AllianceBernstein L.P.(AB) - 2025 Q3 - Quarterly Report

Part I. Financial Information This section presents the unaudited condensed financial statements and related disclosures for the reporting period Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements and accompanying notes Condensed Statements of Financial Condition This statement provides a snapshot of the company's assets, liabilities, and partners' capital at specific points in time Condensed Statements of Financial Condition (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------------- | :------------------ | | Investment in AB | $1,178,765 | $2,034,632 | | Total assets | $1,178,765 | $2,034,632 | | Other liabilities | $1,870 | $2,770 | | Total liabilities | $1,870 | $2,770 | | Total partners' capital | $1,176,895 | $2,031,862 | | Total liabilities and partners' capital | $1,178,765 | $2,034,632 | - Total assets decreased by approximately $855.87 million from December 31, 2024, to September 30, 2025, primarily due to a decrease in Investment in AB[13] Condensed Statements of Income This statement details the company's revenues, expenses, and net income over specific reporting periods Condensed Statements of Income (in thousands, except per unit amounts) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Equity in net income attributable to AB Unitholders | $81,412 | $136,374 | $242,995 | $345,360 | | Income taxes | $7,661 | $9,179 | $24,962 | $27,420 | | Net income | $73,751 | $127,195 | $218,033 | $317,940 | | Net income per Unit | $0.79 | $1.12 | $2.08 | $2.77 | - Net income for the three months ended September 30, 2025, decreased by 42.0% YoY, and for the nine months ended September 30, 2025, decreased by 31.4% YoY[15] - Net income per Unit for the three months ended September 30, 2025, decreased by 29.5% YoY, and for the nine months ended September 30, 2025, decreased by 24.9% YoY[15] Condensed Statements of Comprehensive Income This statement presents net income and other comprehensive income components, reflecting total comprehensive earnings Condensed Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $73,751 | $127,195 | $218,033 | $317,940 | | Other comprehensive income | $1,049 | $7,588 | $23,599 | $7,121 | | Comprehensive income | $74,800 | $134,783 | $241,632 | $325,061 | - Comprehensive income for the three months ended September 30, 2025, decreased by 44.5% YoY, and for the nine months ended September 30, 2025, decreased by 25.7% YoY[18] Condensed Statements of Changes in Partners' Capital This statement outlines changes in partners' capital, including net income, distributions, and other equity transactions Condensed Statements of Changes in Partners' Capital (in thousands) | Category | Sep 30, 2025 (End of Period) | Sep 30, 2024 (End of Period) | | :---------------------------------------------------------------- | :--------------------------- | :--------------------------- | | General Partner's Capital | $1,351 | $1,384 | | Limited Partners' Capital | $1,224,384 | $2,165,060 | | AB Holding Units held by AB for long-term incentive compensation plans | $(31,015) | $(33,390) | | Accumulated Other Comprehensive (Loss) | $(17,825) | $(34,923) | | Total Partners' Capital | $1,176,895 | $2,098,131 | - Total Partners' Capital decreased by approximately $921.24 million from September 30, 2024, to September 30, 2025, primarily due to the retirement of AB Holding Units in connection with the EQH Amended Exchange Agreement[20] Condensed Statements of Cash Flows This statement reports cash inflows and outflows from operating, investing, and financing activities Condensed Statements of Cash Flows (in thousands) - Nine Months Ended September 30 | Metric | 2025 | 2024 | | :------------------------------------------ | :--------- | :--------- | | Net income | $218,033 | $317,940 | | Cash distributions received from AB | $300,993 | $281,164 | | Net cash provided by operating activities | $275,131 | $253,021 | | Cash distributions to Unitholders | $(274,324) | $(253,923) | | Net cash used in financing activities | $(275,131) | $(253,021) | | Non-cash financing activities: Retirement of AB Holding Units in connection with EQH Amended Exchange Agreement | $(820,188) | $0 | - Net cash provided by operating activities increased by $22.11 million (8.7%) for the nine months ended September 30, 2025, compared to the same period in 2024, driven by higher cash distributions