171,959 | | Net cash used in financing activities | $(203,922) | $(171,959) | | Change in cash and cash equivalents | $— | $— | Notes to Condensed Financial Statements This section details the company's business, accounting policies, and financial statement items, including its structure, distribution policies, and a subsequent exchange agreement - AB Holding's primary income and cash flow source is its investment in AB limited partnership interests, with AB providing diversified investment management services[28][29] - A distribution of $0.76 per Unit was declared on July 24, 2025, for the second quarter of 2025[38] - Post-quarter, on July 10, 2025, AB and EQH exchanged 19,682,946 units, resulting in EQH holding 68.6% and AB Holding 30.8% economic interest in AB[56][57] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the significant decrease in net income for the three and six months ended June 30, 2025, attributing it to lower AB ownership and net income, while confirming sufficient liquidity Results of Operations Net income for Q2 2025 decreased 38.1% to $70.2 million, and 24.4% for the six-month period to $144.3 million, driven by lower AB equity ownership and net income Results of Operations Highlights (in thousands, except per unit amounts) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Net income of AB Holding | $70,248 | $113,523 | $144,282 | $190,745 | | % Change | (38.1)% | | (24.4)% | | | Net income per AB Holding Unit | $0.64 | $0.99 | $1.31 | $1.66 | | % Change | (35.4)% | | (21.1)% | | Management Operating Metrics The company utilizes non-GAAP measures like 'adjusted net income' to assess performance, with Q2 2025 adjusted net income at $83.9 million compared to $70.2 million GAAP net income GAAP to Non-GAAP Reconciliation (Q2 2025 vs Q2 2024) | (in thousands, except per Unit amounts) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income, GAAP basis | $70,248 | $113,523 | | Impact of AB non-GAAP adjustments | $13,630 | $(32,232) | | Adjusted net income | $83,878 | $81,291 | | Net income per Unit, GAAP basis | $0.64 | $0.99 | | Impact of AB non-GAAP adjustments | $0.12 | $(0.28) | | Adjusted net income per Unit | $0.76 | $0.71 | - Management employs non-GAAP measures such as 'adjusted net revenues' and 'adjusted operating income' for a clearer view of operating performance and long-term trends[62] Capital Resources and Liquidity Net cash from operations increased to $203.9 million in the first six months of 2025, primarily from AB distributions, which management deems sufficient for all financial obligations - Net cash provided by operating activities increased by $31.9 million in the first six months of 2025, primarily due to a $33.7 million increase in cash distributions from AB[68] - Net cash used in financing activities rose by $31.9 million, mainly driven by a $32.5 million increase in cash distributions to Unitholders[69] - Management confirms no liquidity risk for AB Holding, as distributions are paid only from cash received from AB, net of taxes[70] Quantitative and Qualitative Disclosures About Market Risk No material changes to the company's market risk profile occurred during Q2 2025 compared to the 2024 Form 10-K disclosures - No material changes to AB Holding's market risk have occurred since the Form 10-K for the year ended December 31, 2024[73] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the period end, with no material changes to internal control over financial reporting in Q2 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the reporting period end[76] - No material changes to internal control over financial reporting occurred during Q2 2025[77] Part II - Other Information Legal Proceedings Information on legal proceedings is referenced in Note 8 of the condensed financial statements, with management not expecting material impact on financial condition or liquidity - Legal proceedings information is detailed in Note 8 to the condensed financial statements in Part I, Item 1[79] Risk Factors No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, have occurred - No material changes to risk factors were reported from those disclosed in the Form 10-K for the year ended December 31, 2024[80] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of AB Holding Units occurred in Q2 2025, though AB purchased 338,900 units on the open market and retired 30,200 units in private transactions Issuer Purchases of AB Holding Units (Q2 2025) | Period | Total Units Purchased | Average Price Paid | Publicly Announced Plan | | :--- | :--- | :--- | :--- | | 4/1/25 - 4/30/25 | 338,900 | $36.43 | — | | 5/1/25 - 5/31/25 | 22,682 | $39.63 | — | | 6/1/25 - 6/30/25 | — | — | — | | Total | 361,582 | $36.63 | — | - AB purchased 338,900 AB Holding Units on the open market under a Rule 10b5-1 plan to fund incentive compensation obligations[84] - AB purchased and retired 30,200 AB Units in private transactions during Q2 2025[87] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[88] Mine Safety Disclosures The company reports no mine safety disclosures - None[89] Other Information CEO Seth Bernstein adopted a Rule 10b5-1 trading plan on May 21, 2025, for the sale of up to 31,694 AB Holding Units, effective August 19 to November 17, 2025 - CEO Seth Bernstein adopted a Rule 10b5-1 trading plan on May 21, 2025, for the sale of up to 31,694 AB Holding Units, effective from August 19, 2025, to November 17, 2025[90] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications, AllianceBernstein L.P.'s Form 10-Q, and XBRL data files - Key exhibits include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and the quarterly report of AllianceBernstein L.P. (Exhibit 99.1)[92] Signature - The report was signed on July 24, 2025, by Thomas Simeone, Chief Financial Officer, and Alexis Luckey, Chief Accounting Officer[95][96]