AllianceBernstein L.P.(AB) - 2024 Q1 - Quarterly Report

Part I Item 1. Financial Statements (Unaudited) This section presents AllianceBernstein Holding L.P.'s unaudited condensed financial statements for Q1 2024, detailing financial position, performance, and cash flows Condensed Statements of Financial Condition As of March 31, 2024, total assets were approximately $2.07 million, a slight decrease from $2.08 million at year-end 2023, with total partners' capital also seeing a slight decrease Condensed Statements of Financial Condition Summary | (in thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total assets | $2,068,761 | $2,077,540 | | Investment in AB | $2,068,751 | $2,077,540 | | Total liabilities | $389 | $1,295 | | Total partners' capital | $2,068,372 | $2,076,245 | Condensed Statements of Income Net income for Q1 2024 increased to $77.2 million from $67.4 million in Q1 2023, driving basic and diluted net income per unit to $0.67 Condensed Statements of Income Summary | (in thousands, except per unit amounts) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Equity in net income attributable to AB Unitholders | $86,281 | $76,382 | | Net income | $77,222 | $67,437 | | Basic net income per unit | $0.67 | $0.59 | | Diluted net income per unit | $0.67 | $0.59 | Condensed Statements of Comprehensive Income Comprehensive income for Q1 2024 was $73.1 million, impacted by a $4.2 million other comprehensive loss from foreign currency translation adjustments Condensed Statements of Comprehensive Income Summary | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net income | $77,222 | $67,437 | | Other comprehensive (loss) income | $(4,159) | $2,636 | | Comprehensive income | $73,063 | $70,073 | Condensed Statements of Changes in Partners' Capital Total partners' capital increased to $2.07 million at the end of Q1 2024, reflecting net income offset by cash distributions and compensation plan adjustments - Key drivers of the change in partners' capital for Q1 2024 included net income of $77.2 million, cash distributions to unitholders of $88.5 million, and the issuance of $16.0 million in AB Holding Units for incentive compensation plans[16] Condensed Statements of Cash Flows Net cash provided by operating activities was $87.7 million in Q1 2024, entirely offset by financing activities, resulting in no net change in cash and cash equivalents Condensed Statements of Cash Flows Summary | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $87,675 | $77,986 | | Net cash used in financing activities | $(87,675) | $(77,986) | | Change in cash and cash equivalents | $— | $— | Notes to Condensed Financial Statements The notes detail the company's structure, business services, accounting policies, cash distributions, compensation plans, income taxes, and legal contingencies - AB Holding's principal income and cash flow stem from its investment in AB limited partnership interests - As of March 31, 2024, AB Holding held a 39.7% interest in AB, while EQH and its subsidiaries held a combined economic interest of approximately 61.0%[24][30] - AB provides investment management services across four main segments: Institutional Services, Retail Services, Private Wealth Services, and Bernstein Research Services[24][25] - On April 25, 2024, a cash distribution of $0.73 per unit was declared for the first quarter, payable on May 23, 2024[34] - A class action complaint filed against AB concerning its employee profit-sharing plan was dismissed in its entirety on March 25, 2024 - The company does not believe the litigation will have a material adverse effect[50] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 14.5% increase in AB Holding's Q1 2024 net income, the 10.6% rise in distribution per unit, and the company's sufficient liquidity Q1 2024 vs Q1 2023 Performance | (in thousands, except per unit amounts) | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Net income of AB Holding | $77,222 | $67,437 | 14.5% | | Diluted net income per AB Holding Unit | $0.67 | $0.59 | 13.6% | | Distribution per AB Holding Unit | $0.73 | $0.66 | 10.6% | GAAP to Non-GAAP Reconciliation (per unit) | (in dollars) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Diluted net income per AB Holding Unit, GAAP basis | $0.67 | $0.59 | | Impact of AB non-GAAP adjustments | $0.06 | $0.07 | | Adjusted diluted net income per AB Holding Unit | $0.73 | $0.66 | - The increase in net cash from operating activities to $87.7 million in Q1 2024 from $78.0 million in Q1 2023 was primarily due to higher cash distributions received from AB[61] - Management believes AB Holding has no liquidity risk, as its cash inflow is comprised entirely of distributions from AB, which are subsequently distributed (net of taxes) to its own unitholders[62] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk profile since the disclosures in its 2023 Form 10-K - There have been no material changes in AB Holding's market risk from the information provided in the Form 10-K for the year ended December 31, 2023[69] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting in Q1 2024 - Based on an evaluation as of the end of Q1 2024, the CEO and CFO concluded that the company's disclosure controls and procedures are effective[71] - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2024[72] Part II Item 1. Legal Proceedings This section refers to Note 8 of the condensed financial statements for details on legal proceedings, including a recently dismissed class action complaint - Information regarding legal proceedings is detailed in Note 8 to the condensed financial statements[74] Item 1A. Risk Factors The company reports no material changes to the risk factors previously disclosed in its 2023 Annual Report on Form 10-K - There have been no material changes to the risk factors from those disclosed in the company's 2023 Form 10-K[75] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details unregistered sales of equity securities, including units retained for tax withholding and private repurchases, with no new repurchase plan adopted in Q1 2024 - No plan to repurchase AB Holding Units was adopted in Q1 2024[76] Issuer Purchases of AB Holding Units (Q1 2024) | Period | Total Units Purchased | Average Price Paid Per Unit (in dollars) | | :--- | :--- | :--- | | Jan 2024 | 2,042 | $30.74 | | Feb 2024 | 94,838 | $33.55 | | Mar 2024 | 33,668 | $32.72 | | Total | 130,548 | $33.29 | - The 130,548 AB Holding Units purchased were retained from employees to fulfill statutory withholding tax requirements on long-term incentive compensation awards[77] - In Q1 2024, AB purchased 14,200 AB Units in private transactions and retired them[80] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans or other trading arrangements during Q1 2024 - No directors or officers adopted or terminated a 10b5-1 plan or other trading arrangement during the first quarter of 2024[82] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications, AllianceBernstein L.P.'s 10-Q, and XBRL data files - The filing includes required certifications from the CEO and CFO, the financial section of the AllianceBernstein L.P. 10-Q, and XBRL data files[84]