received from AB[23] - Net cash used in financing activities increased by $22.11 million (8.7%) for the nine months ended September 30, 2025, primarily due to higher cash distributions to Unitholders[23] Notes to Condensed Financial Statements This section provides additional detailed information and explanations for the condensed financial statements 1. Business Description, Organization and Basis of Presentation This note describes AB Holding's business, organizational structure, and the basis for financial statement presentation - AB Holding's primary income and cash flow source is its investment in AB limited partnership interests[26] - AB provides diversified investment management and related services globally, including institutional, retail, and private wealth management, with expertise in various equity, fixed income, alternative, and multi-asset strategies[27][28][29][30] AB Ownership Structure as of September 30, 2025 | Holder | Percentage of General and Limited Partnership Interests | | :----------------------- | :---------------------------------------------------- | | EQH and its subsidiaries | 68.5 % | | AB Holding | 30.8 % | | Unaffiliated holders | 0.7 % | | Total | 100.0 % | - On July 10, 2025, AB entered into an Amended Exchange Agreement with EQH, increasing available AB Units for exchange and resulting in the retirement of 19,682,946 AB Holding Units held by EQH[32][33] - Post-exchange, EQH holds approximately a 68.5% economic interest in AB[33] - AB Holding accounts for its investment in AB using the equity method[35] 2. Cash Distributions This note details the company's policy and declared amounts for cash distributions to Unitholders - AB Holding is required to distribute all of its Available Cash Flow to Unitholders, defined as cash distributions received from AB minus amounts retained by the General Partner for business use (e.g., taxes)[37] - On October 23, 2025, a distribution of $0.86 per Unit was declared for the three months ended September 30, 2025, payable on November 20, 2025[39] 3. Long-term Incentive Compensation Plans This note describes the company's long-term incentive compensation plans, including unit awards and repurchases - AB grants restricted AB Holding Units to employees and Eligible Directors under unfunded, non-qualified long-term incentive compensation plans[40] AB Holding Unit Repurchases (in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total amount of AB Holding Units Purchased | 0.1 | 1.1 | 1.3 | 2.1 | | Total Cash Paid for AB Holding Units Purchased | $4.1 | $38.6 | $47.8 | $71.7 | | Open Market Purchases of AB Holding Units Purchased | 0.1 | 1.1 | 1.1 | 1.8 | | Total Cash Paid for Open Market Purchases of AB Holding Units | $3.9 | $38.6 | $42.3 | $60.1 | - During the first nine months of 2025, AB awarded 1.6 million restricted AB Holding Unit awards, compared to 1.2 million in 2024[43] 4. Net Income per Unit This note explains the calculation of net income per unit and diluted net income per unit - Net income per Unit is calculated by dividing net income by the weighted average number of units outstanding[44] - Diluted net income per Unit is equivalent as there are no dilutive instruments[44] Net Income per Unit (in thousands, except per unit amounts) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $73,751 | $127,195 | $218,033 | $317,940 | | Weighted average Units outstanding | 92,816 | 114,042 | 104,575 | 114,592 | | Net income per Unit | $0.79 | $1.12 | $2.08 | $2.77 | 5. Investment in AB This note details the changes in AB Holding's investment in AB, accounted for using the equity method Changes in AB Holding's Investment in AB (in thousands) - Nine Months Ended September 30, 2025 | Item | Amount | | :---------------------------------------------------------------- | :----------- | | Investment in AB as of December 31, 2024 | $2,034,632 | | Equity in net income attributable to AB Unitholders | $242,995 | | Changes in accumulated other comprehensive income | $23,599 | | Cash distributions received from AB | $(300,993) | | Capital contributions to AB | $807 | | AB Holding Units retired | $(43,313) | | AB Holding Units issued for long-term incentive compensation plans | $48,878 | | Retirement of AB Holding Units in connection with EQH Amended Exchange Agreement | $(820,188) | | Change in AB Holding Units held by AB for long-term incentive compensation plans | $(7,652) | | Investment in AB as of September 30, 2025 | $1,178,765 | 6. Units Outstanding This note provides information on changes in the number of AB Holding Units outstanding during the period Changes in AB Holding Units Outstanding - Nine Months Ended September 30, 2025 | Item | Number of Units | | :---------------------------------------------------------------- | :-------------- | | Outstanding as of December 31, 2024 | 110,530,329 | | Units issued | 1,296,834 | | Units retired | (20,833,912) | | Outstanding as of September 30, 2025 | 90,993,251 | - The significant reduction in units retired includes 19,682,946 AB Holding Units retired due to the Amended Exchange Agreement with EQH on July 10, 2025[47] 7. Income Taxes This note outlines the company's income tax structure, applicable taxes, and effective tax rates - AB Holding is a publicly-traded partnership (PTP) and is not subject to federal or state corporate income taxes, but is subject to a 4.0% New York City unincorporated business tax (UBT) and a 3.5% federal tax on partnership gross income from active trade or business[47] Income Taxes (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | % Change | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | % Change | | :-------------------------- | :------------------------------ | :------------------------------ | :------- | :----------------------------- | :----------------------------- | :------- | | Federal income taxes | $7,424 | $8,924 | (16.8)% | $24,293 | $26,728 | (9.1)% | | State income taxes | $237 | $255 | (7.1)% | $669 | $692 | (3.3)% | | Total income taxes | $7,661 | $9,179 | (16.5)% | $24,962 | $27,420 | (9.0)% | | Effective tax rate | 9.4 % | 6.7 % | 40.3% | 10.3 % | 7.9 % | 30.4% | - The effective tax rate increased to 9.4% for the three months ended September 30, 2025 (from 6.7% in 2024), and to 10.3% for the nine months ended September 30, 2025 (from 7.9% in 2024)[49] 8. Commitments and Contingencies This note discloses potential future obligations and legal matters that could impact the company's financial position - AB may face regulatory inquiries, administrative proceedings, and litigation, with potential for significant damages, though management believes the outcome will not materially affect operations, financial condition, or liquidity[52] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses AB Holding's financial condition and results of operations, primarily driven by its investment in AB Key Financial Results (in thousands, except per unit amounts) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | % Change | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | % Change | | :---------------------------------------- | :------------------------------ | :------------------------------ | :------- | :----------------------------- | :----------------------------- | :------- | | Net income of AB Holding | $73,751 | $127,195 | (42.0)% | $218,033 | $317,940 | (31.4)% | | Net income per AB Holding Unit | $0.79 | $1.12 | (29.5)% | $2.08 | $2.77 | (24.9)% | | Distribution declared per AB Holding Unit | $0.86 | $0.77 | 11.7% | $2.42 | $2.21 | 9.5% | - AB Holding's net income decreased by $53.4 million for the three months and $99.9 million for the nine months ended September 30, 2025, primarily due to a lower weighted average equity ownership interest in AB and a prior period gain recognized in 2024 related to the AB CarVal acquisition[54] - The effective tax rate for AB Holding increased to 9.4% for Q3 2025 (from 6.7% in Q3 2024) and to 10.3% for the nine months ended September 30, 2025 (from 7.9% in 2024)[55] Adjusted Net Income and Per Unit Impact (in thousands, except per Unit amounts) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income, GAAP basis | $73,751 | $127,195 | $218,033 | $317,940 | | Impact on AB Holding's net income of AB non-GAAP adjustments | $5,695 | $(39,515) | $32,488 | $(65,198) | | Adjusted net income | $79,446 | $87,680 | $250,521 | $252,742 | | Net income per AB Holding Unit, GAAP basis | $0.79 | $1.12 | $2.08 | $2.77 | | Impact of AB non-GAAP adjustments | $0.07 | $(0.35) | $0.32 | $(0.56) | | Adjusted net income per AB Holding Unit | $0.86 | $0.77 | $2.40 | $2.21 | - Net cash provided by operating activities increased by $22.1 million to $275.1 million for the nine months ended September 30, 2025, primarily due to higher cash distributions received from AB[62] - Net cash used in financing activities increased by $22.1 million to $275.1 million for the nine months ended September 30, 2025, mainly due to higher cash distributions to Unitholders[63] - Management believes AB Holding has sufficient resources to meet financial obligations, as its cash inflow is entirely from AB distributions, which are then distributed to Unitholders (net of taxes)[64] Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in AB Holding's market risk during the third quarter of 2025 compared to the information provided in the Form 10-K for the year ended December 31, 2024 - No material changes in market risk during Q3 2025[69] Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting during the third quarter of 2025 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of the end of the reporting period[71] - No material changes in internal control over financial reporting occurred during the third quarter of 2025[72] Part II. Other Information This section provides additional non-financial disclosures and other required information Item 1. Legal Proceedings This section refers to Note 8 of the condensed financial statements for details on legal proceedings, indicating no new material information beyond what is already disclosed - Refer to Note 8 of the condensed financial statements for information on legal proceedings[75] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in AB Holding's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes to risk factors during Q3 2025[76] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's equity security transactions, including repurchases of AB Holding Units under Rule 10b5-1 plans and the significant retirement of units related to the EQH Amended Exchange Agreement - No unregistered sales of AB Holding Units by AB Holding occurred during the period[77] - AB may adopt future Rule 10b5-1 plans for open-market purchases of AB Holding Units for incentive compensation obligations and other corporate purposes[78] Issuer Purchases of Equity Securities - Third Quarter 2025 | Period | Total Number of AB Holding Units Purchased | Average Price Paid Per AB Holding Unit, Net of Commissions | | :--------------- | :--------------------------------------- | :--------------------------------------------------------- | | 7/1/25 - 7/31/25 | 19,686,771 | $42.01 | | 8/1/25 - 8/31/25 | — | — | | 9/1/25 - 9/30/25 | 103,004 | $37.89 | | Total | 19,789,775 | $38.04 | - The total units purchased include 19,682,946 AB Holding Units retired in connection with the EQH Amended Exchange Agreement on July 10, 2025, which was a unit-for-unit exchange without cash consideration[80] - During the third quarter of 2025, AB purchased 103,004 AB Holding Units on the open market under a Rule 10b5-1 plan for incentive compensation awards[80] - AB also purchased and retired 1,100 AB Units in private transactions during the third quarter of 2025[81] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - No defaults upon senior securities[82] Item 4. Mine Safety Disclosures There were no mine safety disclosures required for the reporting period - No mine safety disclosures[83] Item 5. Other Information This section discloses a Rule 10b5-1 trading arrangement adopted by CEO Seth Bernstein, under which 31,694 AB units were sold during the third quarter of 2025, and the plan was subsequently terminated - CEO Seth Bernstein adopted a Rule 10b5-1 trading arrangement on May 21, 2025, effective August 19, 2025, and ending November 17, 2025[84] - A total of 31,694 AB units were sold under the plan during the third quarter of 2025, after which the plan was terminated[85] - No other directors or officers adopted or terminated 10b5-1 or non-10b5-1 trading arrangements during the third quarter of 2025[85] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including certifications under Sarbanes-Oxley Act, the AllianceBernstein L.P. Quarterly Report, and XBRL-related documents - Exhibits include certifications (31.1, 31.2, 32.1, 32.2), AllianceBernstein L.P. Quarterly Report (99.1), and various XBRL documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[86] Signature This section contains the official signatures certifying the accuracy and completeness of the report - The report was signed on October 23, 2025, by Thomas Simeone, Chief Financial Officer, and Alexis Luckey, Chief Accounting Officer, on behalf of AllianceBernstein Holding L.P.[89][90]